JPMorgan has launched a healthcare venture capital practice, entering the market at a time when innovation in the life sciences remains high but investment has pulled back from last year’s record pace.
The largest US bank by assets has created a venture team targeting the life sciences through JPMorgan Private Capital, a growth-equity and private-credit investment group within JPMorgan Asset Management.
JPMorgan Private Capital, launched last year, previously created venture teams to invest in early- to growth-stage companies in the consumer and technology and climate-technology sectors. It took about 18 months to launch the new healthcare venture team, Life Sciences Private Capital, said Brian Carlin, chief executive of JPMorgan Private Capital.
As it turns out, JPMorgan is entering the sector when life-sciences venture funding and initial public offerings have slowed, creating opportunities to invest at relatively low valuations.
“The entry point for the life-sciences space is probably one of the best we’ve seen,” Carlin said.
JPMorgan can help entrepreneurs with things like introductions to top pharmaceutical companies, he said. Other large banks also have venture groups, including Deutsche Bank.
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Stephen Squinto, a biotech executive, entrepreneur and investor, will lead the new team as managing partner and chief investment officer. Joining him are two co-managing partners: Gaurav Gupta, founder of life-sciences investment firm Ascendant BioCapital, and Anya Schiess, who co-founded and was general partner of healthcare venture firm Healthy Ventures.
US biotech startups raised $23.8bn in venture capital in the first nine months of this year, according to market tracker PitchBook. That is high by historical standards — topping the $17.9bn US biotechs raised in all of 2019 — but marks a slowdown from last year’s pace, when drug startups collected $38bn for the year, according to PitchBook.
While numerous biotech startups have launched in recent years, there is an “experience gap” in the sector because some lack significant expertise in areas needed to achieve success, Squinto said, adding that the life sciences team at JPMorgan can help close that gap.
“What has been left behind, a bit, is deep operational and drug-development experience,” said Squinto, a former executive partner at healthcare investment firm OrbiMed Advisors who also co-founded rare-disease drugmaker Alexion Pharmaceuticals, which AstraZeneca acquired last year in a $39bn deal.
The new team plans to invest in early- to later-stage companies, Squinto said, and seeks to capitalize on innovation in areas such as genetic medicine, autoimmune diseases, cardiometabolic diseases and rare disorders.
Squinto said he expects the team’s first fund to begin investing in life sciences companies early next year. The amount to be deployed has yet to be determined, he said.
A group of advisers will assist the investment team, meeting regularly and providing guidance as needed to help portfolio companies. The advisers are:
• Laurie Glimcher, president and CEO of the Dana-Farber Cancer Institute
• Jeffrey Leiden, executive chairman and former CEO of drug developer Vertex Pharmaceuticals
• Fred Moll, a robotic-surgery pioneer and entrepreneur who is now an executive at Johnson & Johnson
• Stephen Oesterle, former senior vice president for medicine and technology at medical technology company Medtronic
• Robert Stockman, co-founder and former CEO of medical device company REVA Medical
Write to Brian Gormley at firstname.lastname@example.org
This article was published by The Wall Street Journal, a fellow Dow Jones Group title