On my first night in town for the 41st annual J.P. Morgan Healthcare Conference, it was the Lyft driver who provided me with a distinctly San Francisco experience. Switching his Tesla into autonomous mode, we cruised along the freeway with the car doing the work and my driver merely “supervising.”
I’m happy to report that the autopilot feature safely conveyed us downtown. “Wait ‘til I tell my kids!” I thought to myself, giddy with excitement.
While getting a first-hand glimpse at the future of travel was certainly a high point, here are a few other observations from the rest of my brief time at the conference:
Brewing GLP-1 battle…
The GLP-1 space has largely been controlled by Eli Lilly and Novo Nordisk. As they pursue the wide-open obesity market, the pair look poised to strengthen that duopoly.
Last year, Novo got a green light for obesity drug Wegovy, which has the same active ingredient as Ozempic (semaglutide), its type 2 diabetes drug approved in 2017.
To compete, Lilly is seeking an obesity indication in 2023 for tirzepatide, its type 2 diabetes med which won approval last year under the trade name Mounjaro. The drugs’ impressive weight-loss efficacy has been a double-edged sword, leading to viral marketing and widespread shortages.
On Tuesday, Lilly execs were asked if the diabesity market could become another duopoly. Lilly CFO Anat Ashkenazi noted that the company is planning to have multiple incretins in the market, from an oral GLP-1 to triple-G, an agonist of GIP, GLP-1 and glucagon receptors which could find a niche for use in those who don’t reach a desired body mass index on tirzepatide.
Lilly says its oral GLP-1 delivers “injection-like efficacy” (Novo already markets an oral, Rybelsus) and is building a “wall of evidence” that treating obesity can have a range of downstream health benefits.
“We see this as a chronic disease with severe medical consequences,” ranging from sleep apnea to heart failure to kidney disease, said Ashkenazi.
Payers don’t see weight loss the same way, though. She said she hopes a bill, moving through Congress, can expand Medicare coverage to include obesity screening and treatment.
Novo, for its part, recently said the Wegovy relaunch is getting underway, setting up a clash of these two titans later this year. Obesity is a huge market, with 100 million people in the U.S. and 650 million affected globally. That’s likely too big to be served by just two players, so look for others to try and threaten the Lilly-Novo axis of power.
…but not between Alzheimer’s drugs
Sometimes competition helps define a new market.
In the Alzheimer’s arena, it’s helping to turn the page after some frustrating setbacks, said Lilly chief science officer Daniel Skovronsky during the same presentation Tuesday.
“A sense of nihilism came over the [anti-amyloid] field,” he recalled, in the wake of Biogen’s Aduhelm debacle and the recent negative trial results seen with Roche’s erstwhile Alzheimer’s agent gantenerumab.
Building from that “deficit of credibility” were the positive Phase 3 trial results for Eisai/Bogen’s Leqembi (lecanemab), which went on to score accelerated approval and is now awaiting full approval with the Food and Drug Administration. Unsurprisingly, Skovronsky said he expects data for Lilly’s own donanemab, poised to arrive in Q2, to continue to restore faith in the amyloid approach.
Echoing Biogen CEO Chris Viehbacher’s comments from a day earlier, Skovronsky put in a plug for Medicare coverage – “a basic necessity,” as he put it (currently, Medicare coverage is essentially limited to those in clinical trials) – and shared that Lilly is planning to launch a blood test at the same time.
In a statement last week, the Centers for Medicare & Medicaid Services said that traditional approval could lead to broader coverage.
While the Alzheimer’s treatment landscape has been somewhat more welcoming than obesity, that doesn’t mean that Lilly hasn’t sought to differentiate. If donanemab is approved, Its duration of dosing could offer an advantage over Leqembi’s with many patients requiring less than a year on the therapy. That may also save the U.S. from breaking the Medicare bank on Alzheimer’s treatment for seniors.
Precision immunology advances
One would not characterize immunology & inflammation as an untapped area. But a sub-branch – precision immunology, which entails taking a biomarker approach to treating inflammatory diseases like RA and IBD – could grow the I&I market via therapies that improve on the efficacy and safety of established players.
