Dispensed: What we're looking out for at the biggest healthcare investor conference, One Medical's going public, and biotech surprises

lramsey@businessinsider.com (Lydia Ramsey)
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Jamie Dimon, CEO of JPMorgan Chase, speaks about investing in Detroit during a panel discussion at the Kennedy School of Government at Harvard University in Cambridge, Massachusetts, U.S., April 11, 2018.

Brian Snyder/Reuters

Hello,

Welcome to Dispensed, Business Insider's weekly healthcare newsletter, in which we're steeling up for our travels to the West Coast for the annual J.P. Morgan Healthcare Conference and making sure we don't forget our business cards.

Zach Tracer and I will be out there, so be sure to say hi if you see us dashing around San Francisco. After the chaos, I'll be spending the weekend in LA! It's my first time there in more than a decade, so please pass along any can't-miss spots (for either city, really!) You can reach me at lramsey@businessinsider.com, or the whole health team at healthcare@businessinsider.com.

Are you new to the newsletter? You can sign up here. 

Before we jump in — I want to introduce y'all to Yeji Jesse Lee, who's joining our team as a cannabis fellow! While I'm sure her bylines will mostly be popping up in my colleague Jeremy Berke's cannabis focused newsletter Cultivated, get ready to see her helping me out on some fun healthcare stories over the coming months. 

For those who have been spared from the madness, here's a little recap on JPMorgan's big healthcare conference: Now in its 38th year, the conference has ballooned from a small event with 150 attendees that was essentially the "birth of biotech," to an event attended by everyone from the biggest pharma company to the smallest biotech. There are now more than 9,000 attendees at the conference. 

And that's just the main conference. Thousands more descend on San Francisco in January to talk deals, attend the seemingly dozens of conferences that have grown up on the sidelines of what's going on at the Westin St. Francis, where JPMorgan has historically held the event. 

With an extra week between the holidays and the conference, which officially starts Monday, we've already started to see some dealmaking and developments take shape.

Here's what we've been keeping an eye on going into the conference

For one, late last Friday, One Medical officially filed to go public with the Securities and Exchange Commission, the first of the digital health companies to flip. CNBC reported this week that employee-benefits navigator Accolade has hired on bankers ahead of an IPO, potentially adding to the ranks. 

I put the most interesting tidbits from One Medical's S-1 in this post (no paywall!). 

I also broke down the company's top investors, a group that includes founder Tom Lee, The Carlyle Group, and Benchmark Capital. 

Primary-care startup One Medical just filed to go public. Here are the investors and execs who stand to make the most.

(This one is behind the BI Prime paywall, but you can use my link here to get 20% off your BI Prime subscription.) 

Another development we're keeping an eye on: Digital health companies going on an acquisition spree in 2020.

To kick things off, Bright Health — newly infused with $635 million — said it's buying a California Medicare Advantage plan provider that significantly grows the company's footprint in the 65 and over market, with the added bonus of getting into California.

I had the scoop: 

$2.2 billion Bright Health just struck a deal to buy a health plan and gain a big foothold in the lucrative Medicare Advantage market

  • Bright Health, a Minneapolis-based health-insurance startup, just agreed to acquire a California-based health insurer to beef up its presence in the red-hot Medicare Advantage market.
  • The acquisition comes on the heels of the insurer raising $635 million from investors in December. According to PitchBook, Bright is valued at $2.2 billion.
  • The acquisition would substantially increase Bright Health's Medicare Advantage business — from about 4,000 members to roughly 46,000.

This year seems to be shaping into a make-or-break year for pharmacy companies, emblematic in Walgreens' earnings miss on Wednesday.

Reimbursements on the drugs pharmacies dispense aren't what they once were, the competition for getting people into a store is fierce, and it seems like investors still haven't figured out how a company like Walgreens finds a way out. 

A question on the company's earnings call felt emblematic of all that's stacking up against the company.

One question on a Walgreens investor call sums up the massive pressures facing the pharmacy giant after an earnings whiff

  • Pharmacy giant Walgreens' stock dropped 6% after missing Wall Street's expectations. 
  • It's a tough time for the company, which finished 2019 as the worst-performing stock on the Dow Jones Industrial Average.
  • The company's prescription volume didn't grow as much as the company expected during the three months that ended November 30, and the company's gross profits decreased by 5%, which the company attributed to reimbursement pressure outweighing other gains the company made.
  • The company has been relying on partnerships and a digital strategy as a path forward.
  • A question from Evercore ISI analyst Elizabeth Anderson about the competitive pressures facing the US pharmacy summed up the challenges ahead for the company. 

And a fun one that might be worth keeping in mind when anticipating the likely (or unlikely) outcomes ahead next week. Cowen pulled together its list of biotech surprises that could hit the industry in 2020. They range from some that (to me) sound probable, to some where it's clear the team was having a lot of fun pulling this together.

You can read the list of surprises, ranked from most likely to least likely here. 

Sessions we won't be missing at JPMorgan's conference

At the JPMorgan conference next week, a few sessions have caught our attention: Verily presents at the conference for the first time on Monday after hiring on a CFO who took Tesla public and some other top execs. It's got me curious: Could Verily — the life sciences arm of Alphabet that does have outside investors — go public? How might that work? We'll have updates generally on the company coming out of the conference presentation. 

We'll also be tuning into Oscar Health's presentation at the conference, also on Monday. And telemedicine company Teladoc has a prime spot on the agenda on Monday morning — I'll be curious to hear what questions attendees ask the company. 

What else should we be sure not miss next week? Assuming we survive, next week's dispatch should be a good debrief on all that transpired during the week. 

And a quick programming note from the larger BI team: If you'll be in New York next week, BI is hosting an event focused on the future of retail on January 14. We've done a few of these now (keeping my fingers crossed for a health-focused one!), and they're really interesting discussions with entrepreneurs and industry experts. Click here for more information and to apply to attend.

Safe travels to those traveling to the West Coast next week, see you then!

- Lydia 

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