Digest of the 2022 JPMorgan Healthcare Conference
Author: Jean-Claude Muller, 穆卓Executive Editor at BtoBioInnovation email@example.com
SPECIAL REPORT #22.3
Digest of the 2022 JPMorgan Healthcare Conference
The 40th JPMorgan Annual Health Care Conference took place virtually on January 10-13, 2022. This yearly conference is the largest health care investment symposium in the biopharmaceutical industry which connects global industry leaders, emerging companies, innovative technology creators with members of the investment community. In sharp contrast to previous years no major acquisitions were announced during the conference, but updated announcements from many companies were thoroughly assessed by analysts and business development leaders. We report a digest of some of the most relevant news released earlier this week.
Mergers and Acquisitions.
Medtronic announced that it made an offer worth $925 million to acquire Affera, a Boston based company, and extends its own cardiac ablation catheters. The offer includes a $250 million unnamed contingent package. Affera makes catheters that build detailed maps of the heart to help physicians direct pulsed-field and radiofrequency ablation to the correct location. In ablation procedures, catheters apply electrical or thermal energy to scar cardiac tissue, treating atrial fibrillation and other arrhythmias by blocking abnormal signals from moving through the heart.
Takeda agreed to acquire Adaptate Technologies, a London-based company, for access to new antibodies cell engager platform for the modulation of a specific type of gamma delta T cells. Terms of the deal were not disclosed.
Pfizer. On the first day of the conference Pfizer, the new leader in the mRNA field, announced a deal with Beam Therapeutics worth $300 million in upfront money and up to $1.05 billion in downstream milestones as part of a four-year R&D collaboration to develop gene base editing work for a trio of therapeutic targets including the liver, CNS and muscle. Beam therapeutics, based in Boston, is one of the leaders in base editing, a CRISPR-driven approach that switches nucleotide base pairs instead of making irreversible cuts in the genome. Coined as “CRISPR 2.0,” the approach aims to valid unwanted mutations in patient’s genetic code while still capturing most of the earlier technology therapeutic power. Later in the day Pfizer also announced a nonexclusive licensing deal with Acuitas, a Vancouver based company, for a Lipid Nanoparticule (LNP) delivery systems for up to 10 vaccines and therapeutic indications and a $100 million deal with Codex DNA, a San Diego based company, for bringing synthetic DNA assembly into Pfizer’s R&D organisation. A few days ago, Pfizer already announced an extension of its partnership with BioNTech to develop a shingle vaccine which would compete with GlaxoSmithKline Shingrix. Pfizer is clearly taking a huge bet on mRNA being a major part of its future growth strategy. Pfizer, CEO, Albert Bourla indicated that the company could produce more than the projected 50 million courses of treatment of Paxlovid, its COVID-19 antiviral agent, announced in November. “We have confidence that w can make 120 million treatments this year. That is 3.6 billion tablets. That is a very big capacity. But it is doable” Bourla said.
Johnson & Johnson which is preparing for a consumer healthcare business spinoff late next year, aims to generate $60 billion in pharma sales according to new CEO Joaquin Duato. In the second half of the decade J&J expects to launch new products which would contribute in a major way. Amongst them Duato highlighted five programs that could each generate $5 billion or more in peak sales: Carvykty – a CAR-T cell medicine-, nipocalimab, – a drug that could treat 10 diseases-, Rybrevant – for the treatment of lung cancer-, Milvexian,- the BMS partnered oral Factor XI inhibitor – and Taris – a bladder cancer platform for local delivery of a variety of drugs into the bladder. J&J also announced a project to link up with Microsoft to connect its digital surgery programmes. The project based on Microsoft’s Azure services includes artificial intelligence and machine learning support for J&J medical devices such as its knee replacement robot or its endoscopy robot, located in the operating room.
Bristol Myers Squibb revealed that it expects to have around $45 billion to $50 billion in free cash flow between 2022 and 2024 to spend on a “balanced capital allocation strategy, prioritisation business development and returning cash to shareholders” through dividend and share repurchase programmes. “With our strong financial position, we continue to invest in internal and external innovation to further enhance and diversify our pipeline, while delivering new medicines to patients with serious disease and creating long-term value for our shareholders,” CEO Giovanni Caforio said in a statement. On the same day BMS and Century Therapeutics, a Philadelphia based company, entered into a strategic collaboration to develop induced pluripotent stem cells (iPSC) derived allogeneic cell therapies in a $150 million cash licensing deal to develop natural killer and T cell therapies.
