From SXSW to the Texas Biohub: Exploring the Future of Healthcare with Melinda Richter and Stacy Feld from Johnson & Johnson Innovation

[00:00:00] Jason Scharf: BioHealth continues to be a growing portion of SXSW with numerous panels, events, expos, and even a dedicated track. This year, Johnson & Johnson is the lead sponsor of the Health & MedTech track. Why now and how does our evolution as a BioInnovation hub fit into this? What is the future of the company here? [00:00:18] We explore all of this and more with Stacy Feld and Melinda Richter from J&J. Stacy Feld is the Regional Head of Johnson & Johnson Innovation West North America, and is based in South San Francisco. In this role, she leads a team of scientific and business leaders to build, advance, and manage a portfolio of co-investments and collaboration spanning the pharmaceutical, consumer health, and medical device sectors. [00:00:41] Stacy's also responsible for expanding and nurturing the external networks within the innovation community, including academia, venture capital, entrepreneurs, and other governmental and private organizations. Stacy is 25 years at first business experience translating innovative science and technology into transformative commercial solutions for patients and consumers. [00:01:01] As Global head of Johnson & Johnson Innovation JLABS, Melinda Richter fosters the J&J external R&D engine and supports the innovation community by creating capital-efficient commercialization models that give early-stage companies a big company advantage. [00:01:14] By providing infrastructure services, educational programs, and networks, and global hotspots, JLABS is a great place to start a company working in healthcare with a specific emphasis on Johnson & Johnson sectors, consumer, medical device, and pharmaceuticals. Melinda, Stacy, welcome to the Austin Next Podcast. [00:01:32] Melinda Richter: So good to be here. Thank you for having us. [00:01:34] Stacy Feld: Yeah, thank you, Jason. It's great to be here. [00:01:37] Jason Scharf: All right, so SXSW’s coming up, we're about to jump in. Talk to me first about your both personal experiences. Have you been before? How long? What have you guys been up to? [00:01:49] Melinda Richter: Stacy, why don't you start? Cause I think you're the longest-standing annual member of SXSW. [00:01:55] Stacy Feld: Oh, by no means longest-standing, but maybe between us. So coming up here in the next couple weeks, it'll be my 11th SXSW. So by standards of the health and health tech community, that is pretty, pretty significant. But it's by no means, in the thick of when tech companies used to launch itself and create all sorts of buzz. Now it's wonderful to see the community that's been created across health. [00:02:30] Stacy Feld: Actually, I did look in the way back machine of the events that I've attended. So I've been a judge at what used to be the accelerator competition and now is called SXSW Pitch. And just looking at the name of the event and how it's changed is sort of illustrative of how health has evolved at SXSW, so it started out as the Health Technologies Accelerator and then it became the Digital Health and Life Sciences Accelerator. And then for a couple of four years, it was the Health and Wellness, and Health and Wearables Pitch Competition. This year, it's actually called the Food Nutrition and Health Technologies Pitch Competition. [00:03:17] So just a very small of the time that I've spent at SXSW has evolved to really how the technology has evolved. [00:03:27] Melinda Richter: I started going to SXSW when I first started investigating Texas to be a biohub for us, for J&J. And I'll never forget meeting the CEO and COO of Texas Medical Center and they said there's so much going on here, you'll get a capture of everything that illustrates Texas if you go to SXSW. And I said, “Wow. Usually a tech thing, a film, art, music, but that sounds good. I'll go.” And I was so impressed by the cacophony of people and ideas and conversations and technologies and solutions. [00:04:13] And to me, this represented the best fertile ground for the best ideas to become solutions for patients and consumers. So that helped tip me over the edge to say, “Yeah, Texas is the right place for us to be.” And certainly, I learned a lot about Texas and you see it all there in Austin. You see people from every part of the world, from every walk of life who are curious about solving big problems, who are about making the world a better place. [00:04:48] And all of those things are so critical in healthcare. So no question, it has been and continues to evolve to be the right place to be to get the right connections, the right ideas, the right solutions off the ground. [00:05:04] Jason Scharf: We'll get into how J&J is being involved this year, but how has J&J officially been involved in the past? Or has it been just as individual attendees and people