The massive life sciences meeting now known as the J.P. Morgan Healthcare Conference started out as a clubby get-together hosted by investment bank Hambrecht & Quist.
Back in the days of H&Q, bankers and entrepreneurs flocked to San Francisco to get information about biotech companies that was otherwise hard to come by. Investors, thrilled—or spooked—by the details proffered by company representatives, would rush to a trading desk set up in the Westin St. Francis Hotel, says long-time conference attendee Joe Panetta, president and CEO of California’s Biocom, who returned this year for the 37th annual. (Read Xconomy’s annual reporter’s notebook-style JPM wrap-up story, published Friday, for more on the event itself.)
Today, of course, information is easy to come by, thanks to the Internet, so the focus of the conference and many associated events held in its vicinity has shifted to deal-making, partnering, and general schmoozing. However, many companies still get a stock bump—or see it battered—based on what they say during the event, often used to set investor expectations for the year.
Here’s a look at some of the San Diego-based public life sciences companies that made the trip (notwithstanding delayed flights, high winds across the SFO runway, and a general dampness about the city, anathema to us denizens of Southern California), and how investors responded.
4 STOCKS THAT SAW A BUMP
—Mirati Therapeutics (NASDAQ: MRTX) stock was up 35 percent as of market close Friday compared to its price a week prior on Jan. 4, the last day of trading before the conference kicked off. Its stock price jumped from just shy of $45 to about $61. (In the same time, the Nasdaq Biotechnology index rose about 6 percent.)
Investors liked what president and CEO Charles Baum had to say about the commercial potential of the company’s oncology programs. Mirati also announced a collaboration with Bristol-Myers Squibb (NYSE: BMY) Jan. 11, through which it will get to use the company’s nivolumab (Opdivo) for free in its planned Phase 3 trial testing the checkpoint inhibitor in combination with Mirati’s sitravatinib in non-small cell lung cancer.
—Dexcom (NASDAQ: DXCM) saw about a 21 percent increase over that time, rising from about $116 to about $141. Investors liked the diabetes care company’s financials, including its preliminary estimate that its 2018 revenue would top $1.025 billion, 47 percent more than the year prior. The company also estimated about 15-20 percent additional growth in revenue in 2019. Dexcom makes continuous glucose-monitoring devices that don’t require blood samples from the fingertip.
—The stock price of Acadia Pharmaceuticals (NASDAQ: ACAD) rose about 20 percent, from nearly $18 to more than $21. Investors were excited about the potential for the company’s drug, pimavanserin (Nuplazid), on the market today for hallucinations and delusions in Parkinson’s patients, to treat other indications, too. The company is testing the drug in clinical trials for schizophrenia, major depressive disorder, and dementia-related psychosis.
—Neurocrine Biosciences (NASDAQ: NBIX) recorded about a 16 percent rise, going from about $75 apiece to about $87 per share. Investors responded to a preliminary estimate that net product sales of valbenazine (Ingrezza), the company’s first drug and the only FDA-approved product for the treatment of adults with tardive dyskinesia—a disease that causes uncontrollable repetitive, jerking movements, often caused by some medications for mental illness—would total $409 million in 2018, and $130 million in the fourth quarter of the year (compared to $116.6 million and $64.5 million, respectively, the year prior). The company, which had its first two medicines approved in the last 18 months, anticipates FDA decisions for three of its five clinical-stage drugs in four indications in 2020, said CEO Kevin Gorman.
2 STOCKS THAT SLIPPED
—Crinetics Pharmaceuticals (NASDAQ: CRNX) saw its stock price drop 20 percent, with its per-share price falling from about $29 to about $23. The company is developing treatments for rare endocrine disorders. Its lead product candidate is entering Phase 2 trials as a potential treatment for acryomegaly, a hormone disorder that results from abnormally high levels of growth hormone in adults. It also has two preclinical programs and one in the discovery stage.
One of those preclinical drugs, however, may prove too toxic to move forward, CEO Scott Struthers said. The compound, CRN02481, which Crinetics is testing as a treatment for patients with congenital hyperinsulinism, a genetic disorder in which the pancreas produces abnormally high levels of insulin, has “hit some stumbling blocks in the (toxicology) program we’re trying to sort through,” he said. “We’re also activating the backups … these kids deserve the best molecule we can (offfer); not sure if 2481 is it.”
—NuVasive (NASDAQ: NUVA) saw its stock drop by 9 percent, falling from about $50 per share before JPM to about $46 apiece. The company, which makes products and services for spine surgery, said it estimated fourth quarter revenue totaling $288 million and 2018 revenue of about $1.1 billion, lower than the range it had previously told investors to expect.
“I’ll acknowledge the fact that we need to do a better job of articulating our commitments and making sure that we’re delivering on our commitments, (and) executing on those commitments,” said CEO Christopher Barry during the company’s presentation on Jan. 11. Barry succeeded former NuVasive chief executive Greg Lucier in November.
AND 1 THAT GOT A SHRUG
—Investors responded indifferently to Illumina (NASDAQ: ILMN), which saw its stock rise about 1 percent from about $303 per share to about $307.
The company estimated 2019 revenue of $3.76 billion and $3.8 billion, 13-14 percent above 2019, below the average analyst estimate of $3.81 billion. That excludes the impact of its acquisition of Menlo Park, CA-based Pacific Biosciences, which the company anticipates will be finalized in the middle of the year.
However, it’s forecasting low single-digit growth for its arrays business.
“Our outlook reflects a cautious view of the consumer opportunity as we start the year, although we expect this business to reaccelerate as consumer health and international opportunities ramp up,” saidCEO Francis deSouza.
Illumina customers in 2018 generated more than 100 terabytes of sequencing data on its systems, which deSouza called a record for sequencing data generated in a single year. (That’s the equivalent of about 25 times the size of the Netflix (NASDAQ: NFLX) catalog, he said.) Still, DeSouza said that’s just “the very beginning” for the company, noting that fewer than 0.02 percent of people have had their genome sequenced.