Johnson & Johnson, the world’s biggest maker of health-care products, is setting up four centers around the world to scope out early-stage acquisitions, partnerships and investment opportunities.
The innovation centers, in San Francisco, London, China and Boston, will connect business development executives from J&J’s drug, device and consumer units with local scientists and entrepreneurs, the New Brunswick, New Jersey-based company said today in a statement.
The idea follows similar actions by Pfizer Inc., Sanofi and Merck & Co., who have set up shop close to academic and research communities to ferret out early-stage products. J&J, which has made nine acquisitions over 12 months, joined with Index Ventures and GlaxoSmithKline Plc earlier this year to form a $200 million fund to invest in early biotechnology.
“The objective is to strengthen significantly our capabilities to bring on board more products from the biotechnology and academic community,” Paul Stoffels, J&J’s worldwide chairman of pharmaceuticals, said by telephone. The current process “is fragmented and we absolutely believe there is more strength in organizing that in a combined way.”
J&J rose less than 1 percent to $68.55 at the close in New York. The shares have gained 6.1 percent in the past 12 months.
The company will assemble experts on research and development, licensing and investment, business capital and legal intellectual property at the centers to facilitate deal-making, Stoffels said.
The typical development path begins with a breakthrough at an academic center, which is then transferred to a small or newly created company, Stoffels said. Venture capitalists and other investors provide funding to support additional research, and eventually the product or the company is acquired.
“We want to be partners when they emerge in academics, during the venture capital rounds,” Stoffels said. “We have a lot of known-how we can deploy. We want to be part of the whole process, which typically takes years.”
The innovation centers may take five to 10 years before they start yielding new products for J&J’s sales force, Stoffels said. The company will focus in areas where it’s already strong, such as immunology, oncology and infectious diseases, while looking for breakthroughs in “white space,” or new areas that address unmet medical needs, he said.