J&J deepens its Canada ties with $690M in R&D deals

Johnson & Johnson's ($JNJ) new R&D outpost in Toronto isn't slated to open until the spring, but the company has already inked a pair of collaboration deals worth up to $690 million as it settles into the local biotech scene.

Through its Janssen Biotech division, J&J is partnering with Canadian startups Novera Therapeutics and enGene on projects in oncology and inflammatory bowel disease.

With Novera, J&J is handing over an undisclosed upfront payment and promising up to $450 million Canadian ($348 million) in milestone payments in exchange for worldwide rights to some small-molecule drugs for blood cancers. Alongside the Ontario Institute for Cancer Research and University Health Network, Novera is working to discover novel therapies for hard-to-treat hematological malignancies, and now J&J is on hand to provide its development expertise and, if everything goes according to plan, commercial might.

For the Montreal-headquartered enGene, J&J is putting up an undisclosed starter payment and equity investment to collaborate on EG-12, a therapy targeting cells lining the intestine to treat IBD. J&J has signed on to pay out milestones of up to $441 million Canadian ($341 million) throughout the collaboration, with the option to take up full ownership of EG-12 after the proof-of-concept stage. J&J also has the right to use enGene's gene-delivery technology on a second, undisclosed target.

The agreements come about a month after J&J disclosed its plans to construct a 40,000-square-foot biotech incubator in Toronto with room for up to 50 startups. Part of the company's growing JLABS program, the Toronto outpost will mirror efforts in San Francisco, San Diego, Boston and Houston, providing its tenants with no-strings-attached research resources as they work on early-stage drugs and technologies.

- read the Novera statement
- here's the enGene release (PDF)