Biotech 2011 Kickoff Party: Investor Preview

SAN FRANCISCO ( TheStreet) -- The biotech industry descends on the City by the Bay starting Sunday for a week of investor meetings, networking, deal making and partying all centered on the 29th annual J.P. Morgan Healthcare Conference.

Biotech investor conferences are a dime a dozen but the J.P. Morgan confab is the oldest, largest and still the most important because of tradition, location (in the birthplace of biotech) and timing. Companies and investors come into this early January meeting with clean slates and use the forum to set goals and agendas for the next 12 months.

2010 was a mixed year for biotech. The biotech sector outperformed the S&P 500 (barely) but sentiment for a large part of the year was negative, dragged down by healthcare reform concerns, European drug price cuts and overall economic uncertainty. Many large institutional investors abandoned or scaled back healthcare investments in 2010 as a result. Drug approvals and merger-and-acquisition activity -- two vital measures of the health of the biotech sector -- were down in 2010.

What's in store for biotech in 2011? J.P. Morgan's senior biotech analyst Geoff Meacham, who will emcee next week's conference, is bullish:

"Looking to 2011, we think the tone in the sector will improve, and as a result, we are broadly bullish on the biotech sector, more than we have been over the past two years," Meacham told his clients in a Monday research note. "Historically, revenue upside (not EPS upside) has been a critical determinant of biotech outperformance, and in this regard the consensus revenue growth for the sector looks too low to us at 8%. More than 25 products could be in launch mode in 2011, which should fuel higher top-line growth for the sector and may drive multiple expansion. Couple this with a favorable M&A and capital markets environment as well as well-known risks from US/EU pricing that are largely assumed in models and we think that the biotech sector is well positioned in 2011."

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.

This is my 11th trip to this important biotech investor gathering but for the first time, I will be live-blogging the company presentations and investor breakout (Q&A) sessions to provide a more real-time and interactive reporting experience. My plan is to bring you news and insights from the J.P. Morgan biotech conference as it happens on the ground in San Francisco -- similar to the live blogs I've used in the past to cover FDA advisory panel meetings.

To prep, I'm busy putting together my schedule and trying to figure out a way to clone myself so that I can be in two or three places simultaneously. The following is a capsule look at some (certainly not all) of the major story lines and questions for biotech and drug companies presenting at the J.P. Morgan conference next week.

Monday, Jan. 10

Celgene ( CELG): By tradition, this big-cap biotech kicks off the JP Morgan conference every year with financial guidance for 2011 and a pre-announcement of fourth-quarter earnings. Celgene tends to be conservative with its forward guidance, which gives the company flexibility to beat and raise forecasts later in the year. It also creates a fair amount of volatility in the stock price. At present, the Street's consensus estimate has Celgene earning $3.38 a share on total revenue of $4.42 billion in 2011. Sales of Revlimid, the company's key multiple myeloma drug, are expected to reach $3.01 billion in 2011.

Vertex Pharmaceuticals ( VRTX): The focus of the company's presentation -- and investor questions -- will be on the big year ahead for the hepatitis C drug telaprevir. FDA will likely hold an advisory panel in the second quarter, followed by a May approval decision date. Telaprevir's full approval is widely expected, so most investors are already looking ahead to the drug's commercial launch and the looming market share battle with Merck ( MRK) and its hepatitis C drug boceprevir.

Dendreon ( DNDN): Management is supposed to update investors on regulatory plans for Provenge in Europe so the J.P. Morgan conference might be the venue for that important news. The key question: Will European regulators require Dendreon to conduct another Provenge clinical trial? Here in the U.S., investors are focused on the complete build out later this year of Dendreon's three manufacturing plants and how Provenge sales will ramp once supply constraints are lifted.

Amylin Pharmaceuticals ( AMLN): This year's JP Morgan conference was supposed to be where Amylin management talked excitedly about the early Bydureon commercial launch. Instead, the company will field questions about how fast it can respond to FDA's October rejection letter.

AMAG Pharmaceuticals ( AMAG): Can AMAG right the disastrous commercial launch of the intravenous iron replacement therapy Feraheme? Does CEO Brian Pereira have any credibility left with investors, or will someone at the conference suggest he step aside? At AMAG's current stock price, Feraheme is essentially valued at nothing, so maybe there's value to be found here if/when the company's problems are ironed out.

Human Genome Sciences ( HGSI): The FDA's approval decision date for the company's lupus drug is March 10. The big questions for Human Genome is not whether or not FDA approves Benlysta, but what kind of restrictions, if any, does FDA place on the drug's label and how does that affect the drug's commercial launch later in the year.

