JP Morgan 2019 – Drug pricing, drug development, immunotherapy, cancer moonshot, cell/gene-therapy, …

As we all know the JP Morgan Healthcare conference is an invitation-only conference. For this reason, I have summarized various announcements for the purpose of this review. As we have witnessed in the past, exciting announcements happen here in San Francisco around or just before this annual conference, and some of the news spark what eventually will become the big trends throughout the year. One could say it is a window to what is just around the corner in 2019.

Several commercial tool providers and diagnostic companies used this venue to announce their strategies or to provide a status update:

  • Invitae announced that it is expecting revenues of more than $144 million in 2018, more than double the revenue it generated in 2017. The company said it doubled testing volume year over year to more than 302,000 samples compared to approximately 150,000 in 2017.
  • Color will move whole genome sequencing into clinical care through the 100,000-person initiative which is focused on polygenic risk. The initiative, in which Illumina will provide sequencing reagents and hardware, aims to enroll 100,000 volunteers, including those from historically underrepresented groups, in Color’s research platform.
  • Color announced its new DNA10K initiative in partnership with the NorthShore University HealthSystem a new program that will provide free genetic testing to 10,000 patients as part of their annual exam with their primary care practitioner.
  • Genomenon raised $2.5M in new financing round
  • Illumina news included:
    • Illumina has shipped ~350 iSeq units, about half of which to new customers. Furthermore, starting in Q1’19 Illumina will ship the new 2×250 flow cell which will deliver ~20% lower cost than current kits, thus further cementing the path to the $100 genome.
    • Illumina shared that in 2018 ~12M consumer tests were processed on Illumina tech which is more than the cumulative volume processed in the previous 3 years, suggesting consumer genomics is growing to be viewed as an empowering tool to inform health & lifestyle choices.
    • Illumina also shared that >100 PB of data has been generated using their entire tech platform – about half was generated on their NovaSeq instruments – which is a data amount equal to approximately 25x the entire Netflix catalog.

CVS Health’s CEO Merlo talked about the impact of the Aetna acquisition and how the company plans to create value for its stakeholders. CVS Health finalized its $78 billion acquisition of big health insurer Aetna in November of 2018 – the equity value of the deal totaled $70 billion, but CVS Health also assumed $8 billion of Aetna’s debt.

  • CVS Health to create “a new front door to healthcare” – the company intends to scale back on underperforming products in its stores and reallocate up to 20% of space to more profitable healthcare service offerings.
  • CVS and Aetna to integrate clinical programs to support patients during and after discharge from the hospital to reduce readmissions.
  • CVS Health will also expand its MinuteClinic services to help patients manage chronic diseases.

A couple of major pharmaceutical company announcements stole the scene throughout the conference suggesting that 2019 may be the year of major pharma and biotech deals:

Furthermore, we learned that Gilead will make M&A its top capital allocation priority for 2019, while GSK is making big investments in oncology, including with the $5.1 billion acquisition of Tesaro as announced in December, and Amgen reiterated that they will look beyond its considerable in-house, genomic data-driven research and development organization for new assets. Even though drug pricing was a theme  throughout the conference and specially called out to be watched, several companies rolled out dozens of price hikes in the following days, including, J&J boosting list prices for their top-selling drugs such as Xarelto, Stelara and Zytiga, as well as Pfizer for several of its products.

During JPM this year, there were three biotech IPO attempts:

  • Alector looking to raise $150 million;
  • Poseida aiming for $115 million;
  • and Anchiano Therapeutics which has filed for a $35 million IPO.

In addition:

  • Sanofi will pay Regeneron more than $460 million to exit a 2015 immuno-oncology deal.

While the JP Morgan conference is famous for generating attention-grabbing headlines, this year the emphasis in discussions was also on the high cost of living in San Francisco translating into skyrocketing costs of meeting there. In this context we learned that:

  • To give back, a team of reporters at STAT launched a GoFundMe page that raised over $12,000 for Lava Mae, a local non-profit organization that provides mobile showers, bathrooms and supplies to the homeless in San Francisco and Oakland.
  • Some are calling for a complete change in venue – see more at #MoveJPM on twitter
  • Suggestions have been floating to move the conference to a city that can better handle the growing crowds and provide more meeting space at a more reasonable price, such as San Diego.

Hence, it will be interesting to see if and what change we can expect in the near or more distant future for the JP Morgan conference.

In summary: JP Morgan is an exciting event that indeed generates an exciting stream of news giving us an early read on what’s in store for us in 2019.