In this week’s edition of InnovationRx, we report from the scene of the year’s biggest healthcare conference, look at the vaccine pipeline for norovirus, explore the health impacts of California’s wildfires and more To get it in your inbox, subscribe here.
Some 8,000 people descended on San Francisco for one of the healthcare industry’s biggest events this week: The 43rd annual J.P. Morgan Healthcare Conference. The event comes at a time when the industry has been unsettled. It’s been just six weeks since the killing of United Healthcare CEO Brian Thompson, and security was tight at the conference with a wall of armed police officers standing guard at the Westin St. Francis. Even with that, eleven major companies, including all the major health insurers, dropped out of the event. Meanwhile, uncertainty reigned as the nation lurched toward the inauguration of Donald Trump as president, bringing with him the nomination of Robert F. Kennedy Jr. as the nation’s top health official.
The conference is typically a hotbed of dealmaking, and a flurry of announcements coincided with it. Most notably, Johnson & Johnson announced that it would buy Intra-Cellular Therapies, whose drug Calypta is approved to treat schizophrenia and bipolar-related depression, in a $14.6 billion deal. Eli Lilly also signed a major deal, agreeing to buy Scorpion Therapeutics, which has an experimental oral therapy for breast cancer, for up to $2.5 billion. GSK is acquiring oncology biotech startup IDRx for $1 billion. And PE firm New Mountain Capital is acquiring software platform company Machinify with a plan to combine it with three other recent acquisitions to create a single software company valued at about $5 billion.
In a presentation at the conference, Novartis CEO Vas Narasimhan told investors that the company was “fully open” for M&A with the cash to do deals. “We’ve seen more activity here in our funnels and our markets,” added Danaher CEO Rainer Blair in the biotech and diagnostics company’s presentation. However, he noted that “valuations are still a little elevated.”
One possible tailwind for drug M&A: a coming patent cliff. Recent reporting by Stat noted that patents on dozens of brand-name medications, including Keytruda, Eliquis, Jardiance and Opdivo, will expire by 2033, potentially costing major drugmakers more than $400 billion in lost revenue – leaving open the possibility that the companies affected may try to buy their way out of that decline.
Moderna Has The Best Shot At A Stomach Flu Vaccine
Every year, somewhere between 19 and 21 million Americans come down with gastroenteritis (aka “stomach flu”), most often caused by a group of pathogens called noroviruses. These infections lead to hundreds of thousands of ER visits and hospitalizations, as well as around 900 deaths, every year. This winter, norovirus infections are particularly bad in the U.S., according to the CDC, which is recording the highest outbreak numbers of the last decade.Much to the consternation of parents, teachers and cruise ship enthusiasts, there are no approved treatments for norovirus infections, nor is there any vaccine against it. A treatment for norovirus is unlikely to be developed because the viral infection typically lasts just about a day or two, making it hard to demonstrate a benefit to regulators. Additionally, the primary complication that leads to hospitalizations is dehydration, which is easily treated with IV fluids.
This makes a vaccine the most promising avenue for fighting noroviruses right now. There are currently three vaccine candidates moving through the clinical pipeline in human trials right now, and the furthest along is Moderna, which has developed a norovirus vaccine with the same mRNA technology as the one for Covid-19. Being the first to market provides a big opportunity, given that annual infections of the virus cost the global economy around $60 billion, including both direct healthcare costs as well as indirect costs such as productivity losses. Moderna estimates that a norovirus vaccine has a total addressable market of about $3 to $5 billion.
Read more here.
PUBLIC HEALTH & HOSPITALS
The wildfires raging in Los Angeles have been a nightmare, causing at least 25 deaths and destruction of at least 12,000 structures. They’re also a public health concern as toxic smoke inhalation could lead to serious lung damage. The fires have also stressed southern California’s hospitals, health clinics, first responders and nursing homes. At least one clinic, an affiliate of Providence, burned down, while medical offices closed and routine appointments were canceled.
