By Mike Kuczkowski

JPM healthcare conference is usually held during some sort of cataclysmic weather event. In 2023 the combination of an atmospheric river and a bomb cyclone dumped 4 inches of rain in five days on the roughly 8,000 conference attendees and 12,000 other JPM pilgrims who, like me, crowd downtown San Francisco to meet with investors, reporters and biotech/pharma executives. This year’s clear skies, bright sun and mid-50s temperatures were uncharacteristic.

JPM 2025 got off to a strong start with Johnson & Johnson’s $14.6 billion acquisition of Intra-Cellular Therapies, followed by deals from GSK and Eli Lilly. But unlike the clear skies outside, the sector’s outlook remained cloudy. After bullish returns in 2019 and 2020, the Nasdaq Biotech Index (NSDQ: NBI) has struggled to find consistent upward momentum. At the close of JPM, there was a mere 1% “JPM bump,” but by the end of the month the index was up 5% for the month of January. Is the industry poised to break out again?

Monday mergers

This tension between optimism and skepticism pervaded virtually every conversation at the JPM healthcare conference. Inside the halls of the Westin St. Francis, heightened security—including armed police in Kevlar vests—served as a reminder of UnitedHealth CEO Brian Thompson’s tragic murder. Several healthcare companies withdrew from the conference, marking a shift in how the industry addresses executive safety. There were several small anti-industry protests. Yet, the challenges were discussed alongside promising pipelines and commercial opportunities.

The deal-making climate reflected similar complexity. While J&J’s bold move suggested an appetite for acquisitions, other leaders signaled restraint. “We will look to be more selective, however, on our M&A moving forward,” Gilead CEO Daniel O’Day said, echoing a sentiment that was reinforced throughout the week. With an estimated $183.5 billion in patent cliffs by 2030—and an estimated $383 billion in cash available for dealmaking among top pharma companies—there is a sense that everyone is trying to figure out how to place winning bets with their capital.

Seeking innovation

This search for growth is pushing the industry in new directions clinically and geographically. China’s emergence as a source of innovation captured significant attention. As BMS’s Chief Research Officer Robert Plenge told Biopharma Dive, “There’s been a lot of really good, high-quality molecules and data that have emerged from China over the past couple of years. It’s also no longer just simply repeating what’s been done with the exact same type of molecule.” I heard echoes of this from several attendees. “I almost wonder if any drug discovery will happen in the U.S. in the future,” said one.

Meanwhile, technology advances in cell therapy sparked enthusiasm about ‘in vivo CAR-T’ approaches that could solve multiple problems (cell extraction, shipping, manufacturing and administration) in that space. At a packed meeting of the Alliance for Regenerative Medicine, CEO Tim Hunt acknowledged the challenges while highlighting progress: “No one’s saying there aren’t headwinds, but we are seeing important signs of growth.”

Women advancing

The industry’s evolution was evident in other ways too. In Union Square Tuesday midmorning, the Biotech CEO Sisterhood and Breaking 7 gathered for a photo celebrating women’s leadership progress, evidence of growth from 2018, when the number of CEOs named Michael outnumbered the number of female CEOs presenting at the JPM healthcare conference. This shift mirrors broader changes in how the industry approaches inclusion and representation.

Storm clouds on the horizon

But perhaps the greatest winds of uncertainty came from 2800 miles away, as the world prepared for President Donald J. Trump’s inauguration. There was constant chatter about what the incoming administration would mean to the industry. Most were positive at the macro level. “I think it’s good,” said billionaire hedge fund manager Joseph Edelman in a rare interview at a STAT event, while noting that Trump has mentioned bringing drug prices down to the levels paid by developing world countries.

On Trump, Edelman said: “He’s more of a capitalist.” On Martin Makary, Trump’s pick for FDA Commissioner: “He seems okay to me.” On incoming Health and Human Services pick Robert F. Kennedy, Jr.: “He’s a little scary, but I don’t think he really can or even wants to change everything. There are all these statutes, you can’t just change the bureaucracy.”

This was a particularly striking exchange for me, reflecting on the November elections. Following the framing of President Joe Biden, much media coverage focused on the election as a referendum on democracy. But I suspect many others viewed it as a referendum on capitalism. And capitalism won.

Vaccine hesitancy

Former FDA Commissioner Dr. Scott Gottlieb was less sanguine. In a later panel at the same STAT event, Gottlieb warned that Kennedy’s appointment “will cost lives in this country.” He described how Kennedy, an outspoken vaccine skeptic, could make small policy changes that could lead to significant declines in vaccine rates and public health. Gottlieb noted that, unlike FDA, which was created by the Food and Drug Act, the Centers for Disease Control (CDC) was not created by statute. This means Kennedy could disband the Advisory Committee on Immunization Practices (ACIP), a body that makes recommendations on vaccine schedules. Or populate it with anti-vaccination nominees. If CDC were to shift vaccines from being “recommended” to “joint consent” that would be a major shift in favor of parental power. Vaccines would no longer be required for school enrollment, for example. If a further decline in the measles, mumps and rubella (MMR) vaccine takes place, Gottlieb predicted measles outbreaks, noting the mortality rate of measles in children is 1 per 1,000 cases. “It wouldn’t take much,” Gottlieb warned.

Although the skies in San Francisco for the JPM healthcare conference were clear, the forecast for biotech was less so. While the deals were positive, there are many things to be concerned about on the horizon, from patent cliffs to Inflation Reduction Act negotiations, potential regulatory upheaval and policy headwinds. The Trump administration’s rapid-fire executive orders, which dominated the last 10 days of the month, suggested the concerns about policy headwinds are real.

The industry’s path forward will rely heavily on innovation, reputation and navigation of a volatile environment. Whether by exploring new modalities like in vivo CAR-T or embracing new drug discovery from China, companies are following the same script, betting on innovation in a variety of forms. For an industry built on long-term planning and de-risking R&D, innovation will likely only be a part of the answer on the road ahead. I’d say, plan for sun, but pack an umbrella.