A Fireside Chat with J.P. Morgan’s Michael Gaito, Head of Healthcare Investment Banking

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J.P. Morgan Chase & Co. is the largest investment bank in the U.S. and the seventh largest in the world, with a strong presence in healthcare. At a recent Demy-Colton Virtual Salon, Michael Gaito, head of healthcare investment banking at J.P. Morgan, discussed the strength of capital raises despite COVID-19 and the resilient state of the biotech sector in the run-up to the Presidential election in November and the virtual J.P. Morgan Healthcare Conference (and the virtual Biotech Showcase) in January, with Dennis Purcell, founder of Aisling Capital LLC.

Dennis Purcell: What’s happened in the IPO market the past six months?

Michael Gaito: The price of entry for an IPO used to be clinical data. Then the strength of the management team, investors or pharma partners became important. Now, crossover investors have almost replaced the role of Phase II data as a barometer. There’s a foundational level of support with crossover investors. Many have deeper pockets than the venture capitalists. They support the valuation, buying the IPO, and typically round up their investment in the after-market.

We used to spring companies on investors. Now we test the waters. The company gets to know investors before it starts an IPO, and investors now have bigger appetites to invest in those companies.

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