In honor of JPM Week, you’re reading a special edition of our biotech newsletter, The Readout. To stay on top of the latest scoops and live reporting from the San Francisco conference, join our newsletter list.
JPM Week is finally drawing to a close, sending the drug industry’s many financiers scattering from San Francisco to their respective homes and ski destinations. Before you put the whole business of the conference behind you, here’s a look at what you might have missed and what’s worth pondering on what should be a well-earned break from all this biotech business.
Lastly, don’t forget that we have a JPM recap event coming up tomorrow. Join us.
That wasn’t so bad
If the J.P. Morgan Healthcare Conference is a barometer for the 12 months to come, 2024 is going to be considerably rosier than the recent years of biotech history.
As STAT’s Allison DeAngelis writes in a recap of the conference, last year’s gloom seems to have given way to optimism among the investors and executives occupying Union Square this week. The deals get all the attention, but there’s a growing sense that biotech’s recent rally is less of a blip than a sustainable new normal.
But it’s not all cheer. The industry is reliant on macroeconomic factors over which it has no control, and 2024 is an election year, which promises more unpredictability and a high likelihood of some public demonization. Shawn Davis, CEO of genetic medicine delivery company Liberate Bio, is leaning into an emerging slogan in biotech: “survive to ’25.”
Cytokinetics took a JPM round trip
Cytokinetics, maker of an effective treatment for a genetic heart disease, entered JPM Week trading at about $88 a share. Then came news, from the Wall Street Journal, that Novartis was close to acquiring the company, sending Cytokinetics up more than 20% and setting in motion a will-they-won’t-they story that endured all week. But now it’s Thursday and JPM has concluded without Cytokinetics changing hands, a series of facts that were enough to send the company right back to about $88 a share.
This will all be lost to history if it ends up being the prelude to a multibillion-dollar deal, but Cytokinetics’ trading pattern might be instructive as biotech tiptoes out of its slump. Investors are so wedded to the “takeout thesis” — valuing companies according to the odds someone else will want to buy them rather than, you know, the drugs they’ve invented — that every minor twist in a negotiation makes for volatile days at the market.
A similar pattern played out with biotech stocks at large. The XBI, a bellwether index, started the week up more than 5%, driven by a spate of deals announced at the outset of the conference. Then, when the pace of M&A slowed, it fell nearly 3% on Thursday.
How JPM played out
With the rush of meetings, receptions, and groggy treks through sodden streets, you can be forgiven for missing some of the news out of J.P. Morgan. Here’s a look at what drove conversations at the conference.
Deals. There were about a half-dozen transactions disclosed this week, including Johnson & Johnson buying the cancer firm Ambrx, Merck acquiring Harpoon Therapeutics, and GSK paying more than $1 billion for a startup called Ailos Bio.
AI. The hottest commodity at the conference was breathing room at a presentation by Nvidia, the roughly $1 trillion maker of computer chips, where the company proclaimed that novel technology would dramatically increase the number of new medicines that are created while reducing their cost. Isomorphic Labs, a drug development arm of Google’s DeepMind, inked deals with Eli Lilly and Novartis at this J.P. Morgan conference. Insitro, another AI-focused biotech, presented data that it may be able, for instance, to estimate the number of people who have liver disease from bone scans, making it possible to do more genetic research.
The FDA’s Peter Marks, the agency’s top regulator of gene therapies, seems to be leaning toward granting full approval to Elevidys, the Sarepta Therapeutics gene therapy for Duchenne muscular dystrophy. His words, delivered at a STAT event, sent shares of Sarepta up more than 20%.
- Pumping milk at JPM was a nightmare. It’s part of a bigger problem in the industry, STAT
- Contributors to psychiatry’s bible, the DSM-5, got $14 million from industry, STAT
- Drugmakers plot way into obesity market with deals and development, Reuters
Pssst. If you’ve made it to the end of this article, you might be interested in joining this secret list for an upcoming biotech newsletter. Just some food for thought.