J.P. Morgan 2021: The Show Must Go On
Executive Summary
The J.P. Morgan Healthcare Conference will be a virtual event but the industry's biggest business meeting will still lay the groundwork for the year ahead.
The pharmaceutical industry's usual kick off to the year – the J.P. Morgan Healthcare Conference – will be different in 2021, with zoom conversations and virtual presentations replacing the crowded breakout rooms at the Westin St. Francis Hotel and impromptu meetups around San Francisco's Union Square.
The virtual meeting will take place from 11 to 14 January and will use Eastern Standard Time in another change, given that the meeting usually runs on West Coast time. While most of the industry's big meetings were held virtually in 2020 because of COVID-19, J.P. Morgan presents a particularly unique challenge in a virtual format in that so much of the meeting is about the social gatherings, dinners and cocktail parties on the side. That kind of spontaneity can't be recreated.
AstraZeneca PLC VP-business development operations Shaun Grady reflected on it during a Biotech Showcase panel on 7 January. "We would all be getting on airplanes and going out to San Francisco this coming weekend," he said. "Maybe it is a bit of a relief to some degree that we aren't doing that … but at the cost of bumping into people and just learning about things or hearing about things."
He urged people in the industry to try to replicate some of those unexpected conversations online. "Maybe taking the time to still have the zoom calls or e-mail exchange with people who when you see the first e-mail, it doesn't quite hit the mark for you," he said. "We should maybe try to create our own serendipitous moment."
Sanofi chief medical officer Dietmar Berger, in a pre-J.P. Morgan media briefing, said his calendar is as full as ever next week. "Personally, I'm missing some of the face-to-face and the spontaneity. I think that is something we are all missing at this point, and we are looking forward to getting that back, but I think we will be highly efficient still."
The break may be a welcome reset for some. J.P. Morgan has ballooned in size over the last decade and the meeting has been criticized in recent years for the high cost associated with attending and the setting, cultivated for exclusivity. While the J.P. Morgan organizers have clutched to tradition, the forced change to online could allow for reimagining the conference going forward.
J.P. Morgan usually provides pharmaceutical executives a stage for setting the tone for the year ahead, and after a year like 2020, when health care and business fundamentals were upended by COVID-19, that hopefully involves turning the page on the global health crisis and providing a new vision incorporating the lessons learned from the pandemic. It's also an opportunity for the industry to celebrate the achievements it made last year, namely rising to meet the COVID-19 challenge to deliver treatments and vaccines that will help end the pandemic.
There is no crystal ball, of course. Just a year ago at the 2020 conference, the industry appeared to be coasting into 2020 on solid footing with COVID-19 not even a thought as a potential business headwind. (Also see "A Muted J.P. Morgan, But The Focus Is Execution – And That's Good News" - Scrip, 15 Jan, 2020.) One year later, the pandemic is poised to leave a long-lasting impact, potentially bringing changes to the way that pharmaceutical manufacturers are perceived by the public and legislators, as well as how industry conducts business and commercial operations, interacts with health care providers and patients, thinks about the speed of drug development, and collaborates with one another and others. (Also see "How COVID-19 Defined 2020 For Biopharma" - Scrip, 31 Dec, 2020.)
Given all that has come to pass, 2021 could be a banner year for the pharmaceutical industry.
A Subdued Meeting For Deal News?
As a prime setting that has been the start of many biopharma deals, J.P. Morgan attendees are always hyper-focused on business development and any foreshadowing that the year ahead will be plentiful in biopharma payouts. This year, it seems likely deal news could be more subdued than usual given the virtual format of the meeting.
Drug makers certainly don't appear to be holding off on announcements to wait for J.P. Morgan as a springboard. Deal-making seemed to be picking up steam toward the end of 2020, with AstraZeneca capping off the year by announcing a $39bn acquisition of Alexion Pharmaceuticals Inc.. (Also see "AZ's Alexion Acquisition Looks Astute Bit Of Business" - Scrip, 13 Dec, 2020.) That deal was the biggest announced in 2020, a year that saw 13 biopharma M&As valued at $1bn or more up front.
