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Cartography Biosciences CEO Kevin Parker doesn’t see 2025 being much better than 2024 when it comes to financing opportunities for biotechnology companies like his. But like other executives who descended on San Francisco this week for the J.P. Morgan Healthcare Conference, he still took the opportunity to connect with investors, potential partners, and others to figure out creative solutions amid a yearslong downturn for the industry.
There’s a lot up in the air this year. A new administration will take office in the US in a few days, with new heads of the Food and Drug Administration and the Federal Trade Commission to follow in short order. Many large pharmaceutical companies will soon lose exclusivity on major drugs, leaving their business development teams to figure out which compounds they could acquire to plug the inevitable revenue gaps. And as executives like Parker know, it can still be difficult for start-ups to raise money—particularly in midstage rounds designed to fund drug development programs that are some distance from delivering promising therapeutic data.
“It does seem like everybody’s still kind of capital-constrained, judicious, focused—pick your wording, but it’s just a slower cycle than it’s been in the past,” Parker said.
An estimated 8,000 people attended the J.P. Morgan conference. Other biopharma execs never stepped foot in the Westin St. Francis, the event’s official hotel, but instead took over hotel lobbies and coffee shops in the Union Square neighborhood to pitch, mingle, and—if all goes well—make deals.
Conference organizers stepped up security measures this year in light of the killing in New York City last month of UnitedHealthcare CEO Brian Thompson. Metal barriers were erected around the entrances to the Westin, and guards were plentiful alongside bomb-sniffing dogs. Major health insurers dropped out weeks ago.
On Monday, about 20 protestors gathered across the street from the hotel, holding signs that read “people over profit” and “demand single-payer health care.” At least one called for the release of Luigi Mangione, who has been charged with the crime.
“I’m sort of shocked at this,” said Ethan J. Weiss, cofounder and chief scientific officer of Marea Therapeutics. “There’s a sort of belief that Big Pharma and biopharma and biotech are all evil. That to me is so sad.”
Still, there was an air of optimism in San Francisco. Uncharacteristically sunny weather lured executives out into the daylight for plein air meetings and interviews. Most days, the Union Square plaza was awash in blue suits, but on Tuesday, more than 100 members of the Biotech CEO Sisterhood donned pink and gathered for a photo on its steps “to show the power of community and to highlight the need for continued leadership representation and access to opportunity,” a spokesperson said.
There’s also a need for innovation. It became clear from multiple conversations that investor interest has started to swivel back toward platform companies—biotechs with novel science that could potentially yield multiple therapeutics rather than the single, clinically validated drug candidates that have attracted attention the past few years. And the wild commercial success of weight-loss drugs has spurred interest in widespread, chronic conditions.
“Chronic conditions are becoming more frequent because we’re getting older. I don’t think people appreciate how fast our population is aging,” said David Bearss, CEO of Halia Therapeutics, which is developing treatments for inflammatory diseases. “Our medical system and our therapeutics are usually a lot better at handling more acute things than chronic things. It’s like, well, let me fix this and go home and get better. But when you have to take this the rest of your life, it’s not the greatest thing. If inflammation is a driver of all that, we’re hopeful.”
Bearss was among the biotech executives looking for strategic partners to help finance the development of Halia’s drug candidates. Big drug firms make up the other side of that coin. For instance, Takeda Pharmaceuticals had its business development team on the ground in San Francisco to vet licensing opportunities in oncology, gastrointestinal inflammation, and neuroscience, according to Andy Plump, Takeda’s president of R&D.
A handful of executives are looking to get off the fundraising merry-go-round with mergers and acquisitions or initial public offerings (IPOs) after a few slow years for these financing methods. Cancer start-up MOMA Therapeutics is preparing for an IPO, although the company is “not in a rush,” said CEO Asit Parikh. Satellos, a Canadian developer of small-molecule drugs for muscular dystrophy, is planning to list on the Nasdaq stock exchange this year, complementing its Canadian listing, according to chief financial officer Elizabeth Williams.
This year will also doubtlessly bring deals involving artificial intelligence and related technologies. Experts predict that 2025 will be the year AI becomes ubiquitous in chemistry. It’s already happening inside start-ups like 1910 Genetics as well as Big Pharma firms like Novartis.
AI has yet to yield a fully realized drug—a treatment approved by a regulator like the FDA—but as McKinsey partner Erika Stanzl pointed out, it will take a few years to see the effects of the programs that drugmakers are implementing now. In the meantime, AI is clearly speeding up clinical development, she said.
“On the operational AI side, some of that is getting relatively mature,” Stanzl said. “We can see upwards of 3–6 months’ acceleration if you do that kind of AI right.”
Plenty of J.P. Morgan attendees had a chance to see what it might look like to do AI right from another perspective. Outside the Westin each day, a fleet of driverless white sedans lined up along the curb. Scanners—specifically, light detection and ranging (LIDAR) devices—spun atop them like black lighthouses, taking in information about their surroundings that allowed them to safely transport passengers down Powell Street. Open the Waymo app, select your vehicle, and step right in.
Executives were by and large enamored with the robotaxis. But to Jen Asher, CEO of 1910 Genetics, the cars were also a frustrating reminder of how far behind the life sciences industry is in adopting AI. She came to J.P. Morgan in part to change that and was meeting with partners to pitch how 1910 might serve as a link between their scientists and tech people. And, she thinks, it’s a multibillion-dollar opportunity.
“We’ll have more to say in a couple months,” she said.
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