As everyone unpacks from last week's JPMorgan Healthcare Conference 2023 and digests their various meetings, it is worth reflecting on some of the key themes to emerge.

Impact of IRA: The full impact of the drug pricing reforms under the US Inflation Reduction Act is still be felt. Many commercial teams are continuing to assess these changes, with knock-on consequences for which deals may get done. At Ropes & Gray we have written extensively on this topic, including here and here. In February, we will also be hosting a webinar for those interested in learning more about this topic (who should contact

Gradual alignment of pricing expectations: As we previously noted, many investors were looking to do deals, but 2022 was marked by a mismatch in pricing expectations. On the other side, many biotechs were stuck with expensive prior rounds and were holding out to try and keep their high valuations. As we predicted last year, several good companies are now running out of cash and starting to readjust their expectations. This should allow for a greater uptick in dealmaking.

Importance of cash: On the same note, 2023 should present opportunities for those sitting on large amounts of cash (and lots of pharma are sat on unspent dry powder, as we have noted). At least for the first part of the year, the debt markets look set to continue to be more challenging than many investors had become used to. This gives room to manoeuvre for those who don’t need debt to execute transactions.

Not all deals may be acquisitions: Notwithstanding the comments above, there is still a frustration by many biotechs at the pricing they may be forced into. Therefore, they may still hold onto the prized assets or delay putting the whole business up for sale. Instead, they may try to explore a range of structures, such as licensing and collaborations (as we previously noted).

Royalty cliffs: Many large pharma are facing upcoming holes in their pipelines (and revenues) created by blockbuster patents due to expire. This will fuel dealmaking activity, as they try to fill this loss of exclusivity. This pressure may help push pricing on some high quality deals in favour of the biotechs.

Expansion of cell & gene therapy: As we have discussed on a number of occasions, many people are excited about the broader application of cell and gene therapies (CGT). This is particularly true as CGT moves out of oncology into other indications, such as autoimmune diseases. However, there is concern that the ecosystem is not yet there to allow these companies to grow as they might, and more service providers are needed. In addition, CGT companies have typically sought to retain a high degree of control over their intellectual property (for understandable reasons), but this may need to change if they are going to scale up.

In conclusion, there are positive signs for the potential bounce back in biotech deals. However, some negotiation may be needed, both in terms of price and structures.