JPM25: Oncology Outlook for 2025

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J.P. Morgan held its 43^rd Annual Healthcare Conference, January 13-16, 2025, in San Francisco, CA. Tuesday’s session ‘Priorities in oncology R&D’ focused on the diverse directions of this sector of the industry amongst regulatory changes, existing and emerging innovations, and more.

The panel participants included: Dan Malarek, CEO of Foundation Medicine; Stephen Hahn, CEO of Harbinger Health; Maha Katabi, general partner at Sofinnova Investments; and Marjorie Green, svp, head of oncology and clinical development at Merck. John Carroll the founder & editor of Endpoints News was the moderator.

The discussion began with a dialogue about recent innovations in the space. Green commented on the recent shift to diversified approaches. “It's very diverse now, which I think makes people think that it isn't focused. What you're seeing is, rather than a wholehearted universal focus on immunology, there is a movement towards understanding historically what has worked well. Whether it's chemotherapy or it's targeted therapies and then working on iterations of those. Understanding mechanisms of resistance and working on things that address that, and then still working on immunology. You're seeing a more diversified approach to oncology and that’s where you'll see multiple portfolios, like Merck. We have three pillars of biology in over 25 assets that are designed to affect the multiple different drivers of cancer, and hopefully lead for combinations, because the best way to treat cancer is either combinations together or sequentially.”

Malarek expressed his excitement over his company’s expected Q2 launch of Foundation One Monitor, saying, “What we're looking at is what the patient journey is when they're put on the therapy and how do we design an assay that will give the ordering physician all the information that they need to make the right decision. A lot of the assays out there on the market are custom bespoke assays looking at only specific mutations based on a tissue baseline. This will answer the question: is the therapy working? Yes or no—but that's about it. And the next question is often: but why isn't the therapy working? What are those resistance mutations? And that question would then require a new tissue baseline. With our Foundation One Monitor assay, what we're looking at is a tissue naive assay that a patient can get started very quickly. What its reporting is the percentage of tumor fraction in the sample. If tumor fraction goes down, then the therapy is working. If tumor fraction goes up, it's not working. It also reports the resistance mutations that come up, so that then the physician can make the right decisions straight from that point of view.”

Katabi noted that though small indications in targeted oncology had not delivered the anticipated commercial promise and driven away investments as a result, J.P. Morgan’s show had kicked off with two M&A transactions in the space. “The interest remains, but the shift that I've seen is towards targeted oncology that addresses a much broader patient segment than the specific genetic mutations, where you characterize a population by biomarkers…and go specifically after these patients. So, I'm thinking ADC (antibody-drug conjugates) Technologies, which have opened up a broad spectrum of oncology indications while remaining in that targeted scope. It's the T-cell engagers radiopharmaceuticals. Our investment focus that has probably about 30% of assets allocated to oncology fund over fund, that's where the innovation has shifted to. It's novel modalities and the targeted oncology space in addition to what we all know well in the small molecular arena.”

The conversation then turned to regulatory concerns, specifically the potential impact of the Inflation Reduction Act (IRA) and evolving FDA policies on innovation. Hahn shared how he’s seen recent changes to the classic development plan play out and how things like diagnostics play a key role in FDA approvals. “I still think there is a rationale for establishing a beachhead depending on the biology and the diseases that you're talking about. And we really do need to move away from our classical definitions of the indications and more toward the target as it spreads across a number of different cancers. I'm hopeful that could certainly be a way forward with that. But there's no question that the IRA and its impact on exclusivity is having an impact on this. This is highly dependent upon diagnostics. If you think about where we believe HHS and FDA is heading from a preemptive medicine point of view, the point of cancer being one of them, moving drugs to an earlier stage—It's highly dependent upon the diagnostic space, which is a little bit of a mess right now. So, 85%+ of cancer drugs approved by FDA last year had a companion diagnostic, so it's here to stay as far as I'm concerned.”

Katabi spoke about recent innovations with circulating tumor DNA testing and liquid biopsies for identifying whether patients are responding to therapies and healing that are being implemented on a broader commercial scale. “I am hopeful that at least data will be driving future treatment decisions much more specifically.”

The discussion then turned to the topic of community. Carroll had noted the division between 90% of community-based cancer treatment versus the rest of the people being treated, and how implementing newer technologies into the community can pose challenges.

Green said to start with the incorporation of clinical studies, pointing out that she does think community physicians do a good job of trying to keep up with innovation that has transformed how patients are treated and impacted outcomes. “If you produce overall survival, there's general awareness that ends up in NCCN guidelines and in pathways for physicians and their treatments. And so, as these technologies are incorporated, as diagnostics are used, then it gets rolled out into these guidelines and shapes the care in the community.” Panelists commented on comprehensive genomic profiling as an example of these recent technologies, noting that the percentage of patients being tested should be 90%, but instead is somewhere around 30-40%.

Participants were excited about the possibility of clinical trials being simplified with real world evidence, although they did note that there may be some resistance. Hahn suggested that phase III be smaller, and the industry should depend upon real world evidence and accelerated approval more. Green says it needs more time. “Overall survival definitely is the gold standard. Can you get that from real world data? As the infrastructure and then data continues to improve, we get closer to that kind of future where you can rely on community and rural data.”

The biggest hurdle for this is the data regulatory grade according to Malarek. “We're having these discussions with the agency right now. Part of it is the fact that our tests are FDA approved, so that's already a big component. Then we match it with EMR outcomes data. And then we're discussing topics like post market commitments, claim extensions to other indications, and these uses of the data with the agency. From their perspective, they're equally interested in using this data.”

Hahn, former commissioner at FDA, explained there are cultural barriers to significant change. He noted that the RFK Jr, if confirmed, is very interested in preemptive medicine and the potential to facilitate it. “Can we standardize it? Can we make it more transparent? What can we do to actually enable innovation to come to the forefront?” Overall, the panelists were optimistic and saw opportunity for a huge improvement in patient populations big and small.

The discussion wrapped up touching briefly on China’s future role in sourcing oncology therapeutics, suggesting speed is a currency (a reference from an earlier session.) Green commented, “It's not just China, the US, or people from Europe. China, because of their regulatory system, their manufacturing requirements, are different than they are for the US to launch drugs. So, things can be done at a lower cost in China, and it does facilitate speed in a way that it can't necessarily, if you're doing solely US development. There's an advantage there.”