What We’re Watching for at J.P. Morgan Week 2024
CG Life Managing Partner Erik Clausen’s take…
If you’re like me, you can’t recall NOT making the annual pilgrimage to San Francisco to meet, network, and (let’s be honest) imbibe during the J.P. Morgan Healthcare Conference and associated events. The big week in January is a bellwether for the economic health of the life science, biopharma, and medical sectors as hundreds of companies present their financial forecasts and latest innovations, and vie for the interest of venture capitalists, potential partners, and investment banks. Long days of sessions and networking meetings are punctuated by lively evenings of cocktail receptions and dinners. The week is not for the faint of heart.
Here are a few trends and themes we will watch in The City by the Bay with our clients, partners, and friends.
- Historical Perspective: Will we see parallels between past economic cycles and the current state of the biotech industry in 2024? Since late October 2023, CG Life has been tracking positive indicators that highlight a likely recovery of the biopharma market in 2024 and indicate a cautiously positive outlook for the current biotech landscape. Will it gain momentum? Will that momentum hold in an election year?
- Changing Dynamics in Pharma: Much has been written about biopharma’s shift towards focusing on chronic diseases rather than niche markets like oncology and rare diseases. This growing emphasis on “real drugs for real diseases” seems driven by payors and suggests an acceleration toward treatments in cardiovascular, metabolic, respiratory, mental health, and kidney conditions.
- Direct-to-Consumer: Eli Lilly’s move to provide home delivery of pharmaceuticals via Lilly Direct allows direct access to diabetes, migraine, and obesity drugs without intermediaries like PBMs and pharmacy chains. This innovative model could be potentially disruptive (if embraced universally by payors) to the industry and create more equitable access to healthcare in the U.S.
- Mergers and Acquisitions (M&A): Acquisitions have been heating up during the past quarter and have continued since the new year. After nearly two challenging years in biotech, there are undervalued companies with promising data or products in the pipeline that are ripe for acquisition. There may even be a return of bigger deals (in the $5 billion to $15 billion range) to fill targeted strategic gaps by pharma despite higher risk in some cases. Case in point: Pfizer’s recently completed $43 billion purchase of oncology biopharm Seagen was the largest transaction in biopharma since 2019. Expect a few similar announcements this week.
- Commentary on Homelessness: Despite San Francisco’s undoubted efforts in advance of the conference to “relocate” the homeless population from the streets, alleyways, and plazas surrounding Union Square, the economic disparity on display between those visiting to discuss market shaping moves and multi-billion dollar global transactions and those living minute to minute on the streets and in shelters outside will be jarring to anyone paying attention. While many will decry San Francisco’s “homeless problem,” I’ll be curious to see if anyone recognizes it as the healthcare problem it is that might in some way be addressed by improved access to healthcare and therapeutic advancements in mental health promised by the very discussions taking place.
This year should be telling. Following a relatively lackluster 2023 for the industry, many are looking for tea leaf readings and comparing pulse readings with others across the industry. The week may bring renewed optimism and confirm the growing theory that the economic recovery is coming. Or, if the consensus is that 2024 is more of the same, then at least misery will love company in the watering holes of The City.