Johnson & Johnson, Takeda Open Up Israeli Biotech Incubator to Develop New Cures for Old Ills

January 21, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor

Global conglomerate Johnson & Johnson is taking its foray into the world of innovative incubators one step further Wednesday, after announcing it and its partners Japanese pharmaceutical giant Takeda Pharmaceuticals and venture capital firm OrbiMed have named the first two members of their Israeli-based innovation center.

J&J said the two, Hepy Biosciences and XoNovo, are the first candidates to come out of its new FutuRx incubator, which was funded by around $2 million, most of which was provided by Israel’s Chief Scientist’s Office. FutuRx is located in the Weizmann Science Park in Nez Ziona, in Central Israel.

Both of the new companies are focusing on therapies to “develop potentially transformative new medicines,” said CEO Einat Zisman, in a statement.

Hepy is developing an experimental drug that uses enzymes to stop tumor growth, while XoNovo is targeting a protein that plays a part in Alzheimer’s disease and Batten Disease, fatal nervous system disease that begins in childhood.

“A key aim of Johnson & Johnson Innovation is to find novel ways of advancing the most promising early stage science,” said Patrick Verheyen, head of Johnson & Johnson Innovation, London.

“The formation of the new biotechnology incubator in Israel is the product of an important collaboration between government, industry and venture capital that demonstrates a multi partner approach in practice,” he said. “The collaboration provides a unique platform to support and advance new companies with not only funding, but also strategic advice from both venture capital and industry pharmaceutical development experts.”

Through its innovation efforts, J&J and its partners have raised almost $30 million to fund early-stage biotech and biopharm companies. The company is a familiar face in Israel, after buying Haifa-based Biosense in 1997.

Big pharma is beginning to understand the “startup ecosystem” and learning to “get small to think big” in its quest to find the most innovative new companies and offer them partnerships that benefit both parties, said Ken Drazan, director of Johnson & Johnson's Innovation Center in California, in an interview in October.

Johnson & Johnson (JNJ) was one of the first large biotech companies to fund its own set of incubators, with two currently in La Jolla and South San Francisco, and one solo project on its way in Mission Bay. Overall J&J has five incubators with smaller offices across Europe, Asia, Israel and the U.S., as well as a 40 year history in investing in companies.

It offers everything from laboratory space, business model development, and product design guidance, as well as research grants and flexible partnerships with biopharma startups, which have been much in demand lately, he said.

“Right now there is an unstoppable wave of large companies trying to figure out how to be small, which is as much a cultural change as it is trying to figure out what kind of products they want to be associated with,” said Drazan, adding that larger biotech firms are smart to hire younger, often non-affiliated partners to help point out a company’s value.

“You really need the younger base of human capital, you need those Millennial and Gen Y eyes to really understand that the entrepreneurs are trying to create,” said Drazan. “Your infrastructure needs to look more like theirs, to create cultural affinity.”

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