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Financial Expertise Helps Innovative Companies Make It in the Long Run

Commercial Banking leaders outline how the firm’s specialized industry groups can provide resources and customized solutions to high growth companies.
October 12, 2017

In their early stages, tech companies move very quickly. Employees wear multiple hats and there’s rarely time to develop a deep finance staff.

Some life-science companies might not even have revenue for months or longer, then suddenly have a surge of income when a drug gets through FDA approval.

“We can really make a difference for these companies by helping create more efficient day-to-day operations and providing the resources and solutions to help them grow,” said Tim Sandel, who leads Commercial Banking’s middle market technology group.

In the last few years, the bank also dedicated teams to life sciences and for-profit healthcare in a strategic approach to provide specific expertise and customized solutions to the fast growing businesses in the innovation economy. Working successfully with these growth industries across the firm, Commercial Banking leaders saw the benefit of sharpening their focus to build relationships with these clients at an earlier stage.

Experience with Complexity and Tackling Challenges

“The US continues to be a leader in the innovation economies,” said Scott Geller, Head of Specialized Industries for Middle Market banking at J.P. Morgan. “We can serve companies in these sectors well with our in-depth knowledge of the complexities, challenges and opportunities that are unique to their business.”

Peter Meath knows that firsthand because he co-founded Square 1 Bank in 2005. Eleven years later, he joined J.P. Morgan to build a dedicated team to serve life sciences companies, which includes everything from biotechnology to pharmaceuticals and medical devices.

Power in Resources and Scale

“There’s an enormous opportunity to serve the life sciences industry with J.P. Morgan’s resources and scale,” Meath said. The Commercial Banking team works closely across the firm’s lines of business, from the Investment Bank to Asset Management to the Private Bank, to deliver solutions, products and capital markets expertise to clients.

“We’re like a specialty life sciences bank with the strength of the firm behind us,” he said. “That enables us to help our clients succeed, from their early stage business strategies and beyond.”

Many are often pre-revenue but can grow to $100 million in revenue overnight if a drug passes FDA approvals. Other innovative companies have different needs and require various forms of support.

“We already have all the solutions our clients need,” Sandel said. “There’s huge value to clients to know that J.P. Morgan can scale with them as they grow and help take them from idea to IBM.”

An Evolving Landscape

Healthcare companies are both highly regulated and heavily reliant on credit, which can create challenges. But they also benefit from dedicated teams keeping a close eye on the evolving landscape.

For example, as healthcare shifts from volume-based to value-based care, reimbursement for services may be tied to measurable outcomes. This affects everything from physician interactions with patients to payments tied to quality care and additional collection risks.

The for-profit healthcare team works with physician groups, urgent care centers and ambulatory surgery centers.

“We recognize the critical role that healthcare plays in the economy, especially now,” said Dan McNamara, who leads the group with the experience of 40 years at the firm. “And every part of our firm is committed to this industry and helps provide clients with exactly what they need as their needs evolve.”

J.P. Morgan plans to be there as the innovative economy continues to progress.

“Our team has grown with these emerging businesses and, today, we have more than 50 bankers dedicated to serving companies in this unique space,” said John Simmons, Head of Middle Market Banking and Specialized Industries. “Our goal is to build long-term relationships with clients and provide them with the right resources and counsel they need to reach their goals.”

 

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