Looking at the Bigger Picture: 5 Key Takeaways from JPM 2025

The 2024 biopharma landscape witnessed significant progress in cell and gene therapies, fueled by technological advancements such as CRISPR and AI, and highlighted by breakthroughs in autoimmune disorders, cancer, and chronic disease treatments. Major pharma players showcased promising developments, including gene-editing therapies for immune system dysfunction and CAR-T therapies for cancer. A resurgence in pharmaceutical dealmaking, with notable acquisitions, indicated a stronger industry recovery. Meanwhile, health policy uncertainties, particularly around the Inflation Reduction Act, added complexity. Chinese biotech innovation gained ground, challenging U.S. startups, and AI’s role in drug development grew, promising accelerated progress. The outlook for 2025 remains cautiously optimistic, driven by ongoing innovations and clinical milestones.

The Dominance of Artificial Intelligence in Drug Development

Artificial intelligence (AI) is rapidly transforming drug development, solidifying its role as a critical innovation driver. Despite a challenging 2024 for health tech companies lacking market-ready products, industry consensus affirms AI’s transformative potential. Early in the year, the FDA issued draft guidance highlighting AI’s growing importance in drug development, underscoring its pivotal role in shaping the future of healthcare.

Major players are leading the charge, with Nvidia announcing partnerships with healthcare leaders IQVIA, Illumina, and Mayo Clinic. Similarly, Faro Health Inc. has partnered with Recursion to leverage AI/ML-powered platforms for optimizing clinical protocol design across Recursion’s clinical-stage drug candidates. Recursion, a leader in AI-driven drug discovery, aims to accelerate its portfolio of over 10 clinical and preclinical programs by integrating AI/ML technology into its end-to-end platform for biology, chemistry, and clinical development. This collaboration supports Recursion’s mission to make drug discovery and development more efficient through advanced, data-driven AI technologies. These collaborations exemplify the deepening synergy between AI and biopharma, accelerating drug discovery and development processes.

Nobel laureate Jennifer Doudna, a CRISPR pioneer from UC Berkeley, emphasized that AI’s potential hinges on access to high-quality data. Moving forward, ensuring data availability and quality will be vital to unlocking AI’s full capabilities in revolutionizing drug development and healthcare solutions.

Tech Innovations Powered Progress

The event showcased how technological advancements are driving the evolution of cell and gene therapies. Industry leaders such as Editas Medicine and Intellia Therapeutics directly emphasized how tools like CRISPR-Cas9, base editing, and prime editing, enabling precise gene modifications. New manufacturing technologies also stood out, improving scalability, reducing costs, and speeding up therapy delivery. These innovations expanded the range of treatable diseases, unlocking possibilities for conditions previously deemed untreatable.

Specifically, Intellia Therapeutics is advancing its pipeline with NTLA-2002 for hereditary angioedema (HAE) and nexiguran ziclumeran (nex-z) for transthyretin amyloidosis (ATTR). The company is actively enrolling patients in the Phase 3 HAELO study for NTLA-2002. In addition, the Phase 3 MAGNITUDE study is progressing well for nex-z in ATTR cardiomyopathy (ATTR-CM). Intellia is also screening patients for the Phase 3 MAGNITUDE-2 study for hereditary ATTR polyneuropathy (ATTRv-PN). The company aims to complete key milestones for both programs in 2025.

Also, Editas Medicine announced new in vivo preclinical proof of concept data, including successful gene editing of hematopoietic stem cells (HSCs) and liver cells in non-human primates. The company demonstrated its proprietary lipid nanoparticle (LNP) delivery platform in humanized mice for “plug ‘n play” gene delivery to additional cell types. Key 2025 milestones include declaring two in vivo development candidates, presenting further preclinical data, and advancing additional target cell types. Strategic priorities for 2025-2027 include submitting an IND/CTA, achieving human in vivo proof of concept, and expanding the scope of diseases addressable by in vivo gene editing. With $270 million in cash, Editas is well-positioned to extend its operational runway into Q2 2027.

Resurgence in Pharmaceutical Dealmaking

The pharmaceutical sector witnessed a significant resurgence in dealmaking activity throughout 2024. With over 100 biotech venture deals exceeding $100 million, this upturn in activity reflects a robust recovery from earlier industry downturns. This trend toward larger deal sizes is expected to accelerate as companies urgently seek to strengthen their pipelines, addressing an estimated $400 billion revenue loss from patent expirations projected between now and 2033.

