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JPM at 10

By 1991 the biotechnology industry, as measured by our annual January gatherings in San Francisco, had just hit 10.   In just over a decade, a new industry built on the ability to “cut and paste DNA” had erased the need to await the Mendelian generational clock to rewrite the blueprints of life.  In just a short 10 years, remarkable investments, talents and ambitions had been mobilized and new medical and agricultural advances were emerging.

But as history never ceases to teach, neither we as individuals nor any industry can escape the turbulence of the world around us.  Just months before JP Morgan’s 10th Healthcare Conference gathering, Saddam Hussein announced his intent to annex Kuwait then proceeded to invade his neighbor in August of 1990.  By January at the JP Morgan conference, the hallway chatter was filled with not “if” but “when” the world would strike back.  We would not have to wait long.  Just hours after the January U.N. deadline, a coalition of 34 nations led by the USA, began Operation Desert Storm with massive air and missile attacks on targets in Iraq and in Kuwait.  As the attacks began, the world gathered together to watch a televised announcement by President Bush who proclaimed, “as a coalition of peace loving nations, we will not fail.” After seemingly endless televised news coverage, on Day 39 the ground assault begins and then on February 28th, just five days later, Kuwaiti troops raise the Emirate’s flag above Kuwait City.  More chapters on Iraq were yet to be written but by February of 1991, Kuwait would be returned to its people.  Technology and the will of a unified world had rejected a rogue leader – good (and technology prowess), it seemed, had prevailed.

In 1990 the internet was born via Tim Berners-Lee’s first Internet “browser” and, by 1991, this new software application hit its one millionth download with vigorous discussion of the Persian Gulf war dominating the newly-formed chat groups and “online” newsfeeds.   

Biotechnology’s first decade had made some history itself.   Since Genentech’s historic offering in 1980, 89 new biotechnology companies had captured the attention of investors and gone public in markets that were buoyed less by revenue-generating biotech products than by prices paid by would-be acquirers.  1991 was to be a record-breaking year with 33 young companies completing IPOs, eclipsing the previous record of 25 in 1986.

But building these new businesses and making biotech-based products was proving to be extremely difficult, expensive and slow.  Running these businesses solely off of persnickety equity-based financings was difficult.  Partnerships with profitable and well- capitalized pharmaceutical companies were proving to be critical.   Even Genentech, the company that had laid the groundwork for the biotech industry and had already used its head-start with recombinant DNA technologies to generate a basket of new products was struggling to fund operations.  In 1990 the company’s management team sold a 60 percent stake and an option-to-fully acquire the rest to Roche for $2.1B.   The Genentech 1990 transaction was the first of what proved to be many similar types of transactions between leading biotechs and the established pharmaceutical companies of the day.  Immunex, Genetics Institute, Systemix, Chiron among many others were integrated into larger organizations during the next few years.  And each would illustrate to investors that the large, well-established players in the healthcare industry could provide access to robust profit-built balance sheets and pathways to earlier investor liquidity.

1991, a full 10 years after the discovery of the AIDS virus, the growing epidemic continued as a relentless reminder that all of us are vulnerable.   It was in 1991, after a 13-season NBA career with the L.A. Lakers, that included five championships, that Magic Johnson after testing positive for HIV, announced his retirement.  Johnson was one of the first sports stars to go public about his HIV-positive status.  Since HIV’s discovery and as a result of the advances purely made possible by biotechnology, Magic and others around the world with access to treatment are living longer lives.

Following the 1986 space shuttle Challenger disaster and after nearly three years of mission hiatus, investigation, accusation and engineering review, it was resilience and determination that had prevailed.  In 1990, one of the five remaining space shuttles, in this case the Space Shuttle Discovery, roared back into space with the Hubble telescope in its cargo bay to deploy.   By 1991, streams of images were opening a new window through which we could peer more deeply into the cosmos than ever before. 

While back on earth a new biological “moonshot” was just getting underway as Congress seeded funding to both the NIH and the DOE to begin a 15-year research effort called the “Human Genome Project.”  The project would develop technology for analyzing DNA; map and sequence human and other genomes; and study related ethical, legal, and social issues.  It was a program thought to exceed the technical complexity of anything ever conceived but one that finished ahead of schedule at a fraction of the anticipated cost.  When reflected on today, it is hard to fathom the progress in sequencing and now gene editing that has been made since 1991 and even harder to fathom where both will be in just 10 short years from now.

As we head into the 35th annual JPM Healthcare Conference, perhaps it is also good to reflect on the year we’ve just completed.  Biotech stocks finished a tough year with the BioCentury 100 losing 1,474.40 (23%) to 4,834.54 at year-end and far underperforming the broader markets.
The NASDAQ Biotechnology Index and the iShares NASDAQ Biotechnology ETF each slipped 22% on the year, while the NYSE Arca Biotechnology Index shed 19%.  By comparison, the Dow Jones Industrial Average was up 13% in 2016, and the NASDAQ Composite rose 8%.

2016 saw only 22 medicines approved by the FDA, which was down dramatically from 45 and 41 in 2015 and 2014, respectively.  That said, many of these 2016 approvals do address key areas of unmet medical need including new treatments for advanced ovarian cancer, bladder cancer and spinal muscular atrophy.  Nearly half of these advanced quickly as a result of FDA sponsored innovation pathways and many have accompanying diagnostics to enable targeted treatment approaches.  In 2017, 115 applications for approval have been accepted for review by the FDA, loading the calendar for an exciting new stream of patient-directed solutions in the year ahead.

