The 43rd Annual JP Morgan Healthcare Conference was held in San Francisco from January 13-16, 2025.
I just finished a productive week at the JP Morgan Healthcare Conference 2025, where the global biopharma industry gathers in San Francisco to find opportunities to make deals, advance promising science, and accelerate new medicines for patients.
It is clear that the industry is at a pivotal moment – a golden age for patients, marked by unprecedented innovation. Even from the financial side, the sector is coming back after several difficult years. However, as an industry, we await how the Trump administration will implement policies related to health. Here are the key trends I predict will shape the biopharma landscape in 2025:
An increase in deal activity
One of the most visible trends is the revival of deals in the pharmaceutical sector. In 2024, we saw 106 biotech venture deals exceed $100 million, signaling a rebound from previous declines. The trend toward larger deal sizes is likely to continue as companies look to bolster their pipelines amid a looming patent cliff for many drug developers. With an estimated $400 billion in lost revenue expected from patent expirations between now and 2033, the urgency to refill pipelines is great. This year, I predict we will see an increase in acquisitions of early and late-stage assets, such as Eli Lilly’s acquisition of Scorpion Therapeutics, as companies look to secure innovative therapies that can have a significant impact on patient care. the patient. That said, larger funding sizes will also be tied to ensuring companies pass critical testing milestones.
Navigating health policy questions
The health policy landscape 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 keen to see reforms, such as the repeal of the “pill penalty”, a provision in the IRA that reduces the exclusivity period for small molecule drugs to 9 years, while biologics get 13 years . Health policy was not a major 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 handle regulatory policies related to new drug approvals. Some observers wonder about the influence of the so-called “DOGE” aspect of his cabinet, a proposed presidential advisory commission called the Department of Government Efficiency. With its focus on reducing inefficiencies, analysts question whether this administration will favor faster clinical development and drug approvals. Vaccine policy remains another hot topic and question mark. But unlike Trump’s first term, I’ve noticed more enthusiasm from business leaders this time around to work with his administration.
The rise of Chinese innovation
Another trend that cannot be overlooked is the growing influence of Chinese innovation in biopharma. Last year, one-third of pharmaceutical licensing deals originated from Chinese biotechs, a staggering increase from almost zero a decade ago. This change means a growing recognition of the high-quality science coming out of China, along with the cost advantages these innovations present. While the United States remains the leading 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 about Chinese assets develops, the implications for venture capital teams and patient access to new medicines are profound. The challenge for US biotech startups will be to differentiate their offerings from those coming out of China, especially as the latter continues to ramp up its capabilities.
The dominance of artificial intelligence
Artificial intelligence (AI) continues to dominate the headlines, and its role in drug development is becoming increasingly critical. While 2024 was a challenging year for AI and health tech companies—especially those without market-ready products—the consensus is clear: AI will revolutionize the way we approach drug development. On this point, the FDA released a draft guidance earlier this year signaling the importance of AI to drug development going forward. The question is not if AI will be useful, but when and how we can use it effectively. The world of technology and AI is increasingly entangled with biopharma: Nvidia’s new partnerships with healthcare companies IQVIA, Illumina and the Mayo Clinic were just announced this week. And Recursion, a technology 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 great, but the challenge lies in getting high-quality data to train models of AI. As we move forward, ensuring access to robust data will be essential to realizing the full potential of AI in healthcare.
Advances in cell and gene therapies
The momentum behind cell and gene therapies continues to gain steam, especially with exciting developments in the treatment of conditions such as type 1 diabetes. Recently, for example, Sana Biotechnology announced promising data in a patient in a first-in-human allogeneic cell therapy for type 1 diabetes – without immunosuppression.
And Bayer, along with our subsidiary BlueRock Therapeutics, announced plans to initiate a Phase III trial of its investigational allogeneic cell therapy for Parkinson’s disease, based on compelling data from the Phase I trial.
These examples, among others, are raising high hopes for cell and gene therapies as they begin to demonstrate positive human data.
A cautiously optimistic look ahead
While I predict that deal flow will improve as we move further into 2025, we must recognize that we are not going back to the peaks of 2020 or 2016. Instead, the focus will shift back to the basics: good science and good data will reign supreme.
The IPO landscape remains challenging with many companies struggling to maintain their post-launch valuations. However, the expected 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 breakthroughs on the horizon that will undoubtedly expand our repertoire of tools to treat disease. Despite the 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.
Thanks to Kira Peikoff for additional research and reporting on this article.
