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### 2024 Outlook: AI, Politics, and Pricing in the Spotlight

As with any new year, 2024 presents new possibilities; though new and existing challenges are also …

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The JP Morgan Healthcare Conference (JPM) mirrors the current sentiment in the life sciences sector. While the atmosphere was notably more positive than in 2023, this positivity is tempered by economic uncertainties. Speaking with BioSpace, Daniella Kranjac, the founding partner at Dynamk Capital, expressed cautious optimism, noting, “There are still a few challenges ahead, but our experience with therapeutic technologies, Healthtech, and related fields suggests a smoother transition.”

Geopolitical and macroeconomic factors continue to exert significant influence on the market. Anticipated decreases in interest rates in 2024, coupled with a rise in successful public offerings, may pave the way for a resurgence in investment within the biopharma industry. However, amidst heightened regulatory activity and the backdrop of an election year, optimism remains guarded. Kranjac highlighted the upcoming election as a wildcard, stating, “The election in the fourth quarter and its potential impact on the economy and the industry pose uncertainties.” She also observed that startups are managing their expectations more realistically this year, albeit some are facing financial strains.

Leading up to JPM 2024, venture capitalists were already setting the stage for a more pragmatic approach. Bessemer Venture Partners’ 2024 Predictions report indicated a trend where traditional investors are exiting the biopharma sector, making funding acquisition more challenging. Deals are now subject to prolonged scrutiny, with investors demanding significant milestones before committing. The era of FOMO (fear of missing out) has waned. Despite the cautious optimism, Ansbert Gadicke, managing partner at MPM BioImpact, warned, “We must acknowledge that the [JPM] conference caters to industry experts. The key lies in attracting investments from large generalist funds, which are typically underrepresented at JPM, especially in a bear market.” Gadicke suggested that these generalist investors might exercise more caution than specialized investors.

Henry Chen, CEO of Tanvex CDMO, echoed a similar sentiment of cautious optimism. He noted a scarcity of significant acquisitions among public biotechs. Chen emphasized the ongoing concern regarding the availability of capital for biotechs, leading to a more disciplined approach to expenditure. “Entities with access to capital are strategically positioning themselves for future growth amidst market challenges,” he remarked.

In a conversation with BioSpace, Rob Williamson, president and COO of Triumvira Immunologics, Inc., shared his perspective on the familiar landscape at JPM. He observed, “M&A activity was robust in 2023, surpassing expectations despite a challenging financing environment. Therefore, the continuation of this trend at the beginning of the year did not come as a surprise.” Williamson expressed optimism about the trend of consolidation resulting from years of substantial investments, hoping for its continuation.

However, Williamson did highlight one surprising development that he finds encouraging. “There seems to be a growing interest in deals within therapeutic domains traditionally perceived as risky, such as neuroscience.”

CGTs: Pricing & Perception

The introduction of the first two FDA-approved gene therapies, Casgevy and Lyfgenia, for sickle cell disease (SCD) with price tags of \(2.2 million and \)3.1 million, respectively, has sparked discussions on drug pricing among industry executives. These therapies join the league of high-priced treatments like Hemgenix ($3.5 million), Skysona, Zynteglo, Zolgensma, and Luxturna.

Tim Hunt, CEO of The Alliance for Regenerative Medicine (ARM), emphasized during the Cell & Gene State of the Industry Briefing that diseases treated by cell and gene therapies (CGTs) often incur substantial costs for healthcare systems over a patient’s lifetime. For instance, treating SCD can cost between \(4 million and \)6 million per patient, while hemophilia B exceeds $600,000 annually, according to Orphanet Journal of Rare Diseases. Despite the eventual cost-effectiveness of CGTs, concerns linger over their affordability within healthcare systems.

Christian Cobaugh, CEO of Vernal Biosciences, pointed out to BioSpace that while CGTs have demonstrated clinical efficacy, a shift in perspective is necessary. “Although the pharmacoeconomics of CGT generally hold true, sustainability hinges on incorporating a pay-for-performance model into pricing,” he explained. Cobaugh elaborated, “Viewing today’s CGTs more as procedures than products underscores the high costs involved.”

Cobaugh predicted that as CGTs become more routine, standardized, and industrialized, development costs would decrease. “For instance, the intricate process of cell therapy administration will appear archaic once we can administer redosable gene editing medications that target hematopoietic stem cells efficiently,” he envisioned. “The latter’s cost-effective manufacturing and distribution methods are already established.”

