JH Explorer: Takeaways from the 2025 J.P. Morgan Healthcare Conference
Portfolio Manager Dan Lyons shares key takeaways from one of the sector’s biggest annual conferences, noting that despite a recent pullback in healthcare stocks, the prospects for innovation and dealmaking appear as strong as ever.
4 minute read
Key takeaways:
- The 2025 J.P. Morgan Healthcare Conference came on the heels of a significant decline in healthcare stocks, but we saw no signs the pace of medical innovation was slowing.
- On the contrary, new mergers and acquisitions were announced and firms reported significant progress in pipeline development and strong product launches.
- We came away from the conference believing today’s valuations do not adequately reflect the sector’s growth potential, creating an opportunity for long-term investors.
For the last 25 years, members of the Healthcare Team have attended the annual J.P. Morgan Healthcare Conference, a week-long event that takes place every January and helps set the tone for the sector for the coming year.
The 2025 conference, held in San Francisco, came at a key moment: Healthcare stocks sold off the month before, following Robert F. Kennedy, Jr.’s controversial nomination to head the Department of Health and Human Services, along with a number of high-profile drug candidates that suffered negative data readouts. The tragic killing of United Healthcare’s CEO also led to heightened security concerns.
Early dawn in San Francisco during the 2025 J.P. Morgan Healthcare Conference.
But amid a stretch of unusually nice weather (rather than the typical driving rain), this year’s conference was lifted by the sector’s promising innovation. Our calendars were booked from morning to night, attending company presentations and meeting one-on-one with executives and industry leaders. Here, some highlights and takeaways from the week:
Valuations seem out of step with fundamentals
Healthcare’s pullback at the end of 2024 seemed out of step with updates provided by companies throughout the week, including promising pipeline developments and unusually successful product launches. Through the end of 2024, for example, one small-cap biotech stock suffered a double-digit decline after hitting a high in November. But the company delivered no negative news. On the contrary, at the conference, management gave encouraging updates on the firm’s novel platform for neuromuscular diseases such as Duchenne muscular dystrophy and facioscapulohumeral muscular dystrophy. The company is expected to deliver multiple data readouts both this year and in 2026, and our confidence in the leadership team grew only stronger after meeting with them.
M&A activity could rebound
Last year, just $45 billion in merger and acquisition (M&A) activity was done, roughly half the 10-year average. Notably, not a single acquisition greater than $5 billion was announced, which may have contributed to negative investor sentiment, particularly for biotech.
But companies often announce acquisitions at the J.P. Morgan Conference, and this year Johnson & Johnson kicked things off with a $15 billion bid for Intra-Cellular Therapies, the biggest deal for the sector in more than a year. In addition, a number of private companies were scooped up, including Scorpion Therapeutics, bought by Eli Lilly for up to $2.5 billion, and GSK’s purchase of IDRx for $1 billion.
We think the deals could be a prelude of what’s to come in 2025. Pharmaceutical companies face over $250 billion in patent expirations through the end of the decade, putting pressure on the industry to rebuild pipelines through M&A. Furthermore, expectations for a more lenient Federal Trade Commission under the Trump administration could also encourage dealmaking.
Biotech not the only area delivering rapid innovation
This year’s conference may have been one of the most important for medtech, which has experienced rapid changes in terms of new product launches and a bifurcation between “have” and “have-not” companies. At the conference, our view that medtech is a stock-picker’s market – with opportunities to tap into unusually strong growth – was confirmed.
One company, for example, reported that electrophysiology (EP) procedures – diagnostic and therapeutic tests used to treat abnormal heart rhythms (arrhythmias) – have exploded in number, and projected significant demand for the procedures for the foreseeable future. Helping propel this surge is a new technology called pulsed field ablation (PFA) for atrial fibrillation, a common form of abnormal heart rhythm that can increase the risk of stroke. PFA has proven to be a safer option than older techniques and, as a result, has seen strong adoption since the first PFA won regulatory approval little more than a year ago. With demand for the procedure accelerating and expected to exceed historical averages in 2025, PFA revenues could deliver yet another year of significant growth.
Such opportunities are helping drive M&A in medtech, as well: In January, Stryker announced it would pay $5 billion for Inari Medical, a leader in peripheral vascular devices that treat a variety of blood clot conditions, and Boston Scientific revealed it would buy its remaining stake in cardiovascular company Bolt Medical for up to $664 million – both signs that healthcare’s innovation is alive and well, in our view.
| The JH Explorer series follows our investment teams across the globe and shares their on-the-ground research at a country and company level. |
Health care industries are subject to government regulation and reimbursement rates, as well as government approval of products and services, which could have a significant effect on price and availability, and can be significantly affected by rapid obsolescence and patent expirations.
These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. References made to individual securities do not constitute a recommendation to buy, sell or hold any security, investment strategy or market sector, and should not be assumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned.
Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.
The information in this article does not qualify as an investment recommendation.
There is no guarantee that past trends will continue, or forecasts will be realised.
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Specific risks
- Shares/Units can lose value rapidly, and typically involve higher risks than bonds or money market instruments. The value of your investment may fall as a result.
- Shares of small and mid-size companies can be more volatile than shares of larger companies, and at times it may be difficult to value or to sell shares at desired times and prices, increasing the risk of losses.
- If a Fund has a high exposure to a particular country or geographical region it carries a higher level of risk than a Fund which is more broadly diversified.
- The Fund is focused towards particular industries or investment themes and may be heavily impacted by factors such as changes in government regulation, increased price competition, technological advancements and other adverse events.
- The Fund may use derivatives to help achieve its investment objective. This can result in leverage (higher levels of debt), which can magnify an investment outcome. Gains or losses to the Fund may therefore be greater than the cost of the derivative. Derivatives also introduce other risks, in particular, that a derivative counterparty may not meet its contractual obligations.
- If the Fund holds assets in currencies other than the base currency of the Fund, or you invest in a share/unit class of a different currency to the Fund (unless hedged, i.e. mitigated by taking an offsetting position in a related security), the value of your investment may be impacted by changes in exchange rates.
- When the Fund, or a share/unit class, seeks to mitigate exchange rate movements of a currency relative to the base currency (hedge), the hedging strategy itself may positively or negatively impact the value of the Fund due to differences in short-term interest rates between the currencies.
- Securities within the Fund could become hard to value or to sell at a desired time and price, especially in extreme market conditions when asset prices may be falling, increasing the risk of investment losses.
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- The Fund could lose money if a counterparty with which the Fund trades becomes unwilling or unable to meet its obligations, or as a result of failure or delay in operational processes or the failure of a third party provider.
Specific risks
4 minute read
Key takeaways:
- The 2025 J.P. Morgan Healthcare Conference came on the heels of a significant decline in healthcare stocks, but we saw no signs the pace of medical innovation was slowing.
- On the contrary, new mergers and acquisitions were announced and firms reported significant progress in pipeline development and strong product launches.
- We came away from the conference believing today’s valuations do not adequately reflect the sector’s growth potential, creating an opportunity for long-term investors.
