Like every year, 2024 kicked off with a bang for the biotech industry, as thousands gathered at the J.P. Morgan Health Conference (JPM) that took place in San Francisco, last week. One of the largest healthcare conventions in the world, JPM recaps the glories as well as the gloom of the past year, and sets the stage for what’s to come.
Here are some of the key takeaways from the JPM conference that lay the groundwork for what we can expect in 2024.
CNS disorder therapies grab attention
There was quite a bit of buzz around central nervous system (CNS) disorders, with biotechs like Neurocrine Biosciences, Intra-Cellular Therapies, Anavex and Voyager Therapeutics presenting at the event.
Olivia Cavlan, chief corporate development and strategy officer of Alchemab, described the field as a “really hot area,” particularly with regards to rare neurological conditions. And, the U.S. Food and Drug Administration (FDA) can attest to the growing attention towards rare disease therapeutics. More than half of the drugs that were approved last year received the FDA nod for an orphan-drug designation to treat rare disorders.
Delving into CNS, Paul Little, chief executive officer (CEO) of the clinical biotech Vesper Bio ApS, said: “CNS is in vogue and it is not just about new modalities. A review of 2023 suggests that psychiatry indications led the way with ca. 60% of the upfront deal value. Companies are waiting for pharma to open their checkbooks.”
One of the most prominent FDA approvals in the field that paved the way for further triumphs in the industry last year, was that of Leqembi for the treatment of Alzheimer’s disease.
Vaccine development in a post-pandemic world
Another field that has attracted the interest and funds of investors is vaccine development.
As vaccines have been recognized as the most effective and rapid response to emerging infectious diseases, Alexandre Le Vert, executive chairman & co-founder of Osivax explained that in the post-COVID world, there has been a substantial increase in funding from government agencies for broad-spectrum vaccines with the potential to prevent pandemic threats. This includes the Biomedical Advanced Research and Development Authority (BARDA) in the U.S., and the Coalition for Epidemic Preparedness Innovations (CEPI) in Norway, which reflects a deepened recognition of the critical role vaccines play in global health security.
“The pricing dynamics of innovative respiratory virus vaccines have experienced a noteworthy shift. The increased awareness of the impact of respiratory viruses has led to a greater perceived value of novel vaccines targeting these pathogens, including vaccines against COVID-19 and respiratory syncytial virus (RSV), with price points greatly increased compared to influenza vaccines,” said Le Vert, who attended JPM.
Moreover, big pharma-led buyouts like AstraZeneca’s $1 billion Icosavax acquisition, GSK’s $3 billion purchase of Affinivax, and the $3 billion Translate Bio-Sanofi deal, is proof of the heightened interest within the vaccine sector.
Le Vert predicts a “sustained flow of clinical innovations,” particularly in relation to pneumococcal and broad-spectrum influenza vaccines. There are hopes of universal influenza vaccines hitting the market in the coming years, now that the National Institutes of Health began clinical trials for a vaccine that targets six flu strains in September, last year.
“The industry is expected to experience a sustained trend in acquisitions of innovative biotech companies by large pharma, enabling companies to pool resources, enhance capabilities, and strengthen their positions in the competitive vaccine landscape. M&A activities are likely to play a pivotal role in shaping the vaccine landscape’s dynamics and fostering collaborative efforts,” said Le Vert.
JPM: a platform for making deals and investments come true
In fact, mergers and acquisitions (M&As) across the biotech sector seem to be on a measured rise. The JPM conference has been the birthplace of many deals, which has witnessed major deals like Takeda’s $6 billion takeover of Nimbus Therapeutics and Johnson and Johnson’s $17 billion acquisition of medical devices company Abiomed, in the past.
“After nearly 20 years being in San Francisco for JPM, outside of the pandemic, some things remain the same; the industry talks about indications of the financing and deal markets, and what will be the next big thing,” said Birgit Zech, CEO of Anavo. “The recent M&As point to a potential increase in new capital to be invested.”
