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Biotech 2012 Kickoff Party: Investor Preview

Stocks in this article: CELG VVUS DNDN ITMN IDIX GILD REGN

SAN FRANCISCO ( TheStreet) -- The City by the Bay earns its reputation as the birthplace and epicenter of the biotech industry next week as executives, investors, consultants (and hangers on) convene for meetings, networking, deal making and parties all centered around the 30th annual J.P. Morgan Healthcare Conference.

People complain about how crowded and over-hyped the J.P. Morgan conference has become, but yet the biotech tribe still gathers faithfully every January because this conference (and all the ancillary meetings that piggyback off it) is still the best forum to set agendas, trade gossip and think about new investment ideas for the coming 12 months.

2011, like the year before, wasn't so great for biotech investors. Biotech stocks outperformed the broader indices although the second half of the year was largely a nightmare thanks to disappointing new drug launches (Hello, Dendreon (DNDN)!), European economic turmoil and a general loss of investor confidence and interest in the sector. Biotech will always have its small, obsessed investor fan base, but it can't really prosper without participation from generalist investors.

What's in store for 2012? I'll let J.P. Morgan senior biotech analyst Geoff Meacham set the table since he's co-hosting next week's big investor shindig:

"Broadly speaking, we think that 2012 brings more challenges than opportunities in the biotech space. Our concerns include: 1) European economic uncertainty, which instills a fear of additional austerity measures or reimbursement hurdles or lower utilization, 2) a more clear path forward for biosimilars in the US, which is not a surprise but it impacts industry bellwethers, and 3) slightly lower revenue growth expectations for the overall sector of 9%, which doesn't look as beatable as in prior years. There are some positives in 2012, namely the US Presidential election, where NBI performance has beaten the S&P by an average of 21% over the past four elections. In 2012, however, the impact of the election on healthcare policy is less clear with HCR already well in place. Other positives for the sector include the M&A backdrop (uptick in 2011), where large cap companies seem to be looking to do more with cash than just buybacks / dividend increases."

No disrespect intended, but prior to last year's conference, Meacham was way more ebullient about biotech prospects for 2011. So, perhaps his curmudgeonly outlook for 2012 is a harbinger of brighter days ahead?

I'll be in San Francisco next week to cover and analyze all the breaking biotech news, rumors and goings-on at the J.P. Morgan Healthcare conference. Check the site for my ongoing stories and updates from the conference's presentation rooms and hallways.

New and different this year, I also plan to hold a series of live chats each night after the conference winds down for the day. The live chats -- similar to my regular monthly Biotech Stock Live Chats -- will give me a chance to answer your questions and provide additional analysis of what's happening on the ground in San Francisco. I hope you'll participate. The first J.P. Morgan Biotech Live Chat will be held on Monday, Jan. 9 at 7:30 pm ET.

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