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, leader for Johnson & Johnson Innovation–JJDC when he replaced Brad Vale in 2015, has done his best to continue the group’s finest traditions.
He said: “We expect that this year we will close on as many investments as last year. One company we invested in [Torax Medical] was acquired by J&J and we made a very significant investment in the [$900m] series B of Grail.”
Although the deal was led by VC firm Arch, J&J made the largest investment in cancer treatment company Grail through an affiliate, Johnson & Johnson UK Treasury. The $900m round in March was just a first close, with further funding expected by institutional investors later that month, the company said, with a regulatory filing indicating $914m in total had been placed by investment bank Goldman Sachs by mid-month.
In his annual statement for 2016, 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: “One way to visualise our impact is to look at the many critical investments we have made, each one representing our commitment to help an emerging business move closer to improving lives.
“This year [2016] included a significant investment in a company that invented a tiny eye implant that drastically improves near-vision. Another went to a company developing novel drugs to treat behavioural problems associated with brain disorders, and yet another is helping finance a potentially revolutionary medical device designed to improve cardiovascular function. And there were many more – each addressing a dire healthcare need.
“Numbers also help tell the story of impact: We closed out 2016 with a portfolio of over $1bn, having completed more than 60 investments in private and public companies. About 35% of our investments were new, versus follow-on. This comprised a total of over $200m of capital deployed. As we continue to create new strategic options for our consumer group, we had five new investments in this sector.”
Heyman added: “Important to note is that since 2015, we had nine onboarding events of companies in which JJDC had an equity investment. For us, onboarding is an important goal because we are strategic investors.”
Heyman has also retained his role since 2008 as CEO of Janssen Pharmaceutical 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 two years since he took over.
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.”
