Last week, the J.P. Morgan Healthcare Conference once again gathered investors, analysts, bankers, and corporate teams in San Francisco to kick off the year with critical updates and discussions. These J.P. Morgan Healthcare Conference 2025 insights offer a first look into what’s ahead across across MedTech, Biotech, Life Science Tools & Diagnostics (LSTDx), and Digital Health/HCIT. Below, are our key takeaways from each sector authored by various members of our team at Gilmartin Group.
MedTech Key Takeaways:
The atmosphere at this year’s J.P. Morgan Healthcare Conference 2025 was notably upbeat, particularly across MedTech. Despite initial worries about hurricane-related IV fluid shortages impacting Q4 surgical volumes, very few companies called out any material disturbance to their sales as a result. Pre-announcements were largely positive across the sector; of the 32 companies that published their Q4 preliminary results, 24 came in ahead of expectations, beating Street estimates by an average of 4.8%. While a few companies missed their marks, the sector as a whole outperformed expectations by 2.1%. Looking ahead to 2025, company guidance has come in slightly below consensus at -0.6% – though this feels more like traditional conservative forecasting than any real concern about growth prospects. For the week, the iShares US Medical Devices ETF was up 3.5%, inline with the S&P 500.
Additionally, this week M&A activity continued to heat up, demonstrating larger players’ appetite for inorganic strategic growth. Stryker announced their move to acquire Inari, building on the momentum we have seen with other major deals closing last year, like Johnson & Johnson acquiring Shockwave Medical and Boston Scientific completing its Silkroad Medical acquisition.
We also saw an uptick in interest for private MedTech during the conference with encouraging optimism for the MedTech IPO market. Ceribell’s successful public offering in October has created a buzz about the potential for more MedTech IPOs in 2025. We’re seeing strong investor interest in companies with innovative technologies targeting large addressable markets, further validating the positive MedTech market outlook for 2025. Specifically, the acquisitions of Inari, Shockwave, and Silkroad; all three being standout companies from the 2019/2020 class of MedTech IPOs. This healthy dual track dynamic – having both IPO and M&A as viable exit paths – suggests we may be seeing the resurgence of the overall sector moving forward. Companies have multiple routes to achieve greater value creation, which is exactly what MedTech is hoping for in 2025. These trends are among the most notable J.P. Morgan Healthcare Conference 2025 insights, reflecting a renewed confidence in the MedTech sector’s growth opportunities
Biotech Key Takeaways:
Perhaps it was the daily dose of sunshine or the optimism inherent in a new year and new beginnings, but the most common phrase we heard this week was “I’m cautiously optimistic.” In other words – “I’m tired of this market, and I hope it gets better!” Although this year lacked the buzz of previous JPM’s, it’s understandable that biotech investors have adopted a wait-and-see approach. Difficult markets, volatility, and even muted reaction to positive acquisition news have left us waiting for the reversion to the mean. The week started off well with positive announcements from several large players. Gilead kicked off the week with a $1.7 billion dermatology deal with Leo Pharma, which was quickly followed by Eli Lilly announcing acquisition of Scorpion Therapeutics for up to $2.5 billion, GSK announcing a buyout deal of IDRx for up to $1.15 billion, and Johnson & Johnson announcing a $14.6 billion acquisition of Intra-Cellular Therapies. We saw additional announcements from companies advancing their candidates into Phase 3, and a slew of positive collaboration and partnership announcements.
The market reacted positively initially, but it retraced the gains by the end of the day. What is putting the caution in the optimism? The most common response we heard this week was: “interest rates.” While the Fed cut interest rates three times last year and signaled a potential of two additional 25 bp rate cuts this year, latest FOMC decisions suggest a cautious approach.
