Johnson & Johnson (NYSE:JNJ) is slowly veering their way into the domain of healthcare technology by setting up innovation centers in California, Boston, London and China. These places were not random choices; they are currently the hub of biotech. Each center will comprise initially of 15-20 employees, whose main job is to look for investment ventures and potential partnerships relevant to drugs, medical devices, diagnostics and consumer health.
The reason why J&J is setting up local centers in order to capture new deals is because the competition among big-shot healthcare companies has become extremely fierce with most of them looking to small biotech firms for collaboration as a "partner of choice". The reason why stakes are higher than ever is because most MNC’s are turning to external science for help so that they can incorporate it into their products. Loss of patent production on existing top-selling products and lack of lucrative discoveries in their own labs have led them to take this step.
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Paul Stoffels, head of global pharmaceuticals says that J&J has set a record for seeking external science for their products as more than 50% of their offerings are a result of outside collaborations. However, the company is now changing the way it associates itself with the outside world by having a steady on-the-ground presence and making the deals a whole lot simpler.
The new centers will plunge into activity in the coming months. The Californian headquarters will be in
Francisco, whereas the Chinese center will probably be in Shanghai. Last month,
J&J sealed a deal with Genmab, thus blending equity investment and product
licensing. If the experimental cancer drug daratumumab shows positive results,
the deal might be valued at $1.1 billion.