Gilead Sciences, Inc. was a busy dealmaker, as investors had been hoping. The company finished the year with the $1.4bn acquisition of private biotech MYR GmbH in December, gaining a treatment for hepatitis D virus, Hepcludex. (Also see "Gilead Turns Back To Virology With $1.4bn MYR Acquisition" - Scrip, 10 Dec, 2020.) Most of the deals Gilead signed in 2020 were in oncology, however, including one of the other big deals of the year, the $21bn acquisition of Immunomedics, Inc. in September. (Also see "Infographic: Cancer Deal-Making In 2020" - Scrip, 14 Sep, 2020.)
Despite being an active dealmaker, Gilead's stock price is down 7% from where it was trading a year ago, when it was already under pressure to reinvent itself and diversify from its maturing antiviral businesses. That's even with the near-term and unexpected top-line revenue boost it gained from the launch of Veklury (remdesivir) for the treatment of hospitalized patients with COVID-19. Investors at J.P. Morgan will be anxious to hear how the company intends to leverage all of its recent deals into a long-term growth strategy.
The last two years running, Eli Lilly and Company has delivered on the deals front at J.P. Morgan. In 2020, the company announced the acquisition of Dermira Inc. for $1.1bn, gaining the interleukin-13 inhibitor lebrikizumab for atopic dermatitis. (Also see "Lilly’s Paying $1.1bn For Itch Advantage With Dermira’s Lebrikizumab" - Scrip, 10 Jan, 2020.) A year before, Lilly announced the $8bn acquisition of Loxo Oncology, Inc. on the opening day of JPM 2019, sparking an overall optimistic tone for the meeting. (Also see "J.P. Morgan 2019: Industry Throws A Bonanza, With An Elephant In The Room " - Scrip, 9 Jan, 2019.)
This year, however, may be different, since Lilly announced the roughly $880m acquisition of the neurodegenerative gene therapy firm Prevail Therapeutics Inc.in December. (Also see "Deal Watch: GSK Makes $85m Wager On Surface’s Preclinical NK Cell Therapy" - Scrip, 21 Dec, 2020.)
Tracking Innovation Advances
New technologies like mRNA – the platform behind the Pfizer Inc./BioNTech SE and Moderna, Inc. COVID-19 vaccines – have matured at a rapid-fire pace, raising questions about how they will next be deployed and what is ahead for their developers. Moderna will be under scrutiny for the rollout of its first commercial product, which turned out unexpectedly to be a COVID-19 vaccine, and how it plans to build on its current strong position. The company is developing a mid-stage portfolio of mRNA vaccines and also earlier-stage mRNA intracellular therapeutics that it has big hopes for, but has yet to prove out in the clinic.
Meanwhile, gene therapies faced setbacks last year, highlighting the challenges of bringing truly breakthrough medicines to the commercial market, despite their promise.
There was a record investment in public and private companies working in cell therapy, gene therapy and gene editing in 2020, with $13bn in funding, a new record and up 91% year-over-year, according to an analysis by William Blair analysts on 31 December. That shows there is no lack of interest in their potential.
At J.P. Morgan, investors will look for updates from companies like Novartis AG, BioMarin Pharmaceutical Inc., bluebird bio and Sarepta Therapeutics, Inc. on their gene therapy programs and commercial strategy.
BioMarin received a complete response letter from the US Food and Drug Administration in August for its gene therapy valoctocogene roxaparvovec for severe hemophilia A, with the agency requesting more long-term data.
Sarepta, meanwhile, announced mixed data on SRP-9001, including lackluster functional improvements in boys with Duchenne muscular dystrophy on 7 January, a therapy that is viewed as being a big catalyst for the company and gene therapy more generally. (Also see "Sarepta's DMD Gene Therapy: Durable Responses After Two Years" - Scrip, 29 Sep, 2020.)
