A tradition for much of the industry, the annual JP Morgan Healthcare Conference kicked off yesterday morning in San Francisco. It’s a yearly ritual during which the Westin St. Francis Hotel, located downtown and right across from Union Square, becomes the epicenter of biopharma pronouncements and deal-making, for four days anyway. 

For those drawn by its sheer size, the event does not disappoint. More than 9,000 pharma CEOs, institutional investors and biotech entrepreneurs have converged on the hotel. That means that, besides the snaking lines in the hallways and competition for electrical outlets, it’s standing room only in many sessions and close quarters overall.

This year’s conference being the first of the 2020s, though, the usual healthcare hubbub and hooplah mixed with a sense of history, specifically what the new decade may bring relative to the 2010s. Recall that the last decade was one of frenetic innovation, in everything from next-generation cell and gene therapies to precision oncology, immuno-oncology and a cure for hepatitis C. That led to a historic level of funding

It’s largely up to the healthcare execs standing at the podium to determine the extent to which that funding rate continues—this is an investing conference, after all—and, as we move into a new decade, to what extent healthcare growth will remain immune to shifts in the larger economy, geopolitical risk or other macro themes like the election. 

Below are some other themes that emerged on Day 1.

A cold open for biotech consolidation

Pharma execs typically complement their internal R&D strategy with business development. “You have to do both,” Bristol-Myers Squibb CEO Giovanni Caforio reminded us. And JPM is often the venue where firms announce M&A, but what a difference a year makes.

One year ago, it was Caforio’s $74 billion acquisition of biotech titan Celgene that set the stage for JPM, with news breaking the weekend before the conference. By contrast, this year’s biopharma business-development season opened last Friday with Eli Lilly’s rather modest $1.1 billion deal for medical dermatology company Dermira, and its experimental treatment for moderate-to-severe atopic dermatitis, lebrikizumab. 

With the Celgene deal now closed, Caforio touted the progress BMS has made toward integrating the biotech. “We will deliver one third of the promised $2.5 billion in synergies this year,” he said. 

But BMS is not done paying. If three of the biotech’s investigational drugs score approval over the next two years, its former shareholders stand to take home another $9 per share. One of these, ozanimod, a multiple sclerosis drug which the FDA initially refused to review due to incomplete data, has a March 25 FDA review date. Analysts expect approval.

You never know what Vas is thinking

The relatively quiet start to M&A this year was all the more surprising given that 2019 ended on a high note, with Novartis agreeing in November to pony up $9.7 billion to acquire The Medicines Company. That deal set up the Swiss drug maker to add a biologic, MedCo’s inclisiran RNA interference drug, to its cardiovascular franchise, alongside heart-failure med Entresto.

The MedCo deal not only represented the largest acquisition thus far for third-year CEO Vas Narasimhan. It also marked a bet on the return of cardiovascular drugs. Over the past decade or so, pharmaceutical drug development has made a well-publicized shift toward treating smaller, more focused populations, pivoting away from some large public health issues like diabetes and CV disease, which remains the no. 1 killer globally. 

The Novartis-MedCo deal, whose centerpiece was the PCSK9 inhibitor inclisiran, bucks that trend. To underscore the point, Novartis and the UK government yesterday announced a large-scale, NHS clinical trial, in which the drug maker will make inclisiran available to tens of thousands of patients at risk of heart disease. It’s set to launch later this year.

If inclisiran is given to 300,000 patients annually, it could help prevent 55,000 heart attacks and strokes, and has the potential of saving 30,000 lives in the next 10 years, UK officials said in a release.

The NHS deal “demonstrates how [inclisiran] in particular can transform population health and cardiovascular disease,” said Narasimhan.

Sarepta’s not done 

In 2016 biotech firm Sarepta Therapeutics secured approval for Exondys 51, which treats the 13% of children with Duchenne muscular dystrophy whose genetic mutation is amenable to exon 51 skipping. Last August the FDA rejected its Vyondys 53 treatment, designed for those whose genetic mutation is amenable to exon 53–another 80% of DMD patients.

After that surprise decision, the company, whose relationship with the FDA has been strained in the past, mounted a data-driven appeal and ultimately won, securing the agency’s nod for Vyondys 53 last month. Doug Ingram, Sarepta president and CEO, called the regulatory about-face “the fastest reversal of a CRL [complete response letter] in FDA history.” 

Exondys 51 generated $380 million in revenue in 2019, a 26% annual increase, Ingram said. What’s more, last Friday the company initiated a rolling submission for casimersen, which is designed to treat another 8% of the DMD population. 

Sarepta expects casimersen to be approved this year. It would double the number of treatable patients between Vyondys and casimersen vs. Exondys alone.

Also last month, Sarepta inked what’s being touted as a megadeal with Roche, which gained ex-U.S. commercial rights to Sarepta’s investigational gene therapy candidate for DMD, SRP-9001, but no ownership stake in the biotech itself. Ingram said the deal ranks as the largest gene therapy licensing deal, and the largest single-candidate ex-US licensing deal, ever. More importantly, when the deal closes this quarter, the firm will have $2 billion at its disposal to help drive its programs.

Other deal news to note

On the M&A front outside of biopharma, Medtronic—the med-tech giant behind such medical devices as pace makers and heart valve replacements, spinal implants and robots used in general surgery—announced yesterday it’s acquiring spinal cord stimulation firm Stimgenics for an undisclosed amount. 

Teladoc, which facilitates virtual doctor visits, said it would acquire rival InTouch Health for $600 million, including $150 million in upfront cash.