Johnson & Johnson launched its incubator program in 2012 amid a wave of Big Pharma companies taking a similar approach to sourcing early innovation.
The incubation model was straightforward: Offer lab space and guidance to cutting-edge biotechs so they can get their foot in the door. If all goes well, bring them into the pharma fold.
For the up-and-comers, it’s an opportunity to tap into the expertise and experience of a large company. For the established pharma, the process helps de-risk investments in unproven science.
So far, the strategy has been paying off for J&J and its incubator JLabs. The large pharma has incubated about 1,200 companies since 2012 and over 500 have resulted in collaborations between J&J and its member companies, according to Stacy Feld, a global head of external science innovation at J&J.
“Nearly 60% of active on-strategy portfolio companies currently have executed a deal, or are in active discussions with J&J,” she added.
One of the biotechs in the win column for J&J is Serotiny, a startup that “set out to address one of the biggest challenges in cell and gene therapy … identifying promising therapeutic designs,” Feld said.
Serotiny joined JLabs in 2019 and then struck a research collab with J&J in 2022 to leverage its “tMDP mining and design capabilities” and develop next-gen CAR-based cell therapies with “improved therapeutic function.” After its platform was validated, J&J acquired Serotiny in 2024.
"You’re not dipping your toe into the water, you have to be prepared for a longer swim."
Stacy Feld
Global head, external scientific innovation, J&J
J&J already had a solid presence in cell therapies with its Legend Biotech-partnered CAR-T Carvykti, which was approved in 2022, and the acquisition fit into J&J’s larger goal of building more momentum in the space.
Over time though, JLabs has also tweaked its incubator model to make it more targeted. With the mindset that J&J can source emerging tech from anywhere, the company has begun to focus more on the innovation process and less on “operating incubators,” Feld said.
To that end, JLabs has scaled back its physical reach, closing its New York location this year, following three other North American closures in 2025.
J&J still maintains four regional Innovation Centers — in South San Francisco, Boston, London and Shanghai — while JLABS continues to support companies through physical and virtual incubation.
The company has also evolved its incubation strategy to “focus more intentionally on a select group of early-stage companies,” Feld said. J&J then tailors membership to each company “with support centered on the critical scientific and business milestones relevant to its next stage of development.”
Going forward, J&J’s goal is to increase its “percentage of engagement” with incubated companies, Feld said. To help boost that success rate as it hunts for the best science, J&J has also begun hosting different Shark Tank-like events including the “QuickFire Challenge” that invited applicants to submit their “potentially transformative computational techniques aimed at designing antibody sequences de novo against ‘hard-to-drug’ targets.”
Here’s more on how J&J is evolving its incubator model and what Feld has learned from the partnerships that don’t pan out.
This interview has been edited for brevity and style.
PHARMAVOICE: Tell me a bit about your approach to incubating biotechs right now.
STACY FELD: We take a really strategic approach. We're looking for the most transformational science that matches with our strategic areas and where there's unmet need. Not necessarily within a given geography or within a given deal structure. Great ideas can be sourced from anywhere, and we look to our teams to find it, to nurture the relationship, to understand where the win is, so that we can bring together our scale and our strategic capabilities with what an innovator brings to the table. Sometimes it's partner ready, and we're going to collaborate and license it. Sometimes it's about acquiring a company and bringing it in house.
How well does the incubation model work with a smaller physical footprint?
Let me use our EMEA region [Europe, the Middle East and Africa] as an example. We have been incubating companies virtually in that region for about three years, and we have roughly incubated about 60 companies across 14 different countries, and that has been in the last couple of years without a physical space. That is about sourcing opportunities where companies are looking to engage with a global healthcare leader that has resources to meet the needs of what they're looking for. The entrepreneur gets to stay in their home country, leveraging the regulatory framework, leveraging the ecosystem that they're in versus requiring them to convene in a particular physical location. So we’ve established that we can scale that innovation in more of a virtual approach.
Still, a fairly large percentage of the time, the incubation relationship doesn’t result in any kind of deal. What tends to go wrong in those cases?
These are companies that are really early and the science is risky, and so things might not turn out the way we planned. There are examples where we haven't been able to replicate the science that was established through the relationship. Or sometimes we want to take a collaboration in one direction, and the company isn't aligned.
But because we're in these regions and really close to innovators, we have ongoing conversations and check in with them, and sometimes the conditions are not right … but then they come back and they'll share data or an update, and that’s a catalyst for a renewed relationship.
What lessons have you learned from managing JLabs? What advice would you give to your pharma peers?
Be clear on the strategic objectives for incubating companies, and have a strong value proposition for entrepreneurs. At J&J, we're bringing to bear the global capabilities across R&D, commercial manufacturing, etc.
And these are early stage companies that want you to be in it for the long term. You have to shift and adapt to where the market is, but still take a long term view, just like venture investing.
Before J&J, I was at a small fund, and we had financial LPs and corporate LPs, and corporate LPs wanted to know what the ROI was right away. It's like, well, venture investing and early stage incubation — these are longer term propositions. You're not dipping your toe into the water, you have to be prepared for a longer swim.
