J.P. Morgan is partnering with the Westchester Biotech Project at an inflection point for the three-year-old coalition of biopharma and healthcare industry stakeholders in suburban Westchester County, NY, as it moves beyond fostering collaborations among researchers, data scientists, and engineers to bringing those professionals together with business leaders in Westchester and beyond.
The partnership—which aims to strengthen the region’s biopharma and healthcare cluster by combining J.P. Morgan’s financial expertise with the coalition’s life science know-how—will be launched Thursday, when J.P. Morgan sponsors the Westchester Biotech Project’s “State of the Healthcare and Biotech Community Breakfast” in Tarrytown, NY.
“The purpose of this event is to not just bring together the scientific community with the traditional business community, but more importantly, to update the traditional business community on all that’s going on in this biotech healthcare research world, both specifically here in Westchester and elsewhere, as well as shine a light on the opportunity that we believe is at our doorstep and in the near future for Westchester and the surrounding area,” Michael Welling, the Westchester Biotech Project’s Co-Founder and Chief Strategy Officer, told GEN.
Welling, who directs the Life Sciences group of Meridian Risk Management in Pelham, NY, said the breakfast will highlight advancements in biomedical R&D, both within Westchester and beyond, including New York City, the U.S., and overseas.
“Places and organizations that can bring together all of the disparate pieces of the universe of life sciences—research institutions, university systems, financial services organizations, investors, entrepreneurs, big pharma, small pharma, biotech—to both spur new technologies and companies, and also educate peoples to what is going on in the market, are extremely valuable. The Westchester Biotech Project is a great example of that,” Peter Meath, J.P. Morgan’s co-head of Healthcare and Life Sciences, J.P. Morgan Commercial Banking, told GEN.
Meath will deliver the keynote address at the breakfast, an update on biopharma and healthcare trends as seen during the recent J.P. Morgan 38th Healthcare Conference in San Francisco. Unlike recent years, as GEN has noted, this year’s conference saw little in the way of big mergers-and-acquisitions (M&A) deals being announced. The biggest was Eli Lilly’s planned $1.1 billion purchase of Dermira.
$1.4 Trillion in M&A “Firepower”
Yet biopharmas and other healthcare companies retain ample capital for M&A. Last month, EY estimated that such companies had $1.4 trillion in such “firepower,” which it defines as a company’s capacity to fund transactions based on its balance sheet, based on cash and equivalents, existing debt, debt capacity including credit lines, and market capitalization.
Given the volume of that capital, continuing interest by pharma and biotech companies in growth and innovation, and the interest expressed publicly by larger biotechs about acquiring companies in 2020, Meath said, “It looks like the ingredients are certainly right for that to continue to happen into 2020.”
“A lot of people still feel very excited and interested in that aspect of the market going into this year regardless of not having the big splashy announcements we had last year,” Meath added. “The fact that you do have product portfolios that need to be right sized, you have assets that are either being shed or you have assets that are desired to be brought on in core therapeutic areas—these are all things that everybody’s talked about for several years that will require this sort of activity. All those things certainly make for an active market.”
One potential area for future M&A, Meath said, is between biopharmas and companies focused on healthcare data and analytics. While Roche acquired Flatiron Health for $1.9 billion in 2018 to stake a beachhead in personalized medicine, pharma-data deals have mostly entailed collaborations among big-name companies. In 2018, Gilead Sciences agreed to use Verily Life Sciences’ Immunoscape platform to identify and better understand the immunological basis of rheumatoid arthritis, inflammatory bowel disease and lupus-related diseases. And last year, Novartis agreed to launch an “AI innovation lab” designed to enable its research and commercial employees to use Microsoft’s artificial intelligence solutions.
“You would think at some point, acquisitions that can bring in more of the data and analytics side would be interesting to drug developers. Largely, we haven’t seen that yet. Mainly, it’s because the value proposition, from a pure valuation standpoint, hasn’t been proven yet: What is the true ROI [return on investment] on bringing these sorts of things in? I do think that it will be an increasing aspect of deal activity.”
“Right in the sweet spot”
Meath said Westchester Biotech Project has skillfully drawn upon healthcare and biopharma’s sizeable presence in the Northeast corridor stretching from Boston and Cambridge, MA—the nation’s top regional biopharma cluster as ranked by GEN for several years—south to New York and New Jersey, Greater Philadelphia, and the BioHealth Capital Region of Maryland, Virginia, and Washington, D.C.
“If you look at the totality of that corridor, it is very robust,” Meath observed. “Westchester and that geographic area sits right in the sweet spot. Initiatives like the Westchester Biotech Project are important for making sure that the healthcare and life sciences ecosystem is integrated enough to be able to capitalize on opportunities.”
Westchester Biotech Project can also help grow that ecosystem, Meath added, through its work of assisting early stage life-sci and healthcare companies by connecting them with resources—especially private capital and talent.
At the breakfast, the Westchester Biotech Project will highlight initiatives that include:
- Career Consortium, designed to foster ongoing collaborations among colleges and universities, institutes, companies, and high schools, both regionally and beyond. The Consortium this spring plans to launch a certificate program teaching Essential Skills in the Laboratory at Westchester Community College.
- A Data Science Research Hub designed to bring together life-sci focused big data projects, an outgrowth of the Project’s efforts to build a rare disease research hub. Last month, the coalition named 3Sixty Pharma Solutions of Conshohocken, PA, as the data hub’s project manager.
- Westchester Biotech Blueprint 2030, a long-range cluster-building initiative focused on bolstering education strategies, facilities development, incentives, resources, and services.
“As these initiatives are emerging, this is the perfect time for us to deepen our relationships with the business community, because now we can really bring those folks all together,” said Joanne Gere, co-founder and executive director of the Westchester Biotech Project.
$1.2 Billion community
The breakfast is also expected to feature updates on two efforts to grow biopharma and healthcare in Westchester. One is North 60, a planned $1.2 billion mixed-use community set to combine bioscience, tech, and medical space, plus a hotel/conference center and restaurants. North 60 would rise on a 60-acre portion of the Grasslands Reservation in Valhalla, NY, that is leased for 99 years to Greenwich, CT, developer John Fareri by Westchester County government, plus 20 adjacent acres owned by Fareri in Hawthorne, NY.
Colleen O’Connor, VP, East Coast and U.K. Markets for BioMed Realty, a Blackstone portfolio company, will discuss her firm’s redevelopment of two buildings totaling 97,000 square feet for smaller biotechs at Ardsley (NY) Park (town of Greenburgh). Other speakers set to address the breakfast include:
- Fritz Handtke, director of Montero Language Services;
- Nancy J. Kelley, JD, a steering committee member of NYC Builds Bio+ and president and CEO of Nancy J Kelley + Associates, which provides strategic, legal, and financial management services in the life science and healthcare industries;
- Carla Romney, DSc, MBA, the Westchester Biotech Project’s director for Education Strategy, and an adjunct research assistant professor of Medical Sciences and Education at Boston University; and
- Anthony Trimarchi, MBA, executive director, J.P. Morgan Private Bank.