Eli Lilly. Every year analysts at Clarivate issue their prediction for which drugs will become blockbusters. By the end of 2026 the analysts are expecting $16 billion in sales from the top 7 drugs and the top 2 candidates are both from Eli Lilly. As number 1 they predict diabetes drug tirzepatide, a dual GLP-1 and GIP antagonist for the treatment of type II diabetes, with sales of $4.55 billion in 2026 and donanemab, a potential Alzheimer’s disease treatment with sales of $4.5 billion at the same period. Eli Lilly has set the ambitious goal to receive five drug approvals in the next two years. Lilly has already submitted an NDA to the US FDA and to the EMA for tirzepatide. Donanemab is currently under investigation at the US FDA after it received Breakthrough designation (BTB) in June and Eli Lilly started a rolling Biologics License Approval (BLA) in October.
Amgen. Less than a week after announcing a $1.9 billion collaboration with Flagship’s Generate BioMedicine (Cambridge, MA), to boost its artificial intelligence capabilities, Amgen announced a strategic collaboration with Arrakis in a “several billion dollars” deal to develop five RNA degrader therapeutics. “Though once considered a near-impossible task, drugging RNA has since become a hot topic in the industry. Arrakis’s approach, in theory, is similar to protein degradation, except it uses an enzyme to degrade RNA instead of proteins. It’s a goal that’s been long on his mind and can be applied to any disease area” Amgen SVP of global research Ray Deshaies said. Roche had already invested in the Arrakis platform in a $190 billion deal in 2020.
Biogen. The launch of Adulhem, for the treatment of Alzheimer’s disease has been highly controversial for several reasons, not least its initial price of $56,000 a year for the average patient. Last month Biogen announced it would cut Aduhelm’s price in half after very disappointing sales and pushback from stakeholders. “We were wrong, by the reaction of the community, by the reaction of physicians, by, eventually, the reaction of patients and policy leaders “ Biogen CEO, Michel Vounatsos said.
Novavax. 2022 could be the year of Novavax. Since the beginning of COVID-19 pandemic the biotech has turned out impressive data but was struggling to keep up with its own deadlines. The protein-based vaccine had been delayed because of a series of regulatory delays but seems to have overcome most of them. Since the beginning of the year NVX-COV2373 received World Health Organisation emergency listing and a European Medicines Agency conditional marketing authorisation. Novavax said that it completed certain submissions required by the US FDA for an Emergency Use Application (EUA) request and plans to submit them at the end of the month. Novavax has run into manufacturing problems to file authorisations using manufacturing data supported by its partner, Serum Institute of India.
Vertex. According to its President and CEO, Reshma Kewalramani, Vertex thinks it will be the leader in cystic fibrosis (CF) “well beyond” this decade and into 2030. Aside from its approved drugs Vertex aims to treat CF with a triple combination that is in phase 3 and is working on an mRNA-based treatment in the preclinical phase.
Acadia Pharmaceuticals (San Diego, CA) and Stoke Therapeutics (Bedford, MA) announced a collaboration agreement aiming at developing three new RNA-based therapies in a deal worth $900 million for rare diseases and CNS disorders. The companies will focus on the recently discovered SYNGAP1 syndrome, followed by the Rett Syndrome (MEPC2) and an undisclosed target. Stoke will receive a $60 million upfront payment from Acadia and is eligible to receive up to $907 million in milestones. SYNGAP1 syndrome was first identified in 2009 and can be characterized by developmental delay or intellectual disability, generalized epilepsy and autism spectrum disorder, among other things, presenting in early childhood. The condition is caused by mutations in the SYNGAP1 gene and is said to account for “1% to 2%” of all intellectual disability cases. Rett syndrome typically occurs in young girls, due to a mutation of a gene on the X chromosome. It’s a condition in which Acadia is working on another program, having revealed positive top line data in a Phase III study last month showing the candidate, known as trofinetide, beat placebo on two co-primary endpoints.