Novartis ran into trouble expanding Zolgensma (onasemnogene abeparvovec) to older patients with spinal muscular atrophy after FDA requested another study of an intrathecally administered formula. (Also see "Intrathecal Zolgensma Delay Could Allow Competitors To Shine" - Scrip, 23 Sep, 2020.)
Bluebird bio has had to push back the commercial sale of its first gene therapy Zynteglo in Europe several times, as well as the filing timeline for its gene therapies in the US. But this could be a big year for the company, with a potential US filing in mid-2021 for betibeglogene autotemcel (beti-cel, formerly LentiGlobin) for transfusion dependent beta-thalassemia and the potential approval of Lenti-D (elivaldogene autotemcel) for cerebral adrenoleukodystrophy in Europe. (Also see "EU Gene Therapy Submissions, Approvals Expected To Pick Up In 2021" - Pink Sheet, 4 Jan, 2021.)
The Year For Alzheimer's?
Another milestone for the industry this year could be the approval of the first disease-modifying drug for Alzheimer's disease, a potential catalyst on the horizon if Biogen, Inc.'s closely-watched aducanumab is approved by the US FDA. It's far from a guarantee after a negative FDA advisory committee meeting in November, but the action date is 7 March. (Also see "Aducanumab Panel Pushes Back On Rosy FDA Outlook, Could Derail A Swift Approval" - Scrip, 7 Nov, 2020.)
Bringing the first disease-modifying treatment for Alzheimer's to market would be an accomplishment and a big market opportunity, but uncertainty around the efficacy data supporting the regulatory filing is likely to carry through to the commercial realm.
The Biogen story is one investors will be watching closely at J.P. Morgan, because of aducanumab as well as a recently announced $1.53bn deal with Sage Therapeutics, Inc.. The companies are partnering on zuranolone for major depressive disorder, postpartum depression and other psychiatric disorders and SAGE-234 for essential tremor and other neurological conditions, which puts another near-term commercial opportunity on Biogen's doorstep. (Also see "Biogen And Sage On Plans To Build A Brain Franchise Together" - Scrip, 30 Nov, 2020.)
Sage, meanwhile, is one company that will be entering the new year with a new CEO. Barry Greene, the former Alnylam Pharmaceuticals Inc. president, was announced as the successor to Jeffrey Jonas in December. (Also see "Barry Greene Seizes CNS Leadership Opportunity As New Sage CEO" - Scrip, 16 Dec, 2020.)J.P. Morgan is generally a high-profile venue for new leaders to make a public debut and unveil their corporate vision, though this year, but there is no single CEO leadership transition that stands out within the top big pharma and biotech ranks.
Merck & Co., Inc.'s Merck Research Laboratories president Dean Li is one leader investors will be curious to hear from, after he took over the top research position at Merck at the start of the year from Roger Perlmutter. (Also see "Merck’s Perlmutter Is Retiring, Handing Over Keytruda To Li" - Scrip, 2 Oct, 2020.)
Don't Forget About A New US President
Another topic at J.P. Morgan will most certainly be the incoming US President, Joe Biden, and the Democrat-led Congress. The government's focus initially will be on a widespread COVID-19 vaccination campaign, but drug pricing could eventually return to the forefront.
It appears the Senate will have a slim Democrat majority, along with the one in the House, but the appetite to pursue serious drug pricing reform may not be significant, given the slight margin. Industry already had a contentious relationship with President Trump in any event and managed to avoid material legislative landmines over the last four years, despite lots of threats. He notoriously criticized the industry as "getting away with murder" during the middle of J.P. Morgan in 2017. (Also see "Trump Throws Pharma A Curve Ball On The Third Day Of J.P. Morgan" - Scrip, 12 Jan, 2017.)
Bernstein Research analyst Ronny Gal, in a recent note, estimated the risk from a Democrat administration as being low. "It currently seems drug policy is more of a tag-along issue for president-elect Joe Biden, who is more focused on coverage expansion," he said. "A legislative effort is likely, but the outcome will be measured, and the finality provided should help s