J&J heads to Texas with its R&D farm system, scouting for biotech startups

Melinda Richter, head of J&J Innovation's J-Labs

Johnson & Johnson ($JNJ) is expanding its network of biopharma incubators, taking to Texas with a plan to host as many as 50 local biotech startups.

The new facility, to open within the Innovation Institute at Houston's Texas Medical Center (TMC) by the end of 2015, will be a 30,000-square-foot biotech incubator with space for lab and office work. The hub is part of J&J Innovations' Janssen Labs initiative, now shortened to J-Labs, and, mirroring the flagship San Diego incubator, the TMC incarnation will be staffed by some of Janssen's biotech big thinkers and provide operational support, education and business services to its guest companies.

The idea is to co-locate everything a biotech needs into a one-stop shop for shared services, allowing scientists to keep their heads down and innovate instead of worrying about permits and clerical work. J&J's Houston operation, to be christened J-Labs @TMC, will expand the capacity of an incubator system already home to 70 startups.

As biotech hubs go, Texas tends not to come up in the same conversation as the hotbeds of Boston and San Francisco, but J&J believes that could change with the right nurturing. The state is home to some world-class research institutions, including TMC members like the MD Anderson Cancer Center and Baylor College of Medicine, organizations that rake in billions a year in grant funding. What's missing is an infrastructure to translate all that research into products that can eventually benefit patients, and J&J's model could fill the void and accelerate the path of innovative treatments, J-Labs head Melinda Richter said.

"As one of the top global biotechnology clusters, and home to the Texas Medical Center, the largest medical center in the world, Houston is a flourishing life science hub in which we see great potential for an incubator to enable the talented scientists in the region to take their innovation to the next level," Richter said in a statement. "The continued demand for our J-Labs model fueled our decision to expand with J-Labs @TMC, which furthers our goal of helping entrepreneurs advance science with the potential to become transformational solutions for patients."

J&J opened its San Diego outpost in 2012, further expanding to Boston and San Francisco the following year with the help of MIT and the California Institute for Quantitative Biosciences. In May, the drugmaker unveiled plans for J-Labs @South San Francisco, a Bay Area incubator with space for 50 startups of its own.

With each expansion of the program, J&J stresses that J-Labs offers a no-strings-attached opportunity to promising biotechs, and qualifying companies aren't roped into equity deals or required to hand over options, leaving them free to negotiate with whomever they choose. A few J-Labs tenants have already inked financing or licensing deals, including Alector, Bell Biosystems and Araxes Pharma.

The incubator network is part of the broader J&J Innovation program, through which the pharma giant has launched a string of global deal-recon operations, setting up shop in Boston, London, San Francisco, Shanghai and elsewhere. Unlike J-Labs, J&J Innovation is designed specifically to scout for collaborations, potential license agreements and buyout targets, making equity investments in its partner companies along the way.

- read the announcement

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