The second most common response we heard this week: “uncertainty around policies from the new administration.” While we have had a good peek at who could be leading key agencies if confirmed (Kennedy at HHS, Oz at CMS, and Ferguson at FTC), companies and investors alike expressed uncertainty on how the new agency heads will impact our portion of the healthcare universe. Will the focus be on the “F” and not the “D” at the FDA? What will be their new priorities? What will be the impact of the Inflation Reduction Act (IRA)? Will the DOGE’s goal of efficiency affect the drug review process? When will we have clarity on priorities and direction?
Despite the uncertainties surrounding biotech, investors were down to business meeting with new companies (vs only looking at their portfolio companies) and looking to put capital to work. The J.P. Morgan Healthcare Conference 2025 insights in Biotech suggest cautious optimism as deal activity returns and investor interest grows. We will take that feedback and hang on to the belief that once we gain some regulatory clarity, the market will return to rewarding companies with good data and messaging.
Life Science Tools & Diagnostics Key Takeaways:
Sentiment from across conference participants reinforced a positive outlook for the year ahead for the LSTDx sector. Across all four days we observed hardy demand for meetings among investors, analysts, bankers and strategic corporate teams with both public and private clients.
During the course of the week, approximately 30 industry leading public LSTDx companies announced preliminary Q4/FY2024 updates which provided predominantly positive readthroughs with 2/3 beating expectations, buoyed by companies’ fundamental business execution and lean operating discipline in 2H25. The remaining 1/3 of companies were distributed between in-line results and missing slightly with previously set expectations. While companies were hesitant to provide conviction on FY2025 guidance, management teams voiced a slightly better go-forward setup and tone, albeit a gradual and partial recovery to more normalized conditions in 2025.
Key Themes & Readthroughs:
M&A Activity Likely to Increase in 2025: Current valuations and the slowdown seen in private financings has created an opportunity for well positioned and strategically oriented businesses looking for accretive bolt-on acquisitions as well as high growth M&A deals supported by likely lower rates from the Federal Reserve.
Digesting the effects from Export Controls: The U.S. Commerce Departments’ Bureau of Industry and Security imposed new export controls on biotechnology equipment to China and a few other countries due to national security concerns. The new Interim Final Rule (IFR), announced on Wednesday specifically flags flow cytometry & LC/MS instruments. While there is headline risk, there are ways for companies to limit the overall impact and reduce potential headwinds, but we need to let the new administration take effect and iron out all the details.
Long Term Growth Trajectory (2026 & Beyond): While many companies in the space have noted difficult conditions in 2023 & 2024, most anticipate a partial and continued gradual recovery in 2025. As such, management teams remained enthusiastic and upbeat on the long-term growth trajectory of the sector.
AI in the Healthcare Industry: Use cases within the sector continue to gain traction. This week alone we saw numerous LSTDx companies announce new strategic collaborations with some of the leading AI players. We continue to monitor this theme and anticipate additional partnerships to come in 2025.
As growth expectations remain gradual, continued focus on the bottom line remains a top priority and has become a clear differentiator between companies with near-term line of sight to becoming cash-flow positive and those with significant capital needs on the horizon.
Companies provided less conviction on the outlooks for 2025, (with only a handful providing FY2025 guidance) which is unsurprising in our view, given the persistence of various factors including challenging end market dynamics, China uncertainty, FX headwinds, and recent geopolitical changes.
Overall, we come away from the week encouraged by the state of the LSTDx sector and the broader J.P. Morgan Healthcare Conference 2025 insights that point toward gradual recovery.
Digital Health & HCIT Key Takeaways:
Digital Health and HCIT sentiment remained cautious as the sector continues to underperform relative to its historical weighting in the S&P 500. The absence of major players like UnitedHealth, Cigna, and CVS dampened enthusiasm. However, the conference highlighted several positive developments. Despite the challenges, the J.P. Morgan conference maintained a constructive atmosphere, with well-attended meetings and presentations suggesting underlying resilience.
