Hi, everyone. This is Lucas Voss with the Becker's Healthcare Podcast. Thanks so much for joining. It's very excited for a conversation with 2 consultants from Spencer Stuart, Niran Thanke and Lynn Lapierre from AI to a 2025 outlook, the latest trends they're watching, So much to talk about. Niran, Lynn, thanks so much for being here today. Great to have you both. Thank you for having us, Lucas. Thanks, Luca. Excited for this. Niran, if you could introduce yourself and just give us an overview, of who you are and your work. Sure, Lucas. Happy to do so. So for the past 20 years, I've been advising health care boards and leadership teams on critical governance and leadership challenges, including board CEO and c suite succession work. And, our health care strategy here at Spencer Stuart spans early stage companies through to more established businesses. It's effectively molecule to patient. And on a day to day basis, I lead the EMEA health care team and work in our board and CEO practice. I'm based in London, and I actually qualified as an immunologist and microbiologist many, many years ago. Very interesting. Lynn, same to you. I'll kick it over to you. Thanks so much. I lead our biopharma practice globally. So like Niran, work very closely with boards and CEOs of biopharma companies, everything from venture backed through large pharmaceutical companies on their talent and business agendas. My background is in neuropsychology. I was a schizophrenia researcher, and then I was actually a lawyer in the industry before coming into leadership advisory about 10 years ago. Lots of great background here for both of you, I think. Really great. Lynn, could you give us an overview of Spencer Stuart? Sure. Happy to. So Spencer Stuart is a global leadership advisory firm that helps organizations find, develop, and accelerate the performance of senior level leaders and teams. We believe an organization's single greatest performance lever is their people, and we mobilize them through leadership, effective teams, a strong and aligned culture, and deep engagement. A fundamental tenon is that we believe that to win on the outside, you first have to win on the inside. Our health care practice is 59 consultants globally. 36 of those are in the US. And we bring an incredibly broad and deep scope of industry knowledge, which we integrate with functional expertise as well. As Niran mentioned, our consultants work with health care boards, CEOs, and c suite teams, which includes clinical leaders across a range of settings. And we've conducted more than 2,000 senior executive and board level searches globally over the past 3 years, and 95% of our placement are still in their roles today, which we're very proud of. Fantastic. Heading into, into 2024, there's lots of things that were happening throughout the year and then also heading into 2025 right now. It's it is December. Niran, could you give us just an overview of what you're watching for, coming 2025 and and beyond certainly? Yeah. So, you know, when I when I look ahead and sort of when I reflect back on what has happened this year, I think from a deal perspective, there's cautious optimism going into 25. I think there are some signals that 25 could be a stronger year for health care m and a. Although I think that's gonna be more in the private markets than in the public markets. I think sort of big macro themes, the the impact of this drug class, GLP ones or GLPs as some people call them. I think that's gonna have a huge ripple effect, not only on the pharmaceutical industry, but across the health care services landscape and into other sectors as well. And maybe we can get into that in a bit more detail. The other key thing I'm I'm quite interested in is the, the use of AI in drug development. Now we've heard a lot of promise about AI in drug development and the use in novel technology development, but I haven't yet seen out seen that play out in terms of efficiencies. But one thing that I can say is that we've never been able to crunch and process as much data so fast, and at such volume. So I think where AI has been very helpful is in bringing, linkages and observations between what is known and coming up with maybe linking one drug in one area to an indication in another area. But I think what I'm really excited to figure out is as we go forward, will AI help us figure out what's unknown? And that that I think is one of the big questions. I think one of the other key areas that I'm really interested in is, how private equity is also investing across the health care continuum as well. Lots of different things, and we'll we'll touch on these, in a little bit here as well. Lyn, I wanna head over to you, to something Nir mentioned there in the beginning. Can you talk a little bit about more specifically on on health care deals and and really what it means for leadership? We're certainly seeing more of that. Sure. Absolutely. There are multiple factors that come into play here, a few that we're hearing a lot about. One of them is, of course, uncertainty around interest rates that remains. There is optimism that there will be more funding available in broad terms in 2025, but it's certainly been a very difficult 18 months. But a, you know, a shift in rates would bode bode well for biotech companies. The second is the evolving geopolitical landscape. That's causing a lot of uncertainty coming into 25. 