Russ: I’m Russ Capper and this is The HealthMakers Show, coming to you today from JLABS @ TMC, and I’m very pleased to have as my guest, Dr. Tom Luby, Head of JLABS Texas.  Tom, welcome to the show.

Tom: Russ, great to be here. Thank you very much.

Russ: You bet. So, I suspect a lot of our audience knows about JLABS, some might not. Regardless, give us an overview.

Tom: So, JLABS is Johnson & Johnson’s no strings attached incubator. We have, soon to be, ten locations globally now. Eight of them will be in North America, one in Europe, one in Asia. Companies need to apply to join JLABS and when they come in they are truly an independent company. We look for healthcare companies that represent all three enterprises of J&J; consumer, medical device, pharma; and for us, it’s a great place to get close to companies, develop relationships with them, see what they’re doing, understand whether it’s going to be successful or not, and for those that are and are on strategy for J&J, look to strike partnerships with those companies. So, no strings attached when you come into our community, but really relationship driven and then at the end of the day, hopefully, partnerships come out of it.

Russ: I remember when JLABS @ TMC was announced. It was a huge deal. The whole medical center was talking about it, the whole city was talking about it, and it’s been here now over two years?

Tom: Two years this month; March.

Russ: So, back to the companies, you said companies should apply. Is that the only way they become portfolio companies? You don’t ever recruit them?

Tom: We always like to be engaged with companies from the get go. There are companies we run into and we say, hey, you’d be a great company to join JLABS, and we encourage them to apply. In order to get in, there’s a selection process. Companies need to meet certain criteria. First, they have to be a healthcare company; second, we have to think that they are working on a problem, a real problem in the world with a differentiated solution, JLABS isn’t a place for me too product development; and finally, the team needs to be a team we think can actually progress their potential projects forward, and always looking for great people to be in the space as well. It’s a lot of fun to be in a JLABS and we love to have interesting and fun people engage with us on a daily basis.

Russ: So, describe the portfolio here today, JLABS @ TMC.

Tom: At JLABS @ TMC we have over forty companies, and over fifty if you include the full two-year run. We’ve had a few companies graduate from here. Our portfolio is pretty diverse. We have the highest proportion of medical device companies here at JLABS @ TMC. I think that’s reflective of being next to the world’s largest medical center. We also are strong in oncology therapeutics. Texas, in general, has a very strong focus on that through it’s CPRIT funding mechanism and major oncology institutions like MD Anderson, and a few consumer companies. Health tech is a part of our portfolio that we’re looking to grow, as well. We just announced a new health tech initiative at JLABS and so we work closely with our partners next door at TMCx and their accelerated program. We try and recruit some of those health tech companies here at JLABS @ TMC as well.

Russ: Is that diversity typical of other LABS, too, or is Houston kind of—

Tom: That’s a great question. I think that diversity is reflective of the environment that you’re in. Because we’re close to the world’s largest medical center, with the number of procedures and, essentially, the number of surgeries that take place, there’s a lot of surgical innovation which leads to a significant amount of medical device companies. In San Francisco, I would say their stronger suit is therapeutics. That’s a classic biotech hub and the portfolio of companies that are in that site are reflective of that.

Russ: Do you care the proportion? Is it ok if it was 80% devices here?

Tom: Yeah, I don’t think we really care. I mean, we look for great companies, great teams in those companies. We want to make sure that we do our best to represent the portfolio, but each JLABS doesn’t have to be evenly split amongst consumer, pharma, and device. We would look at the JLABS portfolio as a whole to look for more of that balance.

Russ: Say I’m a company and I qualify, and I’m here. What all do I get? You’ve already touched on this, but I want to know more.

Tom: Three things: one, the infrastructure. So, you’re sitting here in JLABS @ TMC in the front of the house. So, conference rooms, business center, reception, security, all that is included. In the back of the house, behind us is all the wet labs.  So, a little over four million dollars in capital equipment that’s shared. So, you have access to that equipment, essentially on day one. We take care of all your operational concerns. Back there we provide personal protective equipment, we manage your waste streams for you. So, you just come in and on the first day you can get started on focusing on what you’re trying to do in your company and not worrying about the operational piece or buying equipment. So, that’s the first thing and it’s incredibly important to start a company because that lowers the activation energy to get started. You can get started on a very small amount of capital rather than a long-time delay to build a space, equip it, and get moving.

Tom: The other two things that you get when you join JLABS is access to Johnson & Johnson.  So, our JLABS companies have priority access to the insights and feedback from the world’s largest healthcare company, and that’s incredibly important to them. They really ask for that often to get that. And then, finally, we bring experts from around the world to our sites. We invite the community in. So, if you’re a startup you get to engage with internal and external experts from Johnson & Johnson in panel discussions, in podium speech, in networking opportunities, and Houston comes. The people invite the community in. People self-select that are interested in healthcare here in Houston, so you get a great opportunity to meet a potential investor or a potential board member, other people like that.

