JPM25: The FDA’s Future, AbbVie’s Second Thoughts, and Lilly’s Lessons
The close of the J.P. Morgan Healthcare Conference turns the spotlight to the forthcoming inauguration and what the new administration might mean for the Food and Drug Administration (FDA) and the Department of Health and Human Services. Industry leaders exhibit confidence despite potential disruptions, underscoring a belief in the stability of regulatory processes.
Pharmaceutical executives like Andy Plump, president of R&D at Takeda Pharmaceuticals, express confidence as they highlight the scientific strengths of potential FDA leaders. Even amid potential new scrutiny on drug approvals, experts suggest that the foundational systems in place will maintain stability.
As significant changes in leadership loom at the FDA with the departure of veteran figures, anticipation builds for a clarified healthcare agenda. In the interim, the conference provided valuable insights and revealed several key highlights.
Biotech’s Challenges Persist
Analysts at HSBC Innovation Banking suggest that the biotech sector may face a prolonged period of challenges, aggravated by fluctuating interest rates and expectations of regulatory instability. Rebecca Stevenson, head of healthcare investment banking with HSBC, notes the retreat of generalist investors from biotech offerings, impacting initial public offering (IPO) performance.
Stevenson indicates that recovery hinges on increased deal-making activity. Mergers and acquisitions (M&A) in the private market appear stable, although public deals have lagged. Geopolitical tensions and anticipated interest rate trends add to investors’ concerns.
Lilly’s Forecast Misstep
Eli Lilly faced investor disappointment with 2024 revenue forecasts that did not meet earlier guidance. CEO David Ricks attributes this shortfall to unexpected prescription growth patterns for their GLP-1 drugs, Mounjaro and Zepbound, during the previous December. Additional factors included unanticipated distributor and wholesaler stock decisions.
Ricks acknowledged the learnings gained from the GLP-1 drug market, emphasizing the complexity and scope of this business segment. Moving forward, Lilly aims to provide more accurate guidance and navigate these challenges effectively.
AbbVie’s Re-evaluation Post-Cerevel
AbbVie’s significant investment in Cerevel Therapeutics took a hit when its experimental drug for schizophrenia underperformed in trials. The outcome led to a major financial impairment charge for the company. Despite the setback, AbbVie CEO Robert Michael insists that the firm is still exploring the potential of emraclidine.
This situation prompts AbbVie to reassess its investment strategy, particularly in neuropsychiatry. Emphasis remains on taking calculated risks, as demonstrated by past successful acquisitions that bolstered the company’s portfolio.
Novartis: An Active Year Ahead
Novartis plans to continue its active acquisition strategy in 2025. Fiona Marshall, Novartis’ president of biomedical research, emphasizes a willingness to incorporate early-stage assets, even when overlapping with the company’s internal projects.
This approach was evident in their acquisition of radiopharmaceutical developer Mariana Oncology and gene therapy assets from Kate Therapeutics. Despite generic challenges faced by the gene therapy sector, Novartis maintains an optimistic outlook on its potential.
The J.P. Morgan Healthcare Conference offered a platform for navigating the upcoming changes and challenges in the healthcare industry, underscoring the sector’s resilience and capacity for adaptation.