Clarity on policies out of the incoming administration is a key focus. Investors are waiting for visibility into policy developments that have the potential to get done and could meaningfully impact the sector, as the year-end package was scaled down and substantial reforms were not hastily included in a continuing resolution. AI was another major theme throughout the week. While still in early innings, use cases in areas like treatment planning, clinical decision support, and revenue cycle are beginning to come to light. Waystar, Talkspace, and Tempus AI announced new AI products to advance provider and researcher efficiency, though Tempus highlighted the difficulty in monetizing generative AI. Additionally, Nvidia announced a partnership with the Mayo Clinic to leverage vast repositories of medical data to advance AI models.
Positive news flow during the conference about Medicare Advantage (MA) reimbursement rates as well as enrollment was well received by the Street and provided a boost of optimism for MCOs, value-based care provider groups, and data analytics HCIT companies into 2025 and 2026.
Several digital health companies highlighted that self-insured employer groups are grappling with high healthcare costs per employee that are now higher than key input costs of their core business and growing 8-9%. For example, the healthcare cost per employee at a large automaker now exceeds the manufacturing cost of an entire car. This cost pressure is driving demand at the CFO level to find multi-point enterprise solutions that can help manage down healthcare costs.
Looking Towards 2025: A larger number of attending companies in our universe pre-announced Q4 than last year (~62%), with more misses than beats. Looking at 2025 guidance, ~1/3 of companies in attendance provided 2025 guidance on at least one metric. Overall expectations for 2025 are largely unchanged which was not a surprise. The stock reaction during was net negative as much of the Digital Health/HCIT sector trading off throughout the week, value-based care companies were an exception due to the positive MA updates.
Capital markets environment: With a handful of Services and HCIT IPOs in 2024, the sector is in a “wait and see” pattern. Investors are gauging the durability of the IPO window, and some investors remain skittish as a prior tranche of IPOs (2021 timeframe) have performed poorly. The prevailing view is for another IPO window to open soon, but the kinds of milestones needed to reignite optimism are a strong stock performance in 2024 IPOs, successful large IPOs in MedTech and/or life sciences, and M&A at valuations that could rerate groups. There is a large pipeline of private companies with attractive growth and margin profiles, who are scaling profitably albeit with shrinking funding opportunities. The packed presentation rooms in the private track are a positive leading indicator for investor’s appetites perhaps returning. Additionally, M&A is top of mind as activity is expected to accelerate in 2025. This is especially applicable where the valuations of some public equities are disconnected from previous valuation multiples and from the perceived underlying value of the organization. Transcarent’s acquisition of Accolade was much discussed last week, as well as Health Catalyst when it announced its acquisition of Upfront.
Conclusion: Key J.P. Morgan Healthcare Conference 2025 Insights and What’s Ahead
The 2025 J.P. Morgan Healthcare Conference showcased a cautiously optimistic outlook across sectors, with positive updates, strategic deals, and emerging opportunities that fueled discussions last week. While challenges such as regulatory uncertainties, economic pressures, and market dynamics persist, the enthusiasm for innovation, strategic M&A, and potential IPO activity highlights the resilience of the healthcare industry. At Gilmartin, we’re excited to continue supporting our clients as they navigate these trends and position themselves for success in the year ahead — particularly as the MedTech market outlook for 2025 continues to take shape. Collectively, these J.P. Morgan Healthcare Conference 2025 insights highlight a cautiously optimistic outlook across healthcare, with innovation and strategic momentum guiding the year ahead. The team at Gilmartin Group has extensive experience working with both private and public companies across the Medtech, Biotech, Life Science Tools & Diagnostics, Digital Health & HCIT sectors. To find out more about how we strategically partner with our clients, please do not hesitate to contact our team today.
Authored by: Greg Chodaczek, Managing Director (MedTech), Gilmartin Group; Monique Kosse, Managing Director (Biotech), Gilmartin Group; David Holmes, Managing Director (LSTDx), Gilmartin Group; Ryan Halsted, Managing Director (Digital Health & HCIT), Gilmartin Group