Johnson & Johnson deal opens door for subsidiaries to partner with Canadian univs

By Debbie Lawes

Health care giant Johnson & Johnson is expanding its research collaborations in Canada through a deal with two western provinces and the Centre for Drug Research and Development (CDRD) to fund early stage, pre-competitive health research. While the company's initial investment is relatively small —$350,000 — participants say it will create a framework for J&J's large stable of subsidiary companies to provide additional funding and expertise.

"Like everybody else in our industry, we're focusing increasingly on external innovation as a way of sourcing new product ideas, and collaborating around translational research and proof-of-concept," says Dr Garry Neil, corporate VP of J&J's Corporate Office of Science and Technology (COSAT). "We've invested and spent a lot of time in the major innovation centres in the US and Europe, but we see there is untapped opportunity in Canadian universities."

The two-year, $1,050,000 Western Canada Innovation Agreement (WCIA) brings together COSAT, CDRD and the British Columbia and Alberta governments to jointly develop and manage a fund to support fundamental health research. The partners will form a joint steering committee that will oversee the seed fund, including assessing opportunities for the collaboration, funding, management and commercialization of research projects. COSAT, Alberta, and BC/CDRD are each contributing $350,000 to the grant pool.

J&J has bolstered external partnering over the past two years, as part of a trend that has seen an increasing number of pharma companies turning to universities to feed their development pipelines. COSAT evaluates promising research underway in universities and other research labs and identifies which J&J companies are best positioned to collaborate with those institutions.

"Within J&J, COSAT serves a coordinating role. We aren't the final customers for these new technologies, it's our operating companies," says Dr Robert Zivin, senior director S&T at COSAT who is overseeing the WCIA. "As each project of interest comes up we're going to be engaging these operating companies and they will be providing their expertise."

J&J will contribute scientists, as well as market, regulatory and development advice to projects. The result, adds Neil, is that the initial $350,000 investment will grow as other J&J companies come on board.

COSAT has set up similar co-managed funds with universities and not-for-profits in the US, Israel and Europe, with investments usually less than $1 million. Some of those investments have resulted in new spin-off companies for J&J, which Neil says they hope to replicate in Canada.

Johnson & Johnson spent US$7.0 billion on R&D in 2009, making the company the seventh largest for global spending on R&D, according to The Global Innovation 1000 report, released this month by Booz & Co. J&J is highly decentralized, with some 250 quasi-independent companies in 57 countries, including six in Canada representing the consumer, pharmaceutical, medical devices and diagnostics markets. Many of these companies have their own internal R&D organizations.

In August, COSAT signed a co-funding agreement with MaRS Innovation in Toronto. The three-year Translational Innovation Partnership Program aims to bring early stage pharmaceutical and medical device technologies to preliminary proof-of-concept within two years. The project review process will begin in mid-November.

shared risk model

This is the third such fund Vancouver-based CDRD has established. Pfizer Canada has contributed $3 million to set up the Pfizer-CDRD Innovation Fund (R$, February 9/09) and Genome BC is investing $1 million, with matching funds from CDRD, for a separate commercialization program. All three funds are designed to de-risk technologies, increasing their likelihood of being licensed to industry or spun off into new companies.

"In the old days, many of these technologies spun into companies, raising money from family, friends and angels. The technologies were far too early to have been spun out so many died. CDRC moves these technologies to a stage where they become investable," says Dr Karimah Es Sabar, senior VP, business and strategic affairs, CDRD, a federally funded Centres of Excellence for Research and Commercialization.

CDRD has developed a shared risk model for drug development. It links research facilities across BC, and elsewhere in Canada, to provide academic researchers with access to all the divisions typically found in a large pharma company, including drug screening, target validation, medicinal chemistry, drug delivery, pharmacology, toxicology and biologics. By the end of its five-year mandate, it aims to license over 15 new drug candidates for commercialization.

"CDRC's model is a truly unique, collaborative, shared risk model that is hugely appealing to the PIs, to the academic institutions and to industry," says Es Sabar. "It's a model that is resonating around the world."

CDRD has been expanding beyond BC through affiliation agreements with MaRS Innovation and its 14 institutions in the Toronto area, and with universities such as McMaster and Dalhousie. The WCIA is its first partnership with Alberta. CDRD is also negotiating agreements with international research institutions, with announcements expected over the coming months.

For Alberta, the WCIA stems from a memorandum of understanding it signed with COSAT in May to assess opportunities for supporting commercially promising healthcare and life sciences projects underway in Alberta. As with its other co-managed funds, J&J will participate on a steering committee that will source and review prospective projects.

"This is the beginning of a new relationship," says Mel Wong, ADM technology innovation with Alberta's ministry of Advanced Education and Technology. "We thought we would start relatively small and build that relationship so we could get some working experience with one another... There are some immediate opportunities and longer range opportunities under discussion and we'll continue to work at that."

It's also a way for Alberta to leverage research capabilities in other provinces and the private sector, adds Wong. "Leveraging makes sense even when we have good times in the economy. It's not just a matter of bundling financial resources, but also bundling technologies and people. R&D can be very expensive so it makes sense to share the risk and also share the benefits."

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