What the healthcare sector was selling at the J.P. Morgan confab
Every year, thousands of bankers, venture capitalists, private equity investors, and other moneybags flock to San Francisco’s Union Square to pursue deals. Scores of security guards keep the homeless, the snoops, and the patent-stealers at bay, while the dealmakers pack into the cramped Westin St. Francis hotel and its surrounds to meet with cash-hungry executives from biotech and other health care companies. After a few years of pandemic slack, the 2024 J.P. Morgan Healthcare Conference regained its full vigor, drawing 8,304 attendees in early January to talk science, medicine, and, especially, money.
1. Artificial Intelligence: Revolutionary or Not?
Of the 624 companies that pitched at the four-day conference, the biggest overflow crowd may have belonged to Nvidia, which unlike the others isn’t a health care company. Nvidia makes the silicon chips whose computing power, when paired with ginormous catalogs of genes, proteins, chemical sequences, and other data, will “revolutionize” drug-making, according to Kimberly Powell, the company’s vice president of health care. Soon, she said, computers will customize drugs as “health care becomes a technology industry.” One might think that such advances could save money, but Powell’s emphasis was on their potential for wealth creation. “The world’s first trillion-dollar drug company is out there somewhere,” she dreamily opined.
2. Weight Loss Pill Profits and Doubts
With predictions of a $100 billion annual market for GLP-1 agonists, the new class of weight loss drugs, many investors were asking their favorite biotech entrepreneurs whether they had a new Ozempic or Mounjaro in the wings this year, Zhavoronkov noted. In response, he opened his parlays with investors by saying, “I have a very cool product that helps you lose weight and gain muscle.” Then he would hand the person a pair of Insilico Medicine-embossed bicycle racing gloves.
More conventional discussions about the GLP-1s focused on how insurance will cover the current $13,000 annual cost for the estimated 40% of Americans who are obese and might want to go on the drugs. Sarah Emond, president of the Institute for Clinical and Economic Review, which calculates the cost and effectiveness of medical treatments, said that in the United Kingdom the National Health Service began paying in 2022 for obese patients to receive two years of semaglutide — something neither Medicare nor many insurers are covering in the U.S. even now.
3. Spotlight on Tax-Exempt Hospitals
Nonprofit hospitals showed off their investment appeal at the conference. Fifteen health systems representing major players across the country touted their value and the audience was intrigued: When headliners like the Mayo Clinic and the Cleveland Clinic took the stage, chairs were filled, and late arrivals crowded in the back of the room.
These hospitals, which are supposed to provide community benefits in exchange for not paying taxes, were eager to demonstrate financial stability and showcase money-making mechanisms besides patient care — they call it “revenue diversification.” PowerPoints skimmed through recent operating losses and lingered on the hospital systems’ vast cash reserves, expansion plans, and for-profit partnerships to commercialize research discoveries.
4. Money From New — And Old — Treatments for Autoimmune Disease
Autoimmunity drugs, which earn the industry $200 billion globally each year, were another hot theme, with various companies talking up development programs aimed at using current cancer drug platforms to create remedies for conditions like lupus and rheumatoid arthritis. AbbVie, which has led the sector with its $200 billion Humira, the world’s best-selling drug, had pride of place at the conference with a presentation in the hotel’s 10,000-square-foot Grand Ballroom.
CEO Robert Michael crowed about the company’s newer autoimmune drugs, Skyrizi and Rinvoq, and bragged that sales of two-decades-old Humira were going “better than anticipated.” Although nine biosimilar — essentially, generic — versions of the drug, adalimumab, entered the market last year, AbbVie expects to earn more than $7 billion on Humira this year since the “vast majority” of patients will remain on the market leader.e market to challenge Humira “was shocking,” he said. “I don’t think this will happen again.”
This article originally appeared on KFF Health News.
