I have been watching with great interest the reactions to Bruce Booth’s thoughtful observations about this year’s J.P. Morgan Healthcare Conference. He noted the number of ways the conference has changed and that its value to his company, Atlas Venture, has greatly diminished. Booth’s thoughts have been echoed on Twitter and elsewhere by a number of attendees.
At the same time, many people have come to the defense of the conference as it has evolved. As someone who helped grow the conference to what it is today, I’d like to offer some historical perspective on its evolution and my thoughts on where it is today, and also ask for your ideas on how to make it better.
In the 1980s, four firms decided that raising capital for the technology and biotechnology sectors was about to become a profitable line of business. At the time they were known as the Four Horsemen: Hambrecht & Quist (where I worked), Robertson Stephens, Alex. Brown, and Montgomery Securities. One of these four was involved in almost every technology or biotechnology deal. Hambrecht & Quist, for example, took both Apple (AAPL) and Genentech public.
To help investors make sense of these new technologies, the four companies decided to start holding conferences to bring together the entire industry and the entire investor class. Robertson Stephens held its conference in New York the week after Thanksgiving, as a sort of lead-in to the Christmas season. Hambrecht & Quist (later acquired by Chase Manhattan, a predecessor of J.P. Morgan) held its conference the first or second week of January in San Francisco, as the lead-in to the year (and with hopes for nicer weather). Alex. Brown and Montgomery Securities also started their own conferences.
The first Hambrecht & Quist conference happened 37 years ago. It lasted about half a day.
During the early years, our goal was to showcase up-and-coming companies — most of them biotechnology related — with cutting-edge technologies that would be transformative to patients. We felt it gave investors in the space an early look at what biotechnology could achieve. Genentech, Regeneron, Gilead, and many other familiar names broke into the mainstream by presenting at the conference. Later on we highlighted the growing fields of genomics, high-throughput screening, and combinatorial chemistry as they were emerging as key technologies in the sector.
We wanted to make the conference a must-go event. We cajoled a few big pharma companies to present because we thought that gave the conference extra credibility. Our strategies worked. We were beginning to hit the limit of 9,000 badges set by the St. Francis Hotel and the San Francisco police department. The conference did set the tone for the year: one FAQ became “What was the mood like at H&Q this year?”
The smaller size made meetings longer, generally lasting at least an hour, and more meaningful. Inevitably, the same people who complained about the crowds in the hallways would call me and say it was the best conference ever and they couldn’t wait for next year.
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Other investment banks noticed. They began renting out entire hotel floors because they spotted new business opportunities. This only added to the aura, even if we viewed it as poaching Hambrecht & Quist clients at our expense.
The conference grew more and more attractive for several reasons. First, we began to let only CEOs present, so investors could hear the story right from the top. Second, portfolio managers needed to rebalance their portfolios in the new year, and at the early January conference they could see all the companies in one place. We were able to highlight some of our private companies as ones that portfolio managers needed to pay attention to. Both VCs and IPO investors liked that. Third, securing a slot for a company presentation became harder and harder to do. The scarcity value of presenting company slots combined with hitting the limit of how many badges we could give out added cache.
And finally — I’m dating myself here — there were no iPhones, company websites, or Bloomberg terminals, and the internet was in its infancy. To get the information they needed, people had to go to the conference.
They were exciting times as we introduced this new, now mainstream, industry to the public.
The conference evolved with the times. We understood that other areas such as health care IT, health care services, and the like would also be important for getting the right drug to the right patient at the right time. We lengthened the conference and invited leaders in these fields to present. We expanded our international invitation list, as we realized that many companies outside the U.S. had important insights.
As biotechnology industry began to explode, what started as an innovation conference whose primary mission was to make an impact on patients’ lives was now also becoming an investment conference.
After J.P. Morgan acquired Hambrecht & Quist, things understandably changed in several ways. First, J.P. Morgan’s client base was of a larger size than Hambrecht & Quist’s, so many large-capitalization companies began to present at the J.P. Morgan Healthcare Conference. The company had a higher threshold for a transaction to make a difference, so it needed to gravitate toward larger players.
Second, the internet made it possible to learn about what CEOs were saying in real time without going to the conference. For some, the conference now comes to them. CNBC does live interviews and covers breaking news, just as it does at the Consumer Electronics Show.
Third, the dizzying number of meetings and presentations has made for less meaningful interactions. Fourth, although it took longer than I thought, the hotels, restaurants, and coffee shops have realized they have a monopoly during that week. And they are using that power, to our collective dismay.
With transitions come opportunities. The Biotech Showcase, led by EBD Group and Demy-Colton, was one of the first to seize an opportunity. The showcase, now in its 11th year, reintroduced the idea that there was still demand to learn about the smaller public and private companies that will play major roles in the industry. This year it had 4,000 registrations, and more than 1,000 investors attended. Sara Demy, the founder of the showcase, half jokingly calls it H&Q 2.0. In many ways, it is.
The 15 to 20 “side conferences” at this year’s JPM also represent new opportunities. The topics included regenerative medicine, neuroscience, digital health, China, and more. I spoke at some of these, and observed they were very well-run, had solid agendas, and offered ample time to network with leaders in those fields.
Because of the overall growth in attendance, it’s easier than ever to “meet and greet” and set up meetings later in the first quarter. The opportunity to network continues at a strong pace.
Both points of view — that JPM is diminished and that it is still going strong — are valid. For those who used the old H&Q conferences to dive deeply into issues, have meaningful conversations (not just fly-bys) with colleagues, and engage in substantial back and forth with large pharmaceutical companies, it makes perfect sense that the current version of the conference isn’t satisfying.
One of the things we were trying to do in the early days was develop a community. We are still doing that. At this year’s JPM, I spoke with a number of people who had come to the conference for a few years or less. Many told me that this is the only place where they feel part of a larger community that matters. They are still trying to find their footing, make contacts, learn about the scope of the industry, and more. The conference still works for these leaders of tomorrow.
The JPM conference exists for all of us. How can we make it better?
Dennis Purcell is the founder of Aisling Capital LLC and currently serves as a senior advisor to the company. Before that he served as managing director of the Life Sciences Investment Banking Group at Chase H&Q (formerly Hambrecht & Quist).