Johnson & Johnson Innovation LLC's ongoing investment in Canada's drug discovery and development space has yielded two early stage deals for the company, both securing access to potential new assets for J&J unit Janssen Biotech LLC. A newly formed blood cancer drug developer, Novera Therapeutics Inc., stands to earn milestones of up to C$450 million (US$346 million) in one deal, while Engene Inc. could see up to C$441 million in milestones should Janssen embrace its non-viral vector for gene delivery to cells lining the intestine.

Both deals include potential tiered royalties on net sales should the programs reach market.

Janssen will pay Toronto-based Novera an undisclosed up-front payment as part of the deal, which turns on new compounds discovered through an ongoing collaboration between the Ontario Institute for Cancer Research (OICR) and University Health Network. The deal also includes potential preclinical, clinical, regulatory and commercial milestone payments for Novera along the way. Through an exclusive global licensing option, Janssen can secure global rights to human uses of any candidates identified through the partnerships if it wants them. Once triggered, the option would shift responsibility for subsequent preclinical and clinical work to Janssen.

David O'Neill, vice president of business development for the Fight Against Cancer Innovation Trust (FACIT), OICR's commercialization partner, is serving as interim president of Novera. Though he declined to share additional details about the method of action the new partners are exploring, he told BioWorld Today that "it made sense for FACIT to form Novera to act as a commercial entity to manage and steward this program in a classical way, as opposed to keeping the technology within the academic space."

In a second deal, also facilitated by J&J Innovation, Montreal-based Engene Inc., a gene therapy company focused on development of therapies using its Gene Pill and enema gene delivery platform, agreed to work with Janssen to develop and commercialize new therapies for inflammatory bowel disease (IBD). In addition to an undisclosed up-front payment and equity investment, the company is eligible to receive various preclinical, clinical, regulatory and commercial milestone payments.

The company's nucleotide delivery platform enables the delivery of nucleotides to various mucosal tissues throughout the body. The alliance gives Janssen the option to exclusively license Engene's lead candidate, EG-12, for gut-localized expression of the anti-inflammatory cytokine IL-10. Engene and Janssen will jointly develop EG-12 through to clinical proof of mechanism in patients with IBD. Should it exercise its option, Janssen would take over further clinical development and commercialization of EG-12 for all indications worldwide. The collaboration also allows Janssen to explore the therapeutic potential of Engene's platform to deliver one additional undisclosed target.

"By delivering into the GI tract through Engene's technology, we hope to be able to achieve a level of activity, potency and hopefully diminishment of what otherwise might be side effects associated with these programs if you were to give them systemically and do something quite transformative. So we're quite attracted to their base technology and the payloads in particular as being things that we believe will have a very high potential in difficult to treat patient populations," Robert Urban, head of Johnson & Johnson Innovation, Boston, told BioWorld Today.

The ecosystem of Canada's national biotech industry has grown and thrived during the past few years, driven by a growing network of hundreds of pre-commercial biotech companies, venture capital investors and university laboratories. J&J is becoming an increasingly active player in the sector's development, through not only new partnerships like those with Novera and Engene, but also neurodegeneration-focused Neuroscience Catalyst project with the University of Toronto's Centre for Collaborative Drug Research and through its upcoming incubator in Toronto. The incubator, called JLABS @ Toronto and slated to open early next year at MaRS Discovery District, is still under construction. But when it's open, it will support start-ups with lab space, programs and potential investment partners as they work to build early stage companies. (See BioWorld Today, Sept. 21, 2015.)

It's likely we'll see J&J working "in an increasingly translational way" alongside organizations like OICR to bring programs forward, Urban said. "There's some great science there and some really interesting opportunities to do entrepreneurial things."

The company is not, of course, without competition for innovative early stage programs in Canada. Celgene Corp. has also been active in cultivating the sector, striking deals with both Triphase Accelerator Corp. and Northern Biologics Inc. among others. "I think there's a greenfield opportunity that both Celgene and J&J have latched onto, realizing that there's some really innovative science going on north of the border, and I think they really want to latch onto that," said O'Neill. (See BioWorld Today, Nov. 12, 2014.)