The Biggest, Buzziest Conference for Health Care Investors Convenes Amid Fears the Bubble Will Burst

SAN FRANCISCO — Well being care’s enterprise class returned to its San Francisco sanctuary final week for JPMorgan’s annual well being care confab, on the gilded Westin St. Francis resort on Union Sq.. After a two-year pandemic pause, the temper among the many executives, bankers, and startup founders in attendance had the aura of a reunion — as they gossiped about promotions, work-from-home routines, who’s getting what investments. Dressed of their capitalist greatest — starting from brilliant-blue or pastel-purple blazers to puffy-coat stylish — they thronged to massive events, housed in artwork galleries or eating places.

However the occasion was tinged with new nervousness: Would the large cash invested in well being care attributable to covid-19 proceed to move? Would buyers ask to see outcomes — which means income — fairly than simply cool concepts?

The buzzy convention had simply as many phrases about income as about sufferers. The largely maskless crowd spoke English, French, Japanese — and, in fact, cash.

Apart from the company and funding varieties, attendees routinely noticed shocking characters — like celeb physician Mehmet Oz, contemporary off a Senate run, holding court docket within the foyer on Jan. 10.

If the vibe within the resort’s congested halls was upbeat — or, at the very least, cheery — beneath there was a frisson of hysteria as all have been conscious that the well being care enterprise bonanza seemed to be slowing down.

The convention began with a sidewalk protest of pharmaceutical firm Gilead Sciences, whose medicine combating HIV and hepatitis C are fabulously efficient — and fabulously costly. Through the pandemic, Congress for the primary time has arrange a plan to permit Medicare to barter U.S. drug costs, that are by far the best on the planet. In an announcement, firm spokesperson Catherine Cantone mentioned Gilead is the most important non-public funder of HIV applications within the U.S., including, “Gilead’s function in ending the HIV and hepatitis epidemics is to find, develop, and guarantee entry to our life-saving medicines.”

Then there’s the financial setting, which is popping treacherous. Journalists at monetary publication Bloomberg diagnosed a lack of exciting deals. Startup executives — who beforehand discovered hundreds of thousands of {dollars} in investments simple to come back by — appeared obligated to indicate ends in their impromptu pitches in bars and occasional retailers. Enterprise executives of all stripes promised they both at present made income or have been about to, quickly.

“I believe it is a tough yr,” mentioned Hemant Taneja, CEO of the enterprise capital agency Normal Catalyst, throughout one panel. He instructed that giant swaths of well being tech startups have been overvalued and that their shoppers will probably be extra keen on whether or not they’re really offering helpful providers.

The brand new message from potential buyers was clear. “The thought you would develop and never be worthwhile is lifeless, gone,” mentioned Dr. Jon Cohen, CEO of the psychological well being startup Talkspace, in an interview.

There was some cognitive dissonance on the convention. Take, for instance, BioNTech, the vaccine developer whose mRNA vaccine, created with Pfizer, offers highly effective safety for covid. Firm co-founder Uğur Şahin was interrupted by applause throughout a presentation recounting its function in preventing the pandemic — and that’s earlier than he touted his firm’s function in decreasing infectious illness, saving lives, and assembly international well being wants for tuberculosis and malaria.

The dialog later turned to the pricing of his firm’s flagship vaccine — which it’s jockeying to set at greater than $100 a dose, up from an average government purchase price of $20.69. It was a good worth contemplating the “well being economics,” BioNTech’s chief technique officer, Ryan Richardson, defined: the hospitalizations and severe outcomes averted.

Or take drugstore big CVS — which is steadily increasing past its retail roots into medical health insurance and first care. CVS Well being CEO Karen Lynch mentioned that as a part of its well being enterprise the corporate is taking a look at all of the elements that underlie being properly. “Well being isn’t simply in regards to the engagement with the supplier; it’s about all the opposite elements — together with housing and diet,” she mentioned. Left unaddressed was the sight typically greeting CVS prospects upon coming into a retailer: sweet, chips, and different processed meals.

For critics, it was a mind-bending remark. “The final I heard, CVS was a for-profit firm, not a social welfare company,” mentioned Marion Nestle, a researcher who’s a longtime critic of the meals business. “It sells junk meals that make folks sick and medicines to deal with these sicknesses. How’s that for a nifty enterprise mannequin!”

CVS spokesperson Ethan Slavin supplied a really completely different imaginative and prescient, one through which CVS is in search of to be a premier well being and wellness vacation spot. “We’re at all times evolving our meals and beverage assortment to offer more healthy, on-trend merchandise.” Additionally it is supporting applications to bolster meals availability in underserved areas, he added.

Some techies encountered new skepticism about “synthetic intelligence.” Ginkgo Bioworks co-founder Jason Kelly famous throughout his presentation that folks on the convention heard a lot about synthetic intelligence in the course of the conferences, “they need to cease listening to it.” (Ginkgo’s AI, used to help pharmaceutical and biotech analysis, he mentioned, was completely different than the remainder.)

One surgeon, Dr. Rajesh Aggarwal, discovered conversations with financiers in regards to the stealth startup he based, which focuses on metabolic well being, have been targeted on silver bullets. “Inform me if I make investments on this, I’ll 10x” the outlay, he mentioned, paraphrasing the bankers. Many, he mentioned, needed to “do some good as properly” for sufferers.

Aggarwal felt the buyers have been searching for easy options to well being issues. And one merchandise match that invoice: a brand new class of medication — GLP-1 agonists, a sort of remedy that aids in weight reduction however will seemingly should be taken for lengthy intervals. Some analysts are projecting these medicine will probably be value $50 billion. The bankers, Aggarwal felt, aren’t “desirous about well being care,” they’re “desirous about the {dollars} hooked up to the capsule.”

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