It used to be that healthcare companies released news at the J.P. Morgan Healthcare Conference. In the last few years, the Friday before the conference became a news dump.
Now, the whole week before the conference has become a news extravaganza. The conference is starting later in January than it usually does, which has probably also added to the spreading of the pre-JMP news cycle.
Here are the stories healthcare investors should know as the conference kicks off on Monday.
Preliminary fourth-quarter revenue
Celgene's bean counters were famous for burning the midnight oil in early January to release preliminary fourth-quarter earnings so management could talk about the results at JPM. More and more companies have followed the big biotech's lead -- even if Celgene is no longer with us and its acquirer, Bristol-Myers Squibb, didn't carry on the tradition. (The big pharma has more moving parts than Celgene, so we'll give its accounting department a pass.)
Here's a sprinkling of the companies that released preliminary results this week:
- Amarin (AMRN -0.40%) reported 2019 Vascepa sales of $410 million to $425 million, up about 85% year over year. The biotech is guiding for sales in the $650 million to $700 million range this year, thanks to an expanded approval to treat patients with moderately high triglyceride levels.
- Clovis Oncology (CLVS) reported slowing growth in sales of its cancer drug Rubraca, but there's potential for sales to reaccelerate with launches in Europe and a likely approval in prostate cancer later this year.
- Intuitive Surgical (ISRG -0.37%) saw sales jump 22% year over year in the fourth quarter as the robotic-surgery company increased sales of instruments and accessories used on its da Vinci Surgical Systems by 24%.
While we didn't have any news as big as last-year's Celgene buyout, there were a few smaller acquisitions this year that should keep investors hopeful that their favorite company could be next.
- The good news: Eli Lilly (LLY 1.66%) announced plans on Friday to acquire dermatology expert Dermira (DERM) for $1.1 billion. The bad news: Dermia was already up 21% this year after more than doubling in 2019, so the premium was only 2.2% higher than Thursday's closing price. Investors seem to think Dermia can do better: Shares of the company closed at $19.16 on Friday, higher than the $18.75 per share Eli Lilly agreed to pay.
- Sorrento Therapeutics (SRNE.Q 2.78%) didn't need big pharma to step in -- and it got a bigger premium -- as the company received an unsolicited, non-binding buyout offer from an undisclosed private equity firm for $7 per share, more than double the previous closing price. Investors weren't quite sure what to make of the offer, and Sorrento closed Friday at $4.76, well short of the full potential offer price.
- In the too-small-to-be-material category, Medtronic (MDT -0.25%) announced the acquisition of privately held Stimgenics, which is focused on spinal cord stimulation to alleviate pain, for an undisclosed sum.
While buyouts can offer a quick payout for investors, deals with larger companies can help them get to the next inflection point while remaining (mostly) independent. Quite a few duos announced pre-JPM deals:
- Kaleido Biosciences (KLDO) hooked up with Johnson & Johnson (JNJ -0.63%) to use Kaleido's microbiome screening platform to discover treatments for childhood allergies and other related diseases.
- Sanofi (SNY 0.56%) entered into a research collaboration with privately held Nurix Therapeutics to use Nurix's DNA-encoded libraries and portfolio of E3 ligases to develop drugs against five undisclosed targets. Sanofi is paying $55 million upfront and is on the hook for $2.5 billion in potential payments based on the successful completion of certain research, preclinical, clinical, regulatory, and sales milestones.
- In another discovery deal, Roche Holdings (RHHBY 1.18%) elicited the help of privately held Amunix Pharmaceuticals to discover and develop non-oncology therapeutics against certain undisclosed targets. Roche will pay $40 million upfront, and Amunix is eligible for $1.5 billion in developmental and sales milestones, plus royalties on sales of commercialized products.
More to come
While more and more companies are releasing news ahead of JPM, investors should expect a smattering of news items at the conference in the week to come. And of course, JPM will also serve as a meeting place for companies to initiate deals that will occur later this year.
Blackstone Group (BX) will likely be interested in talking to companies looking for buyouts. The private equity company has raised $3.4 billion of its $4.6 billion goal for a fund dedicated to investments in the life sciences sector.