SAN FRANCISCO — Every January, the Westin St. Francis in San Francisco is, for a few days, the center of the universe for the healthcare industry. It’s the site of the J.P. Morgan Healthcare Conference, where hundreds of companies pitch investors, negotiate deals and plan for the year ahead.
The convergence of thousands of executives in one location makes the meeting a good barometer for the industry’s mood. But in the wake of the recent killing of United Healthcare CEO Brian Thompson, this year’s conference began with a dose of tension — and extra security.
While J.P. Morgan declined to comment, a person familiar with the situation confirmed an increased presence of both J.P. Morgan and Westin St. Francis security personnel, as well as dedicated San Francisco Police Department officers in nearby areas. Bicycle barricades were set up on Geary and Powell Streets to control entry and exit.
The added security was visible beginning Sunday. SFPD officers manned the entrances and patrolled the hotel halls. Another group in blue-and-black jackets emblazoned with the words “safety team” lapped the block around the Westin.
There were other signs of caution, too. The final conference agenda doesn’t include presentations from some of the country’s top healthcare companies, such as Cigna and CVS, that have been previously appeared at the JPM meeting in past years.
M&A hopes
Dealmaking drives investment in biotechnology, and that’s one reason why the industry has recently been in a slump. The number of big-ticket acquisitions of public biotechs dropped off last year, dragging down stock prices and frustrating shareholders to the point that, just a few days ago, analyst Paul Matteis of the investment bank Stifel wrote, “expectations for meaningful M&A are about as low as we can remember.”
While the meeting is seen as a dealmaking forum, it hasn’t delivered many M&A fireworks in the past few years beyond a handful of bolt-on transactions.
Yet there was excitement Monday. Johnson & Johnson announced the largest public biotech buyout in over a year, agreeing to buy schizophrenia drug developer Intra-Cellular Therapies for nearly $15 billion. The deal is even more notable after there were no biotech deals worth more than $5 billion in 2024 — the first time that’s occurred in at least six years.
Two deals involving privately held companies were revealed as well, continuing a trend of pharma companies looking further afield for bargains.
Such smaller deals may continue to be the order of the day. “Intra-Cellular has been an important demonstration of what we do,” J&J CEO Joaquin Duato told investors at a presentation Monday. “But I also have to explain to everybody that these deals don’t happen every day and, as a matter of fact, larger deals are more outliers.”
A major biotech stock index ticked down Monday, suggesting it will take more M&A to encourage investors.
Nonetheless, Wall Street analysts are already expecting a rally. The J&J deal should “catalyz[e] more interest in the broader sector,” wrote RBC Capital Markets analyst Brian Abrahams. — Ben Fidler
Summit’s ‘black swan’ event
A few years ago Summit Therapeutics scoured the globe for a cornerstone asset. Executives examined some 140 medicines before zeroing in on a cancer therapy discovered by Akeso, a China-based drug developer.
The resulting deal in December 2022 was met with little fanfare and even criticized by investors at the time. “This is boring,” Dave Gancarz, Summit’s chief business and strategy officer, remembers being told. The drug, ivonescimab, was aimed at a “boring set of targets” — PD-1 and VEGF — that existing medicines already addressed, he recalled hearing.
Summit was convinced ivonescimab had more to offer. Its belief was validated last year, when the drug outperformed Merck & Co.’s Keytruda, the industry’s dominant cancer immunotherapy, in a clinical trial.
Practically overnight, Summit’s results made drugs like ivonescimab the next big thing in oncology. Summit is now the leader in a fast-moving race that already involves several competitors — among them Merck, formerly a critic of the approach.
“This really was a ‘black swan’ event,” said Summit Chief Medical Officer Allan Yang. “It’s clearly what everyone’s been looking for.”
Now the pressure is on. Summit has started multiple Phase 3 trials, including one that’ll test whether ivonescimab can keep people alive longer than Keytruda. Rivals claiming to have superior versions of ivonescimab are entering testing, saying they intend to move quickly.
