San Francisco during the second week of January is neither the time nor place to score deals on meeting space.
Nevertheless, each year a host of smaller biotech companies brave the soaring conference room rates at the downtown hotels to host their own mini investor presentations.
“It’s definitely still a premium,” reported Myesha Lacy, chief investor relations and communications officer for Bay Area biotech firm Arcellx, of event space pricing. “But [for] the convenience of it, versus us traveling to the East Coast and doing a three-day road show, it’s definitely worth it.”
Arcellx, for one, is holding court at the Grand Hyatt, located directly across Union Square from the J.P. Morgan Healthcare Conference’s main venue, the Westin St. Francis.
Arcellx already has a co-development and co-commercialization deal with Kite Pharma on its lead clinical program, the CAR-T drug anito-cel, which is in Phase 2 testing for multiple myeloma. So far, anito-cel has avoided the issue of delayed neurotoxicity, a side effect with which some of its CAR-T rivals are grappling.
The clinical-stage cell therapy firm is attracting investors to help it get across the regulatory finish line and beyond. Lacy said she plans to use this week to recap data about its lead clinical program, which it unveiled at last month’s American Society of Hematology (ASH) meeting.
“What we’re doing is building on that good news from ASH and taking it into JPM,” said Lacy, adding that she’s also setting the stage for when her company approaches the go-to-market phase.
“We don’t expect to be commercial until 2026,” she explained, “But it’s a big deal to be able to emphasize that when we do plan to commercialize, we have the best cell therapy manufacturer as our partner.”
Early stage biotech companies that don’t yet have analyst coverage typically aren’t among the 600 or so strategics presenting inside the Westin. Yet, with the biggest life science investor confab of the year as a kind of anchor tenant, thousands more flock to town in coming days, from fund managers to venture capital and private equity firms.
Making the most of JPM
Biotechs take advantage of this rich deal-making environment. They work the sidelines of the main event to get their presentations in front of prospective investors, explore M&A or just nurture relationships.
What are the keys to leveraging this prime opportunity?
Kim Kraemer, founder of marketing and communications agency Waterhouse Brands and a 30-year biotech comms veteran, said it’s perhaps more crucial than ever for life science companies — from startups to mid-cap biotech to large-cap pharma — to “think through how they show up” at JP Morgan.
Indeed, 2023 was a year of retrenching in terms of the volume of biopharma deals. However, as of mid-December, the value of transactions that got done had risen 34% over 2022 to $191 billion, according to the EY Firepower Report, which debuted Monday.
Nearly 70% of those deals were executed by the largest players in life sciences: Big Pharma companies. Considering their increased involvement — and the topline pressures these companies face — including a patent-cliff related growth gap in the neighborhood of $120 billion per EY’s estimate, many expect the M&A activity to continue into 2024.
As the industry emerges from this turbulent period, smaller companies that had to make dramatic shifts and pivots to conserve their cash runway are encouraged by the return of momentum and money moving into their space. For example, Goldman Sachs just launched a $650 million life sciences fund.
As the tide turns, though, investors and partners are being ever more discerning. In a recent KPMG survey of deal-maker preference across healthcare and life sciences, late-stage assets garnered 70% of the vote, versus 55% for early-stage, highly innovative assets and 45% for agents at the commercial stage.
“This year, investors and partners are definitely looking for companies with the right mix of assets, data-de-risked pipeline programs, as well as those with the right management team,” Kraemer observed.
Appealing to them requires telling a “clear story that’s cohesive, compelling and backed up by an action plan,” she shared. Companies need to think through how they want to build their reputation holistically and how they intend to make an impact in the market.
“Those that are successful telling their story at JPM,” Kraemer added, “will do a good job focusing on what their mission is, what assets they’re de-risking and ultimately how they will transition those assets into value creation for investors and partners.”
Biotechs also need to be “purposeful and take their time,” Kraemer stressed. “JPM is an opportunity in any year — and this year especially — for companies to take a step back and look at the progress they’ve made over the past year.”
