Last week A3Access Advisors, LLC spent the week in San Francisco at the JP Morgan Conference. After the past few years of torrential rain, a pandemic, lackluster enthusiasm, the Silicon Valley bank debacle, and industry fatigue, we experienced some sun and far more optimism. With the uncertainty of an election year, uncertainty around the implementation of the Inflation Reduction Act (IRA), thinning pipelines, and a period of investor pessimism, there were notable signs of an industry recovery on the horizon. Several key themes resonated with us.
- Spending may be returning. M&A activity is returning to past levels as evidenced by the volume and value of deals announced leading up to and throughout the week. This likely signals that pharma companies remain concerned with the breadth and depth of their respective portfolios. It also emphasizes the importance for early-stage companies to effectively articulate and demonstrate their unique value proposition through clinical development, market preparation, and the ever-increasing scrutiny of public and private payers.
- AI, AI, AI. Whether it was optimism about how AI can be used to solve the industry’s ills, examples of where impact is being demonstrated, or the sobering discussions about serious watch outs, AI was everywhere and a top priority for most companies.
- Big markets are back. A focus on treatments for large populations and chronic disease is returning. After a decade of the industry pivoting towards oncology and rare disease, there is a noticeable shift happening. The success of GLP-1 therapies is leading a resurgence of companies focusing on cardiometabolic disease. This will undoubtably resurface the age-old debate around value, affordability, patient selection, appropriate utilization, and pricing.
- Less talk about pricing. While ensuring access to new therapies was a prevalent topic across meetings, there was surprisingly little discussion about pricing. The IRA was discussed in many sessions, but it was more about how to evolve and adapt rather than to berate and complain. Is this a sign that the industry has accepted the new norms that come with this legislation? Time will tell, but it serves as a reminder that development and commercial strategies must account for the potential impact of the IRA. Our recent post can help you plan for how to respond. https://lnkd.in/gp-ckusw