JPM25 Day 3: Why 2025 will be a hot year for M&A; Talkspace rolls out new AI-powered tool for therapists

SAN FRANCISCO—The third day of the annual J.P. Morgan Healthcare Conference brought presentations from GoodRx, Health Catalyst, Talkspace and Salesforce along with Medicare Advantage insurers Alignment Healthcare and Clover Health.

For a look at some of the biggest trends to watch this week, check out our preview here.

We have you covered with the biggest updates from Wednesday's sessions and executive interviews in this roundup as well as across our website. 

Check out our Monday roundup and our Tuesday roundup here.

Keep up with news from biopharma thanks to the Fierce Biotech team in their daily tracker, too.

Follow along with all of our JPM 2025 coverage here


Wednesday 3 p.m. PT, Jan. 15

2025 will be a sink-or-swim year for digital health, health tech startups

"I think it's gonna be a shakedown year," said health tech veteran Jonathan Bush, CEO and founder of Zus Health and co-founder and former CEO of athenahealth.

"We sort of had a party with a hangover, and now we're sort of getting back to work with a mild hangover," Bush said on the sidelines of the J.P. Morgan Healthcare Conference this week. "So during the party, anything that can be shown to work, regardless of its economics, was funded. We had 14,000 digital health companies. And then we had COVID and basically every American was forced to try something."

There was a digital health funding boom during the pandemic—venture capital funding for digital health companies hit $14.3 billion in 2020 then skyrocketed to $29.2 billion in 2021 followed by $15.7 billion raised in 2022, according to Rock Health data.

The "hangover" was the post-COVID market correction as VC funding settled down with fewer deals and lower check sizes and down rounds prevailed in 2023 and 2024.

"Maybe half of the companies die, or two-thirds of the companies die. Now, you come out of that and some people live; they're wounded, but they'll live. We're going to see a real 'gross margin rules all' year or two. And, if you can't get there by yourself, you're going to need to merge," Bush said.

He added, "You're going to see a lot of business engineering, and that's good for Zus."

Bush's startup, Zus, is a healthcare data interoperability platform designed that provides easy-to-use patient data at the point of care.

Owen Tripp, CEO and founder of Included Health, a virtual care and health navigation company, also predicts that 2025 will be an active year for digital health M&A.

"I think you're going to see a lot of action this year," he said on the sidelines of JPM. 

Health plans and employers are rethinking their strategies for solutions that improve the quality of care for members and employees while also reducing costs with a focus on value-based care and wraparound capabilities like navigation and advocacy, Tripp noted. 

There will be a separation between the companies that have the scale and capabilities to meet new market expectations, he noted.  

"Traditional digital health companies need to grow up real fast on their ability to service that level of complexity and that level of actuarial rigor or risk," he said.

He added, "I think you're going to see scaled, fiscally performant companies that have the technology and, yes, the AI to deliver are going to separate themselves from the pack, because they're going to be entrusted with greater surface area in the overall benefits picture. Digital health companies that have heretofore been just focused on a narrow point solution or problem are going to find that they will be highly limited in their reach, and probably are going to be the targets of M&A."

Investment bankers also are optimistic about the investment outlook for the healthcare market in 2025.

Healthcare stocks logged other industries in 2024, but the sector saw a strong resurgence in equity and debt volumes alongside a slight decline in M&A volume, noted Ben Carpenter and Jeremy Meilman, co-heads of JPMorgan's healthcare investment banking group, during a presentation at JPM on Monday.

"The equity returns in healthcare have not returned since the peak in 2021, capital markets and M&A activity haven't either. It's not entirely surprising as it tends to take, when you look back at historical cycles, two to three years to hit a trough and start to come out of it post the peak we had in 2021," Carpenter said.

There was an uptick in equity capital markets activity post-Labor Day in 2024, which was particularly pronounced for the biopharma sector, Meilman noted. "We're expecting more of that through 2025. With strong balance sheets and a continued desire for growth assets, we expect to see M&A continue to pick up in activity and to pick up in size," he said. 

Bankers are bullish about a recovery in 2025 in the healthcare and life sciences markets with more M&A and exits.

"When we look at the healthcare services sector, similarly for the equity capital markets, after a long period with no IPOs, we had seven IPOs across healthcare services in 2024, with more to come in the hopper. While strategics were maybe a little bit more measured in some of their activity across healthcare services M&A in 2024, certainly financial sponsors stepped up into the fray. We expect more of that to happen," Meilman said.

Sponsors announced a variety of take-private deals, minority transactions and recapitalizations in 2024, he noted. Investors continue to favor models with durable growth and margins, proven unit economics and profitability over outsized growth, according to JPMorgan.

Looking at 2025 from a macro perspective, there are reasons to be optimistic, Meilman said.

"Certainly there are geopolitical risks. There are policy risks. As the new administration puts in place its thinking, there is likely to be volatility across the broader markets, as well as in our particular industry. However, we do continue to track towards a soft economic landing and there are positive economic indicators in general. We also have strong balance sheets, a favorable FTC environment, a generally pro-business stance from the incoming administration," he said. "With all of that, we do expect to see an uplift in activity through 2025"


Wednesday 2 p.m. PT, Jan. 15

Talkspace rolls out new AI-powered tool for therapists

Online therapy provider Talkspace rolled out a new AI-powered tool that helps providers efficiently prep for sessions and guide client care between sessions.

The new feature from Talkspace’s AI Innovation Group was developed and refined alongside therapists, the company said.

Before each session, providers can use the new AI-based feature, called Insights, to synthesize data from each patient, a process that is typically manual—including changes in that client’s symptom acuity from evidence-based psychological assessments and key details from the most recent session—to generate a concise pre-session primer. After the session, an update can be generated to reflect the discussion’s key points, highlight therapeutic progress and note follow-ups for future sessions, according to the company.

“At Talkspace, our goal is to harness technology to improve both the provider and client experience,” said Nikole Benders-Hadi, M.D., Talkspace's chief medical officer. “The AI Insights feature will not only streamline session prep but also enrich the therapeutic process by pulling multiple data points that help our providers focus more so on their clients’ care and clinical outcomes.”

Insights builds on the success of Talkspace’s “smart notes” feature, which empowers providers to generate summary notes of member sessions.


Wednesday, 1 p.m. PT, Jan. 15

MA insurers Alignment Healthcare, Clover Health dish on future prospects

Medicare Advantage insurers Alignment Healthcare and Clover Health both reported increased membership growth ahead of the J.P. Morgan Healthcare Conference this week.

Leaders at the companies took an aspirational approach to building and growing a robust challenge to industry giants.

Read Staff Writer Noah Tong's full story here.