Several members of our firm’s life sciences team were on the ground at the 43rd Annual J.P. Morgan Healthcare Conference in San Francisco from January 13 to 16, 2025. It was an exciting and sunny four days, during which key players from across the life sciences industry gathered to engage in deal discussions and consider upcoming trends for the pharmaceutical, biotechnology, and healthcare industries. Although there was a notable increase in the level of security at the conference given recent events, the overall sentiment of the conference was one of optimism.
Below are our key takeaways in the areas of US Food and Drug Administration (FDA) regulation, pricing and reimbursement, and corporate transactions from the events surrounding the conference. This includes a STAT News-hosted event featuring former FDA Commissioner Scott Gottlieb and former Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma as speakers, as well as multi-day discussions held by Endpoints News and Fierce Pharma, which included major industry speakers.
- The conference started off with a bang, as several merger and acquisition (M&A) transactions worth more than $1 billion by big pharma were announced on the first day. The largest of these deals was a $14.6 billion ($132 per share) acquisition of a pharmaceutical company focused on the development and commercialization of therapeutics for central nervous system disorders. Other deals announced on this same day included (1) an up to $2.5 billion acquisition of a developer of small molecule precision oncology therapies and (2) an up-to-$1.15 billion ($1 billion upfront) acquisition of a biopharmaceutical company developing precision therapeutics for the treatment of gastrointestinal stromal tumors. These announcements were welcome news for the sector, which experienced a depressed level of M&A activity in 2024, especially in Q4. According to William Blair & Co., 2024 was the first year in more than two decades without an M&A deal larger than $5 billion and the first year since 2012 without an M&A deal larger than $10 billion. This may be a harbinger for the overall sentiment that we should see increased levels of M&A in biotech in 2025 given what should be a more stable economic environment and large pharma’s need to replenish their drug pipelines given impending patent expiration for numerous blockbuster drugs between now and 2033.
- With respect to private financing of biotech companies, many people felt that 2025 would be very similar to 2024, a strong private financing year, with larger funding rounds being raised by biotech companies with experienced management teams and/or derisked clinical assets in development as opposed to promising preclinical platform plays lacking validation. According to Oppenheimer’s 2024 Year End Review, $23.7 billion was raised across 337 deals of private biotech companies in 2024, and sixty percent of capital was raised in mega rounds of over $100 million. Therefore, there is belief that investors will remain selective in deciding which biotech companies to back.
- Many conversations were had regarding the boom in innovative biotechnology in China and its impact on the overall biopharma market. According to Pharmaprojects and Citeline, in China in 2024, there were 6,280 drugs in development, a 1,200% increase from a decade earlier, which represents two-thirds of the total US drug development pipeline. As a result of this burst in innovative activity, many pharma companies have in-licensed potential drug candidates from China over the past several years. According to a Stiefel report, pharma companies now source about one-third of their in-licensed molecules from China, up from around 10% to 12% between 2020 and 2022. This activity, combined with lack of funding in the China-market, has also led to an increase in the formation of new companies in the United States based on licensing or acquisition of Chinese-based biopharma assets; several of which have launched with very large nine-figure funding rounds. It is important to note that although the BIOSECURE Act, a bill that would have banned US executive agencies (as well as companies that deliver biotechnology products and services under US federal contracts) from acquiring biotechnology services or equipment from a specified group of companies in China, was not passed into law in 2024, it could reemerge in a future session of Congress.
- On the regulatory front, all eyes were focused on the ongoing transition of presidential administrations in the United States and its potential impacts across the executive branch, including on FDA and CMS. With more speculation than answers on how 2025 may unfold, discussion focused on past transitions and related challenges and successes. Although hot issues noted at the 2024 conference will surely continue to be a focus in 2025—whether accelerated approval, rare disease, cell and gene therapy, artificial intelligence (AI), or advanced manufacturing—how these issues and FDA’s and CMS’s day-to-day functions will be impacted by the Trump-Vance administration remains to be seen but will surely unfold in 2025.
- Drug pricing, reimbursement, and commercialization were core topics of discussion at the conference for both drug developers and investors. Developers were interested in strategic commercialization timelines (e.g., pre-approval information exchange, contracting strategies, and launch preparation) while investors looked to better understand reimbursement landscape changes and how such changes might impact valuation of investment targets. Although landscapes remain fluid, a well-thought-out commercialization plan and execution of the same can potentially add value at exit or determine a product’s success at launch. Similarly, a comprehensive understanding of complex reimbursement channels may prove essential to properly valuing a target. These topics are certain to remain a focus in 2025.
- As in past years, there was great buzz at the conference about the benefits that AI is bringing to the life sciences and healthcare industries. Some of these benefits could include cheaper or more efficient drug design, more efficient enrollment of patients in clinical trials, better tools for diagnosing cancer and other forms of disease through use of enhanced AI algorithms, and enhancement of clinical process for healthcare workers. Several meetings were focused on ways to monetize AI investments in these industries and potential deal terms for collaborations. However, there were some notable skeptics about the overall ROI that AI will have in the life sciences industry, and key opinion leaders were quick to point out that outcomes from AI will be based on the quality of the data that is utilized in the various models. We expect continued activity in AI in 2025 and in the future.
- Women’s health was also a significant topic discussion at the conference, with numerous meetings and sessions focused on the subject, including our ML Women Panel on the Women’s Health Funding Landscape, led by Delphine O’Rourke, J.D., a highly regarded leader in the women's health industry and adjunct professor at Columbia Law School, alongside Herself Health CEO Kristen Helton. Panelists at these events discussed key takeaways from recent reports on the state of women’s health, such as the January 2025 Blueprint to Close the Women’s Health Gap: How to Improve Lives and Economies for All from the World Economic Forum and the McKinsey Health Institute, as well as ways to drive funding and support into the sector.
- Obesity drugs remained a hot topic and are anticipated to continue to be a key focus within the life sciences industry. They are expected to cause disruption in several areas, including insurance and lifestyle practices.
- Many meetups during the conference also focused on methods for funding biotech research and development beyond the typical funding channels. For example, the decentralized science (DeSci) meetup discussed using blockchain technology to create an open ecosystem for conducting and disseminating scientific research and reviewed some of the current coin offerings and governance associated with such offerings. Although DeSci is still in its early days, it will be interesting to see how this field evolves and the impact it may have on the life sciences industry.
2025 should bring a number of exciting developments across the life sciences and healthcare industries. While the road ahead will not be without challenges, our team will continue following the developments and keeping readers up to date every step of the way.
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