The Hambrecht & Quist Healthcare Conference, as the first financial meeting every year, is always a place where companies test the mood of the investment community. The buyside's mood has particular urgency this year for many of the smaller public and private companies, as many of them won't be able to weather two bad years in a row. As usual, this year's meeting was packed. Yet crowded hallways did not translate into palpable excitement. Thus one of the more frequent questions heard in the hallways was about the "feel" of the conference - which all agreed was hard to judge.

Conference-driven trading also provided few clues. Of the 89 publicly held bioscience presenting companies that also fall into BioCentury's 386 company tracking universe, 36 had positive daily swings on their presentation, 36 lost value on the day, while 17 were flat The movers had little effect on the broader BioCentury 100 price level index, which slipped 1 percent on the week. H&Q foot traffic also didn't correlate into higher trading activity, as volume on the BioCentury 100 companies fell 4 percent to 193.3 million shares.

Mouths where the money is

Likewise portfolio managers on the buyside panel at H&Q emphasized themes that provided little solace to the smaller companies, reminding that small cap biotech is really microcap for most of Wall Street, while the "flight to safety" to big cap biotech is a flight to cash flow and liquidity. Moreover, they said, generating investor interest will be tough for companies short on cash, while industry consolidation will be very selective.