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Highlights From the J.P. Morgan Health Confab

Stocks in this article: PFE ELN OPTR

Thoughts and observations after Thursday's conclusion of the J.P. Morgan Healthcare Conference:

  • Attendance was down to about 6,600 registered attendees this year from 7,500 people last year, according to a J.P. Morgan spokeswoman. Despite fewer people, the conference was still crowded, at least on Monday and Tuesday.

    Moreover, San Francisco was filled with biotech people from just about everywhere. The Union Square hotels surrounding the Westin St. Francis hotel, home base for the J.P. Morgan conference, were taken over by other sell-side investment banks, venture capital firms, biotech companies and various industry hangers-on, all holding their own meetings.

  • If J.P. Morgan were to give out commemorative T-shirts, this year's model would say "Survive in '09" in big black letters. From conversations in the hallways, to comments made by presenters, to questions asked by investors during breakout sessions, worries about the financial health of the industry amidst the backdrop of an overall economic recession dominated this conference.

    This is a typical hallway conversation from the week:

    "Hey, how are you?"

    "Oh man, what a brutal year."


    "But dude, the weather out here this week is unbelievable!"

    "I know, I just want to be outside."

  • Yes, the San Francicso weather was amazing: sunny with temperatures in the 70s every day. Stunning.

  • One quick fix for all these money worries would be a rush of mergers and acquisition activity. Who is Pfizer (PFE) going to buy and when? What about Merck (MRK) or Bristol-Myers Squibb (BMY)? Will Roche get the Genentech (DNA) deal done soon? Could Biogen Idec (BIIB) be on the sale block again?

  • Questions about M&A activity -- when, how much, who -- came up at almost every breakout session I attended. It's as if institutional investors are waiting, hoping, praying for some huge mega-merger/acquisition to be announced in the belief that such a deal will ignite a ferocious rally in all biotech stocks, which in turn will boost the value of their moribund portfolios, which naturally will help them get paid in 2009. (Something that happened for very few in 2008.)

    Alas, no such deals were announced during J.P. Morgan week. The best we got was the announcement from Elan (ELN) that it was hiring bankers to help the company find a way to perhaps sell some assets and pay off the $1 billion in debt coming due in 2011.

  • Speaking of Elan, I had an early morning meeting Wednesday with CEO Kelly Martin and President Carlos Playa. Martin bought me a Starbuck's latte, and it wasn't even spiked! He also wanted to know when he was going to get his Nance Trophy for being named Worst Biotech CEO of 2008.

  • Seriously, we had a very good meeting, and I give Martin a lot of credit for that. I've certainly had my share of things to say about Martin and about the company's experimental Alzheimer's drug this year, so what I wanted to do Wednesday was shut the heck up and hear about Elan from his perspective.

    Here are a few tidbits: Elan will remain an Ireland-based company, in part, because of the country's low corporate tax rate. Martin and Playa are big believers in the multiple sclerosis drug Tysabri, and there are no plans to sell the drug to Biogen or anyone else.

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