Inside Wall Street: Every January, It's a Four-Day Health Care Fest in San Francisco

Gene Marcial's Inside Wall StreetFrom Jan. 10 to 13, some 8,000 investment professionals and corporate chiefs from around the world flocked to one of San Francisco's landmark buildings, the St. Francis Hotel on Union Square. The occasion: the usually standing-room-only annual health care conference hosted by JPMorgan Chase (JPM).

"This is insane, cramped like sardines in a can," complains a money manager from London about, "standing too close to each other's noses" in the lobby. "But, heck, this is the grand conference of the year," he adds, looking quite jolly despite the lack of breathing space at the opulent though jam-packed hotel, resplendent with classical architecture.

The event has been a mecca for all types of business execs and financial pros, including analysts, wealth managers, investors and other suited Wall Street types who want a peek at what's hot and what's not in the bustling world of health care.

Global Networking Occasion

"We're very impressed by the great attendance in this conference," says Morgan Chairman and CEO Jamie Dimon in a CNBC interview with Maria Bartiromo, citing it as one sign of increasing confidence in the economic recovery. Indeed, analysts noted that the mammoth turnout that far exceeded last year's attendance, reflecting the improved outlook among investors about the global economy and the capital markets' revival.

But apart from that, the week-long conference, now in its 29th year, has become a huge global networking occasion, primarily to renew business contacts and contracts, develop new client relationships and catch up with old buddies along the way -- all on corporate expense accounts.

Although the companies provide a lot of data in their presentations, "there isn't much news flow coming out from these meetings," observes John McCamant, editor-in-chief of the San Francisco-based Medical Technology Stock Letter. In reality, he says, the conference is simply an annual melting pot -- the world's largest networking congregation of health care advocates.

The corporate participants are composed, mostly, of JPMorgan's blue-chip and close-to-blue-chip clients. The list is headed by big-cap companies with such familiar brands as Pfizer (PFE), Merck (MRK), AstraZeneca (AZN), Amgen (AMGN), Bayer (BAYRY) and Roche Holding (ROG.VX). "It's like the Who's Who parade in health care," says McCamant.

However, that leaves little or no room for the micro-cap and small-cap biotechs and health care outfits that aren't yet in the class of Morgan's clientele to join that big parade.

"Filling a Void"

This elitist-like situation has sparked the creation of "satellite" health care conferences, catering solely to little known small-caps and micro-caps in health care -- obviously not clients of Morgan. Such organizing groups, namely Biotech Showcase and OneMedForum, hold their conferences on the same days that Morgan's four-day meetings take place, also in San Francisco.

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"The attendance in our meetings has been on the rise mainly because we are filling a void -- a need for the smaller companies to get a chance of introducing their products and technology to customers, including the people who attend the Morgan meetings," says Sara Jane Demy, a co-founder of the Biotech Showcase. It started holding its yearly powwow for the smaller guys in life-sciences and biotechs three years ago.

In 2008, just 50 companies attended Biotech Showcase, but it has since grown, to 195 companies this January from 130 companies in 2010. "Now we're inundated with a long waiting list of companies seeking to join us next year," she says. "We expect 225 companies to participate in 2012," says Demy, who is also a principal at Demy-Colton Life Science Advisors.

Companies at this year's Biotech Showcase included NeoStem (NBS), which is developing stem-cell based therapies and building a network of adult stem-cell collection centers in the U.S. and China, whose stock is trading at $1.54 a share; NovaBay Pharmaceuticals (NBY), whose antimicrobial compounds are aimed at treating and preventing infections in hospitals, currently trading at $1.74; and RXI Pharmaceuticals (RXII), which is developing drugs for the treatment of a wide range of neurological, metabolic and cancerous conditions, and is trading at $2.15 a share.

Fewer Showy Extravagances

OneMedForum holds its meeting at another San Francisco landmark building, the Sir Francis Drake Hotel. "For a small company such as ours, we have had great response from our participation in the OneMedForum conference," says Alnoor Shivji, CEO of Wafergen BioSystems (WGBS), one of the biotechs that at this year's conference. Wafergen has developed a "genomic analytical system" for discovery and validation of biomarkers, or gene-expression patterns, for drug researchers at pharmaceutical companies. Its stock is trading at $1.24 a share.

At this year's JPMorgan fest at the St. Francis, showy extravagances and expensive ballroom dinners have abated, a reminder of the current corporate-governance taboo on excessive spending. Even so, the now-legendary Morgan event continues to attract new adherents. More than 300 companies made presentations during the latest meetings from. And the number of journalists and media people from the U.S. and other countries has also increased, to more than a hundred.

And as the stock market proceeds to baffle some experts by continuing to ramp up, signaling the sustainability of the economic recovery, more investor conferences are bound to again mushroom, headed by JPMorgan's gala event -- admittedly a tough act to follow.
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