Biopharma in 2024: The Industry Outlook

A Report from the 2024 J.P. Morgan Healthcare Conference
Blog
Published on:
February 14, 2024
Joris Pezzini

We spoke with Joris Pezzini, Executive Vice President of Biopharma, Alira Health, to get his take on the 2024 J.P. Morgan Healthcare Conference, the largest health care investment symposium in the industry.

Joris has more than 15 years of executive-level experience in the healthcare industry, with both science and business roles at biotech, pharma, and consulting firms. Joris is a biotech engineer and received a business and leadership degree from Harvard Business School.

What has changed for biotech companies and investors since the 2023 J.P. Morgan Healthcare Conference?

Last year, the atmosphere was very heavy. Most entrepreneurs we met were frustrated by the negative financial environment; it was challenging to get funding for their innovations, and we were all worried that the entire ecosystem was failing. The vital link between innovators and investors was damaged and the entire value creation system was therefore at risk.

Unfortunately, not all biotech companies are meant to survive. The ecosystem is there to create the right filters, selecting only the innovations with the highest medical value for patients. In 2020, it looked like the filter was torn open. Now we are all over-compensating for that and the filter is clogged.

So, what changed in 2024? It’s difficult to argue that the financing environment has drastically improved, but there was a fundamental change in mindset this year in San Francisco. CEOs have shifted their energy towards navigating the storm rather than hoping for the sky to turn blue.

Most of our discussions were focused on solutions to proactively re-connect investors and biotech entrepreneurs. That critical link is now the center of focus of both companies and investors, with both sides convinced that they need each other to create value.

Biotechs have accepted that despite stressfully short runways, they need to invest more time and energy to mature their equity story and have a clearer vision of the assumptions depicting the end market of their innovation, even at early stages. In some capital raise processes we followed, this additional work had an almost magical impact, unlocking blocked discussions with investors who struggled with a particular assumption of the business case. Identifying the blocking point requires experience and active listening during investor meetings, whether it’s pricing, or competition, or clarity of the evidence generation plan. When you put your finger on the right topic, you can almost always address it and repair or reinforce the vital link between investors and innovators.

On the other side, investors have accepted that constant feeling of being overwhelmed by the number of opportunities they need to assess. The issues that completely blocked them last year are now integrated into the normal challenges of their daily operations. More than ever, they ask for help from experts in the field to sort opportunities, identify red flags, and assess the value of the companies they investigate. They also find that more mature companies are coming to the table with extremely educated cases, which helps them to filter out the ones that have not done the job.

This journey is probably still too long and difficult for innovations to progress as we would like, but I feel that we are slowly rebuilding a functional process.

More than ever, [investors] ask for help from experts in the field to sort opportunities, identify red flags, and assess the value of the companies they investigate. They also find that more mature companies are coming to the table with extremely educated cases, which helps them to filter out the ones that have not done the job."
What trends were discussed at the J.P. Morgan Healthcare Conference?

I think that we are living in an amazing time where innovation, science, and medicine are creating value for patients in two very distinct ways.

On one hand, the personalization of medicine has never been so present, with drugs and solutions now specifically developed for a very precise group and profile of patients. The ecosystem is really pushing the concepts of patient centricity and targeted medicine, embracing smaller groups of patients and seeking solutions for rare diseases. Better understanding of a specific patient profile naturally improves the chance to truly generate medical value while limiting irrelevant side effects of lack of efficacy.

This model works especially well for highly medical settings and conditions where patients are closely followed by the healthcare system and a significant amount of data are available to precisely determine their conditions and the relevant targeted approach.

Now this is likely the tip of the iceberg of medicine, and the other way value is being created is that we see strong signs of healthcare players researching ways to treat a broader population by focusing on prevention rather than waiting for diseases to arise. For most diseases, there are ways to slow or prevent them years or even decades before diagnosis. This trend is blurring the line between pharma and lifestyle changes. One example is obesity drugs that made the news recently, because the moment you talk about obesity, you are talking about a broad population with a wide range of backgrounds. And by treating obesity through appetite control medication, you are moving upstream to prevention because many other diseases are driven by or related to obesity and metabolic complications.

The blurred line between pharma and lifestyle is driven by the fact that we are complex organisms. We are progressing in our understanding of human biology at the cellular level, but also recognizing that holistic approaches are immensely powerful, and we therefore need to also find solutions to support patients in their daily behaviors at home (sleep, nutrition, mental health, etc.). This understanding is driving both these trends in biotech innovation; we can create a targeted approach for individual patients, and we can also support broader populations with lifestyle changes to prevent disease. Personally, I would love to see the two approaches coexist in a balanced, innovative healthcare world.

What is your major takeaway from the J.P. Morgan Healthcare Conference?

Biotechs are on the rise! They are becoming a more powerful player in the ecosystem. They are more mature and educated than ever before, better prepared for a world that values true innovation, and are already functioning with patient centricity at the core of their model.

Despite the challenging journey they face, I think that biotechs will retain more value from innovation in the future and play a larger and potentially longer role in the life of assets they develop.

Two distinct trends that validate this in early 2024:

  • M&A and licensing deals are starting to come back, with deal valuations on the rise and some big pharma players willing to front-load deals and take part of the risk.
  • More and more biotech clients consider going to commercialization on their own, especially in rare diseases. That validates the alignment of development and commercial models for those diseases where patient centricity is a major part of the commercial strategy.

I share the optimism I saw on the part of both biotech companies and investors at this important conference; it was a fantastic way to kick off the new year! We are excited to continue our contributions to the ecosystem, reinforcing the vital link between biotechs and investors and directly supporting the progress of innovations.

Learn how we support biotechs and contact us now.

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