After two years of pandemic-induced virtual attendance, the J.P. Morgan Healthcare Conference was back in full swing Monday as biotechnology investors and executives descended upon the Westin St. Francis hotel in the heart of downtown San Francisco.

Well, maybe not full swing. Because while it’s still an upstream swim from the hotel’s glitzy lobby to the upstairs ballrooms where companies pitch their next big moves, this year’s conference is noticeably less packed-to-the-gills than previous iterations.

Even so, more breathing room hasn’t stemmed the flow of news. JPM has historically been a sought-after venue for companies to kick off the year with a big announcement or deal. Sunday and Monday brought three of the latter, even if all were of the smaller variety.

Analysts kept the deal talks going by asking what many investors have been wondering. What are companies Pfizer and Moderna, flush with cash from COVID-19 vaccines and treatments, going to buy with all that money?

Moderna is just getting started with deals …

Stéphane Bancel, head of COVID-19 vaccine maker Moderna, said the company had around $18 billion in cash and investments at the end of 2022. It’s now eager to put that money to work.

Just last week, on Jan. 4, Moderna announced plans to acquire Japan-based OriCiro, which has a technology that Moderna believes will help to speed up the development of its messenger RNA programs. A day later, the company said it had inked a research pact with CytomX Therapeutics.

On Monday, Bancel confirmed that external investment opportunities like licensing agreements and mergers and acquisitions would be a top priority for the company as it builds beyond vaccines and into other therapeutic areas.

“We do not believe we are, on everything, able to do the best science in the world,” he said. “There is amazing science happening outside of the walls of our labs. And so we want to tap that technology.”

Putting its vaccine revenue to work is all the more vital as Moderna is signaling a coming sales contraction. While 2022 sales of its COVID-19 shot totaled $18.4 billion, the company is predicting a minimum of only $5 billion this year. — Jacob Bell

… and so is Pfizer

Pfizer, too, sits on a mountain of cash thanks to the COVID-19 vaccine it co-developed with BioNTech. And like Moderna, the company sees dealmaking as an essential tool toward meeting its revenue goals.

Depending on the amount of annual growth, Pfizer forecasts that, by 2030, its arsenal of non-coronavirus products has the potential to generate anywhere from about $70 billion to north of $84 billion. Of that total, the company estimates that roughly $25 billion could come from medicines obtained through business development.

But hitting such a target will require a mix of small, medium and large deals, according to Pfizer CEO Albert Bourla.

Speaking to a crowded ballroom Monday afternoon, Bourla noted how his team’s dealmaking last year was, in good part, defined by mid-sized transactions like that of Global Blood Therapeutics and Biohaven Pharmaceuticals, which were respectively bought for $5.4 billion and $11.6 billion. Pfizer also purchased Reviral, a privately held biotechnology company, in a deal worth as much as $525 million.

In the days following each of those deals, Pfizer’s stock price either held steady or increased slightly — which, to Bourla, suggested investors were pleased with the company’s approach to business development. “Each one of them received a confirmation [from Wall Street] that this is a good allocation of capital. They like what we did.” — Jacob Bell

A window into a Gilead cancer drug trial

Enhance, a clinical trial of Gilead’s cancer drug magrolimab, is a key study to watch this year. On Monday, CEO Dan O’Day gave an update on its progress, albeit a brief one.

Independent data monitors have given a green light for the study, which involves patients with myelodysplastic syndrome, to continue. That declaration means they’ve seen no major safety concerns — a notable finding given earlier safety-related delays — and that treatment hasn’t proven to be “futile.” Yet progression without a readout is also suggestive that the benefit observed to date, if any, is not strong enough for the data monitors to halt the trial. The next interim analysis will come in the second half of 2023.

Magrolimab came into Gilead’s pipeline as part of a $5 billion acquisition of the biotech Forty Seven. Its success will signal whether that was money well spent.

Elsewhere in Gilead’s business, company executives predicted steady growth through 2030, driven by the HIV pill Biktarvy and the recently approved Sunlenca, a long-acting injectable drug for the virus. An important factor for that growth is a Sept. 12, 2022 settlement over the key active ingredient in Biktarvy and other major HIV drugs that pushes generic competition into the next decade. Perhaps related, the conference’s hosting hotel was on Monday again the site of protests against the company. — Jonathan Gardner

Building platform companies in a downturn

Arrakis Therapeutics isn’t the first startup Michael Gilman has built. The veteran drug hunter previously started and sold two companies to Biogen and Bristol Myers Squibb.

But Arrakis is different. It’s a platform company, built off of a technology — chemical medicines that target RNA molecules — that’s meant to generate many drugs, not just a few.

“Platform companies are just a completely different beast,” Gilman said in an interview. They take more money and time to build, he noted. Investors often pressure such companies to produce “something, anything,” which can lead to programs that might not be the best demonstration of a platform’s potential.

Moreover, Gilman is building Arrakis at a time when investors are less patient. Across the industry, biotechs are having difficulty going public. Startups are struggling to bring new investors in and to raise new rounds at higher values, said Chris Miller, a partner and leader of Troutman Pepper’s emerging companies and venture capital team. Companies like Arrakis have to find other ways to survive long enough to unearth what Gilman terms the “killer app” for their technology.

Still, Arrakis may be better positioned than most. Since 2020 it has signed lucrative partnership deals with Amgen and Roche that have given the company about three years of runway and enough time to “wait out the market,” Gilman said.

Gilman’s objective in coming to J.P. Morgan, then, was about forming relationships. “The problem with the hot market two years ago is that companies’ boards were forcing them to go public really quickly, without thinking through the long term consequences,” he said. “Our strategy is to get out there and find true long-term investors who believe in the vision and are willing to stick with it, because it's gonna take awhile.” — Ben Fidler