Medtech Startups Can Find Home in New Location of Janssen Labs Incubator

The Rock Health, Startup Health and HealthBox model of startup acceleration is incredibly valuable to the health innovation ecosystem but they are largely useless for medtech startups that have need high capital needs and foresee a long product development and regulatory cycle.

Now, an initiative that began in 2012 to help health startups of all stripes, including capital intensive medical device ventures, is expanding its national footprint.

Janssen Labs, the healthcare incubator of Johnson & Johnson, announced last week that it will open a new South San Francisco office modeled on its flagship San Diego location. The new standalone 30,000 square-foot incubator can house 50 life science companies, said Melinda Richter, in a recent interview.

"In the tech industry - this may sound trite but you will get the point - to commercialize you give a couple of guys a couple of computers and couple of $100,000 and a couple of years later they can turn around and sell it to Microsoft or Yahoo or Google for $200 million," Richter said. "In the life sciences industry, before you can even turn the lights on, you at least need a year or more plus millions of dollars to get your lab infrastructure set up, to get your core research lab certified, to get your team in place and hire an operations team and get all your permits and licenses...."

Janssen Labs aims to expedite the time needed for promising life sciences startups to commercialize. The incubator accepts applications from pharma, biotech, medtech, diagnostics and digital health startups and gives them the physical infrastructure necessary to begin developing a product. 

"An entrepreneur can start off from something as small as a 5-foot bench and grow all the way up to a 5,000 square feet," Richter explained.

Aside from the San Diego [and the new South San Francisco] location, Janssen Labs partners with entities in Boston and San Francisco to offer similar opportunities in those locations. Altogether 53 companies are in these three Janssen Labs locations.

Richter noted that applications from life science companies around the world are being accepted through the website on a rolling basis who, if selected, will be housed in the new South San Francisco location.

Half of the new 30,000 square-foot facility will be core lab space filled with equipment. The rest will be flexible office space and wet labs. But it's not simply about capital infrastructure. The office will also have space for members of the Johnson & Johnson Innovation Center in California, who can help promising companies strike deals with Johnson & Johnson.

What criteria does Janssen Labs look for before accepting an entrepreneur and his or her team in the incubator. Great science, great management team and a solution that addresses an unmet clinical need, Richter said. A great management team doesn't necessarily mean only seasoned entrepreneurs who are trying out their next, new idea. It can also be formed of people who are passionate about the solution they are developing and believe it will be revolutionary.

Since its inception in 2012, Janssen Labs has had three graduations and struck deals with five companies. The first company to graduate was Tem Systems, a U.S. subsidiary of a small diagnostic company in Munich - Tem International. The two-member R&D team were developing a near-patient device that would provide a comprehensive profile of a patient's coagulation status from a single tube of blood, explained Rob Hillman, head of product development for that product - Roten Sigma. He expected his tenure at Janssen Labs would be two years.

"[Rob] came into Janssen labs and thought that he was going to be there almost two years and he graduated in one year and into 20,000 square-feet of space," Richter said.

That was before moving into bigger space within Janssen Labs itself, Hillman said via email. 

"Just as advertised they reduced the red tape and let us focus on moving our product development forward," Hillman said.

Which naturally helped to speed up the product development process. HIllman added Rotem Sigma is currently about to be tested in clinical trials in Europe and the U.S.

The experience of Hillman at Janssen Labs underscores its dual mission to hasten time to market as well reduce cost of product development.

"[This model] is not only a great value proposition for entrepreneurs but also is a great value proposition for investors," Richter said. "Investors no longer have to invest in the company with $10 million upfront to get to a proof of concept." 

-- By Arundhati Parmar, Senior Editor, MD+DI
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