
We've had Eye's On the JP Morgan Healthcare Conference, Lifesciences 2024 restructuring stats, and some new drug development partnerships. What have you had your Eye's on recently?
JP Morgan Healthcare Conference 2025 – Key Takeaways
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The JP Morgan Healthcare Conference 2025 took place from the 13th to 16th January in San Francisco, promising to accelerate the development of new medications for patients, advance outstanding science and identify dealmaking prospects.
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One of the most prominent developments is the pharmaceutical industry's comeback to dealmaking. We witnessed 106 biotech venture agreements worth over $100 million in 2024, indicating a recovery from earlier downturns. The need to refill pipelines is urgent because patent expirations are predicted to cost $400 billion in revenue losses between now and 2033. It is anticipated that this year will see a rise in early and late-stage asset acquisitions, such as Eli Lilly's purchase of Scorpion Therapeutics, as businesses seek to acquire cutting-edge treatments that have the potential to significantly improve patient care. However, the greater finance amounts will also be contingent on the companies meeting important testing benchmarks.Â
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Uncertainty still permeates the health policy arena, especially in light of conjecture about the Inflation Reduction Act's (IRA) future under the Trump administration. A repeal of the "pill penalty," a clause in the IRA that shortens the exclusivity period for small molecule pharmaceuticals to nine years while biologic therapies are granted thirteen, is one reform that many industry stakeholders are eager to see. It is unclear what the administration's goals will be because health policy was not a major campaign issue. The way the new administration will handle the regulations pertaining to the approval of new drugs is another unknown. Analysts question if this administration's emphasis on cutting inefficiencies will encourage speedier medication approvals and clinical development. Another major topic and unanswered question was vaccine policy. Nevertheless, compared to the first Trump term, corporate leaders have shown greater interest in collaborating with his administration this time around.
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The growing impact of Chinese innovation in biopharma is another trend that cannot be ignored. Chinese biotechs accounted for one-third of pharmaceutical licensing agreements last year, a startling rise from almost none ten years prior. This change reflects an increasing awareness of quality research coming out of China as well as the financial benefits these advancements offer. Although biopharma innovation is still primarily concentrated in the US, a more cooperative global dynamic is emerging.
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Artificial intelligence is still making headlines, with increasingly important implications for pharma research. The general assumption is that AI will transform the way we approach drug development, even though 2024 was a difficult year for AI and tech health startups, especially those without products that are ready for the market. The FDA signalled the significance of AI for future drug development at the beginning of the year by releasing draft guidance. When and how we can use AI effectively are more important questions than whether it will be helpful. With the announcement this week of Nvidia's new alliances with healthcare firms IQVIA, Illumina, and Mayo Clinic, the tech and AI industries are becoming increasingly intertwined with biopharma. Additionally, the techbio firm Recursion, which has worked with Bayer, recently revealed that it has joined with Faro Health, an AI-powered platform for designing clinical protocols based on data.Â
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Cell and gene therapies are gaining traction, especially in light of promising advancements in the treatment of diseases like type 1 diabetes. For instance, Sana Biotechnology recently reported encouraging results in a single patient receiving a first-in-human allogeneic cell therapy for type 1 diabetes that does not involve immunosuppression. Furthermore, based on encouraging results from the phase 1 trial, Bayer and its subsidiary BlueRock Therapeutics announced plans to start a phase 3 trial for its allogeneic experimental cell treatment for Parkinson's disease.
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With many businesses finding it difficult to sustain their values after launching, the IPO sphere is still challenging. Even so, despite devaluations, the expected surge in mergers and acquisitions will present chances for businesses to refocus and expand. We can be optimistic about upcoming clinical progress, despite policy uncertainty.
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Compared to 2023, the number of layoffs in 2024 only increased a little, despite rounds of Big Pharma layoffs rising by 281%.Â
192 rounds of industry layoffs were reported in 2024, with a 3% increase over the 187 rounds recorded in 2023. As rounds are revealed, they are reported and are not combined where more than one employment reduction has taken place. Out of the 86 companies that reported statistics last year, at least 15,134 employees lost their jobs. Other companies did not share how many of their employees would be laid off or declared layoffs as a percentage of the total workforce. From the 99 companies that did report their percentage of staff layoffs, 38% was the average reduction size.
