{"id":2293,"date":"2024-01-22T10:27:38","date_gmt":"2024-01-22T10:27:38","guid":{"rendered":"https:\/\/healthynewsusa.com\/?p=2293"},"modified":"2024-01-22T10:27:41","modified_gmt":"2024-01-22T10:27:41","slug":"what-the-health-care-sector-was-selling-at-the-j-p-morgan-confab","status":"publish","type":"post","link":"https:\/\/healthynewsusa.com\/?p=2293","title":{"rendered":"What the Health Care Sector Was Selling at the J.P. Morgan Confab"},"content":{"rendered":"
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SAN FRANCISCO \u2014 Every year, thousands of bankers, venture capitalists, private equity investors, and other moneybags flock to San Francisco\u2019s Union Square to pursue deals. Scores of security guards keep the homeless, the snoops, and the patent-stealers at bay, while the dealmakers pack into the cramped Westin St. Francis hotel and its surrounds to meet with cash-hungry executives from biotech and other health care companies. After a few years of pandemic slack, the 2024 J.P. Morgan Healthcare Conference regained its full vigor, drawing 8,304 attendees in early January to talk science, medicine, and, especially, money.<\/p>\n

1. Artificial Intelligence: Revolutionary or Not?<\/strong><\/p>\n

Of the 624 companies that pitched at the four-day conference, the biggest overflow crowd may have belonged to Nvidia, which unlike the others isn\u2019t a health care company. Nvidia makes the silicon chips whose computing power, when paired with ginormous catalogs of genes, proteins, chemical sequences, and other data, will \u201crevolutionize\u201d drug-making, according to Kimberly Powell, the company\u2019s vice president of health care. Soon, she said, computers will customize drugs as \u201chealth care becomes a technology industry.\u201d One might think that such advances could save money, but Powell\u2019s emphasis was on their potential for wealth creation. \u201cThe world\u2019s first trillion-dollar drug company is out there somewhere,\u201d she dreamily opined.<\/p>\n

Some health care systems are also hyping AI. The Mayo Clinic, for example, highlighted AI\u2019s capacity to improve the accuracy of patient diagnoses. The nonprofit hospital system presented an electrocardiogram algorithm that can predict atrial fibrillation three months before an official diagnosis; another Mayo AI model can detect pancreatic cancer on scans earlier than a provider could, said Matthew Callstrom, chair of radiology at the Mayo Clinic in Rochester, Minnesota.<\/p>\n

No one really knows how far \u2014 or where \u2014 AI will take health care, but Nvidia\u2019s recently announced $100 million deal with Amgen, which has access to 500 million human genomes, made some conference attendees uneasy. If Big Pharma can discover its own drugs, \u201cbiotech will disappear,\u201d said Sherif Hanala of Seqens, a contract drug manufacturing company, during a lunch-table chat with KFF Health News and others. Others shrugged off that notion. The first AI algorithms beat clinicians at analyzing radiological scans in 2014. But since that year, \u201cI haven\u2019t seen a single AI company partner with pharma and complete a phase I human clinical trial,\u201d said Alex Zhavoronkov, founder and CEO of Insilico Medicine \u2014 one of the companies using AI to do drug development. \u201cBiology is hard.\u201d<\/p>\n

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2. Weight Loss Pill Profits and Doubts<\/strong><\/p>\n

With predictions of a $100 billion annual market for GLP-1 agonists, the new class of weight loss drugs, many investors were asking their favorite biotech entrepreneurs whether they had a new Ozempic or Mounjaro in the wings this year, Zhavoronkov noted. In response, he opened his parlays with investors by saying, \u201cI have a very cool product that helps you lose weight and gain muscle.\u201d Then he would hand the person a pair of Insilico Medicine-embossed bicycle racing gloves.<\/p>\n

More conventional discussions about the GLP-1s focused on how insurance will cover the current $13,000 annual cost for the estimated 40% of Americans who are obese and might want to go on the drugs. Sarah Emond, president of the Institute for Clinical and Economic Review, which calculates the cost and effectiveness of medical treatments, said that in the United Kingdom the National Health Service began paying in 2022 for obese patients to receive two years of semaglutide<\/a> \u2014 something neither Medicare nor many insurers are covering in the U.S. even now.<\/p>\n

