SAN FRANSICO, Calif. -- By Lee Han-soo/Korea Biomedical Review correspondent – The J.P. Morgan Healthcare Conference 2023 kicked off its four-day run at the Westin St. Francis San  Francisco on Monday. Investors attending the event said they would look into the balance sheets of biopharmaceutical companies more closely and predicted that there would be more M&As in the biopharma sector in 2023.

Notably, this is the first time in three years since the Covid-19 outbreak happened in 2020 that the invitation-only, the world’s largest IR event for the pharmaceutical industry will gather investors, biopharma executives, and the press for face-to-face discussions.

According to J.P. Morgan, the conference will welcome roughly 8,000 attendees and more than 550 leading healthcare companies from around the world – ranging from Fortune 100 corporations to small-cap and emerging private companies.

The event will also draw thousands of global investors and thought-leaders representing industry, the markets, academia, and government, J.P. Morgan said.

"It has been quite a challenging financing environment in 2022 for the pharma and biotech industry," J.P. Morgan's global head of healthcare Michael Gaito said during the opening ceremony. "There has been very little initial public offering (IPO) activity, especially after what we got accustomed to the prior couple of years."

While some funding restrictions have been eased since late last year, cash flow may continue to be temporarily constrained again this year, Gaito added.

"We saw investors focus on the balance sheet, business models and large-cap strategies and, importantly, new industry interests focused a lot on driving consolidation and services," Gaito said.

All in all, Gaito stressed that when looking at 2023, he expects margins scale and balance sheet to continue to be very big themes.

"We've got a challenging financing environment, we've got higher cost of capital, and all of us are going to have to get through the central bank, to mention some geopolitical concerns," he said.

Despite the hardship in the financing environment, Gaito added that it was nice to see some incredible innovation in the fields of disease areas such as diabetes and Alzheimer's.

In line with Gaito's speech, participants also showed mixed feelings, such as anxiety over the looming global recession and expectations for new investment and merger and acquisition deals for the next-generation treatments."

"This year, I am seeing more healthcare officials compared to investors, such as venture capitalists," a company official participating in the JPM Healthcare conference told Korea Biomedical Review. "This is because as the Covid-19 pandemic is calming down, opportunities for biopharmaceutical companies to receive investment have decreased when the number of companies needing immediate funding increased."

The low investor sentiment toward the biopharmaceutical sector has opened a favorable condition for M&A from multinational pharmaceutical companies, he said.

"Notably, Amgen's M&A of Horizon Therapeutics was a great example," another investor said. "Chiesi Farmaceutici, an Italian pharmaceutical company, also started off the JPM conference by announcing the acquisition of Amryt Pharma on Monday.”

Many expect that the year 2023 will see a lot more M&A deals where multinational pharmaceutical companies purchase smaller biotech firms will promising pipelines, he added.

As many pharmaceutical giants attended the event, there were also protests against pharmaceutical companies in front of the event venue.

Meanwhile, protestors from AIDS Healthcare Foundation (AHF) criticized Gilead Sciences for doubling the price of its acquired immunodeficiency syndrome (AIDS) treatment on Monday morning.

AHF protestors held signs such as "Stop being greedy' and "Gilead cares more about money than lives" and continued to protest around the venue chanting "Gilead Greedy."

The protest also involved vans that showed pictures of Gilead Sciences CEO picture on top of a pile of money.