What have been the main highlights for J.P. Morgan in 2023, and what were the main takeaways of the conference in January?

2023 was a busy year for the life sciences industry. The market disruption in March 2023 significantly impacted life sciences companies that worked diligently to preserve capital amid uncertainty. At J.P. Morgan, we grew our team, client base, products, capabilities, and services to ensure that we are appropriately and adequately banking life sciences companies from early stage through to commercialization. Can you elaborate on how J.P. Morgan supports early-stage biotechs with initial investments to commercialization?

We work with startups, VCs, and founders to support the growth of life sciences companies, including biopharma, medtech, devices, and tools, as they develop life-saving products and services. We set clients up with an appropriate treasury platform and take care of their banking needs so that management can focus on advancing programs, getting into the clinic, and capital raising to fund their development.

Oftentimes, when a company emerges from stealth mode, we are in discussions with the VC or founder to set up the company’s banking operations. As they progress with their development, J.P. Morgan has the unique unmatched ability to grow seamlessly with them providing the necessary enhancements to their treasury platform including international accounts, investment and strategic cash accounts, and enhanced reporting requirements and control functions for public companies. We grow with our clients; our clients don’t outgrow J.P. Morgan, eliminating the need to move banking operations and detract from focus on the business. Are you seeing companies having more success in raising funds now compared with early 2023?

There remains a bifurcation between companies that are well-capitalized and de-risked, and those that are not. Investors may take a pause when they are evaluating companies with less than 12 months of cash. The private capital markets are flush with cash, but private investors are becoming much more thoughtful about how they deploy capital, ensuring that every dollar they apply to an investment is carefully vetted. Given the abundance of companies looking for cash, investors can take their time making funding decisions, sometimes to the dismay of the companies.

In terms of the public markets, we have seen several IPOs in the life sciences sector year-to-date, which is a positive signal for the market and broader healthcare ecosystem. Many of the companies that are now coming to market are at the right stage of development, have the right cap table, and have the right milestones on the horizon that public investors are looking for. Signs are pointing toward a cautiously optimistic 2024 for life sciences. How do you anticipate the public markets to shape up in 2024?

I think the public markets will continue to be constructive for the right opportunities. There was more than US$100 billion in healthcare issuance in 2020, of which a significant amount of funds went to early-stage companies. It seems that the investor base has healed enough that they are willing and interested in putting money to work in the life sciences sector again, and the names that have gone public this year are largely trading well in the aftermarket.

In terms of M&A, there is no shortage of news on the patent cliff and the loss of exclusivity that many big pharma companies are facing, but everyone is aware that this is coming in 2025. Innovation and new company creation have continued and big pharma is constantly evaluating acquisition opportunities to add to their pipelines. The cycle has always been there, but it is now a bit more pronounced, and we will see more M&A activity in 2024. What will be J.P. Morgan’s key priorities in 2024?

We will continue to serve our clients, providing them with the banking platform and services so that they can focus on developing innovative science and technologies, getting assets into the clinic, and commercializing drugs, tools, and diagnostics that will change lives and improve human health.