Russ: Ok, so I assume it would cost. If my company got accepted here I would pay rent of something?

Tom: It’s a monthly fee to be part of the model, yes. And that scales on the number of people that you have.

Russ: And what about part of my company? Do you want part of my company from the get-go?

Tom: No, Russ, at the beginning I said no strings attached and I meant no strings attached. We don’t take any equity, we don’t take any rights to your intellectual property. You come in truly as an independent company with no obligation to work with Johnson & Johnson. Now, we’re going to work hard to try and make you successful, you’re going to appreciate that, and then if you are trending towards success and strategically aligned, we are happy to be the first person that you talk to about a potential partnership. That’s why we’re here.

Russ: You’ve already sort of mentioned the global version of JLABS. Share a little bit more about that. Do you interact with the other ones?

Tom: We do. So, every JLABS has a team that’s dedicated to sites, but the teams interact with each other all the time in different forms. Site heads like myself, we’re in a few different meetings together, we talk about our portfolio all the time. We think about ways we can make introductions amongst the companies and we plan events where we do just that. We had a CEO summit last year, we’ll do it again this year. CEOs of all of our LABS companies are invited to attend. The same is true for our operations managers, our business managers, they all have opportunities to connect with each other, share best practices, talk about ways that they can engage more effectively in their communities or with their companies. And then finally, our marketing end; innovation activation teams are all absolutely engaged in trumpeting the successes of our companies, helping us source and recruit new companies to our sites. So, it is a multi-disciplinary, multi-site, team-based approach.

Russ: Describe a couple of companies here that are in the portfolio here that impress you.

Tom: Well, Russ, they all impress me, so I’ve got to start there. I think that a couple that we’ve talked about recently publicly, one is a company called HOOBOX. They’re from Sao Paulo, Brazil. They are working on facial recognition technology to drive a wheelchair. We see the implacability to be more broadly than that, robotics in general, but if you look at what Paulo and his company are working on, they’re thinking about people with ALS, quadriplegics, and their mobility is part of their freedom to live their lives.  With a camera mounted on the wheelchair in any light condition they can use something as simple as a smile to drive the directionality of the wheelchair. It’s super cool to see and we’re always happy to promote Paulo and the work that HOOBOX is doing.

Russ: How did they find you or you find them?

Tom: We found them through a competition. We ran 100 Open Startups, or we are partnered with 100 Open Startups. In Latin America, we had reviewed many, many companies, and HOOBOX, just based on that technology and how it captured our imagination was the clear winner for us. So, as part of their prize, they won residency here at JLABS @ TMC.

Russ: Tell me about another one.

Tom: Another one that we’ve talked about a number of times recently is a company called ViraCyte. This came out of Baylor College of Medicine. Their approach is to help people that are currently undergoing chemotherapy. When you do that, in many cases, especially stronger chemotherapeutic regimens, you become immunocompromised. You don’t have an immune system, and if you get a chronic viral infection like CMV, it’s life threatening. What ViraCyte has been working on is generating T cells outside the body, off the shelf, that are specific to a viral antigen like CMV. So, if you’re immunocompromised, you have a viral infection, you’d be in this life-threatening condition, you’d get infused with ViraCyte’s T cells and it resolves the virus and allows for you to continue to go on, essentially, symptom free. So, it’s lifesaving technology and one that we think can be an important part of chemotherapeutic regimens in the future.

Russ: Those are both so impressive. I’m wondering, I guess, these things when they become successful, it’s gradual over a long period of time, but it seems like they’re so significant when they make it you should ring a bell or have confetti or something. Have you implemented that here?

Tom: We haven’t rung a bell or had confetti, but we open a lot of champagne here.

Russ: All right, better still. So, I find it to be real interesting, exciting that it’s here in Houston, Texas, for sure. But it seems like it takes some special people to work here and operate it, specifically the Head. What’s your background, how did you end up here?

Tom: You know that career question that they always ask, hey, five years from now where do you picture yourself being? Not here, five years ago, that’s for sure, but I’m very excited to be here. I had grown up in New York and went to undergraduate at The State University of New York (SUNY), and then to Boston to Tufts University to train for my PhD in immunology. And then I jumped into startups and I did three different startups in the Boston area and got to see the world from sell side biotech, and then had an opportunity to move into a bigger company, Shire, now on the buy side, thinking about partnerships as well. And then was recruited to J&J and worked in their, in our innovation center in Boston for three years before I came here. My role in the innovation center allowed me to see the power of the JLABS model, both with our JLABS affiliate, LabCentral, in Boston, and the site that we opened up in Toronto. I had not seen a better model for startup companies to interact with a bigger company. That no strings attached piece is really critical, so when the opportunity to come to Houston and be more engaged here became available, I jumped at it.

Russ: Tom, I really appreciate the time. Thanks a lot.

Tom: Thanks, Russ, I appreciate it as well.

Russ:  You bet. And that wraps up my discussion with Dr. Tom Luby, Head at JLABS, Texas. And this is HealthMakers.