M&A didn’t return as hoped for in 2024. The biopharma industry is heading into the J.P. Morgan Healthcare Conference next week in a grim mood.
Despite the cautious optimism a year ago, 2024 did not exactly bust the biopharma industry out of the prolonged downturn that followed the pandemic boom. Going into the 2025 J.P. Morgan Healthcare Conference, leaders in the space are a bit more pessimistic.
“Sentiment is really bad in general in biotech,” Seaport Therapeutics CEO Daphne Zohar told BioSpace.
That said, Zohar and others are looking forward to potentially big news that could spark that optimistic attitude once again. The annual gathering in San Francisco is a who’s who of biopharma with thousands of executives descending on the Bay Area looking to strike deals. The meeting, which officially begins next Monday, Jan. 13, sets the tone for the year, and for many executives who spoke to BioSpace, a few high-profile transactions could really change the tune. But, Zohar commented, it needs to happen early.
“If we don’t see a lot of M&A between now and, like, the Tuesday of J.P. Morgan, I think we’ll have kind of negative sentiment,” Zohar said in a late December interview. “I always feel like, by Monday, if you’re not seeing a lot, then people begin to assume that there’s not much that’s going to happen.”
Linda Marbán, CEO of cell and exosome-based therapy biotech Capricor Therapeutics, agreed that the industry will be watching closely. And despite the swirling gloom, some of last year’s “cautious optimism” still exists, she wrote in an email to BioSpace.
“While challenges like clinical failures remind us of the complexity of developing transformative therapies, they also reinforce the importance of innovation and persistence,” she said. “I think everyone is eager to see what opportunities JPM will bring.”
2024: A Lull in Big Deals
2024 ended with multiple high-profile clinical failures: Roche’s Prothena-partnered Parkinson’s drug; Novartis’ similar flop for a UCB asset; Galectin’s stock-crushing metabolic dysfunction-associated steatohepatitis (MASH) miss; Axsome’s mixed Alzheimer’s disease agitation results and many more. 2025 didn’t start off much better, with Neumora Therapeutics reporting the Phase III failure of a much-anticipated major depressive disorder candidate.
Meanwhile, companies have been slashing pipelines and headcounts. Even good news has not been reflecting at the stock market, according to Zohar.
2023 ended with a flurry of deals that defined 2024, including one involving Karuna Therapeutics—a biotech formed from Zohar’s former company, PureTech Health. Bristol Myers Squibb swooped in to pick up the neuroscience biotech for $14 billion in the final weeks of that year, then brought the company’s schizophrenia asset to an FDA approval in September 2024. Peer AbbVie had the opposite luck with a similarly timed buyout of Cerevel Therapeutics. The biotech’s lead asset failed in two Phase II schizophrenia trials in November 2024. AbbVie is hoping to have better luck with other assets from the transaction.
2024, meanwhile, didn’t have a ton of sector-defining deals. Companies kept their buys to under $5 billion with just one exception: Novo Holdings’ $16.5 billion acquisition of contract development and manufacturing organization (CDMO) Catalent.
What 2025 holds for the sector remains to be seen, with all eyes on JPM for potentially the first multi-billion dollar announcement of the year. But while a big acquisition would certainly help jumpstart the industry, some positive regulatory news, clinical data or other “meaningful partnerships” could also help sentiment, Marbán said.
Executive Wish Lists
Executives from Galimedix Therapeutics have a lofty set of goals heading into the meeting. Executive Chairman and co-founder Alexander Gebauer told BioSpace that his team will meet with several investment banks and venture capital firms in preparation for raising a crossover round this year. The company, which focuses on small molecule drugs for serious eye and brain diseases, is planning a U.S. initial public offering in 2026.
The IPO window did not open as expected in 2024, so Galimedix’s crew will have their work cut out for them. But Gebauer is confident.
“The investors have become even more selective,” he said in an email. “I believe that quality will prevail; companies with excellent teams and high-quality programs should be able to get the support they require.”
Zevra Therapeutics’ management will head into JPM with both partnering and acquisitions on their minds as well as investor relations meetings. CEO Neil MacFarlane told BiosSpace that his company has executed several buyouts in the past so he’s looking to meet with companies that may have single assets in need of a larger partner with proven infrastructure. At the same time, Zevra is also seeking partners for its idiopathic hypersomnia program.
Thijs Spoor, CEO of radiopharma biotech Perspective Therapeutics, similarly has a big wish list heading into the meeting. “I usually go into J.P. Morgan with three buckets of requests: One is people that want money from us—and I’m not doing really any of those for this go around—and then there’s people that I want money from, and then there’s people that I want to do a deal with.”
Perspective is in the enviable position of not needing to court investors at this year’s meeting, having raised a cash reserve of $250 million in 2024. Instead, Spoor and his team will focus on getting his company’s name out there and updating its story from the year prior.
Seaport, which just emerged in April of last year, will present at the conference in the private company track, according to Zohar. The executive team will be meeting with investors and pharma companies, as well as taking some time to see old friends and colleagues.
Another big headwind over the industry is the presidential transition. Donald Trump will re-take the presidency on January 20, just after the JPM meeting concludes. Zohar and Gebauer both said that the wait for the new administration has suppressed deal activity.
“The sooner stability can be achieved, the more openness [we’ll see] to invest,” Gebauer said.
Immunic Therapeutics Chief Operating Officer Jason Tardio said the macroeconomic stars are aligning for a year full of deal activity: the cost of capital has come down and interest rates are declining. On the policy front, the incoming Trump administration and Republican-led Congress are expected to ease corporate taxes, regulatory hurdles and drug pricing provisions like the Inflation Reduction Act.
“2025 could see significant megadeals as companies look to fill their growth gaps ahead of the looming loss of exclusivity in 2028,” Tardio said.
Whether the deals come now or later, Zohar is similarly confident that deal activity will return, fueled by Big Pharma. “They really need to fill their pipeline, so at some point they’re going to get pretty aggressive.”