Chen echoed Cobaugh’s views, emphasizing the significant improvements in CGT manufacturability within a short span. “The focus should be on innovative approaches to managing the costs of cell and gene therapies over time, rather than fixating on a single cost point,” he stressed.

Despite the challenges associated with CGTs, the field remains dynamic and promising. By the first quarter of 2023, over 100 CGTs had received approval worldwide, with more than 3,500 in various stages of development (The state of cell and gene in 2023), indicating a growing market trajectory.

Politics & PR

As 2024 unfolds, the industry faces escalating regulatory measures, both domestically in the U.S. and globally, spanning from pricing policies to artificial intelligence (AI) regulations. While acknowledging the necessity of regulations and standardization, industry professionals are mindful of the prevailing political landscape. Williamson remarked, “It’s convenient for politicians to target biotech and pharma firms as profit-driven entities, but the exorbitant costs of developing innovative medicines and complying with regulatory standards cannot be overlooked.”

In addition to concerns about perceived greed, Chris Pirie, COO at HDT Bio, highlighted a public relations challenge plaguing the industry, exacerbated during election cycles. He drew parallels with vaccine hesitancy trends, attributing them to various factors like conspiracy theories, safety concerns, and doubts about efficacy. Pirie emphasized the industry’s responsibility to articulate the value propositions of their products transparently, acknowledging both their merits and limitations. He underscored the collective obligation of industry stakeholders to elucidate the benefits of emerging technologies and treatments, fostering public trust.


Closely intertwined with politics, legislative actions are shaping the industry landscape. Amidst a surge in legislative initiatives globally concerning AI in healthcare, the Inflation Reduction Act (IRA) of 2022 looms large in industry discussions. Williamson shed light on the complexities surrounding drug pricing regulations. He cautioned against unilateral efforts to reduce branded prescription drug prices without addressing inefficiencies in the drug development cycle, which could impede innovation. In his view, balancing reduced development costs with lower prices is imperative to sustain innovation within the industry.

At JPM, discussions on the Government Regulations & Policy: Are They Stifling Innovation panel, featuring Peter Rubin, executive director of the non-profit No Patient Left Behind, pivoted towards collaborative solutions with governmental bodies. Rubin initiated a dialogue on aligning around moderate reforms to enhance the IRA. Recognizing the positive aspects of the IRA is deemed crucial, with hopes of extending beneficial provisions like reducing patient out-of-pocket expenses while rectifying drawbacks such as disincentives for small molecule innovation. Anchor

AI Tools: Realities & Mysteries

Significant investments in AI technologies are reshaping the industry landscape, with AI emerging as a focal point at JPM discussions. Machine learning, AI, and GenAI featured prominently across various Biotech Showcase panels. Beth Rogozinski, CEO of Oncoustics, underscored the substantial value of AI in healthcare, projecting a robust growth trajectory for the industry. She highlighted the pivotal role of major tech players—Google Inc., Microsoft Health Solutions Group, AWS, Meta, NVIDIA Corporation, Apple, and Tesla—in advancing drug development and discovery through AI integration. With six of these entities already engaged in healthcare initiatives, the convergence of technology and science continues to drive innovation.

Amidst industry challenges, AI is increasingly recognized as a tool for streamlining processes and enhancing operational efficiency. However, it is emphasized that AI complements human expertise rather than replacing it. When queried about AI’s potential to address equity and access issues in the industry, Jane Williams, VP and head of neuroscience, rare disease, and pediatrics at Syneos Health, opined, “AI serves as an invaluable initial screening tool, but human oversight is indispensable for ensuring patient-centric outcomes.” The prevailing consensus is that AI functions as a supportive tool that necessitates human oversight for validation and contextualization.

Any discourse on AI invariably underscores the critical role of data. As AI takes center stage, data quality emerges as a linchpin for AI effectiveness. As investments in AI surge, there is a concomitant need to enhance data collection practices to bolster AI applications.

The year 2024 heralds a wave of innovations and challenges for the industry. The thematic strands discussed above permeated numerous conversations at industry forums. Against the backdrop of an election year, the collaborative efforts among biotech, pharma, and tech enterprises will be closely monitored as the economic landscape continues to stabilize.

Lori Ellis serves as the head of insights at BioSpace, offering in-depth analyses and insights into industry trends for BioSpace and its clientele. Her primary focus lies in exploring the evolving intersection of technology and the pharmaceutical sector. For inquiries, contact lori.ellis@ biospace.com. Stay updated on her latest analyses via LinkedIn _.

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