CLINUVEL #JPM2025 Recap
Each January San Francisco plays host to the J.P. Morgan Healthcare Conference, the largest event of its kind. It is an opportunity for industry to reflect on the past year, while looking at potential drivers and trends impacting investment, asset allocation, and business opportunities.
Participating investors include various funds, private wealth, and VCs. It is thus an important event to proactively engage, listen, and learn. CLINUVEL met with existing and potential shareholders, sell-side analysts, ECM teams, and other constituents in what was a productive week.
Seven key themes emerged, discussed below in no particular order.
Geopolitics:
Contemporary geopolitical decisions could have a significant impact globally, with the ripples extending beyond healthcare. A major topic du jour was potential China tariffs, which continue to grab headlines, and the idea of American protectionism. The feedback from J.P. Morgan is that – hopefully – sanity and diplomacy prevail, minimizing disruption.
U.S. administration under President Trump:
There was a LOT of talk about the incoming administration under Donald Trump. In short, conversations across the board were that, regardless of your thoughts on Trump, the U.S. is open for business. The concern voiced by some is how the new administration will deliver on its promises, interacting with a newly formed House and Senate. Will there be legislative efficiency or gridlock, and to what end?
Inflation:
The impact of short- and mid-term inflation was a central theme, with the Federal Reserve viewed as having a thankless job balancing price stability and maximizing employment. The underlying message was to focus on the prudent use of capital, with some cautious discussions on velocity of money, IPOs, financings and new capital formation.
Healthcare system:
There is an element of frustration with the U.S. healthcare system, particularly “middle” parties and the opacity of money moving in the system. J.P. Morgan CEO Jamie Dimon was direct in his comments that the rebate system needs to be fixed, eliminating cost waste.
M&A and deregulation:
There is clear expectation of a more business-friendly environment under the new administration when it comes to deals and M&A. Jamie Dimon reflected on the “crippling bureaucracy” of recent years. While not all M&A is created equal, it can be a value defining moment and catalyst for a company and its employees. The scuttlebutt was also on whether the new administration would play “favorites” in M&A transactions.
Artificial Intelligence (AI):
AI was the buzz topic at cocktail receptions (like SaaS and the Cloud years ago). Investors are excited about the potential impact of AI, particularly on efficiency gains. There is a lot to unfold with this new era of AI, and the consensus is that there needs to be an element of oversight – not to stifle, but to ensure positive outcomes.
Innovation in biopharma:
Listening to investors talk about the speed and nature of scientific advances was an emphatic positive that innovation and disruption will always prevail. In addition to anticipation within the diabetes/weight loss industry, the lens tended focus on the advancement of new medicines, including rare diseases, and what could be “the next big thing.”
Analyst coverage around J.P. Morgan:
Updated results and guidance around J.P. Morgan prompt analysts to review their assumptions. Jefferies recently highlighted the opportunity in vitiligo, focused in part on the first approved pharmaceutical product. The analyst noted that Incyte’s revenue from topical ruxolitinib creme (Opzelura, an immunomodulatory drug) is likely to beat consensus for Q4, with global Q4 2024 sales of $158M+ (versus consensus estimates of $149.8M), growth of >50% year-on-year. The product is licensed for a subset of vitiligo patients, those with less than 10% body surface area involvement. Based on historical disclosures, around 40% of the revenue figure would be attributable to vitiligo.
Summary:
In its 43rd edition, there were no major surprises or upsets at J.P. Morgan, but clear value in understanding the pulse and pace of healthcare early in the year. The industry is contemplating various headwinds and prioritizing how to effectively manage and deploy capital. There was a fair dishing of caution to “wait-and-see”, offset by a healthy serving of optimism that innovation, over time, wins the day.
– Myles Clouston, Head of US Investor Relations