Identifying 'gems' before others do: J&J exec gives insider's look at dealmaking spree

Whether it’s returning to CAR-Ts, swooping in to pick up a Parkinson’s asset from a sinking biotech or setting up a spinout company to pursue its neuroscience ambitions, Janssen has been busy in recent months.

Nauman Shah, Janssen’s global head of business development, explains that the Johnson & Johnson pharma unit sees “tremendous potential for patients in employing precision medicine.”

“Certainly in neuroscience, but also in immunology, also in oncology—we see a lot of opportunities there,” Shah tells Fierce Biotech in an interview. “Really our broad focus is to pursue strategic M&A and other forms of partnerships that, quite frankly, offer transformational potential.”

Janssen has been expanding its presence in a number of disease areas and isn’t afraid to shuffle through various different deal models to get what it wants. But while Fierce Biotech has been covering each of these announcements with interest, we hadn’t gotten a real sense of the underlying strategy or the work that went on behind the scenes—until now.

One of the most intriguing moves was Janssen’s surprise return to CAR-T therapies earlier this month, when two autologous assets were licensed from Cellular Biomedicine Group for $245 million upfront. Despite having brought Carvykti, a collaboration with Legend Biotech, to market last year, the world’s biggest pharma by market cap had otherwise stayed quiet on the CAR-T front. So what changed?

“The need for new therapies in this area is, quite frankly, what drove our interest here,” says Shah, referring to the fact that over half of patients with diffuse large cell B-cell lymphoma will see their cancer become unresponsive to treatment over time.

Nauman Shah
Nauman Shah, Janssen’s Global Head of Business

“The results that we saw in the phase 1 studies caught our eye,” he adds. “Obviously, we get a chance to apply everything we've learned from Carvykti—development, manufacturing through to commercialization—to this partnership with CBMG. So we are incredibly excited about this.”

When it comes to seeking out eye-catching data like these, Shah and his team try to cast a wide net.

“Sometimes things catch our eye in certain meetings, in certain settings, or maybe a connection at a conference like J.P. Morgan,” he explains. “But truly, foremost, what catches our eye is incredible science. We're not chasing deals or therapies because others are chasing them, we're actually chasing truly transformational science.”

“We pride ourselves in having great insights,” Shah continues. “I'm surrounded by an incredible group of colleagues who have the fortitude to be able to look ahead to decipher data to identify key gems that are out there before others do.”

What catches our eye is incredible science. We're not chasing deals or therapies because others are chasing them, we're actually chasing truly transformational science." — Nauman Shah

It was a “very similar” story with last month’s deal with Pipeline Therapeutics, where Janssen paid out $50 million upfront for a phase-2-ready multiple sclerosis drug. Again, it was the “broad profile” of the asset—a muscarinic M1 receptor antagonist—that “caught our attention,” Shah says.

“We established a very strong connectivity with Pipeline and the management team there a number of months ago,” he said. “We did a lot of our own evaluation, starting in the science, evaluating the molecule and then ultimately assessing it holistically to come forward with a deal.”

While you might assume that a company the size of J&J is the dominant partner in these licensing talks, Shah insists that the best results come when both parties feel they’re getting their money’s worth.

“This is ultimately a marriage that comes to fruition after a number of discussions in which we're looking to create mutual success,” he says. “Obviously you want to have a partnership grounded in trust, transparency—you want to feel good about who you're partnering with.”

On the surface, Janssen’s deal with Yumanity Therapeutics appeared more opportunistic. The struggling biotech was on the lookout to offload its remaining assets, and the Big Pharma was well placed to pick up the company’s unpartnered pipeline, including a clinical-stage Parkinson’s treatment. But rather than cashing in on a tricky asset for a bargain price, Shah insists that, again, it was all about the data.

“It had absolutely nothing to do with the status of the company,” he says. “The company happened to be looking for an exit, we were impressed by the science, we were impressed by the assets and the platform that was there.”

“So that's really what drove our interest,” he adds. “And ultimately, we were able to drive the right deal structure that not only met our needs, but ultimately met the needs of Yumanity’s shareholders.”


Taking a 'spin co'

Sizing up biotechs for early-stage assets to bring in may be all in a day’s work, but J&J hasn’t been afraid to think more creatively about how to broaden out its neuroscience portfolio. In March, the Big Pharma’s venture arm, known as JJDC, collaborated with Third Rock Ventures to launch Rapport Therapeutics. Armed with $100 million in series A funds as well as a neuroscience team hand-picked from Janssen, the new company was charged with developing a phase 1 treatment for drug-resistant seizure disorders plucked from Janssen’s shelves.

“Ultimately, it was a great move for us, because it gives the chance for these specific assets to flourish in a very specific environment—a third company that we still have a tie to,” Shah explains. “We like the ‘spin co’ option for specific assets that maybe wouldn't be at the top of the priority list internally.”

So what’s next for Janssen? With Eli Lilly’s donanemab data making headlines for all the right reasons, would J&J consider expanding its own Alzheimer’s disease portfolio beyond the anti-tau antibody and the vaccine it already has in development?

“It's exciting to see some of the data that has come forward from other companies and we'll have to see how that plays out,” Shah says. “But Alzheimer's certainly is an area that we're going to continue to remain vigilant in.”

When it comes to CAR-Ts, it’s noticeable that J&J is sticking with autologous therapies via the Cellular Biomedicine deal rather than pursuing the much-hyped, but less proven, allogeneic or “off-the-shelf” options. But Shah isn’t ruling that out entirely.

“If we see a great asset out there with the right data with the right profile? Absolutely, we will be open to that,” he says.

However, he alludes to the “challenge” of durability that has plagued some of the early allogeneic CAR-T contenders. “With time, we may see innovation there and a level of care that is elevated,” he adds. “And we'll certainly be ready to potentially add to our portfolio those types of therapies to complement the therapies we already have.”

Whether it’s expanding into Alzheimer’s, collecting more cutting-edge CAR-Ts or new developments in Janssen’s other areas of interest—such as retinal and cardiovascular conditions—the team remains “laser-focused and continues to build on those areas,” Shah says.

Of course, Janssen’s focus hasn't remained static, either, with a major restructuring revealed in March that saw the business scrap its late-stage respiratory syncytial virus program and others.

“Infectious disease and vaccines were previously two separate areas from an R&D structure standpoint, albeit linked,” Shah explains. “We consolidated those into a joint infectious disease vaccine unit.”

As John Reed, M.D., Ph.D., continues to settle in as J&J’s head of R&D, the company is “going to remain flexible,” Shah says. “We're going to look for where the right opportunities are, where the right capabilities are that we possess to advance the specific therapies of interest to us,” he adds.

“And things that don't fit that mold, where we perhaps are not the best ones to be advancing specific areas, then we won't play there, we’ll focus our attention elsewhere.”