7investing advisor Dana Abramovitz shares several of her key takeaways from the JP Morgan 2023 health care conference.
January 20, 2023
The JP Morgan Healthcare Conference wrapped up last week. Although I wasn’t there in person this year, I did try my best to follow the information to share a few key takeaways here with you. (And unfortunately, I found no dirt on any of the parties – they were either not as good as they were pre-Covid, or they were so good that attendees kept it to themselves!)
Here is my assessment of the conference:
A lot of companies present! When I’ve attended in years past, I had my own meetings set up or paid attention to only certain companies. It wasn’t until I had view of the full schedule did I realize how many companies (close to 100) present each day.
As a result, JPM is a good introduction to the health care industry. Many of the presentations are basic introductions of the company to the market. It is a chance for investors to learn about new companies and interact with company leadership if they are already familiar with the business. All of the companies that presented will post their presentations on the investor page of the company website. These presentations are a good way to learn about companies to see if you’re interested in learning more.
JPM is good for deal making. Many deals were announced, initiated, or solidified at the conference. These deals are a good way for investors to monitor the industry. M&A activity and the sizes and structures of the deals will be affected by the state of the economy, but deals will happen. They usually do at JPM.
The overall economy is influencing the industry. Although everyone needs health care, the industry is affected by the economy (although it is different from other sectors, like tech.) Health care industry leaders, like most business leaders, are concerned about the economy, inflation, a recession, etc. and how they are going to affect their businesses.
A continued emphasis on value-based care and companies that support it. Value-based care is essentially providing high-quality care at a good value to the patient. Many different organizations are implementing it (it originated and is driven from the Center for Medicare and Medicaid Services (CMS), which is the largest payer of health care in the US.) As new regulations for payments come out, value-based care may become even more important. Although to me, it just seems like the right thing to do.
Some interesting presentations that stood out to me were the announcement by Elemental Biosciences of a $200 genome, essentially making a challenge to Illumina (NASDAQ: ILMN). I did find that Illumina’s JPM presentation fell a little flat compared to the exciting news and product releases of last fall. Regardless, it’s great to see continued excitement in the field of genomics and where that can lead with personalized medicine.
I found the presentations by Walgreens (NASDAQ: WBA) and CVS (NYSE: CVS) interesting as both companies continue to change the outlook on health care delivery. The competing retail pharmacies have been expanding, through M&A, their ability to deliver care to communities that need them. Offering a literal one-stop shop could be a better way to reach patients where they are has the potential to improve the health of communities.
Investing in the health care industry can be challenging, especially if it’s not your typical domain. The JPM conference doesn’t necessarily make it easier, but it does make it more accessible!
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