Welcome to 2018! What we are watching for JPM18 and the coming year…
Now that the holidays have wound down, we look forward to catching up with many of you in person as the Bionest team and many others from across the healthcare business world descend on San Francisco next week for the three-ring circus of conferences, one-on-one meetings and social gatherings that is JPM18. Here are some of the things we’ll be watching for this year, both over the conference week and the months to come:
- A Continued Focus on Drug Pricing
This week, Spark Therapeutics announced the planned pricing for Luxturna, its one-time gene therapy for a genetic form of blindness, which was approved by the US FDA in December. The price set by the company—$425,000 per eye, or $850,000 for most patients—was lower than most experts expected and was commended by some payers as “responsibly priced.” Contributing to that positive reception was the menu of payment and access options that Spark is offering, which include tying payments to how well the therapy works and exploring payment by installment.
As we’ve discussed many times, drug pricing issues are being exacerbated by the development of highly personalized therapies that provide significant benefits for very small numbers of patients. Drug developers need to recoup the high costs of development and to realize a reward for such innovations, or the stream of innovation will become a mere trickle as investors seek returns elsewhere. It is hoped that such value-pricing innovations and flexible payment options can help expand access and ease the cost issues, which are indeed a real problem for everyone. As more and more such therapies achieve commercialization, we expect discussion to continue in this area and additional pricing innovations to emerge. We believe Spark’s pricing innovation will have a major effect on how innovative new drugs are priced worldwide, especially in the United States.
- M&A — On All Fronts
In early December, retail pharmacy company CVS Health Corp made a $69 billion offer to purchase insurance company Aetna, Inc. From insurers to hospital chains, companies are looking for ways to lower health care costs, and one of the best ways to do so is by keeping people out of the hospital. The combination of these two firms, which pairs Aetna’s medical expertise and data with CVS’s widespread pharmacy stores, is seen as offering the potential for improved healthcare access for patients, better treatment for costly chronic diseases, and lower costs. While regulatory authorities still need to approve the merger, it could spur further M&A activity between insurers and other segments of healthcare delivery.
Many are watching with great anticipation for an upswing in M&A in the biotech/pharma sector. We also predict this increase in M&A, fueled by tax reform that brings trillions of dollars back to the US for biotech and pharma companies and spurs unprecedented activity.
JPM18 will be one of the year’s premier venues for M&A announcements, and so we’ll be watching for news across the healthcare sector. And in fact, the announcements have already begun with today’s $630 million buyout by Takeda of its stem cell partner, TiGenix.
- New Readouts From Cancer Trials — Both IO and CAR-T
We expect 2018 to be another big year of trial read-outs in the oncology arena, including pivotal trial read-outs from Merck, Bristol-Myers Squibb, Roche and AstraZeneca. Much of the expected data will be from combination studies, exploring a number of different pairings of immuno-oncology drugs with similar therapies or with older chemotherapeutic drugs. We’ll also be watching for new data this year on CAR-T therapies, including from studies in indications outside the landscape of leukemia and lymphoma—from small trials in colorectal and pancreatic cancers, for example.
- The Digital Health World Takes Flight
In September, Pear Therapeutics gained FDA approval for its Reset mobile app, designed to be prescribed by clinicians and used alongside counseling to treat substance use disorders, and the company is working on additional apps including those for PTSD and schizophrenia. In November, medical smartphone accessory company AliveCor received approval for its “Kardia Band” medical-grade EKG analyzer for the Apple watch. There are reports that Apple is building a new watch with its own built-in EKG monitor, as well as working on a watch with a continuous glucose monitor. We expect to see this emerging field of digital health really start to take off in 2018.
One issue to consider, at least for products like the EKG monitor that provide data for physicians to interpret and use: What will those doctors, whose time is already very limited, do with the flood of health data from their patients? Will a potential avalanche of data assist physicians, or overwhelm them?
- Women’s Health Becomes “Hot” — At Least in Tech
Women’s health has been a somewhat under-served field. But in the healthtech arena, at least, things are seriously heating up as entrepreneurs are developing and launching intelligent products that help women address such areas as contraception, periods, maternity, fertility, sexual health and more. The result is a new sector that has been dubbed ‘femtech.” This focus on women’s health is only starting to spill over into biotechnology and drug development, with newer companies focusing on such challenges as non-hormonal contraception, post-menopausal symptoms such as hot flashes and sleep disturbances, endometriosis, uterine fibroids, and live microbial therapeutics for vaginal health.
Will other neglected areas of healthcare see a comeback in 2018? We think heart failure is an area that might be ripe for increased attention, especially if we see positive data from trials underway from Bristol-Myers Squibb (CXL-1427), Amgen/Cytokinetics (omecamtiv mecarbil), Renova Therapeutics (RT-100), and Bayer/Merck (verciguat).