Legends Are Born Behind This Closed-Door Healthcare Conference
by Marc Lichtenfeld, Healthcare Expert
Wednesday, January 13, 2010: Issue #1174
Cautiously optimistic. Very cautiously optimistic.
That’s how I’d describe the overall mood at this year’s JP Morgan Healthcare Conference in San Francisco.
While folks are certainly in a better frame of mind than this time last year (when it seemed like we were in the middle of financial Armageddon), they’re still a bit gun-shy.
But with the huge stock market rally and partnership/financing deals available again, the tone is more upbeat. As one banker said, “money is flowing into the market again.”
These days, the conference is a major event and has become increasingly difficult to get into. Luckily, I’ve got the right credentials to get inside (without having to resort to a White House-style gatecrash) and give you the inside track on this exclusive event.
So here’s my first report on the companies I’ve heard from so far…
Two Big Biotechs Take the Stage
This year, there are 337 companies attending the JP Morgan Healthcare Conference and some 2,750 investors crowding into conference rooms and hallways, listening to presentations and sharing information.
To say the least, the hotel is jam-packed.
- Celgene (Nasdaq: CELG) was the first major company to present in the Grand Ballroom. It was standing room only. In fact, it was so crowded that while I was listening to the presentation, I had to endure a hedge fund manager practically right on top of me, chewing in my ear.The CEO, Sol Barer, raced through the company’s recent highlights. And despite lowering guidance, the way he speaks makes it obvious that he believes Celgene to be the pre-eminent biotech company. However, I’ve always found Barer’s style to be a bit too cheerleader-like for my taste.
- From there, it was onto the presentation from Gilead Sciences (Nasdaq: GILD). This was interesting… but not so much because of anything the company said. While at the presentation, I had a conversation with the Chief Scientific Officer of a tiny Australian company, who believes his firm will compete with GILD someday soon.
Pom-Pom Waving at the Keynote Speech
JP Morgan (NYSE: JPM) CEO Jamie Dimon gave the keynote address at the conference on Monday. His prepared remarks revealed little insight and sounded more like a commercial for his firm. However, during the question and answer session afterwards he did say he’s optimistic about the future, as long as any new regulation is effective regulation and not just more of it.
Interestingly, he stated that if Hank Paulson, Timothy Geithner and Ben Bernanke hadn’t had to take the steps that they did during the crisis, we’d have been a lot worse off.
“These Guys Are for Real”
In the area of generic drug manufacturing, TEVA Pharmaceuticals (Nasdaq: TEVA) outlined its plans for world domination. Or at least achieving a 35% market share in U.S. generic drugs within a few years. It currently has 22%.
But without a doubt, the conference I was most keen to attend was from White Cap Report portfolio member Medivation (Nasdaq: MDVN).
This was one of the up-and-coming stars at last year’s conference – and CEO David Hung didn’t disappoint the capacity crowd this year, as he discussed the firm’s Dimebon drug for Alzheimer’s and MDV3100 for prostate cancer.
If Dimebon is successful (it’s currently in Phase III clinical trials and has shown excellent promise so far), it will be a game-changing drug for Alzheimer’s.
In fact, during the presentation, the hedge fund manager sitting next to me whispered, “These guys are for real.” I know! I could have told him that in August 2007 when I first recommended the stock. Back then, shares were trading around $18. Today, the stock is around $38.
I still have lots of information to digest and many more meetings to attend. So I’ll bring you a follow-up report later in the month.
Hoping your longs go up and your shorts go down,
Marc Lichtenfeld
P.S. One other presentation I took in was from WebMD (Nasdaq: WBMD) – a very popular one, too. Once all the chairs were taken, investors were standing three-deep at the back and sides of the room.
Frankly, I was surprised that it generated so much enthusiasm. Sure, WBMD has a great brand and product, but trading at 56 times forward earnings, it seems a bit rich to me. I’m not sure it would pass the “F” part of my F.I.R.S.T. system that I use to analyze healthcare and biotech companies.
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3 Responses to “Legends Are Born Behind This Closed-Door Healthcare Conference”
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Marc is a senior analyst at Investment U. His investment career started out at the trading desk of Carlin Equities in San Francisco, CA, where he executed dozens of trades each day for his clients.
Are you going to comment on KERYX (KERX)
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I too would like to hear comments on KERX.
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It’s okay Marc, stuff happens. Do you recommend it now at $13 now that it is below your buy price of $18? Seems like, the alzheimer’s drug failed in trials. Anything else up their sleeve?
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