"Companies are not looking for banks simply as product providers. They value partners that can bring the full life sciences ecosystem to them and create relationships. This includes assisting them with everything from capital aspects to talent development, specific financing needs, geographic expansion plans and partnerships."
What are your views on the state of the industry and how does JP Morgan help facilitate the growth of companies bringing life changing therapies to market?
Life Sciences has never been as exciting an area as it is today. Technological advancement is robust and the rate of novel technologies developed and commercialized is at record levels. That manifests itself in company formation and in capital markets, primarily through the high level of venture activity. The amount of money being raised by healthcare-focused funds is at an all-time high as well. The panorama is very dynamic and that is where J.P. Morgan can approach it from a banking position. Companies are not looking for banks simply as product providers. They value partners that can bring the full life sciences ecosystem to them and create relationships. This includes assisting them with everything from capital aspects to talent development, specific financing needs, geographic expansion plans and partnerships. J.P. Morgan has built a banking platform around the ecosystem, where we not only deliver specific products, but also help companies navigate the space to help them grow and scale. Entrepreneurs are strapped for time and resources so partners that allow them to be more efficient are very valuable.
We have a dedicated team that focuses on relationships and helping companies navigate the venture capital ecosystem. Life science companies are very capital intensive by nature and they must raise a lot of money to be able to make their dreams a reality. We provide guidance and support domestically and internationally. Life sciences are accessing international markets at earlier stages than ever before and from a pure banking perspective, that can be a daunting task, because it is logistically and structurally challenging.
What are your views on the impact technology is having on the industry, and what tools do you see as most transformative?
AI gets a lot of attention, and rightfully so. Technology is transformative and has become pervasive across all aspects of the industry. For example, in drug discovery, using AI can improve the hit rate and target rate, while also making it more efficient and cost effective. It also helps make the value proposition more evident to the market. Another area it has impacted has been clinical trial management. AI contributes to patient identification, protocol structuring and lower costs, by taking it from an investigator-led approach to a de-centralized model, that uses data to better drive these trials both to outcome, but also to drive the cost down. Finally, there are benefits to imaging. Technology has the potential to assist in digesting medical data used to make diagnoses in a more effective way and also has shown promise in augmenting doctors’ work to improve the success rate in analyzing digital images. Additionally, new imaging technology has applications in certain surgical procedures. These are not necessarily transformational, but you are seeing it in more of the day to day management on the device side and the drug side.
What are some important considerations for emerging life sciences companies?
There are a couple of interesting angles in this regard. One, there are more and more novel drug development companies taking their drugs to market. For biotech companies, going from an inherently science and clinical driven organization to one of manufacturing and sales is challenging and there are cultural and structural shifts that need to happen. Companies need to prepare for this earlier and complicating that fact is that the manufacturing chain is complex. Identifying the most efficient third party providers to collaborate with is very important. On the sales side, it is equally challenging. The sales function is moving away from classic direct sales to more specialized value chain models. Instead of selling to a geography, you are selling to an ecosystem that is around the disease you are trying to solve. With value based medicine and outcome based payments, the sales model is changing.
What are your views on the North-Eastern Corridor as a life sciences hub?
I think it is interesting to look at the life sciences ecosystem geographically. The North-East corridor as a whole is the most robust life sciences ecosystem anywhere in the world, and even inside that ecosystem you have separate distinct and valuable areas. Each hub (Massachusetts, New York, Philadelphia and New Jersey) has its own unique qualities. New Jersey is home to 75% of the world’s top 20 pharma companies. The university ecosystem is obvious in Massachusetts, but we also see it in other states at universities like UPenn, Princeton and Rutgers. New York is one of the most fascinating case studies. 10 years ago, talking about starting an early stage biotech company in New York was almost laughable from a cost effectiveness perspective. Now it is an extremely robust area for new company development and growth, which is a testament to the work that incubators, capital providers and universities have done. In Cambridge, the ingredients for success are already very well mixed. You have a robust university system and tech transfer, large pharma and large corporate partnerships, a well functioning incubator system, and, most importantly, talent and capital are in abundance. I think New Jersey and Philadelphia and, to a lesser extent, New York are at different stages of that same growth. All have the right ingredients to be equally successful
What ideas around healthcare do you believe should be more prevalent in the election discourse?
Drug pricing will continue to be an important topic of discussion in the political cycle. It is a healthy discussion to have. The movement of the market stream to more outcome-based pricing is a subject of discussion that is long overdue. There are some low hanging fruit that can be addressed such as drugs for the elderly and rare diseases, but it will be hard to build a consensus over a transformative drug pricing model.
What goals does JP Morgan’s life science division wish to achieve over the next two years?
We are focused on building on the dedicated ecosystem we have created around the life sciences community. We want to be the holistic partner for life sciences companies to serve their needs throughout their entire life cycle, from opening a bank account on Day 1, to expanding internationally and through a potential IPO and beyond. J.P. Morgan is a partner and an advisor for growth, full stop. We’re investing in and bringing solutions that go beyond traditional banking for our clients.
As an example of this, J.P. Morgan’s acquisition of InstaMed will expand our capabilities in healthcare payments, offering healthcare providers, payers and consumers an end-to-end payments solution. We continue to evaluate opportunities to bring our clients more value as we double down on our commitment to the broader healthcare sector and serving the needs of companies in the value chain.
Our goal is for companies of every size, even very early stage companies, to view us as the first place they would go to overcome any challenges that they have in unleashing their full potential.