The 43rd JP Morgan Healthcare Conference (hereafter JPM), the world's largest pharmaceutical, bio, and healthcare investment event, wrapped up on the 13th to 16th (local time) in San Francisco, United States. This year, many corporations are expected to employ various strategies to find breakthroughs in the subdued pharmaceutical and bio investment market.
According to JP Morgan on the 16th, the number of companies presenting this year dropped by 83 from last year's 614 to 531. This is due to rising interest rates and geographical and political conflicts, which have increased uncertainty in the high-risk, high-reward bio and healthcare sectors, chilling investor sentiment.
Lee Seung-kyu, vice president of the Korea Bio Association, said, "This year at JPM, there was a marked preference for stable large corporations over small and medium-sized bio companies," adding, "Several bio companies that originally intended to participate withdrew due to expense issues or lowered investment expectations."
Recent events, including the death of the head of UnitedHealthcare, the largest health insurance company in the U.S., from a shooting, have also influenced the industry, causing other insurance companies to withdraw their announcements. U.S. media report that insurers' refusals to pay claims have been perceived as a motive for crime. Such dissatisfaction has spread to the healthcare industry, resulting in tightened security measures, including bomb detection dogs and tactical police units inside and outside the venue.
◇"M&A, newCO, technology differentiation will be breakthroughs to overcome the investment winter"
Industry representatives from both domestic and international sectors forecast that three strategies—mergers and acquisitions (M&A), spinoffs, and joint ventures (JV), along with newCO (new corporation) focusing on commercializing new drugs and technologies—could serve as new breakthroughs.
On the first day of the event, leaders of global big pharmaceutical companies, including Roche from Switzerland, Johnson & Johnson (J&J) from the United States, and Pfizer, all emphasized that they would strengthen M&A this year to secure growth drivers for their corporations.
Ben Carpenter, co-head of JP Morgan Global Healthcare Investment Banking, projected at the opening ceremony that, with the replacement of the leader of the U.S. Federal Trade Commission (FTC), which had suppressed the M&A market, there would be healthcare deregulation as well as market revitalization.
NewCO also emerged as a major strategy. This involves creating separate companies focusing on specific assets, platforms, or technologies to commercialize promising drugs, therapies, and technologies. A typical example is Moderna, which was founded and incubated through a spinoff by Flagship Pioneering, a venture capital (VC) firm. According to industry sources, domestic corporations are also reviewing this approach.
At the global IR event hosted by the Korea Bio Association on the 14th (local time), healthcare investors noted, "Parent companies can separate uncertain or high-risk projects into newCOs to diversify risks, and it's easy to attract third-party interests wanting to invest or cooperate through newCOs based on assets or technologies."
The importance of technology differentiation was also highlighted. Vice President Lee Seung-kyu analyzed, "In the past 3 to 4 years, the atmosphere was one of competition among similar pipelines, such as antibody-drug conjugates (ADC) and glucagon-like peptide (GLP)-1, but this year various technologies were announced, indicating that differentiated technology is contributing to an industry atmosphere of mutual cooperation among several corporations."
◇K-Bio targets the ADC market…"The Korean Night event is now a global night"
The enthusiasm of Korean corporations to showcase their competitive edge in the global market and expand business opportunities was palpable. Samsung Biologics and Celltrion made it to the main stage presentation, where only 27 companies were selected by JP Morgan. Lotte Biologics is intensely focused on securing its first contract development and manufacturing (CDMO) order this year.
In particular, all of them have set their sights on the ADC treatment market, likened to a guided missile that attacks only cancer cells, as a new source of revenue.
Samsung Biologics completed its ADC factory last month and will begin providing CDMO services starting in the first quarter of this year. The strategy is to offer services within 12 months from the development of the first cell line to the completion of the Good Manufacturing Practice (GMP), the final step before the final pharmaceuticals.
Celltrion, a strong player in biosimilars, has revealed its blueprint to focus on developing new drugs such as ADCs and multi-antibodies. The company plans to submit 13 clinical trial applications (IND) for nine ADC candidates and four multi-antibody candidates by 2028.
Lotte Biologics, which is in its third year since establishment, recently replaced its head and is making significant efforts to achieve its order targets within the year. Shin Yoo-yeol, the son of Shin Dong-bin, chairman of the Lotte Group, attended and personally handled customer meetings with the newly appointed CEO James Park. Lotte Biologics announced plans to increase contract opportunities by applying the ADC platform at its factory in Syracuse, U.S.
The 6th Korea Night event, hosted by the Korea Bio Association, saw attendance from more than 700 stakeholders from the Korean and overseas investment and bio industries, marking the highest turnout since the event's inception.
John Lim, CEO of Samsung Biologics, Seok Jin-seok, chairman of Celltrion, and Choi Yoon-jeong, business development head (vice president) of SK Biopharm and daughter of SK Chairman Choi Tae-won, also attended to expand their global networks. Andre Andonian, chair of Flagship Pioneering Asia-Pacific (APAC), was also present.
At the venue, Seok Jin-seok, CEO of Celltrion, remarked, "This year’s JPM definitely feels smaller than last year, but it's surprising that Korean Night has grown. I believe this indicates that the global industry is paying more attention to the Korean market."
Lee Dong-hoon, president of SK Biopharm, said, "Korean Night seems to have become a global night. Since half the attendees are foreigners, I see this as a sign of their intention to expand business with Korean corporations or invest in them."