The Year in Biotech and What’s Ahead in 2023

Episode Summary

Executive Summary: Daniel Levine and Adam Feuerstein review biotech’s difficult 2022 and what to watch in 2023: gene therapy commercialization, the next wave of Alzheimer’s and neurology drugs, biotech dealmaking, CEO turnover, and JPMorgan’s return to pre-COVID scale. Feuerstein emphasizes that science kept advancing, but business and reimbursement challenges remained severe.

Main Topics: Biotech’s difficult 2022 market (Priority: 5/5): Feuerstein characterizes the year as a grinding continuation of 2021: weaker biotech indices, approvals down, layoffs rising, and investors still cautious despite some scientific wins. Gene therapy commercialization and reimbursement (Priority: 5/5): The discussion focuses on whether expensive one-time therapies can become viable businesses, with particular attention to Bluebird’s approvals and upcoming decisions for Sarepta and BioMarin. Alzheimer’s drug turning point (Priority: 5/5): Lecanemab’s phase 3 results and expected FDA decision dominate the neurology discussion, alongside questions about safety, reimbursement, and whether the field is finally past repeated late-stage failures. Broader genetic medicines pipeline (Priority: 4/5): Feuerstein notes continued progress in genome editing and RNA-based therapies, but says many of the same scientific and commercial hurdles apply across the category. Biopharma leadership changes (Priority: 3/5): Biogen’s new CEO Chris Viehbacher is discussed as a potentially sensible but still untested choice, with attention to how he may steer the company beyond its MS franchise. M&A and capital allocation (Priority: 4/5): Amgen’s Horizon deal capped a mixed year for biotech M&A, and Feuerstein says the conditions for more dealmaking exist even if pricing remains a barrier. JPMorgan and biotech sentiment (Priority: 3/5): Firestein expects JPMorgan Healthcare 2023 to feel crowded again, with companies and PR teams eager to reconnect in person after COVID-era disruptions.

Key Arguments: Biotech had a very difficult year, but the weakness was a continuation of prior pressure rather than a single collapse. Gene therapies may work scientifically, but their success depends on reimbursement systems handling $2-3 million upfront costs. Lecanemab may not be a cure, but it could mark the start of a broader, more effective Alzheimer’s treatment era. The field has become smarter about Alzheimer’s trial design and patient selection, which may reduce future phase 3 failures even if efficacy remains debated. Biogen’s new CEO should likely make incremental rather than radical changes, preserving neuroscience as the core while exploring adjacent areas. M&A should remain active because large companies have cash and pipeline needs, but attractive targets remain expensive. Twitter remains useful for Feuerstein as a professional tool, so he has not seen reason to leave despite broader platform changes.

Data Points: Biotech layoffs: more than 125 companies - Used to describe the scope of industry cutbacks in 2022. Gene therapy approvals in 2022: 3 - Two Bluebird approvals and one CSL Behring approval. Gene therapy treatment cost: $2-3 million per treatment - Firestein cites this as a major barrier to broad adoption. JPMorgan last San Francisco meeting before 2023: January 2020 - He notes the conference had not returned to San Francisco since then. Lecanemab FDA decision date: January 6 - Firestein expects the approval decision shortly after New Year’s. Biogen earnings/approval path for lecanemab: accelerated approval first, confirmatory study later - He explains the drug’s regulatory route and CMS reimbursement follow-up. Amgen acquisition of Horizon: $27.8 billion - Cited as the late-year deal that bolstered annual M&A totals. Viehbacher role: former Sanofi CEO - His prior leadership is part of why he was seen as a plausible Biogen choice.

Pivotal Quotes: "it felt like it was sort of a continuation of 21, where it just like, you know, it never really got any better." — Adam Feuerstein: His assessment of biotech’s overall 2022 performance. "I think what's interesting and maybe not in a great way is that... all of those events would sort of lift all boats in biotech. And it didn't, it hasn't really happened." — Adam Feuerstein: On why positive clinical news did not broadly revive biotech stocks. "For me, Twitter is a tool" — Adam Feuerstein: Explaining why he continues using Twitter despite ownership and platform changes.

Implications: Biotech’s next phase hinges less on scientific promise than on pricing, reimbursement, and execution. Expect 2023 to test whether gene therapies and Alzheimer’s drugs can translate clinical wins into durable commercial markets.