going? [00:05:14] Stacy Feld: I think it started out as individual attendees kind of dialing into that cacophony as Melinda said all the different convergence of ideas in health and technology and sort of the convergence tech that some of us call it. [00:05:30] My role as a judge, previous conversations in how hardware was shaping consumer health. Over the last couple of years, we've had a number of data scientists from our Janssen pharmaceutical sector participate in conversations on how AI and machine learning is shaping the future of neuroscience and care delivery in that space. [00:05:56] There have been previous years where we've had, I'm remembering Melinda, you, and I were there a couple years ago with Startup Village really spotlighting the focus that we have on accelerating entrepreneurship and helping companies accelerate their path to market. So it's been kind of plugging in a lot of different parts of the conversation. I think you mentioned we are seeing a bigger role this year. [00:06:27] Melinda Richter: I think what's interesting is I'll never forget one of the first few times that I went to SXSW, we went as individuals. And suddenly we started running into a bunch of people that we knew from J&J at all these different points around the Village, if you will. [00:06:42] And we're like, “What are you doing here?” “What are you doing here?” And we realized that there is so much here that if we put the power of our respective resources and our teams together, we could really come out in a bigger way for the purpose of saying, “Here are the biggest problems in the world that we need to solve for healthcare challenges, and you are the community that can help us solve this.” [00:07:08] So let's come together. Let's talk about what these problems are and let's figure out how we can put the brightest minds together to work on these problems. So that's why you're seeing J&J coming in a much bigger way to SXSW this year. And I'm really excited for what the future holds for this. [00:07:32] I think this is just the beginning. I think now we're gonna be able to take this on so many directions cuz there are so many problems to be solved. And there are so many people who are depending on us coming up with these solutions. [00:07:47] Stacy Feld: Yeah, maybe just to build on that a little bit more, I think the dialogues at SXSW have always, at least in the 10-plus years that I've been going, have been really richly call it user-centric. [00:08:03] Very individualistic and it's really a celebration of entrepreneurship in many ways. And with the rising role of health as part of this rich dialogue, the agenda and the content over the last, say, five years has really expanded significantly to address more of a patient-centric agenda. [00:08:29] And then of course with that, and something that is deeply, deeply important to both Melinda and I as leaders and to J&J as an enter is looking at how entrepreneurship and technology and our communities can come together to address what the pandemic has only put in a spotlight are tremendous and unacceptable disparities in care. [00:08:55] And so it's been really rewarding for us as individuals, but also as a company, to see how this community, not just for the two weeks in Austin when SXSW happens, but really to engage in a dialogue that's sustainable, to address sort of the purpose-driven part of our healthcare system and how we can scale that. [00:09:18] So I think that's another really key driver to why we're coming up or down to Austin and showing up in a bigger way this year around health equity. [00:09:32] Jason Scharf: And how do you see the nature of the conference itself diving into that? And what I mean by that is, especially if you think about life science, like the JP Morgan conference, that is a huge deal-oriented conference. [00:09:44] Everybody goes there to actually get things done, right? And on the other side of the equation, you might have something like a San Diego Comic-Con, which is everybody's getting there to promote, push things out. It's to be heard. When J&J and people like yourselves show up to SXSW, in the hallways, what is the goal for J&J? [00:10:07] Jason Scharf: Is it the hallways? Is it to be on stage and to have the message getting out? What is actually the goal over that two weeks to make it sustainable after the two weeks? [00:10:18] Melinda Richter: That's a really good question. I think it's all of that because that's what SXSW represents. I would say that when I think about the community at SXSW, to me, it's about the conversation. [00:10:32] It's about having a larger understanding of the systemic problems that we need to solve and how are we going to promote that. So as opposed to, here's an app that can help you manage your nutrition, or here's an app that does this one little thing, we talk about what's bigger problems that we have here in this healthcare framework, which is, first