2024 was the biggest election year in human history. Over 72 countries held elections, and we expect that we're gonna see some pockets of some very business friendly environments, and that will lead to some increased deal activity, but still some uncertainty as to how all of that will play out. Specifically, as we think about that in the US, there's a lot of questions around what a second term of the Trump administration will look like for our industry. On one hand, president-elect Trump is seen as quite pro business, but on the other hand, there's a lot of uncertainty around his picks for HHS and and leading FDA and what that impact will be on the industry. So as we think about deals, there will be, you know, potentially more deals in the US overall because of this pro pro business approach. But the question remains, will the changes in in regulatory leadership or in those in any of those regulations cause longer timelines for drug approval, particularly around FDA. But regardless of all this uncertainty that we've mentioned, what we do know is that the best companies with the best science and the drugs that demonstrate the most efficacy will continue to get funded and gain FDA approval. And the best companies with the best science and the best drugs are also the ones with the best people. So having the right leadership team that knows how to apply the best science to develop the right target product profile is crucial in the current market. Lots of, things to consider factors to consider there across the board. And we've touched on this a little bit here. Niran, you touched on this a little bit. The impact of GLP ones really and how it impacts the broader health care industry and beyond is certainly a big factor for the future. Niran, I wanna start with you here. Can you elaborate on that a little bit and and how important that is? Oh, yeah. Abs absolutely. And and I mean, you just gotta think about this. I I think there are 1 in 8 American adults who are on GLP ones. And so I I think this one drug class is gonna have a transformative effect across not only the pharmaceutical industry, but much broader. I mean, you're gonna have people potentially eating less. I think you're gonna have people weighing less, and that has a ripple effect across airlines, supermarkets. And specifically in our sector, if there's there's a high correlation between certain chronic diseases and being obese, and so you would logically think if you'll have less people who are obese, you would have less people hopefully suffering from certain chronic conditions. So I also wonder if funding from some of these therapeutic categories is gonna move into different areas, which is actually quite exciting. And I think that's a that's a huge transformative shift. But also when you think about it, how do you make enough product for that many people? The first series of GLP ones, I think, will be generic, in a in a couple years. And suddenly, the man there's not enough manufacturing capacity, currently to make enough of the GLP ones to meet demand. And so I think there's gonna be a massive investment in in manufacturing capacity, and we're already seeing that. And and you remember, Lucas, I I mentioned private equity earlier on. I think, that's an investment class that's gonna get very active in this space. So, look, I I I see a huge amount of transformation coming, and we'll we'll just have to see how that plays out. I I think that's gonna evolve leadership as well. You know, when we think about that, when we think about how how do you sort of think about an evolving consumer customer landscape, we're talking more about prevention here rather than treatment, and that's gonna have a big shift. Lynn, I'd like you to weigh in here as well. I think this is such a such an interesting topic for for the future. Absolutely. Well, I think there's already a shortage of primary care physicians, and this increased demand for the anti obesity GLP 1 drugs is putting more pressure on what's already a constrained primary care system in the US. And so as a result, we have these we see these new care pathways that are popping up dedicated to creating access to physician visits for these drugs. And you see patients pursuing new pathways for their obesity care and for GLP ones. The the biggest example of this is the growth in online providers for obesity treatment and prescribing. Hers and Willow are are 2 that come to mind. This is a small portion of the market right now. So we know that about 11% of US adults who were surveyed per KFF get their GLP ones through an online provider or website versus 79% who are still getting them through their primary care doctor or a specialist. But I think as these compounding pharmacies continue to grow, it's more likely that we're gonna see more and more providers. We're also hearing from a lot of providers that GLP ones have the potential to change prescribing patterns. So for the first line therapy with a patient for obesity and high