Serafina: Hi, I’m Serafina and we’re at AngelMD’s Alpha Conference over in Napa, California. I’m joined by JJ Desai, COO of JLABS and the Center for Device Innovation in Houston, Texas. Thank you so much for joining us today.
JJ: It’s a real pleasure. Thanks for having me.
Serafina: I’d like to take a little bit of time to really dig into your background and what brought you into the health innovation field.
JJ: Yeah, thanks. I usually try not to bore people too much with this. I was sort of the struggling physician, which I think a lot people are, really like the microeconomic impact of health, so, one on one patient delivery. But that kind of nagging, well, I want to try to impact more people, so the macroeconomic pool. So, I just started reaching out as a med student trying to figure out how can I get involved with policy or business, or whatever it is. I stumbled onto a tech transfer process which was sort of my first entrée, helped discover a small molecule that looked at some cancer vaccinations and was able to tech transfer that out of the university. That kind of got my interest peaked, but it wasn’t the full drive to leave medicine at that point. I said I still really want to understand the patient journey and be a physician and get that lens. So, kinda, why not? Got involved with biotech looking at a really novel solution of trying to deliver medications without a needle, and that ended up being a successful endeavor, which continued to keep me really engaged, right? It’s like, hitting a couple good golf shots. You want to be a golfer for the rest of your life even though the majority of them won’t be good. As I entered residency, I had the serendipitous occasion of meeting a lifelong mentor, John Simpson, at a coffee shop as he was starting two companies. He said, why don’t you come help? And then I just kept turning up day after day, and that ended up being a ten year run as we took that company through private, public financing global scale.
Serafina: And that company is now known as,
JJ: I finished residency, went on to be faculty in practice, anesthesiologist by training at Stanford. Through that I got really involved with teaching. I helped start some of the teaching curriculum at the Biodesign program at Stanford, and then just showed up to the Texas Medical Center one day to try to get involved, because I really liked what they were doing with that ecosystem, and I knew a couple of the folks putting together a Biodesign program there. I delivered what I thought was a great lecture and then had the chance to sit and eat with a bunch of companies. I had great one on ones, and the last company of the day, 30 minutes into it, a character of all characters, Billy Cohn, walked in. Really nice suit, cowboy boots, and we had this polarizing conversation with this company. He walked me over to this thing that J&J was doing there and said, ‘You’ve really got to be a part of this.’ I said, ‘That’s crazy. Why would I ever want to do something with a big company that’s so slow and doesn’t really do innovation?’ It peaked my interest, and that’s when I dug in, and I now, a year later, am at J&J helping to do all the things you said.
Serafina: In no small capacity you’re the global leader with the JLABS group. So, what exactly does JLABS do?
JJ: JLABS, it actually took me a little bit of diligence myself to understand it. I think a lot of people said, this model of incubation or acceleration, we will invest some money, take some equity, help you out and see where it goes. They kind of did the opposite. They said we have all these resources at J&J, if we just built something and helped people but didn’t cap the upside, so no strings attached. We take no equity, we make no investments. People, when they show up, pay a licensing fee to use the space and get access to all this phenomenal capital equipment, but most importantly, the programming and the mentorship that’s provided, all in non-confidential capacities. JLABS really thrives in that ecosystem. We’ve opened up locations now West coast, Houston, San Francisco, San Diego, Toronto. We’re opening up New York in June, and we just announced Shanghai. We have about 330 companies; therapeutics, med device, health tech, all that come in and essentially say we just want to be around J&J because we know there’s expertise that will probably help us. We think this is a best in class facility. The places are a ton of fun to work in, right? We think we are one of the best places in the cities. We really take the design seriously, and from that we are starting to see the roots of success. We’re just five years in so I think there’s a lot more still to come.
Serafina: And then just in the other room you were giving a talk on JLABS, and you mentioned that the companies are shaping you almost as much as you are shaping them. Speak a little bit more about that.