Quality over quantity
The almighty Powerpoint remains the coin of the realm, although Kraemer sees a lot of stale presentations. Her recommendation: “Throw out last year’s deck and start fresh.” As well, “Don’t be hamstrung thinking you only have to have one deck.” A firm can have one deck for investors, another for partners and a third for employees.
Lacy’s focus in building her schedule this week wasn’t so much on back-to-back meetings as on spending “quality time with quality investors,” she said.
“When we go to a conference, it’s speed dating,” Lacy explained. “You have 30 minutes and sometimes the room is packed. This is an opportunity for investors to see our CEO, CMO, CFO and myself for an uninterrupted 60 minutes at a time.”
She focuses on establishing credibility. “We want investors to believe us when we say we’re going to do something and not miss expectations,” she noted.
Another company playing the long game during JPM Week is Aurion Biotech. The clinical-stage firm, whose lead candidate is a cell therapy for ophthalmological diseases that lead to irreversible blindness, completed a $120 million raise in the spring of 2022 that drew strategic investors like Alcon as well as financial ones like Deerfield.
In between raises, “It’s important to maintain relationships with key investors so they’re familiar with your story,” said Judith McGarry, Aurion’s VP of marketing and communications.
McGarry and company are holding forth this week at another event on the JPM sidelines called Biotech Showcase, along with hosting a series of meetings at the Westin. It’s part of an effort to meet every three to six months so that investors can hear the latest goings on and Aurion keeps itself top of mind.
“Even though we’re in an extra complicated environment today, [deals] are still based on relationships,” McGarry said. “Our CEO, CFO can make individual connections and make an impression on investors. Sustaining that over time [can] help us with the next raise.”
Aurion, whose cell therapy AURN001 is approved in Japan but just began dosing its U.S. Phase 1/2 trial, is in between clinical data readouts and needs to find other ways to maintain interest.
While the biotech is well-known within the ophthalmology community, McGarry said, cell therapies aren’t traditionally associated with this disease state. That creates a gap from an investor relations standpoint.
“Our communications challenge is to say, ‘You may not have been thinking of cell therapy for this disease indication, but this is a good opportunity because we could be an innovator there,’” she explained.
Aurion is also working to perfect “mass market cell therapy production.” That’s perhaps an equally exciting component of its story, given the manufacturing issues that have hampered the scale-up of many cell and gene therapies.
Be clear in communicating
Kraemer’s essential elements for standing out this week include the pipeline story for the year ahead, with specific advice and a clear investment thesis.
She also recommends a focus on the problem in the market, what the company is trying to solve and why their technology and/or assets are clearly positioned to be the solution. The firm should aim to demonstrate how, in the year ahead, it will focus on de-risking its assets, “putting points on the board” and showing how the right things can go the distance.
Having a winning JPM Week, though, requires going beyond the basics. It’s capturing what Kraemer calls “the head and the heart” that makes a company memorable to investors and partners.
“This year it’s not just about the substance,” she said. “It’s also helping give investors and partners the confidence that you have the team to execute and get the job done.”
When crafting a narrative or presentation, start from the premise of “it’s not enough to demonstrate you’re better than the competition; show fundamentally why you’re different,” Kraemer advised.
Whether a category creator or a new market entrant can provide better efficacy or safety for patients means that in addition to articulating your market opportunity, competitive differentiation and strategy, it’s also important to help others understand what makes the biotech “authentically unique.”
One way involves stressing the company culture, since firms should stand out as a corporate employer of choice.
“Many times a company will ignore the people that are their secret sauce and who set them up for success during turbulent times,” Kraemer said, whether it involves navigating regulatory milestones or surmounting hurdles like the Inflation Reduction Act or market access challenges.
“JPM is also an opportunity to turn it inwards and energize your employees around opportunities and challenges in the year ahead,” she pointed out.
As Big Pharma starts to shop again, the focus is on de-risked opportunities and established and credible management teams. Clearly, these will be a big deal for investors.
Thanks to the phenomenon that is JPM Week, it’s easier to track which early-stage biotechs to focus on. That frees up time to pursue their main challenge: finding the right deals to pursue.
For more on JPM 2024 day one, click here.
