LONDON (Reuters) - Johnson & Johnson (JNJ.N) is stepping a drive to tap into emerging healthcare technology by establishing new innovation centers in four of the world’s biotech hot spots - California, Boston, London and China.
Each will have an initial staff of between 15 and 20 people, tasked with hunting out partnership and investment opportunities across drugs, medical devices, diagnostics and consumer health, global pharmaceuticals head Paul Stoffels said on Tuesday.
The decision by the diversified U.S.-based group to set up local centers with deal-making capabilities highlights the increasing competition among large healthcare companies to become “partner of choice” for small biotech firms.
Multinationals are hungrier than ever to access external science to refill their product pipelines, given the dearth of discoveries from their own labs and the loss of patent protection on many existing blockbusters.
J&J has a track record of reaching outside its own walls for innovation, with more than 50 percent of its products coming from external collaborations, according to Stoffels.
But he wants to push the process further by simplifying deal-making and having a dedicated on-the-ground presence in the world’s main hubs for bioscience.
“We want to get better at interacting with the outside world and we are going to do it in a different way, closer to where the innovation is happening,” Stoffels said in a telephone interview.
“We want to get a significantly higher number of external opportunities, which we can identify and bring into the company.”
A final decision on the location of the Chinese center has yet to be made, but it will most likely be in Shanghai. In California, the centre’s headquarters will be in San Francisco, with a linked office in San Diego.
The four new centres will be operational in coming months. J&J declined to detail how much they would cost.
The group already has nearly 80 investments in biotech companies around the world and is adding between five and 10 partnerships each year to this list.
Stoffels said last month’s tie-up with Danish biotech firm Genmab GEN.CO was typical of its mixed approach, combining equity investment and product licensing. The Genmab deal could be worth over $1.1 billion, if the experimental cancer drug daratumumab lives up to expectations in clinical trials.
J&J is also active in venture capital. Earlier this year it clinched an unusual deal with Index Ventures to part-finance a new life science fund, alongside GlaxoSmithKline (GSK.L).
Editing by David Holmes