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Notes from the JPM19 Vortex: Price Apocalypse, Celgene Fallout & More

Xconomy National — 

[Editor’s note: Ben Fidler and Sarah de Crescenzo coauthored this report.] It is here, and then it is gone. But by the time everyone staggers to the airport or back home to sleep in their own beds, the annual few days of the J.P. Morgan Healthcare Conference and everything that mushrooms around it seem just as long as the holiday break—a distant memory!—that came just before.

In 2020 (yes, that’s really a year), San Francisco might have a new mayor. A new plan to help its chronic homeless population. A glimmer of hope to solve its income inequality and soaring housing costs. But it will still have J.P. Morgan week, centered around Union Square.

Until then, the tone for the year has been set. The issues have been defined. The receptions have been cocktailed. And Xconomy was there, conducting dozens of interviews that will play out in stories across the year. For now, we present what’s top of mind, a bit off the cuff but no less serious for it, what older generations of journalists liked to call a reporter’s notebook. Since 2015, we’ve liked to call it “Notes from the Vortex,” and now, four years on, we’re hitting publish just before we finally negotiate a decent night’s sleep.

ADIOS, CELGENE

Celgene (NASDAQ: CELG) has traditionally occupied the starting-gun slot at J.P. Morgan, the first big presentation Monday morning. It made perfect sense this year, because Bristol-Myers Squibb’s (NYSE: BMY) proposed $74 billion acquisition of Celgene could be the ne plus ultra in the current wave of drug industry consolidation that everyone expects to continue this year.

(Indeed, hours before the presentation, Eli Lilly (NYSE: LLY) said it would grab cancer drug maker Loxo Oncology (NASDAQ: LOXO) for $8 billion.)

Celgene CEO Mark Alles took the podium with Bristol CEO Giovanni Caforio and told the sea of attendees that the Bristol-Celgene combo (SquibbGene? BristolCel?) would create a “scientific powerhouse” and that “it’s the right deal, it’s the right time.”

Investors have had a week to digest the news. Celgene stock has settled into a holding pattern, up about a third from its pre-merger state, to $86.95 a share at Thursday’s close. Bristol-Myers’s share price has been choppier, currently down about 9 percent to $47.72.

Biotech executives and venture capitalists had mixed emotions. Many whom Xconomy interviewed this week hoped that the loss of Celgene would unlock talent, leaving veterans to join startups or form their own. George Golumbeski, the longtime Celgene dealmaker who left last year to become president of cancer diagnostic firm Grail, said it was sobering to see the big biotech ranks diminish. “These things are always bittersweet,” he told Xconomy.

Under Golumbeski and president of research & early development Tom Daniel, who left in 2016, Celgene amassed its pipeline through alliances that often left its smaller biotech partners in control of their own destiny. Will the new company still deal with partners creatively and flexibly?

“That’s a legitimate concern,” said Versant Ventures managing director Tom Woiwode, whose firm has done several transactions with Celgene. “Hopefully Bristol will recognize that the way Celgene got their hands on all of these assets is doing these creative transactions.”

Agios Pharmaceuticals (NASDAQ: AGIO), Acceleron Pharma (NASDAQ: XLRN), Bluebird Bio (NASDA: BLUE), BeiGene (NASDAQ: BGNE), Jounce Therapeutics (NASDAQ: JNCE), and many more are now on watch. The biggest risk comes to those whose drugs have “obvious overlaps” with Bristol’s existing pipeline, said Third Rock Ventures partner Abbie Celniker. Some of those could be Third Rock-backed companies, and Third Rock is evaluating what to do if Bristol ends those partnerships, Celniker said.

One of those companies is Jounce, whose … Next Page »

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