Industry leaders like Eli Lilly exemplified this trend with notable acquisitions, such as their purchase of Scorpion Therapeutics, showcasing a strategic focus on securing innovative therapies with high potential. The push for both early and late-stage asset acquisitions aims to mitigate revenue pressures while delivering impactful patient care. Larger financing deals, however, will increasingly hinge on companies demonstrating success at critical testing milestones, signaling a more cautious yet ambitious approach to dealmaking.

Navigating Health Policy Uncertainties

The health policy landscape remains uncertain as stakeholders speculate on potential shifts under the new Trump administration. A key focus is the future of the Inflation Reduction Act (IRA), particularly provisions like the controversial “pill penalty.” This policy reduces the exclusivity period for small molecule drugs to nine years, compared to 13 years for biologics, sparking calls for repeal. Despite these concerns, health policy did not dominate the campaign, leaving many unsure about the administration’s priorities in this area.

Regulatory policies for new drug approvals also face questions under the new leadership. Analysts are watching for potential changes tied to the proposed Department of Government Efficiency (DOGE), an advisory commission aimed at reducing inefficiencies. Speculation includes whether this focus might accelerate clinical development and streamline drug approval processes. Vaccine policy is another area of uncertainty, although this administration appears to have gained more support from industry leaders than during its first term. Business leaders now show cautious optimism about collaborating on health initiatives, signaling a shift in tone from previous years.

The Rise of Chinese Innovation in Biopharma

Chinese innovation has emerged as a formidable force in the biopharma industry. In 2024, Chinese biotech firms accounted for one-third of all pharma licensing deals—a dramatic leap from negligible levels a decade ago. This surge underscores both the growing recognition of high-quality science from China and the cost advantages its innovations bring.

While the United States remains a global leader in biopharma innovation, the industry is becoming more collaborative, allowing exceptional science to thrive worldwide. This evolution creates opportunities and challenges, especially for U.S. biotech startups, which must differentiate themselves from rapidly advancing Chinese competitors.

The implications of this trend extend beyond research and development. Venture capital teams are increasingly considering Chinese assets in their portfolios, and the global conversation now includes patient access to these innovations. As China’s capabilities expand, its influence will undoubtedly reshape the biopharma landscape, driving new strategies for competition and collaboration.

Advancements in Cell and Gene Therapies

Cell and gene therapies continue to accelerate, bringing transformative potential to the treatment of chronic and complex conditions. Recent developments highlight this momentum, including Sana Biotechnology’s recently shared first-in-human data for its allogeneic cell therapy targeting type 1 diabetes. The therapy achieved positive outcomes in one patient without the need for immunosuppression, marking a significant milestone in diabetes care.

Similarly, Bayer and its subsidiary, BlueRock Therapeutics, announced plans to initiate a Phase III trial for their allogeneic investigational cell therapy for Parkinson’s disease. This decision follows compelling Phase I data that demonstrated the therapy’s potential to improve motor symptoms.

These advancements highlight the progress of cell and gene therapies in delivering positive human data. As these treatments advance through clinical stages, they bring renewed optimism for addressing conditions once considered untreatable, driving significant shifts in healthcare innovation in 2025.

A Guarded Yet Promising Outlook

As 2025 progresses, deal flow shows signs of steady improvement, albeit not at the heights of 2020 or 2016. The industry is returning to its core principles, where strong science and reliable data take precedence. This back-to-basics approach reflects a maturing market, prioritizing sustainable innovation over rapid expansion.

The IPO landscape continues to present hurdles, with many companies grappling to maintain valuations after launching. However, the expected surge in mergers and acquisitions provides a pathway for recalibration and growth. These deals offer companies a chance to secure strategic assets and strengthen their pipelines despite ongoing valuation challenges.

Looking ahead, upcoming clinical milestones promise to expand the therapeutic arsenal, enabling more effective treatment options for patients. While policy uncertainty casts some shadows, the biopharma sector remains on a promising trajectory in 2025. The transformative potential of these advancements fuels optimism, ensuring a brighter future for patients worldwide.

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Author

Bernice Lottering