of all, how do we navigate the system? [00:11:01] When you're a patient, how do you understand how to navigate the system to get your care taken here of, but also done in a way where there's transparency around information, around billing, around what's covered around access, which is why we have all of these equity issues, whether you are access for black communities, impoverished communities, rural communities. For example, I just read in The New York Times about the staggering shuttering of maternal wards in rural populations when we're having this alarming increase of maternal deaths in United States. [00:11:40] That's a conversation we need to have. And from that conversation, you get a sense of understanding what are the biggest problems and how do we solve them in a bigger structural way rather than a little piece here and a little piece there, and a little piece there? [00:11:55] Because at the end of the day, what we're trying to do is prevent disease from happening in the first place. And it's only if you can really take care of yourself and have that transparency around the system and your own data and how to take care of yourself. Can we really start solving these problems? [00:12:14] And so that's what I love about SXSW. It's about having the conversations, the deep-rooted conversations where you can talk about what the problems are? Why do those problems exist? What are the options to solve these problems and how do we get started? If you think about JP Morgan, you're right. [00:12:30] It's a deal. I have this technology that does this thing. Will you fund me or will you partner with me? And like you said on the Comcast, here's what I have. I think what we've been missing in the healthcare system is that deeper level conversation for deeper understanding to look at systemic technologies and solutions then can help solve the problems. [00:12:55] Stacy Feld: And maybe I'll just add to that cause I agree that it's both about the conversation. I think what I would bring into the thread here is that it's also about innovation. And as leaders from Johnson & Johnson Innovation where we are looking for the most promising science and technology innovations in the world, wherever they may exist in that week can have a moment in Austin. [00:13:24] There's a lot going on in a couple of square blocks in terms of innovation, and so it is, as I said before, such a celebration of entrepreneurship. Such a celebration of, as Melinda said, tough challenges being tackled by the innovators across a really wide variety of stakeholders. And sometimes I come out of sessions thinking that those were pretty strange bedfellows to be speaking on a panel. [00:13:55] And last year, for me, it kind of came to a crescendo where you had an African American woman who was talking about health equity, prominent investor from the technology and health side, and then a health system. To think that a state-funded health system would come to Austin and engage in this conversation. [00:14:21] So I think it's about the innovation. And I think we're constantly a learning organization, and so we need to plug into that conversation to hear how other stakeholders are really driving the health agenda. [00:14:36] Jason Scharf: And when we talk about innovation on this podcast, we try to use the broadest definition possible. [00:14:42] Jason Scharf: We try not to be just purely product or technology driven. And you talked about in the name of the pitch competition, how that's evolved over time. How are you seeing the BioHealth innovation changing at SXSW over the last 10 years, the kinds of things. Has it purely been technology? Are you seeing different, I mean, as we said, we saw over the COVID, like the rise of telehealth, which in many ways it's more business model innovation, a technology innovation. [00:15:10] Jason Scharf: So what have you seen kind of the change in SXSW over that time period and what's showing up here? [00:15:16] Stacy Feld: Yeah, so I did reference the rising role of data science and artificial intelligence, and I think that that's been kind of a rising tide over the last couple of years. [00:15:30] Before that, certainly where technologies come together to enable new business models. So for about five years of the time that I've been coming, I was an investor investing in growth options for J&J's consumer health business. And remember running into Julia Cheek really before EverlyWell raised their kind of significant round and well before they've started scaling and acquiring and rolling up companies. [00:16:02] And so I do think that it's been not only about technologies converging health tech and life science and all the things that we've been talking about, but it's also the convergence of new ideas to drive new business models. And I think in digital health and in consumer health, that's been present as well. [00:16:25] Jason Scharf: So the big news, and