Aurelia Butler

SAN FRANCISCO (Reuters) – The biopharmaceutical industry is aiming for a 2025 reversal of last year’s slump in investor returns but remains wary over what President-elect Donald Trump’s priorities might be on hot button issues such as drug pricing reforms and vaccines.The pharma industry faced its biggest regulatory change in decades with the Biden Administration’s Inflation Reduction Act of 2022, which allowed the federal government’s Medicare health plan for the first time to negotiate prices for its costliest prescription drugs.”Nothing kills investment like uncertainty. The IRA led to a lot of uncertainty in the sector,” Steve Ubl, head of industry lobbying group PhRMA, said at the JP Morgan Healthcare Conference this week in San Francisco.PhRMA is hopeful the new administration will be less focused on “attacks to the ecosystem” of the industry and instead seek to reduce inefficiencies that would lower costs for patients, he said.Prices for the first 10 Medicare-negotiated drugs were released last August, with the results largely in line with existing prices after discounts and rebates.Names of the next 15 drugs up for price talks are due by Feb. 1 and could be announced this week, although it is also possible that the final list could change after Trump takes office on Jan. 20.Last year, the Nasdaq Biotechnology Index fell 3%, compared with a gain of 23% for the bellwether S&P 500 and a jump of nearly 29% for the tech-laden Nasdaq. The NYSE Arca Pharmaceutical (TADAWUL:2070) Index rose 1%.The discrepancies came despite all-time stock price highs hit by obesity drug manufacturers Novo Nordisk (NYSE:NVO) and Eli Lilly (NYSE:LLY). Lilly ended 2024 with a gain of 31%, while shares of Novo, which posted underwhelming trial results for a next-generation weight-loss drug, fell 9%.”Growth has been uneven across the sector. There are haves and have nots” as investors assess how drugmakers cope with looming patent expirations, said Roel Van den Akker, pharma deals leader at PwC.PATENT EXPIRATIONS Morgan Stanley (NYSE:MS) estimates that around $175 billion of 2025 U.S. large-cap biopharma revenue – 35% of the total – will go off patent by the end of the decade. To replace that revenue drugmakers need new products, either from their own research or by acquiring companies with promising assets, but those transactions slowed significantly last year.The value of life sciences mergers and acquisitions totaled around $80 billion in the year through November, less than half of 2023’s total, according to the Iqvia Institute for Human Data Science. No deals over $5 billion closed last year.The expectation that the next chair of the Federal Trade Commission will be more deal-friendly than Lina Khan has been is viewed as positive for drugmakers.On Monday, a flurry of deals were announced including a $14.6 billion acquisition by Johnson & Johnson (NYSE:JNJ).Trump nominated current Commissioner Andrew Ferguson to succeed Khan. Investors are less enthusiastic about some of Trump’s other high-profile nominations to top positions in his next administration.”RFK’s views on vaccines could certainly impact some of the major pharmaceutical companies,” said Foley Hoag partner Beth Neitzel, referring to Trump’s pick to lead Health and Human Services, Robert F. Kennedy Jr, who has been an outspoken vaccine skeptic.”I think the objective will also be to find common ground. Making America healthy is what we are all about,” Biogen (NASDAQ:BIIB) CEO Chris Viehbacher said in an interview during the conference.PHARMA EXECS TO EXERT INFLUENCE Pfizer (NYSE:PFE) CEO Albert Bourla underscored the industry’s uncertainty in his session at the conference with investors, but said on Monday he would try to influence the environment. “There are several people that think, for our industry, the risks outweigh the opportunities. There are other people, among them myself, which they think that the opportunities outweigh the risks. I guess we will see,” he said.J&J CEO Joaquin Duato told investors “it’s difficult for me to estimate what’s going to happen,” adding that he would be pushing policies with the Trump administration on innovation and access.Investors are focused on the impact of government policy on drug prices, including any changes to the IRA that could affect how quickly individual medicines become eligible for Medicare price negotiations.Those changes would be difficult to make because they are written into the law, said Priya Chandran, biopharmaceuticals sector leader at Boston Consulting Group.”It is unlikely that anything is going to drastically change in the first year,” she said.Foley Hoag’s Neitzel said reports of Trump’s “warm and cordial” December dinner with pharmaceutical executives in Florida have led to some optimism.However, “the pretty universal statements by both Trump and RFK in the past about drug pricing do not suggest that this incoming Trump administration is going to be helpful to the industry,” she said. More

