Deals
M&A happened!
Johnson & Johnson said it was buying Intra-Cellular Therapies, maker of a blockbuster drug for schizophrenia and depression, for $14.6 billion. It's the largest biotech M&A deal since late 2023.
Eli Lilly said it was buying Scorpion Therapeutics, a developer of cancer drugs, for up to $2.5 billion. GSK announced a $1 billion deal to acquire IDRx, another cancer drug developer. Both IDRx and Scorpion are privately held.
M&A — yes or no? — was the question on the lips of just about every biotech observer in the run-up to JPM Week. Whether three deals, including one very large transaction, are sufficiently satisfying to swing biotech-sector sentiment into a more positive direction remains to be seen.
The XBI biotech stock index opened the day down more than 2%, but rallied a bit into the close to finish down less than 1%.
no-shows
Insurance companies drop out of presentations
Eleven major companies dropped out presentation slots at the conference, including insurance giants Cigna and Centene, a possible sign that leaders of large health care companies are looking to avoid public appearances in light of Thompson's assassination last month.
Our eagle-eyed reporter Bob Herman noticed this when comparing the final agenda posted by JPM with an initial agenda shared on Dec. 11.
Other companies that dropped out include pharmacy chain Walgreens, medical device maker BD, insurer Oscar Health, physician practice management firm Agilon Health.
Read more.
ENVIRONS
Is San Francisco as bad as they say?
As executives from some of the country's largest drugmakers and health conglomerates descend on the Bay Area, it's no secret that at least some of this city is not faring particularly well: Like many urban areas in America, San Francisco has more than its fair share of homelessness and addiction issues, in addition to other public health challenges.
But is it as bad as, say, the president-elect might make it out to be?
It depends on where you venture. Powell Street, the vertiginous thoroughfare with a cable car line that rises from Market Street through Union Square to the top of Nob Hill, is almost devoid of open retail stores. It's jarring to see so many boarded-up buildings in what once was a hopping city center.
Nearby, there are open-air drug markets on certain streets in the Tenderloin and South of Market area — within short walking distances of all the JPM goings-on.
Get away from San Francisco's core, however, either to the Embarcadero along San Francisco Bay, or even better, out to neighborhoods like The Castro, the Richmond or Mission Bay, and the city is thriving.
Forecasts
Moderna's growth and cash troubles continue
Moderna was one of the biggest losers on Monday after posting weak vaccine sales numbers for 2024 and slashing its 2025 forecast. The company is trying to ameliorate the slowing growth by accelerating expense cuts, but it's still burning a ton of cash. The stock fell nearly 17%.
For 2024, Moderna preannounced sales of $3 to $3.1 billion, lower than consensus of $3.3 billion. For 2025, the company lowered vaccine sales guidance to $1.5 to $2.5 billion from $2.5 to $3.5 billion. Moderna now plans to reduce operating costs by $1 billion this year and $500 million in 2026 versus its previous plan to shed $1.1 billion in costs by 2027.
"This company could theoretically go out of business," said Mizuho health care strategist Jared Holz in an email to clients on Monday. Moderna has approximately $6 billion in cash but is burning $1 billion-plus each quarter, Holz noted. "At the very least, Moderna will have to (most likely) raise money if it remains on this current path."
Moderna is seeking approval for a Covid/flu combo jab but the timeline for an FDA decision remains unclear. The development of an RSV vaccine has been delayed after an interim analysis wasn't robust enough to stop a Phase 3 study early. Final data are expected later this year.
BIOTECH
Cytokinetics is not for sale, but ...
CEO Robert Blum is very clear. The company — on track to secure U.S. approval in September for a drug to treat a serious heart condition — is not for sale. With more than $1 billion raised last year, Blum is preparing Cytokinetics to launch the drug, called aficamten for now, on its own.
Before you start cursing his name, know that Blum was also clear he is not an "empire builder." Speaking to STAT reporter Adam Feuestein Sunday from a hotel suite overlooking Union Square, the CEO said that neither he, nor the company's board, will ignore their fiduciary obligations to shareholders. That means if offers to acquire the company are delivered, they will be taken seriously.
"We've never pretended that Plan A is to sell the company," Blum told STAT. "You can make a case that you can maximize shareholder value with or without M&A. And that's what we are doing. And in 2024, I would argue we executed better than nearly any other year in our history in terms of delivering on goals.
"So as we're now in 2025, not that we would turn our nose up on M&A if that's in the best interests of maximizing shareholder value, but we're not beholden to that thesis," he added.
Read more.
RARE DISEASE
Sarepta keeps raking in cash
Sarepta Therapeutics released preliminary earnings on Monday, announcing the company took in $1.8 billion last year — $100 million above guidance. Over $800 million of that came from sales of Elevidys, its controversial gene therapy for Duchenne muscular dystrophy.
Sarepta is now bearing the fruits of an effort begun more than a decade ago to develop the first targeted treatments for patients with Duchenne muscular dystrophy. That push has repeatedly brought Sarepta in conflict with regulators, stretched the bounds of FDA flexibility, and raised eyebrows from some in the community. At the same time, it has brought treatments some doctors and patients are grateful to have and that have proven quite lucrative.
The company expects revenue to keep growing into the next year, when it forecasts it will take in $2.9 billion to $3.1 billion.
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