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It is worth noting that larger pharmaceutical companies are now reporting significantly more layoffs than in previous years. The amount of layoffs Big Pharma decided on increased by 281%. In contrast, the overall amount of industry layoff rounds has stayed consistent. Pfizer, Bristol Myers Squibb, and Johnson & Johnson reported numerous reductions in their workforces in 2023 and 2024. Developments in the obesity market in 2023 have made the tracking of layoffs rather irrelevant for Novo Nordisk (Ozempic and Wegovy) and Eli Lilly (Zepbound and Mounjaro).
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These layoffs may indicate poor market health. While companies enjoyed relative financial prosperity during the COVID-19 pandemic, it was arguably only a matter of time before they felt the pinch of the market challenges of 2023. Roivant CEO Matt Gline pointed out that the large companies that had raised in 2021 and 2022 may not have needed money straight away and leadership teams do not like proactively organizing rounds of layoffs. However, soon the time came when Big Pharma companies felt increasing pressure to save money.
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Since volatility has become the standard in the industry, companies in the pharmaceutical and life sciences sectors that can recognize their fundamental strengths and periodically review their portfolios are thought to be the most likely to succeed in the long run.Â
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Eli Lilly has renewed its efforts to compete with Novartis and Roche for the breast cancer market by agreeing to pay up to $2.5 billion to acquire Scorpion Therapeutics' PI3Kα pipeline at the J. P. Morgan Healthcare Conference.Â
In 2019, Novartis received FDA approval for its PI3Kα inhibitor Piqray. Late last year, Roche's Itovebi joined the group. Last year, Lilly's attempt to follow its peers was thwarted when it discontinued LOXO-783 after comparing the molecule's clinical data to its next-generation options. Daniel Skovronsky, M. D., Ph.D., Lilly's chief scientific officer at the time, predicted that a next-generation candidate would reach clinical trials in 2025.
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Lilly is confirmed as a clinical-phase candidate ahead of schedule by the Scorpion transaction. In 2024 Scorpion released phase 1 data on their candidate STX-478, providing preliminary evidence that the drug might be superior to Piqray and Itovebi and could compete with the rival next-generation candidate from Relay Therapeutics. In exchange for up to $2.5 billion in upfront payments and milestones, Lilly has convinced Scorpion to give up the candidate and the remainder of its development on the PI3Kα route. While purchasing Scorpion, the Big Pharma will spin out its non-PI3Kα pipeline assets to establish a new business. The new business, which will be owned by Lilly and the biotech's current stockholders, will employ Scorpion's employees.Â
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Both Piqray and Itovebi target both the wild-type and mutant versions of PI3Kα, although STX-478 and Lilly's internal PI3Kα candidates are intended to be more selective. Lilly, Scorpion, and others have created compounds that specifically target the mutant PI3Kα enzyme since inhibition of the wild-type enzyme in healthy tissue can lead to metabolic inefficiency and, eventually, dose-limiting toxicities.
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In 2024 Lilly said that LOXO-783 did not result in hyperglycemia, an adverse effect linked to Piqray and Itovebi, in the clinic. However, in the months before dismissing the candidate, Lilly questioned whether the efficacy was sufficient. When STX-478 was taken alone, Scorpion reported a 23% response rate in patients with breast cancer. Every instance of dermatitis, diarrhea, and hyperglycemia (side effects linked to inhibiting wild-type PI3Kα) was grade 1 or 2.
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In order to create new antibody-drug conjugates, Roche’s Chugai is enlisting Zurich-based Araris Biotech, which stands to receive an upfront payment and possible milestone payments of up to $780 million.Â
According to a January 2025 announcement, Araris is also qualified to receive royalties on product sales, and Chugai's selected targets have not been made public.Â
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The research efforts of Araris will be funded by Chugai. The Big Pharma company will also manage development, manufacture, and worldwide commercialisation after exercising an option for the resulting ADCs. This second collaboration comes after the first collaboration with Otsuka’s Taiho Pharmaceutical in November 2023 to formulate ADCs for cancer. The ADCs will be constructed by Araris using its linker-conjugation platform, AraLinQTM. Multiple payloads can be attached to one antibody using this platform. Established in 1925, Chugai joined the Roche Group in 2002. The company employs around 7,500 people and has its headquarters in Tokyo.
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