Gilead Sciences ( GILD): Management usually waits for its fourth-quarter call later in January to provide forward product sales guidance, but right now, the Street consensus has Gilead earning $4.04 a share on total revenue of $8.41 billion in 2011. That implies about 10% earnings growth over 2010 -- a relatively low bar and well below the company's average growth rate. Meaningful HIV catalysts this year include FDA approval in the second quarter for "Btripla" Johnson & Johnson's TMC278 combined with Gilead's Truvada and phase III data from the HIV "Quad" pill in the second half of the year.

Tuesday, Jan. 11

Amgen ( AMGN): Expect a lot of discussion and questions about the Prolia osteoporosis launch and the expectations/potential for Xgeva in cancer, particularly in the prevention of prostate cancer bone metastases. Given the persistent rumors about Amgen's interest in overseas acquisitions, someone will invariably ask management about M&A strategy. Historically, Amgen has not provided earnings guidance at the JP Morgan conference.

Nektar Therapeutics ( NKTR): Management might better explain or justify the decision announced in December to not seek a partner for its cancer drug NKTR-102.

Genzyme ( GENZ): "Henri, when will you stop playing hard to get with Sanofi-Aventis and just sell the company?"

Seattle Genetics ( SGEN): An update on timing of the approval filing for brentuximab vedotin, now expected in the first quarter. I'd expect management to field questions about the size of the commercial markets in Hodgkins lymphoma and anaplastic large cell lymphoma.

Sanofi-Aventis ( SNY): "Chris, when are you going to raise your bid price for Genzyme and get this deal done?"

Teva ( TEVA): The impact Novartis' Gilenya is having on Copaxone's market share in multiple sclerosis. What is the probability of a generic version of Copaxone? And an update on Teva's own oral MS drug laquinimod.

Savient Pharmaceuticals ( SVNT): An update on the early solo efforts selling the gout drug Krystexxa.

Biogen Idec ( BIIB): Data from two phase III studies of the oral MS drug BG-12 are the most important catalysts in 2011. Biogen sometimes, but not always, pre-announces fourth quarter earnings and offers forward guidance at the J.P. Morgan conference. Current consensus is for Biogen to earn $5.67 a share on $4.69 billion in revenue.

Keryx Pharmaceuticals ( KERX): Meaningful clinical data from the ongoing phase III studies of perifosine are more likely to be 2012 events, so 2011 might be a bit of a dead year. The company did recently file a new registration statement with the SEC, so could money raising be a near-term event?

Wednesday, January 12:

Vivus ( VVUS) and Orexigen Therapeutics ( OREX): Obesity drugs? Will the FDA ever approve one or both?

Ariad Pharmaceuticals ( ARIA): Data from the phase III study of ridaforolimus in sarcoma is expected in the first quarter. Given that Merck essentially controls that drug, most of the investors at JP Morgan will be much more interested in hearing about Ariad's leukemia drug ponatinib -- a potential blockbuster in the making.

InterMune ( ITMN): The decision by European regulators last month to approve pirfenidone for idiopathic pulmonary fibrosis should put the company's executives in a much happier frame of mind as they update investors at the conference.

Mannkind ( MNKD): Thirty minutes in a crowded breakout room with Al Mann just days or weeks before the FDA issues an approval decision on Afrezza. This might be the don't-miss event of the conference.

Arena Pharmaceuticals ( ARNA): Rat cancer. By the time CEO Jack Lief is ready to speak at 4 pm, most of the investors (at least those still in San Francisco) are likely to be in a bar.

Thursday, January 13:

My condolences to any company forced to present on the last day of the JP Morgan conference, when dust bunnies and crumpled cocktail napkins outnumber investors in the audience. Try for a better slot next year by giving J.P. Morgan more of your banking business. I'll be on a flight home.

--Written by Adam Feuerstein in Boston.

>To contact the writer of this article, click here: Adam Feuerstein.

>To follow the writer on Twitter, go to

>To submit a news tip, send an email to:

Adam Feuerstein writes regularly for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

More from Stocks

UnitedHealth Could Strike Deal for Tenet's Conifer Subsidiary: Reports

UnitedHealth Could Strike Deal for Tenet's Conifer Subsidiary: Reports

One Chart Will Make You Even More Pumped Up to Buy Tech Stocks

One Chart Will Make You Even More Pumped Up to Buy Tech Stocks

Google Shares Shrug Off $5 Billion EU Fine Against Alphabet

Google Shares Shrug Off $5 Billion EU Fine Against Alphabet

Jim Cramer's Biggest Moments From Delivering Alpha

Jim Cramer's Biggest Moments From Delivering Alpha

The Recent Pullback in the Defense Sector Provides a Buying Opportunity

The Recent Pullback in the Defense Sector Provides a Buying Opportunity