JPM 2022: Licensing and research tie-ups trump M&A at conference in 'reflection of last year'

Just like at last year's J.P. Morgan Healthcare Conference, M&A is so 2019.

In the third winter of COVID-19, the drug development world hasn’t executed on the type of megamergers we saw in 2019, such as Bristol Myers Squibb’s $74 billion Celgene deal, which dropped in the lead-up to the healthcare industry's largest gathering. 

Of course, we don't know what’s happening in private Zoom rooms at the moment, or who managed to make some company-defining contacts at the second virtual edition of the conference. 

Galapagos, with $5.6 billion to spend and a thinned late-stage pipeline, made it known Thursday morning that there are, in fact, private Zoom meetings to hash out potential acquisitions. The biopharma’s chief business officer wasn’t shy to say Galapagos is speaking with a host of companies as the company works on a rebound for 2022. 

RELATED: 2022 forecast: Biopharma M&A lags in 2021. Will drugmakers still look for bolt-on deals or large transactions?

But what was made public is that biopharmas stuck to licensing and research partnerships this week at JPM, extending a trend that has been going on for months. Backloaded, billion-dollar biobucks pacts are increasingly standard.

“This year, I think, is a reflection of last year, and it’s much more licensing, much more tie-up,” said Stuart Henderson, global life sciences industry leader at Accenture, in an interview with Fierce Biotech.

There are a few key factors driving the focus on licensing and collaborations, according to Henderson.

Premiums on acquisitions have increased, thus limiting affordability; venture capital funding has skyrocketed three times in the past five years, reducing the need for pharma’s money; biotechs are going all the way to market on their own with tighter labels and more defined populations, shrinking the need for pharma’s help in selling drugs; and the economic value of Big Pharma buying a late-stage biotech “has declined,” he said.

The virtual conference started with multiple licensing and research handshakes revealed Monday morning. Bayer kicked off the week with a $1 billion biobucks bet on a gene therapy deal with Mammoth, using the CRISPR science out of the lab of Jennifer Doudna, Ph.D.

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Next up was Novartis, ponying up $163 million to opt in on a COVID-19 antiviral after its collaborator Molecular Partners showed a 78% risk reduction in early-stage patients. Then, Pfizer doled out $300 million upfront for Beam Therapeutics’ base editing technique. The COVID-19 vaccine maker made another two deals Monday morning, including a financials-free agreement with Acuitas Therapeutics for its lipid nanoparticle delivery system for use in mRNA vaccines and therapies. Add to that a $100 million biobucks pact with Codex DNA. 

This was all before 7 a.m. ET on Monday. Pfizer’s pandemic rival, Moderna, made some waves with its own development deal at $45 million upfront for Carisma Therapeutics’ in vivo engineered chimeric antigen receptor monocyte therapeutics in cancer. BioNTech followed with a $750 million milestone payments pact with Crescendo Biologics; Bristol Myers Squibb offered a whopping $3 billion in biobucks for cell therapies from Century Therapeutics; and Acadia was stoked to sign a $60 million upfront tie-up with Stoke Therapeutics. 

That’s at least nine collaboration and licensing deals in the first day. You get the pattern. It was medtech that brought the M&A: Medtronic offered $925 million for cardiac mapper Affera, and Exact Sciences will spend $190 million on testing lab PreventionGenetics. 

Henderson said some of the biotechs attracting licensing interest are those with platform technologies and digital biology companies that are attempting to cut the billion-dollar costs of drug discovery and development.

RELATED: JPM22, Day 4: Vertex aims to be cystic fibrosis leader into the 2030s; Gritstone hopes for new cancer biomarker; Galapagos' rebound year

The licensing announcements have slowed since those first days. But could that mean arms will be linked in coming weeks, as final negotiations are hashed out and due diligence is conducted? We hope so. 

We know pharma is looking. Plenty of companies—Pfizer, Moderna, BioNTech, Novartis and many more—have cash burning a hole in their pockets and pipelines to fill.