Pharmaceutical Innovation: Incubators and Collaboration

Pharmaceutical innovation doesn’t just happen because a lot of money is thrown at it or the company has been restructured. It requires a setting that promotes new research and collaboration amongst brilliant scientists. Incubators support entrepreneurs by providing support resources and close working space with similar minded individuals, a concept which has taken off for tech companies in Silicon Valley. The idea is being embraced by Pharma, as we briefly discussed as an alternative way of pharmaceutical innovation to mergers and acquisitions.

San Diego has recently become a hub for pharma incubators. Johnson & Johnson started Janssen Labs,¹ Merck established the California Institute for Biomedical Research,² and Pfizer initiated The Pfizer Incubator.³ Each company is investing millions in each group hoping to help researchers progress beyond the “Valley of Death” and gain access to early stage pharmaceutical innovations.

Although the end goal of the incubators is similar, each company takes a slightly different approach to their incubators:

Pfizer - $10 million/year investment and a research campus featuring Pfizer experts and amenities. Pfizer has also invested $100 million towards research with The Scripps Research Institute. Pfizer can acquire exclusive rights, but provides third party valuation, milestones, and royalties to researchers.³

Janssen - hosts workspace for small drug and medical device companies, who will pay rent but gain access to labs and equipment. Janssen “does not take an equity stake in the companies occupying Janssen Labs and the companies are free to develop products - either on their own, or by initiating a separate external partnership with JRD.”⁴

Merck - $90 million non-profit institute, the California Institute for Biomedical Research (Calibr), with up to 150 staff doing early drug research in immunology, cardiovascular disease, regenerative medicine, cancer, and other diseases. “Merck has an option to obtain an exclusive commercial license to any proteins or small molecule therapeutic candidates derived from work conducted by Calibr.”⁵

We are excited to see such risk-taking from the pharmas and to see the results of it in a few years. Scientist’s own community laboratory is getting ready to start up in Carlsbad, so we are excited to join the pharmas in trying to promote research innovation. With such diverse approaches to incubators, we will see what generates pharmaceutical innovation - and what doesn’t.