Johnson & Johnson’s JLABS looks east as it lands in Shanghai

Shanghai cityscape (Pixabay)
Shanghai will be JLABS' first foray outside of North America.

Now well established across the U.S. and Canada, J&J’s biotech incubator system has expanded into Asia with its first center in China.

This is the first time JLABS has moved outside of North America, and it’s chosen Shanghai as its first port of call, forgoing official sites in Europe or the U.K. (in fact, just last week, the The Telegraph ran a story saying that J&J were dropping plans to open a U.K. JLABS center, something however the company strongly refutes to FierceBiotech).

JLABS @ Shanghai is a 4,400-square-meter facility set to be located in Shanghai's Zhangjiang Hi-Tech Park; doors open in the second quarter of 2019.

The plan, as with is North American sites, is to accommodate up to 50 life science and healthcare startups, both single entrepreneurs and larger companies, which have a focus across pharmaceuticals, medical devices and consumer. The initiative is being done alongside Shanghai Pharma Engine Company.

Johnson & Johnson will typically help companies gain investment and notice to get them off the ground and with the ones that make it, take out options on the biotechs or their tech, but they are also free to make collabs and tie-ups with other biopharmas. Startups can apply to be a part of the system; J&J says that process has started in earnest for its latest offering.

“We are thrilled to be part of the flourishing life sciences community in Shanghai and to contribute to China's vision to help drive the Asia Pacific region toward becoming a world leader in healthcare innovation,” said Paul Stoffels, M.D., EVP and CSO at Johnson & Johnson.

“We are excited about the launch of JLABS @ Shanghai, which will be an integral investment in the city's life science ecosystem. It will support entrepreneurship as it relates to science and technology and strengthen our position as a global innovation hub,” added Liu Qin, Deputy Inspector General, Science and Technology Commission, Shanghai Municipal Government.

RELATED: Johnson & Johnson opens first international JLABs site in Canada

JLABS has a group of facilities in the U.S., with hubs in San Diego (its flagship site), San Francisco, South San Francisco, Houston and Boston, with 2018 plans for New York. It recently opened the first side outside of the U.S. in Toronto. Shanghai will now be added to that list as J&J hopes to make deeper inroads into the tricky Chinese market; one with much potential, but fraught with difficulty for western companies.

But massive regulatory changes recently spearheaded by the Chinese government are widely considered a new boost for the country’s pharmaceutical market, which is already the world’s second largest.

Foreign drugs are expected to enter the country in larger scales in the future, a trend that biopharma companies like J&J are likely to capitalize on.

This also comes in the same month that AstraZeneca said it was doubling down on China, which represents a fast-growing market for the drugmaker, by establishing a new drug development joint venture with a state-backed private equity firm.

The new company, Dizal Pharmaceutical, will be owned equally between AstraZeneca and the Chinese Future Industry Investment Fund (FIIF).

But it’s not been an easy ride for all pharmas, and back in August, GlaxoSmithKline said it would be shutting down operations at its Shanghai R&D base as it looks west.

GlaxoSmithKline has had a rather difficult past in the region. Back in 2013, it became embroiled in a sex, lies and videotape-type scandal that saw allegations of bribery from certain sales teams in the region, with a deeper twist when a sex tape of former head of GSK China, Mark Reilly, in his Shanghai apartment with his girlfriend, was alleged to have been made and then sent to CEO Sir Andrew Witty. Sir Andrew has since been replaced by Emma Walmsley, who announced last recently announced a major shake-up of the company’s R&D.

A few years back, J&J’s chief Alex Gorsky said he saw a “new horizon” in China despite slowing growth and regulatory hurdles, saying his company was taking the long-term view for investment in the region.