As Prescribed and Health Law Scan subscribers know that the end of the holidays means the annual J.P. Morgan (JPM) Healthcare Conference is only days away. To make the most of the 2024 conference and conference-adjacent opportunities, read on for a preview of the current economic environment for dealmaking in the pharmaceutical and biotechnology industries and some practical advice on how to successfully prepare for and navigate the week’s activities shared from panelists at our inaugural Pre-JPM Conference Networking Event last month.
First, with respect to the macroeconomic picture, data presented by our speakers supported the notion that pharmaceutical and biotechnology companies have weathered the current economic environment fairly well. Despite the challenges presented by a cash flow cliff, our panelists expect liquidity to improve and dealmaking activity to increase if interest rates continue to decline in 2024.
Investors in private biotech companies are holding in place for the moment rather than seeking liquidity while they await signs of improvement in the environment for taking companies public. Panelists predicted that, in addition to initial public offerings (IPOs), special purpose acquisition companies (SPACs) will continue to be a viable option for accessing public markets.
The prevailing perception is that although Big Pharma is “sitting on cash,” much of it rests in treasury funds and not in research and development. With this new year being an election year, event attendees were also informed that data on the impact of presidential elections in the United States on the pharmaceutical market is a mixed bag, and that the status of interest rates will be the driving factor in how quickly the environment improves.
Additionally, participants were encouraged to consider alternative sources of capital in the current environment, such as strategic licensing transactions, earlier than they might in a different economic climate.
Below are some considerations for those who are San Francisco bound:
- Do your homework and set thoughtful and strategic goals about what to accomplish during the conference to make the most efficient use of the time and to respect the time of others. For example, most big pharmaceutical companies publish five-year plans. Consider reading them in advance to learn what individual companies are focused on.
- Practice makes perfect. If a founder or scientist will be doing the pitching for the company at JPM, make sure they practice their pitch with someone outside their field to ensure that it is understandable.
- If the person pitching for the company is uncomfortable or inexperienced making such presentations, practice the pitch with colleagues, contacts, or collaboration partners.
- Many attendees will be competing for the attention of the same select group of stakeholders/investors. Make the pitch stand out by leading with the company’s objective. Focus on the data, the mission the company is trying to achieve, and the plan for achieving it. Many investors are modality and indication agnostic—it’s more about the company, and investors will pay a high premium for quality data.
- Similarly, don’t worry about the valuation—the market will determine the value. Focus on why the company is differentiated and present the commercial opportunity.
- Connect the dots. Founders have to convince investors not just that they are great, but that they are great for that specific investor.
- Press the flesh, with an actual business card. Our panelists expressed a universal preference for old fashioned business cards. Don’t request to do a cellphone scan unless it is certain that it is the preferred method of information exchange of a new contact.
- Have a follow-up plan and follow it. Don’t be afraid to try to reconnect after the meeting by, for example, sending the data or the business plan that was discussed. Be mindful that the week immediately following JPM is busy for everyone so it may be best to follow up the week of January 22. If contacts fail to respond, follow up again.
Be on the lookout for more JPM-related posts next week on our As Prescribed blog as members of our global healthcare and life sciences teams touch down in San Francisco. We hope to see you there!