SHANGHAI – Shanghai is the final leg of Johnson & Johnson's world tour of innovation hot spots – having just cut the ribbon on its fourth J&J Innovation Centre after doing so in London, Boston and California. The Asia Pacific Innovation Center promises to open up J&J resources to the region's best minds in pharmaceuticals, medical devices and health care products. Their aim is clear, to close the gaps in the life sciences ecosystem to accelerate innovation.

Talking about a systemic approach to external innovation, Paul Stoffels, chief scientific officer of J&J and worldwide chairman for pharmaceuticals, told BioWorld Today, "we try to maximize the access to the best type of innovation wherever we can find it; we need to do that in a big way."

There are high expectations that J&J's push to accelerate drug development will have some considerable heft behind it. According to Stoffels, last year the company spent $8 billion on R&D with $500 million dedicated to external collaborations.

When asked what the Asia budget for external deals will be under this new initiative, he replied they will absolutely be spending more over the coming year, "to the extent we can find the things we need, it [the budget] is whatever it takes, that is how we work."

It is not altruistic however, the desire to create a "a seamless collaboration between your internal R&D folks and the external world" come from the fact that "you don't always have the best ideas internally – typically you don't have it – you have to work in an ecosystem to get the best ideas," said Stoffels.

OPENING UP AND MOVING AROUND

J&J's Innovation Center (IC) marks a departure from the past in terms of "the location, the composition of the people and their charter," said Ken Drazan, head of the J&J Innovation in California. "This is not a conventional office; it is emblematic of the people here."

Though at first glance it was hard to see how the office differs from most other corporate offices, the idea is the space functions more like a way station, trading traditional offices for "hot desks" to be used by a team constantly on the move crisscrossing the region, spending more time outside of the J&J environment than in it.

The Shanghai-based IC has a particularly large territory to cover, reaching across China, assisted by satellites offices in Singapore, Australia and Japan.

The other differentiator is the innovation team brings together under one umbrella the various J&J resources that collaborators might find beneficial – from scientific expertise to experienced business minds and financial capital.

The assistance on offer runs the gamut, from setting up a venture capital fund to opening up their technical databases. "For example," Stoffels explained, "if they need pharmaceutical formulation, or toxicology information, or toxicology judgment to solve problems, they can access our people to help solve those problems."

The IC model also includes partner offices. In China they will set up a partner office with an existing incubator at Suzhou Biobay that already has 400 various life science companies involved.

What will all this mean for companies? According to Stoffels, "It reduces the amount of capital needed to get to their result. And that facilitates companies in the ecosystem with less money, to go faster and do more with their capital."

When pressed on how long it will take before China produced a significant, mainstream innovation, Stoffels predicted, "between now and five years, you are gong to see several major biotech companies rise up."

GETTING IN EARLY ON THE CHINA 'S' CURVE

For the moment, the focus of the IC is early stage basic research.

The therapeutic focus for drug development, handled by Janssen Pharmaceuticals, a subsidiary (which could well be the first Western drug company to enter China, arriving officially in 1985), covers five areas: neuroscience, infectious diseases and vaccines, oncology, immunology and cardiovascular/metabolism.

According to Patrick Verheyen, the head of the London IC, innovation everywhere is different, and in China the exciting work being done at the university level.

"The academic innovation is amazingly good here in China. The rate of publication in Nature and Cell has been going up dramatically. The great scientists from biotech and med tech companies are coming back. There will be a 120 million college grads by the end of the decade, all extremely well educated."

Although there has been little to show for China's investment in innovation on the global stage to date, for J&J, like many others, it is only a matter of time before that will change.

"Yes, it is early in the 'S' curve," said Verheyen, "but we want to work with that and we want to be on the ground, by actively developing compounds and getting them to patients. Working with the start-up companies and make them successful."

Since the launch of the overall global J&J IC initiative the company touts 80 new collaborations, with six of those in Australia and China. They are behind helping 70 companies move into incubators and 150 new initiatives. At a rate of about two deals a week, Stoffels points to this as a tangible demonstration of the company's commitment to partnership.

In the case of China, however, the newly announced deals are standard for many of the big pharma operating here – working with China's top universities on translational research collaborations.

There is a collaboration with Peking University, China's preeminent academic institution, on the identification of agonists and antagonists for G protein-coupled receptors (GPCRs) to help develop novel CNS medicines.

Another new deal is with Zhejiang University, to elucidate the physiological and pathological role of human lactate receptor GPR81 in the regulation of metabolism and metabolic syndrome such as dyslipidemia, obesity and diabetes.

Many other pharmas have splashed out on investments in R&D centers in China this year, Bayer AG made an announcement in January on a broad-based R&D partnership with Peking University. (See BioWorld Asia, Jan. 29, 2014.)

Sanofi has also announced their new R&D center as a regional hub in support of open innovation. (See BioWorld Insight, Sept. 1, 2014.)

In Sanofi's case, they have already signed an outlicensing agreement with start-up Zai Labs Limited for two COPD candidates. (See BioWorld Today, Aug. 24, 2014.)

'PATIENT' MANAGEMENT

Just getting started with a new approach, J&J will likely differentiate itself in numerous ways from its competitor scouts hunting for the next big thing, but one aspect came across loud and clear from the J&J executives: commitment for the long game that visionary biotech investment requires. "Lots of money is there to chase short-term opportunities," said Stoffels, with particular reference to the investing situation in China.

But J&J plans to lead the charge, according to Stoffels, they "can stimulate by giving the example. We can jointly invest in a company. J&J puts its money where its mouth is. We'll create an infrastructure with companies, and you will see those companies will be successes in this market.

"We need to access money that trusts that long term, to show that big risk, big return is also a way to invest."