24 January 2023
Storm clouds over San Francisco but glimmers of light for investor confidence
By Amber Fennell and Matthew Neal
The Consilium team arrived in San Francisco for #JPM23 in what was described by the local weather service as an “atmospheric river bomb cyclone.” Whilst the rain and wind continued to batter the city over the busy week ahead, it didn’t dampen the spirits of the Consilium team, nor the entire healthcare industry, which seemed determined to put its best foot forward in 2023 after a rather bumpy 2022.
Whilst the M&A frenzy was lighter than in previous years, to the disdain of some journalists, we were pleased to see AstraZeneca acquiring CinCor Pharma, Inc. for approximately $1.3billion, Ipsen acquiring Albireo for $952 million, and Chiesi Farmaceutici buying Amryt Pharma in a $1.48 billion deal, underlining that big pharma are on the hunt for later stage, less risky bets.
The key questions across every meeting were when investor confidence is expected to return and what 2023 holds for the sector. The general cautious consensus was that markets would improve with the world adjusting to a new ‘normal’ trading environment. The expectation was that late stage and commercial companies would be the first to test the water on the public markets and, if these go well, and subject to the macro environment not changing substantially, this could lead to a possible IPO window later in the year for others to push through.
As we know, cash is king, and although the public markets have been in retreat, VCs on both sides of the pond have funds to deploy in a happy hunting ground of fast-growing science-based companies in both Europe and the US. Where price continues to be a barrier to investment, other companies and advisors are looking to more creative deal structures by, for example, packaging assets together and joining forces, try-before-you-buy licensing deals with options, as well as the good old-fashioned reverse merger. Recent deals include Leap Therapeutics and Flame Biosciences, hC Bioscience and 4SR Biosciences, and Elicio Therapeutics’ reverse merger with Angion Biomedica.
Looking at the political climate for the sector, the implementation of the Inflation Reduction Act, known by many in the industry as the Innovation Reduction Act, was the topic of a lot of conversations. Many commented that companies are already thinking twice about taking assets forward themselves due to the reduced length of time products will be protected by IP; with this potentially leading to further licensing and M&A opportunities.
Also in the spotlight was the GDPR ruling in the EU, which is hampering companies collaborating across borders, with some companies not even able to share data internally from the EU to the US. There is no doubt that these new challenges, created by politicians from all persuasions across the globe, could hamper innovation and speed of drug development. We will be watching this with fingers crossed.
As the industry shakes off the jet lag and gets back to the office, we look forward to supporting our growing roster of clients prepare for the potential opportunities of the exciting year ahead and make sure you take a note of our top tips and restaurant picks for next year!
If you are considering going to JP Morgan Healthcare Conference 2024, which will be from 8-11 January 2024 in San Francisco, we have prepared the following five tips:
1 BOOK EARLY – We are already booking our flights and reserving our accommodation for 2024! It pays to get in early and secure a good rate
2 LET’S FACE IT, IT ALWAYS RAINS – a good waterproof, umbrella and walking shoes are essential
3 NOTE DOWN GOOD RESTAURANTS NOW – you will forget – note down the best places to meet and eat so you can book for next year (see below for Consilium’s top five places to eat)
4 YOU DON’T HAVE TO STAY IN UNION SQUARE – it’s not the loveliest part of town and the hotels are extortionate – try staying in a different area and travel in
5 TRY A WALKING MEETING – Swap that stuffy meeting room for a hike up Nob Hill – it focuses the mind and is healthy too!
We could not sign off without acknowledging the great food and hospitality we experienced in San Francisco and would highlight the following restaurants, in no particular order:
- Zuni Café – for the best roast chicken, accompanied by friendly service; perfect for a lazy lunch with friends
- Brandy Ho’s – for fast and excellent food in China town. We were pleased House of Nanking was shut
- Californios – outstanding fine dining Mexican including a variety of ceviche, but cover your eyes when the bill comes and just hand over your card
- Harborview - top dim sum with great views, even in a flash flood warning
- Cotogna – an Italian restaurant in the US that focuses on local produce and extracting their flavour in traditional dishes, v rare…