The Treasury, releasing its final budget report before President-elect Donald Trump takes office next week, said that the $711 billion October-December deficit was $201 billion, or 39% higher, than the $510 billion deficit in the same period a year earlier as outlays grew sharply and revenues declined slightly.For December, the $87 billion deficit was reduced by $51 billion by the calendar benefit shift, and compared to a $129 billion deficit in December 2023. Receipts for the month were up 6% to $454 billion, while outlays as reported were down 3% to $541 billion. More

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldThe US economy is in a “fragile place”, the chief executive of Goldman Sachs said on Tuesday, as the incoming Donald Trump administration promises policies that could stoke or constrain growth and fuel government deficits. David Solomon said he was “incredibly optimistic” and expected the sweeping deregulation Trump promised would catalyse business investment. But he also warned about the potential effects of Trump’s plans to clamp down on immigration, including deporting millions of immigrants who are living in the US illegally. Solomon said the recent rise in long-dated interest rates — the yield on 10-year Treasury notes reached 4.79 per cent on Tuesday — primarily reflected market expectations of continued growth of US government debt. “I’m quite optimistic, but we’re in a more fragile place,” he said at a New York conference hosted by the National Retail Federation, a trade association. Solomon claimed regulations imposed by Joe Biden’s administration had caused CEOs to defer investment. The incoming Trump administration “has sent a clear message that they want to back that off. That’s very constructive for growth and investment, and so I think that’s a positive,” he added. He said the renewal of tax cuts passed during Trump’s first time in the White House, many of which are due to expire this year, “can be stimulative”. “But there are other things that the administration is talking about that we really need to see how they go forward,” Solomon said, including Trump’s threats to impose new tariffs on trading partners and restrict immigration. Secure borders were important, he said. “But when you think about deportations, it’s very, very important that we balance all that with continued immigration growth, and we’ve got to get that balance right,” Solomon said. “So you’ve got this cocktail of change, some of which can be quite constructive for growth, some of which has the potential to slow growth, and I think the thing we have to watch very carefully is how it’s all balanced,” he said. Government bond markets have sold off in recent months, and rates jumped further after an unexpectedly strong US jobs report last week.Solomon said he did not think the recent rise in yields reflected expectations of a more hawkish Federal Reserve or concerns strong inflation will persist. He said: “We’ve really grown the debt stack. You really look at the deficit as a per cent of GDP. You look at some of the policy decisions and, I think it’s super important that we really get our spending and our deficit and the debt levels under control.”Solomon added: “And I think one of the things that’s happening is real bond buyers are looking and saying, we’ve got a lot of financing coming forward as we go through the rest of the decade, and that’s pushing long rates higher. We haven’t seen that in a long time, that’s a change, and I think that’s something to watch.” More

LONDON (Reuters) – Hopes of a ceasefire deal to end the war in Gaza lifted the region’s government bond markets and Israel’s shekel on Tuesday as investors sensed relief after 15 months of conflict.Negotiators were meeting in Qatar hoping to finalise a ceasefire and hostage release agreement after U.S. President Joe Biden indicated that one was within reach. More than six hours after talks began there was still no word on an outcome but Israel’s bonds and those of Lebanon, Egypt and Jordan were all edging higher as optimism built. Israel’s shekel and Egypt’s pound were also both fractionally higher in the currency markets. Clinching a ceasefire deal would cap a historic few months in the Middle East. It has included the killing by Israel of Hamas leader Yahya Sinwar, Iran-backed Hezbollah being weakened enough to allow Lebanon to elect a new president and perhaps most surprising of all, Syria’s veteran leader Bashar Al-Assad being toppled.Marten Bressel, a portfolio manager and rates trader at FIM partners, said the combination of events was helping to lift sentiment towards the region after a difficult couple of years.”The ceasefire deal is one part of that and hopes are pretty high at the moment that the new government of Syria will open up the country more to the West,” he said. Lebanon has been the biggest trade for investors, though.Its bonds have almost trebled over the last few months amid hopes that it can start addressing its dire financial woes now that nearly two years of near complete political paralysis look to be over. Israel’s markets bear the scars of the last 15 months of conflict in Gaza. The heavy cost of the fighting has seen the country’s sovereign credit rating downgraded multiple times despite never having been cut before last year. More