Biotech and life sciences companies have a habit of clustering together, creating shared ecosystems to drive innovation. For going on 12 years Johnson & Johnson Innovation (JLABS), has been supporting this strength in numbers philosophy, finding, funding and incubating promising startups under a scheme of open innovation in its shared lab and office spaces. According to the global head of JLABS, Melinda Richter, speaking on a recent CBRE podcast, both the industry and patients benefit from this “we’re here to work together” approach.
We wanted to be a catalyst where people come together and bump into each other and have ideas and learn together
Melinda Richter, global head of JLABS
The End of the “Gold Rush”
After experiencing what Melinda Richter calls “a gold rush”, the life sciences sector is facing considerable headwinds, making it increasingly difficult for early-stage companies to get financing and advance innovation. “You saw tons of venture capital financing. You saw big valuations. You saw lots of deals getting done. And then, of course, over the last year, the bottom kind of fell,” Richter says.
That is where JLABS, a startup incubator and R&D platform for high potential companies supported by J&J resources, comes in. “I would characterize JLABS as the largest global network of high potential life science companies in the industry,” Richter asserts.
With 13 locations around the world and almost 1,000 companies under its wing, JLABS has seen its protégés raise over USD 90 billion. The network offers budding companies a number of opportunities from access to lab and office space to mentorship with experts at Johnson & Johnson, or through its Quickfire Challenges, non-dilutive financing for companies who apply to solve a problem or have a particular solution.
Up and coming life sciences and biotech companies are most often attracted to hubs, or clusters, where they can join a community of people tackling the same kinds of challenges while taking advantage of neighboring hospitals and universities. JLABS’ 11 locations around the globe are no different. “We wanted to be a catalyst where people come together and bump into each other and have ideas and learn together and new companies are formed,” states Richter.
Stressing the shared nature of JLABS sites where the research areas are filled with common equipment, she says: “When we first created this wet lab [concept] with common equipment and common rooms, everybody thought we were crazy because everybody’s so paranoid about their IP.”
Openness at JLABS stems beyond the use of lab equipment. “We see our concept as open innovation. So, we have glass walls everywhere because we’re here to work together,” she confirms. “It is so hard to do something in this industry that [this is] the only way we’re going to survive and really thrive.”
This approach has helped otherwise struggling companies to advance. “I see a lot of companies that have amazing science and technology, but because they can’t raise that next round of financing, they’re having to shut down. But if they do show that proof of concept, then they can get the big dollars and go off into their own spaces.”
According to Richter, several companies have done just that and the incubator has seen some impressive success stories. Like the startup that in 2014, long before COVID-19, was looking to advance mRNA for rare diseases and initially raised USD 13 million. The company went on to work with Johnson & Johnson’s R&D to develop a treatment for hepatitis B, ended up with a several hundred-million-dollar deal and went public. “[JLABS is] just giving people the tools, the capabilities, the connections, but most importantly, the confidence that they can do it, too,” Richter concludes.
With the length of the drug development life cycle in view, Richter admits that it may be difficult to evaluate the impact on patients of an initiative like JLABS. Because “it takes ten years; it takes 20 years [to bring a new therapy forward and reach patients],” JLABS works from what Richter calls “a patient capital perspective.”