One such drug being tested by Prometheus Biosciences, codenamed PRA023, had a 26% placebo-adjusted clinical remission rate in ulcerative colitis and Crohn’s disease, according to Phase 2 IBD data toplined in December for the anti-TL1A drug. These data were very well-regarded by the Street.
“Rinvoq-like efficacy with Entyvio-like safety,” was how SVB Securities summed up PRA023’s performance in an investor note. The investment bank forecast revenue north of $6 billion by 2035.
Recently, Pfizer spun out its lead TL1A asset to Roivant Sciences. That drug, dubbed RVT-3101, showed a potentially best-in-class 30% placebo-adjusted clinical remission rate in its own Phase 2b IBD study, also toplined last month. Efficacy was even higher in the biomarker-positive population, with no safety signals emerging.
“This is moving a foot in a game of inches,” Roivant CEO Matt Gline boasted in his JPM presentation Monday. The dataset “encourages blue-sky thinking,” he added. “It gives you the idea that you can go beyond just UC into other diseases with inflammatory and fibrotic components, and that’s a function of the unique mechanism of TL1A.”
Roivant’s data also show that RVT-3101 largely preserved its efficacy even in biologic-experienced, second-line patients, whereas other therapies stumbled in this hard-to-treat population. Maintenance data are due later this year for RVT-3101, while Prometheus plans to advance PRA023 into Phase 3 in UC and CD.
M&A is not going away
It’s just changing shape. The down economy and market has led to a dip in healthcare investing. But alternate sources of capital are emerging and deal models have evolved to “single-digit, billion-dollar-type, bolt-on deals,” observed Matthew Leskovitz,” managing director, healthcare investment banking at Goldman Sachs, during an informative breakfast panel.
In this environment, some drugmakers have fallen back on “classic forms of collaboration.” That is, aligning with partners who bring compelling science that addresses highly unmet need, mesh with their broader portfolio and offer line-of-sight into value, explained Michael Klobuchar, EVP/chief strategy officer for Merck, on the same panel.
Indeed, I noticed that a lot of execs, when asked about capital allocation, touted their willingness to do “tuck-in” deals. Johnson & Johnson CEO Joaquin Duato, whose company announced a deal to acquire medtech firm Abiomed in November for $16.6 billion, said smaller tuck-ins will be the order of the day – for medtech and pharma M&A – for the rest of the year.
These trends were evident in the most recent spate of deal announcements: BioNTech’s acquisition of data science outfit InstaDeep, the biotech’s AI partner, for $440 million; Qiagen’s $150 million acquisition of Veragen in the diagnostics area; AstraZeneca’s purchase of CinCor Pharma for up to $1.8 billion; and Ipsen’s deal for liver disease specialist Alberio.
More royalty based tie-ups, spin-offs as well as bolt-on acquisitions could be on the way. With all of the downward pressures, it just makes sense as big pharma needs the needs deals to fuel growth, BCG’s Priya Chandran, managing director/senior partner, global sector leader, biopharmaceuticals, told MM+M.
While the big news may have been JPM’s return to an in-person format for the first time since 2020, organizers made a deliberate effort to “de-densify” the Westin’s notoriously packed hallways by holding the line on attendance, as well. The switch to Q&A-in-place also helped in that regard, as it wasn’t necessary to jockey from ballroom to breakout and back. The halls were still packed, but traffic flowed and people seemed to have an easier time.
Negotiating the rain-soaked streets was another matter. While I can now say that I got a taste of the record rainfall the Bay Area is experiencing, I’ll take staying dry over getting drenched any day. The weather is one factor that’s out of organizers’ direct control. Or is it?
As one tenured JPM attendee told me, when this conference started back in 1983 as Hambrecht & Quist, the 400 attendees could all fit comfortably inside the Westin. January, which is traditionally San Francisco’s wettest month, made sense. Suffice it to say, that is no longer the case. Is it time to move this meeting to February or March?