As networking events can foster investments and growth, Lars Nieba, CEO of Engimmune, pointed out that these M&A deals as well as budding venture capital (VC)-backed companies, signal the “soft comeback” of the market in 2024.
“Almost all pharma companies stated clearly that they are ‘open for business’ in BD,” said Clara Campàs, managing partner and co-founder of Asabys.
However, it wasn’t all rosy at the 2024 JPM conference. Layoffs, or in corporate lingo ‘workforce reductions,’ were brought up by a number of companies. This comes after a flurry of biotechs had laid off their staff, citing that money was tight, owing to a downturn in investments. Last year saw a dramatic drop in initial public offering (IPO) funding coupled with the collapse of the Silicon Valley Bank.
Still, on the fundraising front, 2024 might be more promising compared to 2023.
“The discussion during 2023 was VCs were holding back on new investments keeping their ‘powder dry’ for existing portfolio companies, in case additional funding was needed,” said Jeremy Skillington, CEO of Poolbeg Pharma.
But of late, some VCs have managed to secure funds, like life science investors Forbion and OrbiMed raising €1.35 billion ($1.5 billion) and $4.3 billion respectively, last year. So, there is capital to deploy, according to Skillington who believes that the “pharma deal wheels are turning.”
“Partnering is the lifeblood of the industry with many pharmas having more than 50% of their pipeline of products in-licensed or acquired to add to their internal drug discovery engine. Brighter days lie ahead,” said Skillington.
2024 JPM highlights: the promise of GLP1 agonists and precision medicine
And that’s not all. It seems as if a certain class of drugs has caught the eyes of investors and scientists alike. Rolling on the success of Ozempic and Wegovy, GLP-1 agonists have been touted as one of the breakthroughs of the past year. As a result, GLP-1 agonists were on everyone’s mind at the summit, explained Nieba.
Market leader Novo Nordisk is already planning the next steps for its obesity drug Wegovy, and looks to test different dosages and alternate methods to deliver the drug, compared to the current injectable option. And overall, the GLP-1 production capacity is expected to double this year, according to J.P. Morgan Research.
Meanwhile, precision medicine was the talk of the town, especially on day three of the 2024 JPM conference. While Voyager Therapeutics looks to file at least four investigational new drug applications with the FDA in the next two years, Norwegian company Nykode expects to advance its human papillomavirus (HPV)16-targeted vaccine in the clinic.
Nieba recounted that precision medicine was one of the buzzwords at the 2024 JPM convention, along with artificial intelligence (AI).
“We at Engimmune also experienced the heightened interest in AI and precision medicine directly, with a lot of interest in our innovative AI-based soluble TCR therapeutics platform, which is generating precision medicines for oncology and auto-immune diseases,” said Nieba.
AI in drug discovery is set to reach $5 billion in the next four years, as the technology aims to develop drugs quicker and cheaper.
Less doom and gloom, more optimism at JPM 2024
Furthermore, in oncology, antibody drug conjugates (ADCs), radiopharmaceuticals and immunotherapies garnered attention, according to Nieba. With the ADC market poised to hit $20.51 billion by 2030, and the recent surge in radiopharmaceutical funding, it is no surprise these drugs drew the crowds at the convention.
Overall, there was an air of cautious optimism around this time around. While Little pressed on the need for geopolitical stability to move forward, Campàs mentioned that dealmaking was dynamic but not as rushed as in previous occasions.
“Caution and detail are around every investment and deal,” said Campàs.
Nevertheless, the heavy downpour and storm in California during JPM didn’t really put a damper on things. Although biotechs won’t be buried in an avalanche of investments like back in 2021, people at the 2024 JPM convention acknowledged that the money for funding does exist this year, according to Nieba.
He said: “Compared to last year, it was like night and day. We are clearly coming out of the dark, and now we are seeing the sun rising. It was really a positive mindset. As someone on a podium mentioned, we are coming out of winter and into a mild spring.”
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