J.P. Morgan examines why U.S. healthcare stocks trade at their lowest relative valuations in over three decades. The paper highlights pharma patent cliffs, biotech’s IPO collapse, managed care headwinds, and proposed cuts to NIH/CDC funding, contrasting healthcare’s stagnation with tech’s continued surge.
Sick as a Dog
J.P. Morgan Asset Management
Michael Cembalest
Research
31 Pages
Key Takeaways
Valuation discount: Pharma trades at 8–9x forward P/E vs S&P 500 at ~21x, with biotech at record discounts.
Biotech collapse: Since 2018, 80% of biotech IPOs lost 80%+, leaving only ~20% with positive returns.
Policy pressures: Proposals to cut NIH funding by up to 40% could hinder early-stage drug research and innovation.
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