Investors are gathering in San Francisco this week for the annual J.P. Morgan healthcare conference, the sector's biggest financial event and one where many biotech deals are expected to be announced.
It's likely that J.P. Morgan, which began on Monday, will draw about 9,000 attendees. Presentations will be heard from more than 400 companies, ranging from biotech to pharmaceutical, medical devices to health insurance.
Over a five-year stretch, the public healthcare sector swelled from 10.9 percent of the S&P 500 in 2010 to 15.2 percent in 2014. But according to several published reports, investors worry that political threats to drug pricing and uncertainty over the Affordable Care Act could hamper things in the coming year.
The S&P healthcare index is priced about 16.1 times earnings expected over the next 12 months; the S&P 500, by contrast, sits at 16.5. Healthcare stocks, at 15.2 percent of the S&P, make up less than the 17.4 percent that healthcare spending contributed to U.S. GDP in 2013, according to the most recent data from the Bureau of Economic Analysis.
The climate for deals will be one area of focus, as will the outlook for the ACA, especially after some hospital chains indicated diminishing benefits from the overhaul.
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