between J&J and Polaris, Elliott says. But the two groups have reviewed 20 different projects in the past four months that he says represent “the best and most exciting biology going on.” A short list of projects has been put together, which is being reviewed, he says.
Of course, J&J and Polaris aren’t the only organizations trying to figure out how to revamp the historic relationship between Big Pharma and the venture capitalists the bankroll the biotech companies that attempt to fill up Big Pharma’s pipeline.
Pfizer has sought to do a better job of supporting early-stage innovations coming out of academic centers, through what it calls its “Centers for Therapeutic Innovation.” And Sanofi CEO Chris Viehbacher has been vocal about the value he sees in external innovation—as opposed to doing everything with his in-house scientists. One prominent example of the new approach was Sanofi’s investment alongside Third Rock Ventures in a startup called Warp Drive Bio, which Sanofi has agreed to nurture, and eventually acquire, if it can deliver on its promise.
J&J itself isn’t wedded to any single approach, and it is trying a different type of business experiment with a startup incubator it has established in San Diego. The San Diego approach amounts to a “parallel business experiment” J&J is testing, Elliott says.
Polaris has developed a comfort level of working with Elliott, says Polaris general partner Terry McGuire, through a relationship that dates back to J&J’s acquisition of TransForm Pharmaceuticals, a Polaris portfolio company, for $230 million in 2005. By having a trusted partner at Janssen, McGuire says each side can get something out of it the other needs.
“If you look at the various players in the healthcare space, their portfolio is broader than anybody’s,” McGuire says. “We get access to their deep knowledge. And we work with them to help them identify really interesting early-stage companies. We probably have the broadest collaborations with MIT and Harvard of any VC firm.”
It’s possible some of the startups that result from J&J and Polaris’s investment, if they hit their goals, could end up getting acquired by J&J, Elliott says. But McGuire says the actual structure of the deals, such as whether there will be pre-negotiated acquisition prices for companies, is still to be determined on a company-by-company basis. “We’re starting in Phase 1, which is basically, ‘let’s find some interesting companies together,’” he says.
I’ll be interested to see if and when this collaboration can bear some fruit, since it could end up being a template for solving a couple massive problems in the pharmaceutical industry—the need for Big Pharma to find new products, and the need for startups to find money and manpower to get started at all. I’m planning to probe a little more deeply next Tuesday as the moderator of a free event Polaris is organizing at Dogpatch Labs, with guest speakers from Janssen, Harvard Medical School, MIT, and the Biotechnology Industry Organization. For more information on how to register, click here. If you’ve got questions you’d like to ask these folks, send me a note at [email protected] or show up in person and fire away.
