Duato Reasserts Confidence In J&J Growth Strategy
Johnson & Johnson made quite a splash on the first day of the J.P. Morgan conference with the $14.6bn acquisition of Intra-Cellular, which is the largest biopharma acquisition since Pfizer’s $43bn buyout of Seagen in March 2023. Dealmaking will remain a part of the firm’s growth strategy along with internal research and development, CEO Joaquin Duato told a fireside chat session at J.P. Morgan on 13 January, noting J&J has poured more than $30bn into in-house R&D the past two years.
J&J is poised to post 3% revenue growth this year and 5%-7% compound annual growth annually through 2030, Duato said. Changes in foreign exchange rates mean that J&J will need to revise its financial guidance when it reports fourth quarter and full year 2024 sales and earnings on 25 January, the exec said, but the Intra-Cellular deal will add to revenue this year as well as bolster its neuroscience product portfolio and R&D pipeline.
The revenue projections for both 2025 and 2025-2030 provided last November by J&J already factored in the possible impact of the Inflation Reduction Act on revenue derived from Stelara (ustekinumab), Xarelto (rivaroxaban) and Imbruvica (ibrutinib), none of which are considered core products, Duato added. He predicted that Stelara revenue erosion due to biosimilar competition will occur at a rate similar to what AbbVie has experienced with Humira (adalimumab).
“I want to express my confidence again today,” the CEO said. “We’re very confident in being able to grow 3% in 2025, and acquisitions like Intra-Cellular only reinforce our confidence.”
Of the incoming Trump administration, Duato said J&J would look to work cooperatively with any administration. In all, over its 100-year-plus history, J&J has worked with 24 presidential administrations, he added, and worked well with the first Trump administration.
“It’s difficult for me to estimate what’s going to happen,” Duato said. “What I can tell you is that we are going to be willing to be able to discuss how we can have pro-innovation, pro-access policies here in the US.”
GSK R&D Chief Wood On Why IDRx Fits Its BD Strategy
GSK’s acquisition of IDRx for $1bn was one of the deals that kicked off J.P. Morgan, and in an interview with Scrip, chief scientific officer Tony Wood said the acquisition reflects the types of deals GSK is looking for.
“What we’re looking for are assets that are relatively early to mid- stages of development in which we can be confident in extrapolating their profile into an outcome that perhaps others might not have spotted, and this is just another example of that type of program,” he said.
Under the deal, GSK agreed to pay $1bn upfront and $150m in milestone payments, gaining a highly selective KIT inhibitor IDRX-42 in Phase I/Ib development for second-line advanced gastrointestinal stromal tumors (GIST).
“I’m looking for something that is going to be a reasonably effective proposition to a launch … towards the end of the decade,” he added.
IDRx fits into GSK’s budding oncology portfolio focused on colorectal and GI cancers, centered on the PD-1 inhibitor Jemperli (dostarlimab) for endometrial cancer and mismatch repair deficient (dMMR) tumors, including colorectal cancer. The company also recently signed a deal with the Chinese firm DualityBio to gain an option on a preclinical antibody-drug conjugate directed against a GI cancer target.
As for IDRX-42, GSK is encouraged that the drug could have utility in cancer with primary and secondary KIT mutations that typically lead to relapse. Eighty percent of GIST cases are driven by mutations in the KIT gene that lead to growth and proliferation of the tumor cells, and 90% of patients treated in the first-line develop new KIT mutations. There are no KIT inhibitors that inhibit the full spectrum of primary and secondary mutations.
“Obviously, it’s relatively early with a small number of patients for which we have data in the second line, but nevertheless, a really compelling profile when you look at the response rates in the extensively treated group, as well as those who’ve had already one prior line of therapy,” Wood said.
“The nice thing about this deal, of course, is it’s in an area of signal transduction, the KIT pathway, and one in which we really understand very well the relationship between preclinical science and how the molecule is binding to the kinase and potential outcomes, and that’s what gave us confidence in the molecule,” he added.
RFK, Jr. Is Happening, Former Senator Burr Says
Industry should expect that RFK, Jr. will be overseeing the US Department of Health &Human Services (HHS), according to former US Senator Richard Burr, a longtime Republican legislator who discussed policy issues with industry representatives during a discussion sponsored by Incubate, a nonprofit representing VC firms.
“I think you see that based upon how quickly they made nominations, how coordinated the Senate is at confirmation hearings … how quickly they will confirm all the president’s nominees,” he said. “For all the political pundits that are out saying who’s going to get killed, I would suggest to you today, none of them. They will all get through.”
RFK, Jr. is viewed by many in industry as a controversial pick to run HHS because of his views that run contrary to long held scientific knowledge that vaccines are safe and effective. But Burr cautioned industry not to become overly fixated on any particular high-profile nominee.
“Remember this – as many people might be fearful of this person or that person that is chosen – whoever is confirmed in these slots will carry out whatever the message is of this White House,” Burr said. “So, if you’re Bobby Kennedy and you want to take fluoride out of water, if the White House doesn’t want fluoride out of the water, it’s not coming out.”
“I would suggest to you, don’t be too concerned with the shiny objects. We’ve really got to figure out where the core things are that the industry needs to go after to have a positive impact long term, and that’s why I think it’s vitally important that pharma be engaged,” he added.
More than ever, Burr said, industry leaders need to appeal directly to legislators, especially because so many long-term staffers have left Capitol Hill.
“Washington is very quickly moving from a relationship town to a transactional town,” Burr said. “If you’re a company, whether you’re a member of one of the associations, your CEO has to be involved now. Small, big, your CEO needs to be willing to go to the Hill and have strategic meetings that help to seed those champions that we need going forward.”