JPM Healthcare Conference 2024 Recap: Key Themes and Emerging Trends
January 25, 2024
Earlier this month, the healthcare event of the year returned to San Francisco in style as the annual J.P. Morgan Healthcare Conference brought together executive leaders, industry analysts, top tier institutional investors, investment bankers, and a host of others. Attendance was as robust as ever, giving all who participated a forum in which to share investment opportunities, discuss market trends, and highlight key areas of interest. Even the weather held up, albeit with a few chilly days and nights.
While last year’s conference had a cloud of uncertainty given the challenging financing environment and pressured biotech and medtech valuations, this year’s event had a more optimistic tone, with a perception that the sector may have reached an inflection point. Overall, investor engagement appears to be gaining momentum, supported by improving tailwinds across all subsectors of healthcare. That said, pockets of uncertainty surrounding competition in China, companies negotiating Medicare prices under the Inflation Reduction Act, and the 2024 election cycle all add a layer of caution to a sector in need of a breakout.
The FINN Investor Relations and Media teams organized several hundred meetings on behalf of our clients at this year’s conference. As in years past, our team joined our clients in meetings to gain critical insights about key themes and emerging trends to be on the lookout for in 2024 and to implement 2024 communications programs with findings in mind. Below are our top five themes and trends as well as key IR takeaways:
1. Investor Engagement Remains Robust
Anecdotally, attendance and discussions with investors appeared more active compared with last year. Since the pandemic, virtual conferences enabled investors to remain connected with management teams. Now there’s a growing appetite for in-person meetings again. While virtual conferences will likely continue, in-person events are returning once again in full force and many investors are excited to participate.
IR Key Takeaway: Plan ahead with a calendar of in-person investor conferences and non-deal roadshows throughout 2024 to capitalize on pent-up demand for investor meetings. In addition, don’t depend on traditional investor marketing events. Think outside the box by creating tailored opportunities to engage the financial community with your strongest foot forward.
2. Major Tailwinds Creates Significant Opportunities for Healthcare
An uptick in M&A alongside other macro trends, such as the potential for declining interest rates, a cooling inflationary environment, and stabilized supply chains, supports the notion that there are market tailwinds for healthcare companies heading into 2024. Moreover, on average, biotech has typically outperformed the S&P 500 index heading into the presidential election cycle regardless of which party holds the White House, offering promise for positive momentum.
IR Key Takeaway: Clearly communicate upcoming catalysts to keep the Street excited and engaged in your story. Recent accomplishments are considered yesterday’s news. Smart investors are always focused on the future.
3. Near-Term Fundamentals are a Key Focus
Given the potential for falling interest rates and an increasingly favorable macroeconomic environment, unlike prior years, investors are now focusing on a sustainable earnings profile with a clean balance sheet. This becomes even more of a focus when M&A is involved, as certain financial overhangs are major red flags. We heard in multiple meetings that 2024 will be the year of focus on the bottom-line.
IR Key Takeaway: Be prepared to answer questions, such as “what are you doing to bolster your bottom-line” or “how are you managing your balance sheet.” Ensuring that you can anticipate immediate investor concerns will give them confidence in their investment decisions.
4. Innovation Continues and Will Always Foster the Most Interest
With the IPO market still in an extended drought (although five S-1s have been filed to this point in 2024), M&A potentially remains at the forefront of the deal market. While M&A deals in medical technology seem to be taking place later than ever in the business cycle (post-FDA approval, once reimbursement pathways are secured or when the product or target company demonstrates healthy top- and/or bottom-line growth), those companies that can innovate will continue attracting the greatest interest, providing a path for acquirers to focus on tuck-ins or rollups with low integration risk and value creation. Larger, well-capitalized firms are willing to pay a higher multiple as evidenced by Boston Scientific’s acquisition of Axonics, announced the morning of the conference’s first day.
IR Key Takeaway: Companies considered to be attractive acquisition candidates need to ensure their strengths and differentiated technologies are well understood by potential acquirers.
5. Many Wild Cards Still in Play
Although the tone was generally positive at the JPM Healthcare Conference, there are uncertainties that could drive volatility. In a presidential election that’s garnered worldwide interest, rancor and mud tossing will rule the day. It will lead to more scrutiny on China, heighten debate on drug pricing, and possibly put FDA and HHS in the targets of ongoing political crossfire.
IR Key Takeaway: Do not let day-to-day market fluctuations and individual share price gyrations impact conversations with the financial community. Keep focus on the near-term catalysts and long-term opportunities at your company.
The J.P. Morgan Healthcare conference continues to live up to its reputation as the premier investor event in healthcare. While rumors circulate about the future location of the conference, we expect that San Francisco will remain its home in 2025. We hope to see many of you in the Bay Area at next year’s event and look forward to working together.