Gancarz says Summit is closely tracking the emerging competition. But he noted how others face a tougher challenge: trying to make modifications to a medicine that was already “specially engineered” to accomplish its goals. As a result, Summit still “has yet to find one that we like better” than ivonescimab, he said.
“We think ours has all the features that are important,” Yang added. — Ben Fidler
Working with Trump
How the incoming Trump administration will treat the pharma industry remains an open question. Yet pharma executives taking the stage at JPM Monday expressed optimism they can work with the president-elect, who has nominated critics of the healthcare industry like Robert F. Kennedy Jr. and Marty Makary to lead his healthcare policy.
Pfizer CEO Albert Bourla acknowledged the new administration could bring “radical change,” but said during a presentation Monday that that will come with “risks and opportunities.”
“There are several people that think, for our industry, the risks outweigh the opportunities,” he added. “There are other people, among them myself, which think the opportunities outweigh the risks.”
Pfizer, which sells a number of vaccines, may be more exposed than some of its peers should Kennedy, a high-profile critic of vaccination, put his views into policy. (He and Makary, chosen by Trump to run the Food and Drug Administration, need Senate confirmation.)
Pfizer believes it can work with the Trump Administration in areas like cancer. Bourla, who recently visited Trump in Mar-a-Lago, said Trump asks about cancer development every time they meet, and thinks “that’s an opportunity to try to build programs.”
J&J is hoping to do the same. “We have worked with 24 different presidential administrations, and we are willing to work with every presidential administration,” said J&J CEO Joaquin Duato during his company’s presentation Monday. “We are going to be willing to discuss how we can have pro-innovation, pro-access policies here in the U.S.” — Delilah Alvarado
Braving gene therapy headwinds
In a room overflowing with investors, analysts and biotech executives at the Hilton in San Francisco’s Union Square, Alliance for Regenerative Medicine president Tim Hunt offered a rosy outlook for cell and gene therapy, predicting 10 such treatments will become blockbusters by 2030.
His optimism is notable, given the field’s challenging year in 2024. A number of developers, including high-profile names like Intellia Therapeutics and Bluebird bio, laid off staff or restructured their research in response to clinical and commercial challenges.
And of the dozen or so approved gene therapies in the U.S., only one, Novartis’ Zolgensma, is currently a blockbuster. (Sarepta Therapeutics’ Elevidys could become one this year.) Yescarta, a cancer treatment from Gilead, is the only billion-dollar cell therapy. (Although it could soon be joined by J&J and Legend Biotech’s Carvykti.)
Among 23 highly active biotech investors tracked by BioPharma Dive, investment in cell and gene therapy dipped slightly last year in 2024 after falling in 2023, while funding for biologics and small molecule companies grew, according to BioPharma Dive data.
“No one’s saying there aren’t headwinds, but we are seeing important signs of growth,” Hunt said, pointing to Tune Therapeutics’ $175 million raise Sunday to fund its epigenetic editing research.
“We’re kind of in the basement, but the good news is it’s harder to fall out of the basement window,” said Keith Crandell, founder and managing director at Arch Venture Partners, on a panel about capital markets and the cell and gene therapy industry.
2024 was also a “good year” for gene therapy approvals, said Peter Marks, director of the FDA’s Center for Biological Evaluation and Research, who appeared virtually at JPM’s companion conference, Biotech Showcase. The agency expanded CRISPR medicine Casgevy’s approval into beta thalassemia, and gave a green light to several others, including Pfizer’s Beqvez and PTC Therapeutics’ Kebilidi.
The agency is focused on boosting accelerated approvals, and has launched two pilots to aid gene therapies and treatments for rare diseases, Marks said.
Source:
https://www.biopharmadive.com/news/jpm-25-pharma-deal-outlook-trump-summit-ivonescimab/737198/
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