J.P. Morgan releases its quarterly look-ahead days before the entire biopharma industry descends on San Francisco for the annual J.P. Morgan Healthcare Conference.
The end of 2024 brought “robust” venture dollars, increased upfront payments in licensing deals and a slight uptick for the IPO asset class, according to a 2025 preview report from J.P. Morgan.
The firm released its quarterly look-ahead days before the entire biopharma industry is scheduled to descend on San Francisco for the annual J.P. Morgan Healthcare Conference from January 13–16.
J.P. Morgan’s analysts said that venture investment hit $26 billion across 416 rounds in 2024, up from $23.3 billion in 2023, when there were 462 total rounds. The rise snaps a two-year trend of declining VC spending in the sector. The value is nowhere near the pandemic peak of $44 billion over 759 rounds, of course, but is higher than 2019, when 458 rounds led to $18.8 billion total.
But J.P. Morgan nevertheless calls 2024 a strong year for biopharma. VC firms focused on larger but fewer investments over the past year, with average deal value up more than $12 million. In addition, 98 companies raised megarounds of $100 million more, compared to 73 in 2023 and 80 in 2022.
Investor preferences shifted toward companies with assets in the clinic over 2024, J.P. Morgan said. Preclinical and platform companies saw overall funding rounds shrink.
Standouts for J.P. Morgan included Kailera Therapeutics’ $400 million series A from October 2024. The oncology biotech launched with support from Atlas Venture, Bain Capital Life Sciences and RTW Investments to develop four obesity medications from China’s Jiangsu Hengrui Pharmaceuticals globally. Other notable raises included Seaport Therapeutics’ $225 million series B and Metsera Therapeutics’ $215 million series B—both of which occurred just months after the companies’ initial public launch.
Editor’s note: Both Seaport and Metsera ranked among BioSpace’s NextGen 2025 class of startups to watch. Kailera’s raise came after the cutoff for the 2025 class, but it’s one we’ll be watching as we begin to collect data to identify next year’s selections.
Beyond VC Funding
Licensing deals overall have declined since a high of 228 in 2020, J.P. Morgan reported, but the trend stabilized at 148 total for 2024, compared to 145 the year prior. The value of upfront payments has also leveled out, according to the analysis, once again making up about 7% of overall deal value, compared to a peak of 13% in 2019. In 2024, 28 licensing deals involved upfront payments of $100 million or more.
One of the biggest licensing deals of the year was Novartis’ PTC Therapeutics partnership, which paid out $1 billion upfront to work on a Huntington’s disease candidate, with up to another $1.9 billion to come. Sarepta Therapeutics also turned heads in November with an $825 million upfront payment to Arrowhead Therapeutics for a clutch of RNAi-based medicines for rare diseases, with a total deal value of up to $10 billion.
As seen in VC investments, Big Pharma increasingly focused on late-stage assets, according to J.P. Morgan. This trend was reflected in M&A deals as well. Major pharma companies spent $49 billion on Phase III assets, compared to $43 billion for Phase II and just $28 billion for Phase I. Preclinical followed at $21 billion. Discovery platform deals fell in the middle of the pack at $40 billion.
Unsurprisingly, obesity was a major magnet for investment across the board thanks to the success of Novo Nordisk’s Ozempic and Wegovy and Eli Lilly’s Mounjaro and Zepbound, J.P. Morgan said. There were 24 R&D partnerships and licensing deals signed in this disease area in 2024, totaling $6.4 billion. Eight of those specifically focused on GLP-1 and GIP-targeting therapies, for a total of $8 billion. This higher number reflects the prospects that GLP-1/GIPs have in indications outside of obesity and diabetes, J.P. Morgan explained.
J.P. Morgan also flagged, as others have, the downturn in M&A and depressed deal valuations in the $1 billion to $2 billion range. A BioSpace analysis from early December found that just one deal exceeded $5 billion: Novo Nordisk’s $16.5 billion acquisition of contract development manufacturing organization Catalent.
IPOs, meanwhile, trended up to 19 compared to 13 the year prior, but still pale in comparison to the pandemic high of 99 in 2021.
