Nancy Hemphill, ELS, FAAO , 2025-04-27 16:48:00
April 27, 2025
2 min read
Key takeaways:
- Ophthalmology has large patient numbers and market opportunities.
- Investors look for differentiated products or technologies with strong competitive positioning.
LOS ANGELES — Today’s volatile environment is impacting the markets, but innovation in ophthalmology will drive the sector and lead to increased value, a JP Morgan managing director told attendees at SightLine.
“Volatility is the theme of the market in 2025,” Mike Connor said, and the resulting uncertainty is affecting private and public financing.
Image: Nancy Hemphill
“We are in a down cycle, but we will get through it,” he said. “The driver of that will be innovation. It will be the inventors, the founders, the operators, investors, physicians, surgeons — everyone in this room continuing to listen to patients’ unmet needs and advancing new therapies and products. This will lead to a rebound for our economy and our sector.”
The outlook for inflation has remained unchanged this year, despite different policies being discussed, Connor said.
“Economists have increased their probability of a recession from 20% to 50% to 60%,” he said. “But, importantly, despite all of that, the S&P 500 target is still 5,760, which is 7% above where we currently are. Despite the volatility throughout the year, there’s still optimism around where the market is going to go by the end of the year.”
Connor said investors look for differentiated products or technologies with strong competitive positioning.
“Are you addressing a meaningful problem?” he said. “What’s the financial profile of the company? Can you demonstrate high growth at scale with attractive margins and profitability? Does the management team have significant experience in execution? We have over 850 public biotech companies now. A lot of the management teams aren’t as deep as the investment community would like to see.”
Connor said a trade deal within the next 90 days would be good for the market.
“Even one would go a long way,” he said. “The biggest overhang for the market at the moment is China and the lack of communication between the two countries. If there was any discussion we think that would lead to a significant near-term market correction.”
The positive angle is that there is more than “$4 trillion of private capital on the sidelines waiting to be employed,” Connor said. “There’s broad acknowledgment that the sector is oversold, and investors will look to deploy — and it will deploy quickly. … We’re advising clients to stay ready and be ready to capitalize when things turn.”
Connor also said that continued innovation will be paramount to creating value in ophthalmology.
Ophthalmology has large patient numbers and market opportunities, he said. The hundreds of ongoing clinical trials and FDA product approvals is encouraging.
“The hope is, since we’ve seen an increase in strategic activity, that investors will start to realize we have created great companies meeting high needs in our industry and should lead to more company creation and more investment in our sector,” Connor said.
Sources/Disclosures
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Connor M. If health care is a lagging market, where does ophthalmology stand? Presented at SightLine; April 24, 2025; Los Angeles.
Connor reports being employed by JP Morgan.
