It’s another year, and the annual J.P. Morgan Healthcare Conference, along with all the small and big events it has spawned, has concluded. San Franciscans have their city back from the money-seeking health entrepreneurs, the CEOs, their retinue, and the investor hordes.
So what did we learn?
When Investment Rhymes with Canada
Canada has a proud history of achievement in the areas of science and technology, and the field of biomanufacturing and life sciences is no exception.
Life science investors are not afraid to challenge CEOs
Rightly or wrongly, short sellers can be a bane to public companies.
However, not many will show up and want to shake hands of management while attempting to be a physical thorn in their side. MiMedX management got a taste of that when a short seller challenged the company during sessions designed to allow audience to ask questions of management.
In fact, the short seller repeatedly berated the management so much that it prompted an investor who holds a long position on MiMedx to ask the assembled management to allay his concerns.
MiMedx, which makes tissue allografts, were not the only company to receive investor scrutiny.
A company with more than 75 times the market cap of MiMedx was also challenged but much less provocatively. Following the prepared presentation, Medtronic CEO Omar Ishrak was asked to explain the company’s M&A strategy and why the company is not paying to acquire growth stage companies that are expensive but may be a good fit for the company.
Lesson for CEOs and company management: Expect to be challenged and be ready for anything at investor meetings.
AI needs to lower its ambitions
Artificial intelligence has been hailed as something that will usher in the golden era of everything in healthcare, most notably be able to even save lives by crunching Big Data, seeing patterns and recommending treatment to doctors.
Some have even been bold (or naive) enough to declare that AI will replace physicians.
Well, for AI it is actually the best of times and worst times, says former acting director CMS, Andy Slavitt. He noted that for all the technology’s promise and ability to uncover fraud and waste, it still has no good answers what drives healthcare costs and how to manage that.
Other VCs said AI is developing but it’s best applied in back-office, administrative functions far away from the sexier clinical tasks.
In biopharma, if you are not into oncology, or rare diseases, money won’t be raining down.
Prodigious amounts of money have been invested and will continue to pour into oncology startups. They commanded the largest share of early-stage venture capital dollars in 2017 and there’s no sign of it letting up with an outsize interest in gene therapy and immunotherapy.
But there are corporate investors like Johnson & Johnson who want to invest in a broad swath of companies. In fact, biotech startups should really cultivate the strategic investors given that large corporations are working earlier and earlier with startups.
No surprises there. Large companies have always grown by buying innovation from the outside.
Meanwhile, there is a general consensus that with money being repatriated, this may be a big year for mergers and acquisitions.
France wants to make you rich
Whether you like freedom fries or French, if you like the color of money, you should head to land of the pomme frites.
The election of Emmanuel Macron and his avowed goal to make France a haven for startups means that serious public money is being invested to boost biotech and medtech startups and build an ecosystem.
The CEO of a public investment bank in France, therefore, exhorted U.S. investors to “stop by Paris” because there is “money to be made here.”
There’s just not enough white men to go around
The #MeToo movement is sweeping the nation, but gender and ethnic diversity is not simply needed for an equitable society. It is a business imperative.
Between a large number of Baby Boomers and a sizable group of millennials, there is a leaner cohort of Generation X. The latter will not be able to fill all the positions left when Boomers retire in droves because not enough millennials will be in the workforce in time.
In other words, there aren’t enough middle-aged white men to go around. Companies need to diversify, focusing in particular on gender, age, and ethnicity.
Be nice to strangers
In the midst of the dealmaking, (and interviewing in my case), people have got to eat. And one particular experience just goes to show that kindness to strangers is often returned in unexpected ways.
I was in line at a breakfast joint on Powell Street in Union Square. It was after 10 a.m. but there were no tables available. When a table was ready, I turned to ask the woman behind me whether she would like to join me at my table. She had cut in line ahead of a gentleman, so she said she was after that other gentleman. So I offered him the same thing.
“I don’t mind. I just want to eat,” he said, while also thanking me and joined me at the table. I briefly chatted with him – he was from Los Angeles and also attending J.P. Morgan. From the portion of his badge that he had around his neck and that I could see, he was from an asset management company. But I couldn’t see his name.
By this time, the lady behind me also got a table right next to us, and we began chatting. The gentleman ate his breakfast thanked me and left. The waiter came and spotted $40 on the table and asked if this was the payment for the whole bill.
Turns out it was. Much to my surprise, the gentleman had left enough to cover both our orders.
I did not go to San Francisco seeking money, but at a time in our country when basic decency, decorum, kindness, and compassion have taken flight, I thank the gentleman from Los Angeles for his generosity.
And now, back to reporting fake news.
