JPM19: How Little Fish in the Big Ocean Get Noticed Without Being Eaten by Sharks
The JP Morgan Healthcare Conference is wrapping up today and as usual, it’s host to some of the biggest names in biopharma—Johnson & Johnson, Eli Lilly, Pfizer and so on. But it’s also a venue where tiny biotechs and even mid-size biopharma companies go to meet-and-greet with others in the industry, including analysts and venture capitalists. The trick is in not getting lost in the crowd.
“What I find possibly most interesting about JP Morgan is the sense you get in the streets,” Cedric Francois, the chief executive officer of Apellis Pharmaceuticals, told STAT. “I thought it was going to be more doom and gloom after the November and December that we had, but that’s certainly not the case.”
And it certainly makes sense for smaller biotech startups to be there—up to a point. Not only are many biotech startups helmed by former big pharma executives, but a very common business strategy for a startup is bringing a compound to proof-of-concept or sometimes Phase II trials and then looking for either a big pharma partner to fund the larger, more expensive Phase III trials and into commercialization, or to be acquired for the same reasons.
It has also been noted this year that the so-called “flyover companies” are hot topics in 2019. This refers to the fact that the biopharma industry’s biggest clusters are in Boston and San Francisco. Yet, this year, people seem to have come to the realization that there are great companies scattered around the rest of the country, too.
“JP Morgan is the big game, but nowadays, most of the real action in terms of VCs and entrepreneurs are at the tailgate parties,” Grady Hannah, chief executive officer and founder of NightWare, told The Observer. “For entrepreneurs like myself, and especially later stage companies, JPM sets the tone for the year in terms of raising capital.”
Dietrich Stephan, chief executive officer of NeuBase Therapeutics, told STAT that his attendance at JPM was a way to introduce the company to the wider industry and to investors. On January 3, Ohr Pharmaceutical merged with NeuBase Therapeutics to create a public company via a reverse merger. The merged company, named NeuBase Therapeutics, trades on the Nasdaq under “NBSE.”
“We’ve been in stealth mode, quietly building the company, and [we’re ready] to describe our technology to stakeholders and really just announce ourselves and put a flag in the ground,” Stephan told STAT.
Even for well-established companies, “face time” is important to making deals, now or in the future. “There’s no better forum for companies to gain broad exposure to investors than at JPM,” wrote Stephen Berenson, managing partner of Flagship Pioneering, STAT reports.
JPM is a particularly expensive event, and because it’s so big and prominent, it’s easy to get lost in all the noise. San Francisco is an expensive city anyway, but STAT breaks down various expenses for companies making presentations—$150 for a gallon of coffee, renting semi-private meeting space for more than $14,000, and one hotel even charged hundreds of dollars to rent power strips (hint: They can be bought at Amazon or at your local store for about $25).
Elisabeth Bik, of Microbiome Digest, tweeted earlier this week, “San Francisco prices are so out of control that one hotel is charging the equivalent of $21.25 for a cup of coffee during a JPMorgan conference.”
So is it worth it? That’s a hard call.
Francois, the Apellis Pharma chief executive, whose company went public in 2017, thinks it depends a lot on what it is you’re trying to accomplish and where you are at as a company. “If I had a start-up company with a few million dollars in the bank, I don’t think I’d be coming to JP Morgan,” he told STAT. “You can get a lot of stuff done in a short period of time, but that doesn’t mean you can’t get the same stuff done in a longer period of time.”