The 43rd Annual JP Morgan Healthcare Conference was held in San Francisco from Jan 13-16th, 2025.
I just wrapped up a productive week at the 2025 JP Morgan Healthcare Conference, where the world’s biopharma industry converges in San Francisco to find opportunities for dealmaking, advance promising science, and accelerate new medicines for patients.
It’s clear the industry is at a pivotal moment – a golden age for patients, marked by unprecedented innovation. Financially, the sector is also bouncing back after several difficult years. However, as an industry, we await how the Trump administration will implement health-related policies. Here are the key trends I anticipate shaping the biopharma landscape in 2025:
An Increase In Dealmaking Activity
One of the most notable trends is the resurgence of dealmaking in the pharmaceutical sector. In 2024, we saw 106 biotech venture deals exceeding $100 million, signaling a bounce back from previous downturns. The trend toward larger deal sizes is likely to continue as companies seek to bolster their pipelines amid a looming patent cliff for many drug developers. With an estimated $400 billion in revenue losses expected from patent expirations between now and 2033, the urgency to refill pipelines is great. This year, I predict we will witness an uptick in both early and late-stage asset acquisitions, like Eli Lilly’s acquisition of Scorpion Therapeutics, as companies look to secure innovative therapies that can make a significant impact on patient care. That said, the larger financing sizes will also be tied to ensuring companies pass critical testing milestones.
Navigating Health Policy Questions
The landscape of health policy remains fraught with uncertainty, particularly with speculation surrounding the future of the Inflation Reduction Act (IRA) under the new Trump administration. Many industry stakeholders are eager to see reforms, such as a repeal of the “pill penalty,” a provision in the IRA that reduces the period of exclusivity for small molecule drugs to 9 years, while biologic drugs get 13 years. Health policy was not a big focus of the campaign, so it remains to be seen what the administration’s priorities will be.
Other uncertainties include how the new administration will treat regulatory policies surrounding new drug approvals. Some observers wonder about the influence of the so-called “DOGE” aspect of his cabinet, a proposed presidential advisory commission termed the Department of Government Efficiency. With its focus on reducing inefficiencies, analysts wonder whether this administration will favor quicker clinical development and drug approvals. Vaccine policy remains another hot topic and question mark. But unlike the first Trump term, I have observed more enthusiasm from business leaders this time toward working with his administration.
The Rise of Chinese Innovation
Another trend that cannot be overlooked is the rising influence of Chinese innovation in biopharma. Last year, one-third of pharma licensing deals originated from Chinese biotechs, a staggering increase from virtually zero a decade ago. This shift signifies a growing recognition of the high-quality science emerging from China, coupled with the cost advantages that these innovations present. While the United States remains the core center of biopharma innovation, we are beginning to see a more collaborative global environment where good science can flourish regardless of geographic boundaries.
As the conversation around Chinese assets evolves, the implications for venture capital teams and patient access to new medicines are profound. The challenge for U.S. biotech startups will be to differentiate their offerings from those emerging from China, particularly as the latter continues to ramp up its capabilities.
The Dominance of Artificial Intelligence
Artificial intelligence (AI) continues to dominate headlines, and its role in drug development is becoming increasingly critical. While 2024 was a challenging year for AI and tech health companies—particularly those without market-ready products—the consensus is clear: AI will revolutionize how we approach drug development. To this point, the FDA released draft guidance at the start of the year signaling the importance of AI to drug development going forward. The question is not whether AI will be useful, but rather when and how we can effectively leverage it. The worlds of tech and AI are ever more entangled with biopharma: just announced this week, Nvidia’s new partnerships with healthcare companies IQVIA, Illumina, and Mayo Clinic. And Recursion, a techbio company that has partnered with Bayer, just announced its partnership with Faro Health, an AI-powered platform for data-driven clinical protocol design.
UC Berkeley’s Jennifer Doudna, the Nobel Prize-winning CRISPR pioneer, aptly noted during a panel hosted by Endpoints News that the opportunity with AI is immense, but the challenge lies in obtaining high-quality data to train AI models. As we move forward, ensuring access to robust data will be essential for realizing AI’s full potential in healthcare.
Advancements in Cell and Gene Therapies
The momentum behind cell and gene therapies continues to gain steam, particularly with exciting developments in treating conditions like type 1 diabetes. Recently, for example, Sana Biotechnology announced promising data in one patient in a first-in-human allogeneic cell therapy for type 1 diabetes — without immunosuppression.
And Bayer, together with our subsidiary BlueRock Therapeutics, announced plans to initiate a Phase III trial for its allogeneic investigational cell therapy for Parkinson’s disease, based on compelling data from the Phase I trial.
These examples, among others, are creating high hopes for cell and gene therapies, as they begin to demonstrate positive human data.
A Cautiously Optimistic Look Ahead
While I anticipate that deal flow will improve as we move further into 2025, we must recognize that we are not returning to the heights of 2020 or 2016. Instead, the focus will shift back to fundamentals: good science and good data will reign supreme.
The IPO landscape remains challenging with many companies struggling to maintain their valuations post-launch. Nevertheless, the anticipated wave of mergers and acquisitions will provide opportunities for companies to recalibrate and grow, even in the face of devaluations.
I remain optimistic about the clinical milestones on the horizon that will undoubtedly expand our repertoire of tools for treating disease. Despite policy uncertainty, the future of biopharma looks promising, and I am excited to witness the transformative impact we will have on patients’ lives in the years to come.
Thank you to Kira Peikoff for additional research and reporting on this article.