blood pressure, They have may have been prescribed originally a blood pressure medication, but now we hear from physicians that they would consider starting a GLP one instead to address obesity and the other conditions that are associated with it or exacerbated by it such as blood pressure. So that reflects a real potential change in prescribing patterns. There's also this long term rippling health effect into specialty care, less need for potentially for orthopedic procedures, knee replacements, hair replacements, etcetera, different needs for for less cardiovascular intervention. So this could have a real impact over time for the bottom line for health systems. As you've mentioned earlier, this is really changing the landscape or has the potential to change the landscape. And, Niran, coming back to you here, something else that you had mentioned earlier in the conversation. The use of AI really across the board, but especially in drug development is so important, and as you said, right, is changing the landscape. Niran, can you just elaborate on the AI piece of this a little bit because it is such an important piece of the conversation right now? Absolutely. And, you know, we work with a lot of these emerging technologies, and it it can range from predicting new variants of ultradynamic viruses that might escape immune systems all the way through to trying to figure out if one drug in one therapy area is appropriate for a condition in another therapeutic category entirely. And I think that's the key thing. It's, you know, there's a lot of promise around drawing linkages between what is known, but what the the the promise has yet to unfold around how it'll help us figure out what is unknown. And I think that's where there's a lot of focus and emphasis. But there are some really interesting use cases, and I have a client that has used the AlphaFold technology to, which actually predicts the 3 d structure of a protein based on its amino acid sequence. And that's kind of based on X-ray crystallography, which is kind of static image, of a protein. And they use that technology to to say, well, if we develop these small molecule drugs against these these types of proteins, are we gonna generate a viable drug or not? And actually using this predictive technology, they they realized they probably weren't gonna generate anything useful. And so they went down an entirely different path than their original business plan stated. And so that's just one example. And there are many clients out there that, and businesses out there that are using this technology to kind of predict and make the drug development process more efficient. But I think it's gonna take time for that to really pan out and generate, economies of scale. It's like any any new technology. They're they're gonna come in waves. And as we have, this kind of convergence between science, medicine, and technology, we're gonna see acceleration of these waves. A lot of folks have mentioned that 2025 is really going to be an important year for that certainly in that in that emergence. Throughout our conversation, I think numerous times, we've talked about the importance of private equity and really the impact of private act equity. And the last trend, I I wanna touch on here is where where private equity is investing in health care and and specifically in in biopharma. That's something you're watching. Lynn, can you elaborate a little bit on that impact? Sure. Happy to. And Niran and I, in addition to working with venture backed and big pharma clients, we also work a lot with private equity where they're investing in what is often a pharma services business or even a pharmaceutical company, so we kind of see this triangulated view. And what we're seeing is a lot more continued investment in, as I said, pharma services. This would be manufacturing capacity, CDMOs, especially as it relates to GLP ones given the shortages and how much of this market is still developing and not yet served. Most of the drugs that are currently on patent will lose their patent, and so we'll see, obviously, much more generics getting into the market in the next 5 to 10 years, and we'll need increasing capacity. We also see increasing demand for what we call pharma commercialization services. These are companies that help particularly smaller earlier stage biotech companies gain access to foreign markets. Instead of setting up their own infrastructure, these companies will strike licensing deals with pharma commercialization companies so that they can scale and commercialize their product in a foreign market, or they just offer services to help them launch in the US market. So I think we're also gonna see more investment into the biopharmaceutical supply chain. That can be, supply chain services, distribution, active ingredient, manufacturing, etcetera. We're also seeing, PE scoop up more pharma carve outs. We're seeing pharmaceutical companies divest what would be their over the counter or consumer business, and we see a lot of private equity firms looking around and seeing if they can take parts of those businesses and create separate companies around them. We've discussed many trends today from from deals