What were the key takeaways for the industry at the J.P. Morgan Healthcare Conference in January?

Overall, 2023 was a very busy year as we saw markets recover. One takeaway of the J.P. Morgan Healthcare Conference was that the sector is certainly maturing, and we are beginning to see real traction for innovations. We saw a significantly high number of approvals (55 in total) in 2023, but with the extraordinary number of companies in the sector today, both private and public, not all were fortunate enough to be funded in 2023. There is a bit of an imbalance in the sector, and that is what LHS and companies servicing the industry are working through now, ensuring that our customers with the best candidates and pipelines get access to research and development funding and that their products get to patients in need.

The public markets were basically closed in 2023, which offered opportunities for private equity and strategic partnerships. We are starting to see a couple of IPOs again, but we remain cautiously optimistic, and the companies with strongest and clear data as well as story will prevail. The strongest companies with milestones are going to be are the ones that will get funded, both publicly and privately. 

To what extent do biotechs’ communication strategies adapt at different stages of funding? 

Our communication strategies are directed either to advance discussions on funding or partnerships or for broader audiences such as healthcare providers, patients and other stakeholders. During a company’s evolution, audiences shift in years one, two, and three in a communications program. For example, during a financial raise period, you are appealing to strategic partners, potential backers, or a combination of these, but later on, after you have attained capital, you might be shifting to the customer base in which you eventually would be selling into, such as a targeted health care provider audience.

How do you assess the current IPO market and M&A environment?

There is currently an insatiable appetite for M&A. Large pharma have substantial cash to put to work, and that is certainly giving buoyancy to the sector. Over the past months, it has really been an M&A market rather than an IPO market. With market conditions currently the way they are, we are keeping an eye out for public markets, but it is much more of a partnership M&A market currently. Although we are always moving towards a potential IPO, we must adjust to the market conditions and are developing plans to support deal-making strategies, assuming that an IPO might not happen. 

LHS has its roots in Boston. What makes Massachusetts special in the biotech space?

Boston is not only a state of innovation but has the highest level of education, hospital networks, and medical attention. Boston is a place where you have significant innovation coming out of universities and you also have the best hospitals in the world, and it is only inherent that a great life sciences industry will spawn from this. 

How do you see the relationship between regulation and innovation in the US in the coming year?

It is a great balancing act. I like to think that everything we are doing in our sector is innovative, but I am not sure that is 100% accurate. The IRA has been ready to rear its ugly head for a long time – it is not new. The challenge with it is you already have a skittish public market where there is an insatiable demand for capital and there is too much innovation to fund. To ensure we are funding the right things, the right questions about value and opportunity will have to be asked in terms of what the innovation creates, at what cost, and whether is it something that is enough to demand a certain price. We are now at a place where it is about cautious optimism and due diligence to ensure return on investment. The IRA is a wake-up call that we have to be smarter about the way we approach innovation, pricing and value.  

What are the key priorities for LHS moving forward into 2024? 

LHS will continue to focus on choosing our investments wisely, choosing our clients wisely, aligning with the right things, and deploying the right services at the right time.