As a virtual 39th J.P. Morgan Annual Healthcare Conference begins, typically one of the biggest events of the year, biopharma dealmaking barreled ahead with five new deals Jan. 11 that could eventually hit $1.04 billion in total.

At the opening of the J.P. Morgan Annual Healthcare Conference, two industry heavyweights, Kenneth Frazier, the chairman and CEO of Merck & Co. Inc., and Jamie Dimon, chairman and CEO of J.P. Morgan, offered up their thoughts on COVID-19 and how it has affected their companies. Both said that they expected the pandemic’s impact to lessen as the year went on but there would be lingering problems, including ramping up lagging creativity brought on by employees having to work from home.

Kenneth Frazier, chairman and CEO, Merck

COVID-19 hasn’t diminished much of the dealmaking, however. In the five new deals announced Jan. 11, clocking in at about $361 million is the biggest of the bunch, Zai Lab Ltd.’s acquisition of the exclusive rights to develop and commercialize TPX-0022, Turning Point Therapeutics Inc.’s MET, SRC and CSF1R inhibitor, in greater China, including mainland China, Hong Kong, Macau and Taiwan. Turning Point will receive $25 million up front, with up to approximately $336 million in potential development, regulatory and sales-based milestone payments. Turning Point is also eligible to receive midteen to low 20% royalties on TPX-0022’s annual sales in greater China.

The two companies launched an exclusive licensing agreement in July 2020, when Zai got the exclusive right to develop and commercialize Turning Point’s lead candidate, repotrectinib, in greater China.

Jamie Dimon, chairman and CEO, J.P. Morgan

Beigene Ltd., of Beijing, said it entered a $277 million option and license agreement to develop and commercialize privately held Strand Therapeutics Inc.’s mRNA treatments for solid tumors. Beigene got the option to develop and commercialize up to two immune-oncology programs in Asia (excluding Japan), Australia and New Zealand.

Strand will receive $5 million cash up front cash and is eligible to receive additional near-term payments of up to $28 million. Strand could also receive payments from Beigene based on hitting certain development, regulatory and sales milestones. In connection with the agreement, Strand said it also received new investments of $10 million, including $5 million from Beigene.

Aadi Bioscience Inc.’s $271 million agreement to develop and commercialize EOC Pharma Ltd.’s ABI-009, an mTOR inhibitor, in mainland China, Hong Kong, Macau and Taiwan was also announced Jan. 11. Aadi will receive an up-front payment, regulatory and sales-based milestone payments totaling up to $271 million as well as tiered royalties based on annual net sales of ABI-009. EOC will be responsible for development, regulatory submissions, and commercialization in the territory. Aadi retains full worldwide rights outside of the partnered territory. ABI-009, sirolimus albumin-bound nanoparticles, is an mTOR inhibitor complexed with human albumin the company said has demonstrated higher tumor accumulation, mTOR target suppression and superior efficacy over other mTOR inhibitors in preclinical models.

Hutchison China Meditech Ltd. (Chi-Med) and Inmagene Biopharmaceutics Co. Ltd. agreed to a $230 million deal to develop and commercialize four Chi-Med immunological disease treatments now in development. Chi-Med granted Inmagene exclusive options to four drug candidates solely for the treatment of immunological diseases. Should Inmagene exercise the option, it will have the right to further develop, manufacture and commercialize that specific drug candidate worldwide, with Chi-Med retaining first right to co-commercialization in mainland China. For each candidate, Chi-Med will be entitled to development milestones of up to $95 million and up to $135 million in commercial milestones, as well as up to double-digit royalties upon commercialization.

Glaxosmithkline’s plc’s deal worth up to $224 million for Eligo Bioscience SA to advance an acne vulgaris prevention candidate included an R&D agreement for its CRISPR-based therapeutic. Eligo will receive an up-front payment and R&D funding to advance EB-005, its discovery program in acne, until preclinical proof of concept. Eligo would be eligible to receive up to a total of $224 million in license fees and potential milestone payments, as well as royalties on global sales. Eligo’s platform uses phage-derived particles to deliver an RNA-guided CRISPR/Cas nuclease into the microbiome’s bacterial populations.

Dimon and Frazier contemplate the big picture

While dealmaking news flowed Jan. 11, the lack of in-person meetings this year was felt by Dimon and Frazier, who shared a stage in New York and spoke live to virtual JPM conference attendees on big picture pharma development and the impact of COVID-19.

It’s a huge mistake to think COVID-19 is over, Dimon cautioned, because there is no way to know when those who want a vaccine will be inoculated. But he went on to add that it is possible that in September or October, when high levels of the population are inoculated, “we will have a kind of booming economy.” Overall, he said, the country was unprepared for the pandemic, including the government. Ultimately, he said, the troubles brought on by COVID-19 “teaches you resilience.”

Frazier cited problems at Merck that included an inability to get gloves and masks.

“We’re solving high-tech challenges but we couldn’t solve the low-tech ones,” he said.

The pandemic also brought problems to the company’s business model, Frazier said. As more and more people worked from home, the company culture suffered, he added.

“I worry about how you create a culture in a company when nobody’s in the same place,” he said. Culture is vitally important to the company, Frazier said, and it continues to struggle to “replicate that in a two-dimensional world.” He said he believes people will come back to the workplace eventually because collaboration and innovation need person-to-person interaction.

“They are exhausted with being so far away,” Frazier said. “I don’t know that this is sustainable.”

Dimon agreed, adding that J.P. Morgan productivity has been high but “some of it is wearing off.” He said he envisions a post-COVID-19 future in which people in the business will travel less than they did before the pandemic. Without personal interaction, he said, creativity is diminished.