But studies show people who go off the drugs typically regain two-thirds of what they lose, said Diana Thiara, medical director for the University of California-San Francisco weight management program. Recent research<\/a> shows that the use of these drugs for three years reduces the risk of death, heart attack, and stroke in non-diabetic overweight patients. To do right by them, the U.S. health care system will have to reckon with the need for long-term use, she said. \u201cI\u2019ve never heard an insurer say, \u2018After two years of treating this diabetes, I hope you\u2019re finished,\u2019\u201d she said. \u201cIs there a bias against those with obesity?\u201d<\/p>\n

3. Spotlight on Tax-Exempt Hospitals<\/strong><\/p>\n

Nonprofit hospitals showed off their investment appeal at the conference. Fifteen health systems representing major players across the country touted their value and the audience was intrigued: When headliners like the Mayo Clinic and the Cleveland Clinic took the stage, chairs were filled, and late arrivals crowded in the back of the room.<\/p>\n

These hospitals, which are supposed to provide community benefits in exchange for not paying taxes, were eager to demonstrate financial stability and showcase money-making mechanisms besides patient care \u2014 they call it \u201crevenue diversification.\u201d PowerPoints skimmed through recent operating losses and lingered on the hospital systems\u2019 vast cash reserves, expansion plans, and for-profit partnerships to commercialize research discoveries.<\/p>\n

At Mass General Brigham, such research has led to the development of 36 drugs currently in clinical trials, according to the hospital\u2019s presentation. The Boston-based health system, which has $4 billion in committed research funding, said its findings have led to the formation of more than 300 companies in the past decade.<\/p>\n

Hospital executives thanked existing bondholders and welcomed new investors.<\/p>\n

\u201cFor those of you who hold our debt, taxable and tax-exempt, thank you,\u201d John Mordach, chief financial officer of Jefferson Health, a health system in Pennsylvania and New Jersey. \u201cFor those who don\u2019t, I think we\u2019re a great, undervalued investment, and we get a great return.\u201d<\/p>\n

Other nonprofit hospitals talked up institutes to draw new patients and expand into lucrative territories. Sutter Health, based in California, said it plans to add 30 facilities in attractive markets across Northern California in the next three years. It expanded to the Central Coast in October after acquiring the Sansum Clinic.\u202f<\/p>\n

4. Money From New \u2014 And Old \u2014 Treatments for Autoimmune Disease<\/strong><\/p>\n

Autoimmunity drugs, which earn the industry $200 billion globally each year, were another hot theme, with various companies talking up development programs aimed at using current cancer drug platforms to create remedies for conditions like lupus and rheumatoid arthritis. AbbVie, which has led the sector with its $200 billion Humira, the world\u2019s best-selling drug, had pride of place at the conference with a presentation in the hotel\u2019s 10,000-square-foot Grand Ballroom.<\/p>\n

CEO Robert Michael crowed about the company\u2019s newer autoimmune drugs, Skyrizi and Rinvoq, and bragged that sales of two-decades-old Humira were going \u201cbetter than anticipated.\u201d Although nine biosimilar \u2014 essentially, generic \u2014 versions of the drug, adalimumab, entered the market last year, AbbVie expects to earn more than $7 billion on Humira this year since the \u201cvast majority\u201d of patients will remain on the market leader.<\/p>\n

In its own presentation, biosimilar-maker Coherus BioSciences conceded that sales of Yusimry, its Humira knockoff listed at one-seventh the price of the original, would be flat until 2025, when Medicare changes take effect that could push health plans toward using cheaper drugs.<\/p>\n

Biosimilars could save the U.S. health care system $100 billion a year, said Stefan Glombitza, CEO of Munich-based Formycon, another biosimilar-maker, but there are challenges since each biosimilar costs $150 million to $250 million to develop. Seeing nine companies enter the market to challenge Humira \u201cwas shocking,\u201d he said. \u201cI don\u2019t think this will happen again.\u201d<\/p>\n