JJ: I think you’re missing something if you’re not impression, if it’s not a symbiotic relationship, right? Its hard not to be impressed by early entrepreneurs and by people that are just literally living and dying by trying to create unmet needs and best practices for patients. So, every interaction you have, I think, we could put our head down every day and just try to operate the thing, but we take the true sentiment to get to know the companies. I think we call the companies friends. We really know them beyond just being a licensed fee. I think that’s what really drives relationships all the way up to J&J wanting to do confidential work with them. It takes that kind of dedication to the cause, which I think every early entrepreneur can identify with.
Serafina: Got it. You mentioned therapeutics as one of the major interests of these early ventures. What else is on J&J’s innovation radar right now?
JJ: J&J has three core sectors: therapeutics, med devices, and consumer medicine. I think when it started, the first JLABS, per se, or Johnson & Johnson Innovation, which started, and JLABS within that, was tied to our Janssen Research & Development campus in San Diego. Naturally, a lot of therapeutics came out of that. As we evolved and grew into different economies; Houston, Toronto, New York, we got the benefit of the diversification of talent that came along with that. So, now we have a really healthy blend; about 60% therapeutics, 30% med device, 10% consumer, and then health tech that layers over all of that. We’re starting to see an economy of scale of innovation by showing up into what we think are the best pockets of innovation in North America, and now as we think globally.
Serafina: So, as it gets more and more geographically diversified, you’re also noticing a trend where talent is really pouring in from all over the world. Can you speak to one or two of your favorite companies? And I like to say favorite,
JJ: Yeah, they’re all my favorite companies, but I can give you some examples of who might meet with that criteria. We’re really a portfolio without walls, which is becoming more of a ubiquitous theme because when you start in San Francisco or Boston, those are still just such amazing places to be, but they’re dense and they’re expensive. People are naturally filtering out of there and there’s this great capacity to grab a lot of that. I think Houston, as an example for medical devices, is this amazing opportunity where there’s amazing incentives economically to be there, there’s space to grow. Now, with J&J and a lot of other folks alongside the Texas Medical Center really putting money and time down to say we’ll help you, if I’m an investor or early stage innovator, why wouldn’t I be there, right?
Serafina: Yeah, it’s so intuitive.
JJ: It’s almost like such an advantage. I think some of the companies coming across, I spoke a little about in my talk, but they’ve realized that. We have companies coming from Brazil, like Hoobox, that I mentioned, that is a software layered on top of an application that could be consumer based, it could be medical device based, but they can use facial expressions to drive robotics. I think, you know, they come out of a small lab just north of Sao Paulo, we meet them in Sao Paulo, they come to Texas and now all the sudden because of J&J being there they can just enter into all the relationships that we have there and get some key feedback and prototyping done. Therapeutics much the same way. People are trying to solve Alzheimer’s, aging, really big things out there, that if they just have a cadence of interaction with J&J experts in their field who are some of the world experts, leading experts in all of these therapies, and every quarter they check in, or every month, and say, ‘Hey, I think you’re on the right track, maybe consider this,’ that’s like invaluable experience for those types of early startups. Saving that, just even one, two, three months can be instrumental of the financing of those companies.
Serafina: Typically, how long is a companies’ tenure at JLABS?
JJ: Two years. If you want to apply to stay after two years you have to really make a solid case for it, meaning you have to be on the precipice of a milestone that you think we can help. But we always want to leave room for that really early stage. We don’t want people to get too full and fat and comfortable in JLABS and then not be forced to grow out on their own. We want them to just have enough friction that they want to start their own thing.
Serafina: Leave the nest.
JJ: Leave the nest, and always make room for the next crop because that’s why we exist, is to shepherd them through those two or three years that are the hardest.
Serafina: Well, great. That’s been extremely educational. Thank you so much for informing us about JLABS and all the on goings, and congrats on Shanghai. We look forward to tuning int.
JJ: Thanks for having me. Thank you very much.
Serafina: Thank you so much.
JJ: It’s nice to meet you. Thank you.
Serafina: That was JJ Desai, COO of CDI, the Center for Device Innovation, as well as JLABS at the Alpha Conference.
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