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With dealmaking showing few signs of life, America's biggest bank is turning to a branch of science devoted to the discovery of living organisms.
JP Morgan Chase launched a life sciences venture group Tuesday, the latest development in the bank's goal to diversify and a clear signal that Jamie Dimon's army of investors sees huge opportunities in a sector that truly came of age in the throes of the pandemic.
Fewer Deals, Bigger Bucks
While other major financial institutions like Goldman Sachs and Credit Suisse are scaling back to focus on their fundamental profit centers, JP Morgan is expanding. Last year, the mega-lender debuted JP Morgan Private Capital, a collection of venture teams investing in early to growth-stage companies in the consumer and climate-tech sectors. Eighteen months later, the bank is still hungry for early stage exposure.
While not a complete wasteland, global venture funding has plummeted this year, and biotech is no exception. By September biopharma funding was down 37% and the sector's IPO market was similarly stalled, so Dimon and Co. are zigging while others are zagging, injecting cash while innovation is still relatively hot:
- Starting early next year, JP Morgan's new team wants to capitalize on developments in genetic medicine, autoimmune diseases, cardiometabolic diseases, and rare disorders. "The entry point for the life-sciences space is probably one of the best we've seen," Brian Carlin, CEO of JP Morgan Private Capital told The Wall Street Journal.
- Look no further than Pfizer's latest results, reported Tuesday, for evidence of the spoils of well-timed innovation -- the company raised its 2022 Covid-19 vaccine forecast to $34 billion and maintained its $22 billion target on Covid-19 antiviral Paxlovid.
Ditch the checkbook: As for Dimon, the expansion won't stop at life sciences. On Monday, JP Morgan began rolling out Story, its new automation service for invoices and rent payments. CIO Sam Yen told CNBC, "If you talk to residents to this day, they often say 'The only reason I have a checkbook still is to pay my rent.'" (To our Daily Upside landlord: don't worry, the check is in the mail.)