Insights from the JPMorgan Healthcare Conference 2025
While anything involving AI stole the most attention from prospective investors, the underlying question of the week was “Is this the year that investment capital shifts focus from mid-cap and large-cap M&A to emerging biotech innovations?” I am especially interested in the answer to this question, as my business disproportionately serves emerging biopharma and biotech companies.
The week started with two huge announcements from Johnson & Johnson and Boston Scientific demonstrating that mid- and large-cap M&A still rule the day.
Over the course of the week, I met with and presented to dozens of investors as well as biopharma and biotech executives, individually and collectively. I was also introduced to amazing innovations addressing wound care, immunology, cancer, infectious diseases, drug delivery, obesity, and more.
Where We Can Improve as an Industry
The biggest challenge I witnessed is a communication gap that needs to be addressed if the funding flood gates are to open for investment in emerging healthcare companies.
Let me explain the information disconnect between the investors and early stage biopharma and biotech companies that is important for the bio executives to understand if they want to have sufficient funds for a product launch.
Early Stage Venture Investors Perspective
These investors targeting early stage investments (i.e., $1M – $20M raise) are sitting on a lot of dry powder and need and want to invest, but there is a mismatch between what is available and what they want from an investment: The key comments:
- Investors: Others investors to take the lead – and I will happily follow.
- Market: Clear messaging about a biotech or biopharma’s defined revenue plan (e.g., sales, licensure, or reimbursement) is key to securing funding.
- Funds Use: A detailed plan of why these funds are needed and how they will be used to fulfill the plan.
Biopharma and Biotech Executives Perspective
The bio executives were generally confident in their innovations, but some had challenges understanding what venture investors are telling them about why they are not investing now.
- Investors: I have more than enough funding lined up, but I just need a lead investor.
When an executive hears this from a venture investor, it’s usually due to at least one of these factors: the investor usually needs more information before they will invest and do not have the expertise or bandwidth for the investment size to assess the decision and want to rely on another investor for this function. - Market: How their innovation will treat, cure or eliminate a disease – and all the science to back up their opinion – but fail to define size of the market they can and will address, the data needed for approval and time to license and commercialization for the investment requested.
Investors need to hear less about miracle treatments or a cure. Investors know that often the first innovator, does not win the market. Funding is secured through a comprehensive execution plan that can adapt to the realities of the market. - Funds Use: How much funding they need to conduct a particular study phase, but lack the detail behind use of funds. This would usually includes a pro-forma income statement, balance sheet, and headcount growth showing why their plan needs funds now to succeed.
Often, start-up companies do not segment their market properly so that they can communicate the size of the market that makes sense to the investor, and a strategy to invest that will establish the bio company as a leader in the chosen space. No investor wants to hear that you can capture 1% of a $100B market.
Validcare
Patrick McCarthy leads Validcare, a high-performance Contract Research Organization (CRO) with skill the skill to de-risking the execution of clinical studies for pharmaceutical, biotech and medical device companies that represent a broad range of therapeutic areas.
For more information, visit validcare.com or call 844-825-4322.
