Following last month’s fatal shooting of an insurance executive, healthcare’s largest investor meeting has assumed a higher security posture.
January 13, 2025
9:28 am
SAN FRANCISCO: It won’t take long to pinpoint what’s different, at least on the surface, of this year’s J.P. Morgan Healthcare Conference, the 43rd in its history. Organizers are stepping up security and safety measures due to recent attacks, including last month’s fatal shooting of the CEO of UnitedHealth Group’s insurance arm.
That means the army of personnel that normally swarms the 120-year-old hotel overlooking Union Square, the Westin St. Francis, has been augmented by officers from the city’s police force. And the usual surfeit of velvet ropes is bolstered by a maze of steel barricades, to better control entry and exit among the 8,000 or so attendees.
“We are working closely with the Westin St. Francis, the city of San Francisco, the San Francisco Police Department and various government agencies to increase security and to minimize any impact,” said a person familiar with the efforts.
Others interviewed say they’ve done more than prior years to keep staff and conference-goers safe. The heightened security posture follows the killing of 50-year-old Thompson, who was gunned down right outside the Manhattan hotel hosting his own company’s investor conference on December 4.
Online reaction to the murder featured the surreal phenomenon of large masses of people applauding the alleged murderer, 26-year-old Luigi Mangione. A manifesto found on Mangione reportedly said “these parasites had it coming.”
The sizable swell of outrage against insurers was backed by an Emerson College poll, in which 41% of young voters said the CEO killing was “acceptable” or “somewhat acceptable.” Similarly, two-thirds of respondents in a NORC/University of Chicago survey said denials of coverage and profits in the health industry were partially responsible for Thompson’s murder.
Two other high-profile attacks struck over New Year’s. In one, a man rammed a rental truck into a New Orleans party crowd. In the other, a Tesla vehicle was used as a makeshift bomb outside a Las Vegas hotel. Although these had nothing to do with animus for health insurers, they nonetheless ratcheted up tensions.
The taking of Thompson’s life surfaced “very real frustrations people feel toward the healthcare system,” noted Kathy Boomgarden, Ruder Finn CEO. “It has also generated a wave of hate against those working in the healthcare industry. The terrible murder of an innocent person should shock us all.”
What’s incongruous — disconcerting, even — is that all of this happened during the run-up to what is often a hopeful, if not optimistic, few days for the biopharma industry. Many look to the J.P. Morgan conference as an early gauge on M&A momentum for the year ahead.
“While we do not expect there will be a dramatic shift in the size or type of deals pursued by our large cap names, M&A will likely increase in 2025 as companies have deleveraged from 2023 transactions and as we approach the sector’s 2028-2030 patent cycle,” wrote Chris Schott, JPM senior analyst for diversified biopharma, in an investor note last week.
His team foresees mid-sized deals — those between $5 billion and $15 billion — becoming the norm, as companies pursue later-staged, de-risked assets. “We would not be surprised to see more partnerships across the sector,” he added.
Prior to the start of the conference, Johnson & Johnson revealed it purchased Intra-Cellular Therapies, the maker of Caplyta, for $14.6 billion.
Others are also expecting an up year. According to a KPMG survey conducted in the fourth quarter, 79% of life sciences and 73% of healthcare respondents indicated they plan to increase their M&A activity in 2025, with over a third targeting at least a 10% increase in deals versus last year, despite interest rate challenges.
The survey identified investments in generative AI and continued growth in the consumer health space as drivers of the anticipated deal uptick. Indeed, AI partnerships in life sciences have surged, to the tune of 330 deals in the past five years, consultancy EY found.
As for digital health, “There’s a lot more experimentation happening,” reported Ashkan Afkhami, managing director and senior partner at BCG X, the consultancy’s digital and analytics build unit. “We’re seeing some great green shoots.”
Among them, Afkhami said, is that, coming out of COVID, patients are a lot more willing to interact and engage through telemedicine and telehealth solutions and access prescriptions and devices in the home. Second is using AI to change the care delivery paradigm, whether helping patients figure out answers to basic questions or assisting clinicians by making recommendations that facilitate their workflow.
Third is one Afkhami called the data advantage – companies leveraging the capture of data to gain an edge. Consider devicemaker DexCom’s partnership with health-tech firm Oura, connecting its glucose biosensors and apps with Oura’s ring and app. By surfacing correlations between activities like sleep and exercise with members’ glucose levels, the firms say, they aim to help members decide what and when to eat.
Obesity also continues to be a key theme at JPM, with commentary from Eli Lilly expected to be closely watched as far as the company’s 2025 guidance for its diabetes and weight-loss drugs Mounjaro and Zepbound, respectively, and upcoming catalysts, especially Phase 3 data for oral incretin drug orforglipron.
The industry is still holding $1.3 trillion in dealmaking firepower, meaning “dry powder” to make bigger deals, according to EY’s Firepower Report, which debuted Monday. But larger life science deals, $25 billion and above, will continue to be scarce, analysts predict. The pivot to smaller deals began in 2024, when M&A investments totaled $130 billion, down 41% from $222 billion in 2023, per EY.
Firms that have yet to do an IPO drew their share of capital from the industry, as well. Investment in private biopharma companies remained strong last year, according to a report from HSBC. Corporate investments were robust, supporting early and later-stage companies. China-based assets stood out, the bank said, driving significant funding.
In fact, for bigger companies looking to in-license novel oncology treatments, such as antibody-drug conjugates (ADCs), China is becoming a more important R&D partner, pointed out EY. However, there are uncertainties in the China-U.S. relationship under the incoming U.S. administration.
Analysts don’t anticipate major shifts on 2025 commentary in company presentations. That said, to some degree, remarks by management teams may reflect some of the aforementioned angst.
“As we look to the upcoming J.P. Morgan Healthcare Conference, executives will be asked to speak to these frustrations toward the industry,” noted Boomgarden, “and it’s important to ensure that the frustrations with the healthcare system are separated from acts of violence and hate which should never be tolerated.”
Like it or not, Thompson’s killing, and the lack of sympathy among the flood of commenters, have focused a spotlight on the industry and its problems. As noted in the manifesto reportedly found on Mangione, “the U.S. has the No. 1 most expensive healthcare system in the world, yet we rank No. 42 in life expectancy.”
Empathy for those who are being attacked and questions about needed healthcare structural reforms “are two distinct workstreams that should not be conflated,” urged Boomgarden.
Meanwhile, in addition to JPM, other tentpole events around the city will be taking extra precautions this week. Around the corner from Union Square, the Hilton is expecting about 3,000 registrants to the 17th annual Biotech Showcase.
Sara Demy, CEO and founder of Demy Colton, which co-produces the meeting, said the organizers are expanding registration protocols to include some previously open sessions. And a dedicated security team will shore up the venue’s own personnel.
Said Demy, “The safety and security of our attendees, speakers and staff is a top priority.”