J.P. Morgan kicked off with a flurry of deals, with Eli Lilly, GSK and Gilead all announcing deals potentially worth more than $1 billion while J&J committed $14.6 billion to buy Intra-Cellular. These moves have reinvigorated sentiment across the biopharma industry.
The levee of biotech deals finally broke as the J.P. Morgan Healthcare Conference opened its doors on Monday.
Johnson & Johnson started out the meeting with a $14.6 billion offer to buy Intra-Cellular, the maker of schizophrenia and bipolar depression pill Caplyta. The deal eclipsed the largest biotech acquisition of 2024 by far.
“It has a positive vibe to it,” Marianne de Backer, CEO of Vir Biotechnologies, told BioSpace. “I hope this will be sort of the start of a rejuvenation of our industry where there’s more M&A, more IPOs happening. I would love to see us go back to the pre-pandemic times.”
According to Novartis Chief Medical Officer Shreeram Aradhye, large pharmaceutical companies need external innovation more than ever due to pressures like the Inflation Reduction Act’s drug price negotiation provisions.
“I think there’s a little bit of extra need of that collaboration happening and the deal making, because the demands on pharma . . . of having to create development plans that are much more comprehensive,” he said in an interview.
Aradhye hinted at a jam-packed schedule for Novartis’ business development team, with five executive committee members attending the meeting, including himself and CEO Vas Narasimhan. Together they will attend 100 meetings this week, touching on areas across the Swiss pharma’s purview, including oncology, immunology, neuroscience and cardio-metabolic.
Speaking to the flow of deals so far at J.P. Morgan on Monday, Aradhye said coyly: “I can’t quite say how many more are happening in the next three days.”
Both de Backer and Margot Georgiadis, CEO of Montai Therapeutics, noted that many Big Pharmas are facing looming patent expirations, so they are under pressure to make deals.
“Pharma has the capacity to take on a lot more,” Georgiadis told BioSpace.
Besides J&J, Eli Lilly offered up to $2.5 billion for Scorpion Therapeutics, GSK committed $1 billion upfront to buy precision therapy specialist IDRx and Gilead struck a partnership worth up to $1.7 billion with LEO Pharma to target inflammation. Meanwhile, Biogen submitted a bid for partner Sage Therapeutics.
Prior to those announcements, sentiment had turned rather negative heading into the meeting. The deals weren’t topping $5 billion, and they weren’t happening at the pace needed to provide the signal that the industry was finally emerging from its prolonged downturn following the acute phase of the pandemic.
“Sentiment is really bad in general in biotech,” Seaport Therapeutics CEO Daphne Zohar told BioSpace last month.
But she also predicted that by this time, that could change, noting that most of the action of JPM week happens on the first day.
An Optimistic Turn
Sure enough, day one did not disappoint. In addition to the big deals announced Monday, there has been a “really strong deal flow coming into J.P. Morgan, some great financings, people preparing to go public,” said Shiela Gujrathi, co-founder of the Biotech Sisterhood, a group of women CEOs in biotech, and a member of several biotech boards. She also told BioSpace that more new companies are cropping up, while private deals and high-quality science come out.
According to Julia Owens, a 25-year industry veteran and current CEO of a stealth biotech, the industry is returning to a “healthy normal.” She remembers riding out several “bubbles,” including the collapse of genomics in the early 2000s as the technology du jour.
“I am optimistic for this year, but . . . I’d like to see us in a healthy, gradual way rebuild and not let people just think we’re right back to the roaring days again. I don’t think that’s great for our industry,” Owens said. “I think we need to stay focused on the patient. We need to stay focused on science.”
