Happy New Year, everyone!
Next week, 2012 kicks off with the madness otherwise knows as JP Morgan, or #JPM12 if you prefer. We blogged about last year’s conference here. Last year, we were impressed by the optimism, as well as the strong international presence. What can we expect this year? Here are a few “predictions” ahead of next week’s gathering in San Francisco:
Optimism (Of sorts) – Last year’s conference was brimming with enthusiasm. And why not? It was January. We were all carrying new iPads, wearing new ties, and itching to sign that first new deal of the year. This year won’t be very different. The biotech business model and financing environment remains challenging, even for innovative companies, but not impossible. Burrill is reporting VC financing up in 2011 over 2010, with IPOs down over the same time period. So we think the optimism that is characteristic of JP Morgan will continue this year.
Shop Windows – More than ever, companies will continue to look for creative ways to monetize any and all assets, while trying to maintain some control (and hence, returns to shareholders) over key assets. With Big Pharma pipelines being what they are, we expect the talk at the JP Morgan conference to be largely centered on positioning assets for out-licensing as soon as possible. A major part of the challenge is that there are an increasingly limited number of pharmaceutical & biotech companies with the cash, infrastructure, and the willingness to in-license and develop assets. Companies with good assets at Phase II or earlier may find audiences at this conference that express interest initially, but may quickly fade after a few weeks. Finding international partners will have to be an increasingly prominent aspect of any biotech out-licensing plan for 2012.
Champagne and Beer – We will likely hear a lot of stories at JP Morgan about interesting mechanisms of action, enormous market opportunities, etc. Even niche and orphan indications are now being touted as substantial opportunities just to gain prospective partner attention. Savvy biotech companies know that their pharmaceutical brethren are sophisticated enough to know the difference between stories promising champagne when there is really only cheap beer in the bottle. So companies looking for partners at JP Morgan will need to have their stories be realistic, plausible, and data-supported. Rock-solid clinical development and regulatory plans will be increasingly important at JP Morgan and beyond. In fact, we suspect there are a number of executives who are rethinking and polishing their presentations this week in order to reflect these market realities.
Will the JP Morgan healthcare conference signal the beginning of a great 2012? Only time will tell. What we do know is that the pharmaceutical and biotech industry faces many challenges, and only the savvy companies with solid out-licensing and product development plans will be able to weather what may be a challenging 2012 ahead.
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See you next week!