AstraZeneca. The company announced a $75 million collaboration deal with Scorpion Therapeutics to tackle a “potentially transformative biology” at highly validated targets. Although little is known about the content of the collaboration, the statement of the companies notes that they are all focusing on transcription factors in cancer. The Anglo-Swedish company also announced the extension of its collaboration with BenevolentAI on their artificial intelligence-powered drug discovery efforts in adding heart failure and systemic lupus erythematosus alongside the ongoing successful projects in chronic kidney disease and idiopathic pulmonary fibrosis.
Bayer enters an agreement with Mammoth’s, a CRISPR technology company founded by Nobel Price Laureate Jennifer Doudna, in a deal worth more than $1 billion in downstream milestones for up to five in vivo gene editing candidates. Mammoth, which had signed a similar deal with Vertex in October 2021, has developed gene editing systems using both Cas14 and Casɸ, among other variants, which are two smaller versions that allow for far greater flexibility in terms of delivery to target tissues. That means Mammoth’s team can push its editors into smaller adeno-associated viral vectors (AAV) but also into certain lipid nanoparticles (LNP).
Sanofi. In recent years the Paris based company has not been a stranger to the biopharmaceutical deal making club. Last year alone Sanofi inked buyouts of Kymab, Tidal Therapeutics, Translate Bio, Kadmon Holdings, Orgimm Biotechnology and Amunic thus extending its presence in the immunology, immuno-oncology and vaccine businesses. During a Q&A session it’s chief financial officer Jean-Baptiste Chasseloup de Chatillon said the company's experience with eczema blockbuster Dupixent has it wanting to grow more in immunology. "We are really feeling that we can build the strongest franchise in immunology among big pharma," he said. Sanofi announced a deal with South Korean ABL Bio for a preclinical bispecific antibody that targets alpha-synuclein and crosses the blood brain barrier for the treatment of Parkinson’s disease. Roche, AstraZeneca and Lundbeck also develop alpha-synuclein antibodies and several small molecules targeting alpha-synuclein are already in the clinical stage.
BeiGene (China) expects to bring 10 molecules per year to the clinic in 2024 and a total of 10 molecules to the clinic in 2022-23. “Yes, I said each year,” CEO John Oyler repeated for clarity: “The biggest pain point in our industry is clinical trials,” Oyler said. “Almost all companies rely on third-party CROs, and they’re paid based on activity with no real incentive to modernize, adopt the latest technology and make things more efficient. It’s widely recognized that our industry is decades behind in adopting the latest technology and implementing operational excellence in this area.” To become CRO-free, BeiGene has built its own clinical development team, now with 2,200 people. Oyler explained that this has allowed the company to be more inclusive in securing trial participants, modernizing its trial operations and realizing cost advantages once scale was achieved. Oyler knows the CRO business well. In 2005, he started a Beijing-based CRO, BioDuro, which he sold in 2009. “Today, we’re seeing the results of this endeavour,” Oyler said. “We believe that we have built one of the most important and strategic competitive advantages that exists in the entire industry, and it’s around its biggest pain point that has the most leverage.”
Idorsia. The Swiss biotechnology company, which is a spin-off of former Actelion, acquired by J&J for $30 billion in 2017, received a US FDA approval for Quviviq or daridorexant, a dual orexin receptor antagonist (DORA) for the treatment of adults with insomnia. Previous DORA launches by Merck with Belsomra (suvorexant) and Eisai with Dayvigo (lemborexant) faced difficulties in gaining market shares due to warning labels regarding next-day residual effects and abuse potential.
Denali failure. The US FDA has placed a clinical hold on the IND for Denali’s Takeda partnered DNL919, an Alzheimer’s clinical candidate targeting the protein coding gene TREM2. Denali had received a lot of attention for its pioneering work on a technology allowing the crossing of the blood-brain barrier. The reputation of the company was already tarnished last summer when Denali’s lead drug, DNL310 for Hunter syndrome showed less than expected clinical improvements.
Paris, January 15, 2022.