When JPM began in 1982, it was an assembly of biotech pioneers determined to do and see more and was metaphorically reflected in the audacity of Lawnchair Larry’s fateful balloon powered flight “to rise above it all” and try new approaches.  By 1991, just 10 years later, it reflected a global and powerful industry that reconvened again at the St. Francis.  An industry whose products and talents could truly save lives and even help feed the masses.  And an industry whose successes had provided the catalyst to sequence not just the blueprints of “who we are” but all life that surrounds us.  Yet it was also a time that provided a sharp contrast of what is scientifically possible with the humbling tribal histories from which we have all come and the fragility on which civil society (and technology) rests. 

May 2017 seek to couple peace with our progress.

Diversity… more than a buzz word.

Seema Kumar, Vice President of Innovation, Global Health and Policy Communication at Johnson & Johnson

I recently came across a New York Times OpEd in which the authors likened diversity to fresh air.

“It benefits everybody who experiences it (and) by disrupting conformity, it produces a public good,” say Sheen S. Levine, professor at the Jindal School of Management at the University of Texas at Dallas and David Stark, professor of sociology at Columbia.

Their studies show that by breathing fresh perspective into prevailing wisdom, diversity prevents stale and often flawed group think and improves the overall cognitive performance and critical reasoning ability of individuals working in groups.

Over the years, diversity has become somewhat of a buzzword, and scholars and advocates alike have attempted to define the benefits of diversity and inclusion in many ways. At most organizations, the benefit is opportunity to leverage the improved performance that diversity promotes.

That is true for us at Johnson & Johnson as well, and, in addition, we believe that growth depends maximizing the global power of diversity and inclusion to bring the best science, technology and ideas to deliver healthcare solutions. A great idea can come from anywhere in the world, and innovation depends on finding those great ideas, whether from within our own walls or from around the world, regardless of ethnicity, geography, gender or generation.

So, for us, it is not just a nice to do, but a must do to drive superior business results and create sustainable competitive advantage. Companies in the top quartile for gender, racial or ethnic diversity are more likely to have financial returns above their national industry medians. And it’s not just about financial wherewithal; it’s also about generating promising ideas that better meet the needs of men and women of all cultures and ethnicities that will be using our products. In a country like the US, where more than half of the 20 million children under age five identify as racial and ethnic minorities, that’s important for our future as well as theirs.

Yet, while research shows diversity creates stronger life sciences ecosystems, the fact is our industry still has a long way to go. The good news is that we all are keenly aware of the issue and we all believe we need to work together to change it. But, our ability to affect this change over the long term requires that we work now to create that future. By inspiring young women and minorities into STEM education and careers today, we can ensure a more robust and diverse pipeline for the future. And, that not only do we prioritize diversity within our individual organizations, but also that we work together to build a diverse talent pipeline within the ecosystem as a whole. Without a collaborative effort to educate, attract, retain and advance a more diverse talent pool—from kindergarten through the highest levels of leadership—our industry will continue to miss opportunities and breakthrough ideas.

So, it is critical that we keep this discussion at the forefront, and to work together to find and implement solutions that can potentially benefit all life science companies—and ultimately society.

For those of you who will be in San Francisco in January for the many biotech-related conferences and events, please join me at the Biotech Showcase panel event: Utilizing Biotech’s Biggest Untapped Resource: Diversity.  I look forward to an interactive discussion that will include viewpoints from biotech leaders and other leaders of influence. I hope to see you there.

Finding the best science, wherever it happens

At Johnson & Johnson Innovation, we are searching for top notch science, and we know that a great idea can come from anywhere. We also know that no two environments are made the same, and at the Asia Pacific Innovation Center we are working to find great science and accelerate entrepreneurship across a vast and diverse region. Translating the best science into first-in-class, best-in-class health care solutions means applying the right nutrients to the ecosystem: deep science, access to capital and passionate entrepreneurs. Once we began to dive into this region, we find a diverse ecosystem across countries that require different nutrients in order to accelerate their development. For example, risk taking entrepreneurs in Japan, access to venture capital in Australia and advanced science in China. The region also has a significant scientific diaspora – students, researchers and scientific entrepreneurs – that once left their country to explore opportunities around the world, but who are now interested in returning to contribute to their country and the region, especially in China. Into this environment Johnson & Johnson launched the Asia Pacific Innovation Center in October 2014, and as we celebrate our one-year anniversary, we are finding traction with new and insightful ways to engage the best science in the region, and accelerating entrepreneurship in the local ecosystems where we operate. One example of our practical and flexible approach is a collaboration that was recently signed between ViroGin Biotech and Johnson & Johnson Innovation. ViroGin is a promising startup in the field of oncolytic virotherapy with decades of experience in the field. Work on its technology started in the 1990’s with the first clinical trials conducted in China. Extensive research and development continued in Canada for many years and currently ViroGin has established R&D facilities and operations in Vancouver, Canada as well as Shenzhen, China. In October of this year, ViroGin entered into a collaboration with Johnson & Johnson Innovation and Janssen Biotech, Inc. (“Janssen”) to continue to develop their technology. By working together with Johnson & Johnson Innovation, ViroGin will have access to a large network of Johnson & Johnson experts that they can call on for scientific expertise and translational experience, helping to accelerate their research and development to the next phase. Through these types of collaborations, we strive to continue our efforts to de-risk and push exciting advancements in deep science forward into best-in-class outcomes that will have a positive impact on patients and help scientific entrepreneurs reach their dreams and save lives. As we celebrate our one-year anniversary in the region, Johnson & Johnson Innovation is continuing to find new ways to build and support a vibrant innovation ecosystem. We see a region that has all of the right ingredients for success, and innovation that promises to be truly transformational in meeting the world’s most pressing healthcare needs. If you have what we are looking for, or know someone who does, we want to hear from you.

Contact: Dong Wu, Head, Johnson & Johnson Innovation, Asia Pacific Innovation Center. Email: dwu6@its.jnj.com, Mobile: +86 139 0194 8775  

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