Signs of optimism for biopharma at JPM conference
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Axios' Eleanor Hawkins speaking with PhRMA CEO Stephen Ubl in San Francisco. Photo: Chris Constantine on behalf of Axios
After several years in the doldrums, pharmaceutical companies and biotechs expect an uptick in dealmaking in 2025, with some positive vibes emanating from the giant J.P. Morgan Healthcare Conference this week in San Francisco.
Why it matters: The mood has been decidedly gloomy the past few years as inflation, high borrowing costs, antitrust oversight and election uncertainty all created doubts about biopharma while AI sucked up all the oxygen.
Driving the news: One big sign of a possible rebound this week was Johnson & Johnson's $14.6 billion cash deal for neurological drugmaker Intra-Cellular.
- "The J&J deal should catalyz[e] more interest in the broader sector," RBC Capital Markets analyst Brian Abrahams wrote, per BioPharma Dive.
- Other deals included Eli Lilly's $2.5 billion agreement to buy Scorpion Therapeutics' breast cancer drug, while GlaxoSmithKline announced a $1 billion-plus deal for IDRx and its GI cancer drug candidate.
- "I would expect this year to be a little bit of a more active year," Vamil Divan, an analyst at Guggenheim Securities, told Axios.
Between the lines: The deals could provide a jolt to the long-term outlook of companies with looming drug patent cliffs.
- Anti-obesity medication, in particular, could help further juice the market, although cancer drugs, immunology and rare disease treatments are also expected to get more attention, Divan said.
- Though continued volatility is a given in the market, "it is highly likely, in our view, that M&A volume will pick up substantially in 2025, citing, in part, a 'relaxed [Federal Trade Commission],'" Stifel Investment Banking analysts wrote in a note.
- A number of mid-stage drug candidates from China-based biotech companies were also getting attention in San Francisco, Stat reported.
Reality check: Of course, it's in everyone's interest to stoke excitement at this annual gathering.
- While there may be an uptick in the number of deals, a report from EY suggests they'll be smaller.
- Another negative signal: Moderna slashed its 2025 sales forecast, largely due uncertainty for its COVID and RSV products, CNBC reported.
What to watch: As the Trump administration prepares to take the reins, the industry is cautiously optimistic about the new regulatory environment.
- "If you listen to President Trump, he's talked about a few things that really resonate with us. One is strengthening U.S. industry, really looking at efficiencies within government and regulation and going after chronic disease," PhRMA CEO Stephen Ubl said at an Axios event on Monday.
- He pointed specifically to pharmacy benefit managers and the 340B drug discount program.
- "The reality is 50 cents of the dollar of the list price of a drug goes to somebody else in the system," Ubl said. "We want to make sure that that arbitrage that's grown up in the system actually makes its way to patients at the pharmacy counter. So we think there'll be an audience in the new administration."
