Legal Alert

Key Takeaways From the 2025 J.P. Morgan Health Care Conference

by Margaret Bolce Brivanlou, Ph.D., Peter Jaslow, Philip E. Legendy, Scott D. Marty, Ph.D., Kenneth H. Sonnenfeld, Ph.D., and Ryan J. Udell
January 22, 2025

Ballard Spahr attorneys from the firm’s Life Sciences and Health Care Industry Teams were on the ground in sunny San Francisco for the 43rd Annual J.P. Morgan Health Care Conference (#JPM25) January 12-15. The weather was vibrant and so was the atmosphere, with ample opportunity for networking and collaboration among prominent participants.

KEY TAKEAWAYS:

  • Cautious Optimism for Deal Making. The general consensus is that we will likely see an increase in M&A and capital market transactions in the life sciences sector in 2025. Last year, we saw a focus on smaller, strategic deals. While there should be more in 2025, we might also expect to see larger deals as companies look to fill growth gaps and leverage new opportunities. Potential interest rate cuts (and the consequent lower financing costs), changes in economic conditions, and President Trump’s noted focus on deregulation are all factors expected to boost the potential for M&A activity. These changes should also impact capital markets, which grew modestly in 2024, but are expected to continue to trend upward in 2025. Plus, with the so-called “patent cliff” continuing to loom, the clock continues to tick on the need to refill the drug pipeline. There is hope that the new administration will be less hostile to consolidation in the health care space but as highlighted by the recently released report by HHS and FTC, concerns about increased costs and access to care could dampen that optimism.
  • Focal Areas of Investment in 2025 - No Surprises. Innovations in biotechnology, genomics, and AI-driven drug discovery continue to drive interest and investment in life sciences. After the deep freeze of the last few years for access to capital, from venture to IPO, we are starting to see signs of a spring thaw. We do expect to continue to see more of the larger venture rounds with teams that have proven track records and later stage clinical products. In the capital markets space, we expect the moderate uptick in deals in 2024 to further increase in 2025. While a limited number of preclinical companies accessed the public markets in 2024, interest from early stage companies should increase as market conditions continue to improve, especially due to delayed offerings by companies in the past couple years. Areas of focus are concentrated heavily around cardio/metabolic indications, including obesity (particularly oral drugs) and the GLP-1 market generally, CNS, immunology, oncology, and inflammation. There is also notable momentum surrounding cell and gene therapies with exciting developments following positive trends in human data.
  • Spotlight on China. Chinese innovation in biopharma has seen remarkable growth over the past decade, transforming the country into a significant player on the global stage. The Chinese market is rapidly evolving, driven by a combination of regulatory support, government initiatives and increased R&D. While the shift presents an opportunity for a more collaborative cross-border environment, US companies may be hampered in acquiring these assets and these assets may have more difficulty in general in reaching US patients, due to larger policy issues with China, including tariff implementation and governmental scrutiny. This new competition will require US life sciences companies to sharply differentiate their offerings from those emerging in China. Industry players also continue to monitor legislative and other government efforts, such as the now dormant BIOSECURE ACT, to regulate dealings with Chinese entities.
  • General Uncertainty in the Industry as Trump Administration Takes the Reins. There are a lot of unknowns surrounding drug pricing, tariffs, potential regulatory changes, and health care legislation as we enter the New Year and gear up for the new administration. Notable topics include the future of (or changes to) the Inflation Reduction Act (IRA), including possible adjustments to address the so called “pill penalty” (i.e., harmonizing Medicare negotiation lockout periods for molecules and biologics), how regulatory policies surrounding drug approvals will be addressed, and the crackdown on pharmaceutical benefit managers. Drug pricing in particular is a key “genie” that President Trump does not appear ready to put back in the bottle, but it remains to be seen the approach that his administration may take. The industry is preparing for various potential changes while continuing to focus on innovation. On the capital markets front, the good news is that following the change in administration, we do not anticipate major regulatory changes to capital market financings that would impose new hurdles on follow-on offerings in the public markets.
  • Data is Queen and Artificial Intelligence Continues to Dominate. There was buzz throughout the conference about AI’s critical role in the life sciences sector. There were discussions regarding everything from clinical trials and personalized medicine, to improvements around operational efficiencies and how AI can be used as a tool to improve diagnostics through earlier and more accurate disease detection using image analysis, biomarkers, and predictive analytics. Perhaps most mentioned was how AI will revolutionize how we approach drug development, though questions remain about how to effectively leverage it to unleash its full potential in the industry.

    With the increasing amount of multi-party collaborations, early research and clinical trials, a consistent discussion revolved around the generation and ownership of data. As companies continue to build and train their proprietary AI platforms, the ownership and use of data was a clear source of potential value.  With the increasing interest in drug discovery, we see data sharing and ownership agreements on the rise in 2025.

  • Focus on Health Tech: Health technology featured prominently this year, with companies showcasing tools designed to enhance provider efficiency, advance research, and expand telehealth capabilities. Similar to trends in life sciences, there is significant interest in leveraging AI to improve patient care and experiences. This includes supporting physicians with advanced decision-making tools and empowering patients to access the services they need more effectively.

Subscribe to Ballard Spahr Mailing Lists

Get the latest significant legal alerts, news, webinars, and insights that affect your industry. 
Subscribe

Copyright © 2025 by Ballard Spahr LLP.
www.ballardspahr.com
(No claim to original U.S. government material.)

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.

This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.