Children’s National taps Johnson & Johnson for incubator at Walter Reed

By Sara Gilgore – Staff Reporter, Washington Business Journal

Children’s National Health System has teamed up with Johnson & Johnson’s innovation arm to launch an incubator on its new campus at the former Walter Reed Medical Center.

Johnson & Johnson Innovation LLC will bring its JLabs program to the 12-acre Children’s National Research and Innovation Campus at Walter Reed, the partners were scheduled to announce at an event Tuesday afternoon. The incubator — JLabs at Washington, D.C., which supports entrepreneurs working to commercialize research — will occupy 32,000 square feet in the project’s research and innovation building. It’s now under construction, scheduled to open in the second half of 2020.

“We had this amazing opportunity in front of us to create something really new and something very different that could elevate and accelerate discoveries for children and their needs,” Dr. Kurt Newman, president and CEO of Children’s National, told me in an interview Tuesday. “I felt like we didn’t need to look any further — you just know sometimes. It’s a gut check that this is the right thing.”

Children’s National has always planned to have an accelerator or incubator on the campus, a decision supported by an economic impact study it commissioned from D.C. consulting firm McKinsey & Co. The system “wanted to create a sustainable ecosystem that also in a way created an environment for other companies and entities to take advantage of all of the assets that we saw in the market,” Newman said, “and we wanted the best group or organization that could partner with us to bring those other companies, and that would also share that focus on children.”

For JLabs, the collaboration was attractive because of the organizations’ experience working together (they jointly formed the Safe Kids Worldwide nonprofit), as well as their aligned missions around innovation, the significance of the Walter Reed site, and J&J’s history focusing on babies and children, said Melinda Richter, global head of Johnson & Johnson (NYSE: JNJ) Innovation. “It seemed like an obvious choice for us.”

Richter declined to disclose financial terms of the deal.

The incubator on the Walter Reed campus will serve about 50 companies developing new drugs, medical devices, health technology and precision diagnostics with applications for pediatric patients. Half of the space will include common research areas and shared lab equipment, and the other half will feature individual wet lab, dry lab and office space. The program itself aims to connect entrepreneurs with funding opportunities, third-party services, educational events and mentorship. And as with all JLabs locations (this will be No. 13), the D.C. site won’t take equity or intellectual property and will provide two years of residency.

“We want to make sure this is a place that accelerates innovation to the next inflection point, at which point we want them to graduate and go into their own space and that they’re mature enough to be out there on their own,” Richter said.

The incubator will have an “innovation zone,” a designated space for companies working to advance responses to health security threats, infectious diseases and pandemics. That’s part of a JLabs partnership with the Biomedical Advanced Research and Development Authority, or BARDA — within the U.S. Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response — to speed up the commercialization of new therapies and vaccines in these areas. JLabs is also seeking applications from companies working on innovations in pediatric oncology, pediatric surgical care and influenza, part of a “QuickFire Challenge” to spur development in these areas, with a $150,000 grant as a prize.

For the companies, the incubator could mean working with mentors from J&J and later, potentially, with Children’s National as a clinical partner during advanced pediatric medicine studies.

“One of the beauties of this focus on pediatrics and children’s medicine is that this is an underserved area in medicine and research generally,” Newman said, “so the bet here that JLabs is making, and the investment, and doubling down on this focus really changes things. And people will look at the pediatric market in a different way and they’ll think, ‘Wow, this is legitimate.’”