SAN FRANCISCO—Well, let’s start with the obvious, a pattern that has been set for a good few years now: There were no M&A deals on the so-called Merger Monday that typically kick-started the J.P. Morgan Healthcare Conference of old.
In terms of M&A, if this pattern continues in the new decade, we should rename it Mundane Monday. There was a pre-JPM deal, namely the $1.1 billion buyout of dermatology biotech Dermira from Eli Lilly, but that wasn’t causing a stir.
A new tradition is to look to Gilead Sciences, one of the first presenters of the week, and what that company might buy with its massive cash pile. You’d be disappointed here, too. CEO Daniel O'Day said in a breakout session that: “The vast majority of our deals are going to be early-stage by nature, where you can collaborate better together.”
But, he added, later-stage pipeline deals are also in the cards, specifically those that “fit into our strategy,” all of which could be small to “transformative” like its Galapagos tie-up. When it comes to cancer, the focus will be on immuno-modulation and cell therapy (such as with its Kite Pharma buy), but not on small molecules or targeted therapies. Overall, O’Day sees bolt-on deals in the small to medium size range when it comes to buyouts.
It was a similar story over at Bristol-Myers Squibb, which got Celgene’s first presenting slot due to the fact that they now own the company. After spending $74 billion to become Squelgene, you might not be surprised to hear it’s not looking for major M&A.
Chairman and CEO Giovanni Caforio, M.D., said this JPM was going to be for “smaller science-based deals,” and again, the focus is on boosting its early-stage pipeline. Medium or larger deals are a few years off as it pays of debt and works through its Celgene integration.
Usually, this time of year you’ll see a lot of startups breaking cover to try to grab attention at JPM, but they typically are met with little fanfare; this year, however, one biotech focused on drug pricing was arguably the biggest thing to happen at the conference so far.
EQRx, an Alexis Borisy biotech, will create “equally good or better drugs” than those available today and sell them for cheaper. And, announcing its launch just before JPM got started on Sunday, it’s raised $200 million to get started.
This generated a lot of chatter on bio-Twitter about just how it could do that and whether it was in a financial position to sell drugs cheaper. As Matthew Herper from Stat put it, only in biotech would this be seen as revolutionary: Making products better and cheaper is what any other business outside life sciences would do. You can check out our interview with Borisy here.