Although US-based healthcare company Johnson & Johnson (J&J) had been making venture investments since the 1960s, the creation of Johnson & Johnson Development Corporation (JJDC) in 1973 and its unbroken history of taking minority equity stakes in third-party entrepreneurs marks it as one of the oldest and most consistent investors – perhaps surpassed only by mutual fund manager Fidelity.
Tom Heyman, a new leader for JJDC when he replaced Brad Vale last year, managing more than $1bn and having completed more than 50 equity investments in private and public companies last year could feel he has a full-time job.
But Heyman also retained his role since 2008 as CEO of Janssen Pharmaceutica in Belgium, responsible for its Beerse campus, which is one of eight research centres in Europe spending an aggregate €1.5bn-plus ($1.7bn) in research and development each year.
He was also responsible for acquiring companies for J&J, including Tibotec, Centocor, Cougar Pharmaceuticals, Aragon Pharmaceuticals, Covagen and Alios Biopharma, and “hundreds of transactions for both early and late-stage pharmaceutical products and technologies”, according to his J&J profile. So after 25 years in business development, adding corporate venturing leadership might seem almost straightforward even in what was a record year.
In his annual statement, Heyman recognised the hard work of his team and the experience gained from working with other innovation units over more than 40 years. He said: “We credit our success in 2015 to our tactical alignment and collaboration with Johnson & Johnson Innovation, as well as Johnson & Johnson’s business development teams and R&D organisations. We have seen time and again that by close collaboration, we can accurately identify market opportunities that drive growth for Johnson & Johnson. Thank you for a spectacular year.”
And this collaboration for JJDC extends beyond J&J. News provider MedCity News and law firm Lake Whillans through a survey found JJDC to be the fund that “life sciences innovators most trusted, would most likely work with again and delivered the most positive experience”.
Heyman said “success is also very much about the quality of our investments” rather than just their number. He added: “JJDC seeks to identify companies that not only provide favourable financial returns, but also support the strategic growth of Johnson & Johnson through licensing partnerships, R&D collaborations or acquisitions – activities known as on-boardings. In 2015 we had three successful on-boardings of portfolio companies – one each for our pharma, medical device and consumer portfolios.”
One such notable deal was JJDC making a $225m equity investment in Achillion Pharmaceuticals, in conjunction with a worldwide hepatitis C collaboration between Janssen Pharmaceuticals and Achillion.
JJDC also subscribed to new shares of Alligator Biosciences in conjunction with a worldwide licence agreement between Janssen Biotech and Alligator around ADC-1013, an immuno-oncology agent.
But beyond its pharma and medical device core, Heyman said its JJDC deals had been “aggressively trying to create new strategic options for our consumer group, and we had three new investments in this sector by year end [including leading a $24m series C round in First Aid Shot Therapy].
“Our overall private portfolio of venture investments is comprised of approximately 70% medical device companies. About 40% of our investments were new (versus follow-on), up about a third over 2014. This comprised a total of more than double the amount of capital invested in 2014.”
JJDC also made a $15m commitment to Vivo Capital Fund VIII targeting medical devices in the Asia Pacific region.
Born in the Congo, Africa, and graduating with a master of law from the KU Leuven in Belgium, Heyman started out hoping to have a “real impact” on his country through foreign policy.
In a 2013 interview with PharmaBoardroom, Heyman said: “I am a lawyer by training. My dream was to enter the diplomatic service of Belgium but I quickly came to the conclusion that Belgium is too small a country to have a real impact on foreign policy. I therefore started to get more and more interested in international law and economics.”
His decisions at both Janssen and JJDC will probably already be affecting more than the 11 million population of Belgium. His career choice seems to have been a positive decision.
Johnson & Johnson’s investment activity since the beginning of 2015