Erik Wexler, who took over as CEO of the Providence health system on January 1, told Forbes in an interview at the J.P. Morgan healthcare conference in San Francisco, that more than 1,000 of its caregivers had been displaced from their homes and that he was prepared to evacuate its Los Angeles hospitals if that became necessary. “We’ve been on the edge of evacuation, in Santa Monica in particular,” he said. “If you are in a mandatory evacuation, you’ve got four-to-six hours to evacuate. If we were in a recommended evacuation area, we would probably evacuate.” At the time we spoke on Monday, its Santa Monica location was about 10 blocks outside the recommended evacuation area.
As of Tuesday night, the fires continued to rage, and forecasters warned of powerful winds again on Wednesday after a brief reprieve.
DIGITAL HEALTH AND AI
AI chip powerhouse Nvidia announced a handful of healthcare collaborations at JP Morgan. With clinical research company IQVIA, it’s developing custom foundation models and AI agents. It will be working with genomics giant Illumina to provide AI products for analyzing genome data and other sequencing information. Illumina will also be using Nvidia hardware to power its Dragen analytics platform. The company announced that it will also be partnering with the Mayo Clinic to develop AI solutions that can help discover new cancer treatments and diagnostics tools. “We’re on a mission to improve patient care, increase accessibility, and together we’re going to write the next chapter in medicine,” Nvidia healthcare VP Kimberly Powell told reporters at a media briefing.
Also at the conference: nVision Medical founder Surbhi Sarna announced that her new company, Collate, has emerged from stealth with $30 million in seed funding and a valuation of over $100 million. The company aims to use AI to solve one of the life science industry’s biggest headaches: paperwork. Her company is developing tools that help automate the production of documents for things like clinical trial process, product development and manufacturing.
MEDTECH
The FDA has granted 510(k) clearance to ScreenDx, an algorithm developed by AI diagnostics startup Imvaria that can be used to help doctors diagnose interstitial lung disease from CT scans. The agency’s move comes about a year after the agency cleared Fibresolve, another algorithm that can diagnose lung fibrosis based on biomarkers.
Also: Brooklyn-based Cresilon announced this week that Traumagel, its device that can stop severe bleeding nearly instantly, has launched commercially after being cleared by the FDA last summer.
BIOTECH AND PHARMA
Pharmaceutical giant Lilly announced that it is teaming up with venture capital firm Andreessen Horowitz to launch the Biotech Ecosystem Venture Fund to “focus on advancing the development of new medicines, enabling novel modality platforms, and scaling emerging health technologies,” per an a16z statement. The fund will be managed by the VC’s Bio + Health group, which is now led by Vineeta Agarwala, who took on the role last month when the group’s previous leader, Vijay Pande, moved internally to an AI-focused role.
DEALS OF THE WEEK
The New Year is kicking off with a bang when it comes to venture capital. The past few days have seen multiple 9-figure funding rounds, including London-based Verdiva Bio, which launched with $410 million to fund new GLP-1s. It’s not the only new company that’s launched recently: there’s also Ouro Medicines, which raised $120 million to develop T-cell engagers and cardiovascular startup Kardigan, with a $300 million series A round.
Healthcare AI startup Innovaccer raised a $275 million series F round while U.K.-based AI startup Cera Care raised a $150 million mix of equity and debt. Tune Therapeutics raised a $175 million series B to continue developing its epigenetic editing portfolio. Another big one: diagnostics company Geneoscopy raised a $105 million series C round.
WHAT WE’RE READING
Hospitals are likely to see slower revenue growth in 2025, due to both increasing expenses and reduced demand.
Leaving FDA, Robert Cardiff is unapologetic – and warns of staff departures. CDER head Patrizia Cavazzoni has also announced she’ll be resigning from the agency.
Dementia cases in the U.S. will surge in the coming decades, researchers say.
The Federal Trade Commission’s second interim staff report on pharmacy benefit managers found significant price markups for drugs used to treat HIV and cancer.
An international commission says obesity should be assessed in a way that goes beyond the body mass index.
ACROSS FORBES