and investing to GLP wants to AI. Along the way, you mentioned that all of these trends are impacting and will continue to impact leadership. Can you round out our conversation today with a bit more on those leadership impacts? And we'll start, with Naren here. Certainly, Lucas. I mean, there are a few leadership capabilities that we see as absolutely crucial, considering the current trends that we were talking about. Let me talk about 2 of them, and then I'll pass on, to Lynn. The first is adaptability to change, and the second is navigating uncertainty. So let's take adaptability to change. Leaders across the health care spectrum will have to adapt to rapidly evolving market conditions. This is especially true given the anticipated shifts in demand for both health care services and pharmaceuticals due to the increased use of GLP one drugs. Now this is gonna involve reevaluating the strategic direction of organizations or rethinking areas of investment. Let me let me give you an example. The role of pharmaceutical commercial leaders is likely to evolve. So companies with GLP ones will also need to get get in front of different types of providers and patients and drive demand for these drugs. But the ability to get in front of the numbers of people that they will need to, address and educate them on the product is gonna be challenged in the current commercial pharmaceutical model. So that means reaching other health care prescribers, like nurse practitioners and physician assistants, who have prescribing rights. And this requires a different approach to the current model that we that we see. The second point was around navigating uncertainty. So leaders across health care will need to enhance their skills for managing uncertainty. Economic, regulatory, and market related risk will be more significant, we think. And this is they they we think they can achieve this by fostering a culture that encourages innovative problem solving, agility, and decision making within their teams. And so an an an interesting example of this and where I think they will need to develop these organizational capabilities will be around the funding environment for Biotech. I mean, if 2025 is is rich for deals, we'll see one set of outcomes. But if it's a tight funding environment, then, I think they've got to brace themselves. But, Lynn, what what are you seeing? Thanks so much, Niran. I would I would add 2 more, implications. The the third would be the need for collaboration and influencing, and the 4th would be integrating AI and technology. So on collaboration and influencing, these capabilities are essential for leaders as they navigate what will be very complex coverage decisions and the need for more partnerships and decisions on investments. An example of this will be that payer leaders will need to work closely with their PBMs to understand the implications of, as we've discussed, more and more individuals taking GLP-1s and the impact of increased coverage for these drugs on their bottom line. We know that the coverage of these drugs is changing day by day in terms of insurance products, if they are Medicare Advantage, employer sponsored, individual, Medicaid, etcetera. And so, we'll need to consider carefully in conjunction with the sponsors of these products, meaning the federal government, state governments, employers, etcetera, How all of these stakeholders are going to work together to navigate this very consistently changing environment on coverage decisions. The 4th area, as I said, will be integrating AI and technology. We know that AI is impacting drug development, commercialization, really all pieces of the value chain. So leadership has to prioritize understanding AI's impact on business operations and invest in technology leaders. We need to build internal AI capabilities where required, potentially source talent from other industries that may be further ahead so that can be tech. But as we mentioned, it also can be places like consumer that are further along in their journey. And it's gonna be important for maintaining a competitive edge both in drug development and in the commercialization of products. As we talked a little bit about, with Niran earlier, the R and D leaders that understand how to apply AI early in the drug development process to guide which molecules to advance and for which potential purpose, this is going to be absolutely table stakes for them. Whereas, only a couple of years ago, it was it was brand new technology. So constant change on that front as well. So just to summarize, really, it's it's four implications on leadership capabilities. We need to have our leaders be able to adapt to change, navigate uncertainty, collaborate and influence, and integrate AI and technology. These are 4 key things that we'll need to see from our leaders given all the changes in our industry. Nira and Lynn, thanks so much for your time. What a great discussion. Thanks for being here. Really appreciate it. Thank you, Lucas. Thank you, Lucas. And I'd also like to thank Spencer Stuart for sponsoring this episode. You can tune into more podcasts from Becker's Healthcare by visiting our podcast page at beckershospitalreview.com.