part of the reason that this podcast originated is I saw that J&J was sponsoring the Health and MedTech Track, which I found very interesting that okay, now things are changing. Now Austin and SXSW, as a health hub, is now on the map. What changed? What? Why now? Why this year? [00:16:51] Melinda Richter: Maybe I'll take a quick stab at that, and I'll ask Stacy to join in after. You've seen a lot of changes at J&J over the past year. We have a new CEO Joaquin Duato who has really been passionate about embracing technology and understanding how we can better facilitate our solutions through embracing technology across every dimension of how we do business. [00:17:20] So, as you said earlier, it's not just about a product, it's about the way we do business. Whether it's how we do things internally, how do we interact externally, how do we power up our technologies or products so that they can be leveraged like a robot from many miles away in developing countries. [00:17:40] So I think we've gotten to a point where we said, “This is the moment.” This is when we've just to put a place, a mark in the sand and say, “We're a technology company as much as we're a healthcare company. “ And whereas we've always embraced technology, but not to the degree that I think we could have. I think now we're saying this is the moment. [00:18:03] This is the moment. We gotta think about technology across everything that we do, and leveraging data in all kinds of ways. Again, not just about, we all think about patient data, but there's all sorts of data around all sorts of things that if we really mind it and looked at the insights from it, how could we become more effective, more efficient at doing what we do, at providing care, at providing solutions? [00:18:32] So I think you've seen a real watershed moment this last year with our new CEO coming into place. [00:18:39] Jason Scharf: How do you avoid the typical innovator's dilemma where if you're trying these new models and these new things, you're gonna have that standard pull of here's our—you're seeing it right now with like ChatGPT and Google search. [00:18:54] Like we don't want to send out the search, the new Bard because our advertising model's gonna get totally blown up. Right? And you've seen this and it's very rare that a company, especially the size of J&J, they can be nimble to be able to kind of do this. Because what usually ends up happening is either you don't put the things out or they go in service of the very traditional products that you have. So how are you, especially to people who are heavily driven into new innovation, to be able to balance that tension. [00:19:24] Stacy Feld: So I think whether it's ChatGPT or new models of delivering cell therapy, whatever we're talking about, which is new technologies enabling care and enabling solutions for patients, it's really embedded in how Johnson & Johnson and Johnson & Johnson Innovation together start conversations with entrepreneurs and we focus on early, early, um, drivers of what lead entrepreneurs and academics to start companies. And while they may not be ready to plug in on day one, when that conversation happens, we leverage our expertise, our resources. [00:20:13] In a conversation with entrepreneurs to really help shape how they might plug in in the future. So it starts with, I think, the patience of understanding what a tough road entrepreneurs have to scale novel technologies. And the beauty is entrepreneurs are bold and they're courageous. and they need partners like the global healthcare leaders like J&J to help shape the direction of helping entrepreneurs reach their dreams to have their technologies get to market. [00:20:49] So I think it's really a design principle of how Johnson and Johnson Innovation interacts with the external ecosystem to really start these conversations early and to have the patience and to have, dare I say, the generosity of really sharing our expertise and it's one of the things, and Melinda can go to town on this. [00:21:14] It's one of the things that I think JLABS has delivered to our external ecosystem of helping entrepreneurship and specifically life science, innovation, reach its full potential, giving offices state-of-the-art lab equipment. I'll turn it over to Melinda cuz I think it really plugs into how we think about helping and partnering with entrepreneurs in life science and health technology. [00:21:45] Melinda Richter: Yeah. Thank you for that. And I would just say, when you think about a corporation, a corporation is not a big inanimate object. It is a collection of people. And in a big corporation, when you have a collection of people, it's all about us as individuals willing to take the risk on things to create change and say, “Hey, guys. Look over here, we can do this and here's the business case for it and here's how we make it happen.” And that's how we create change at J&J. So, JLABS just didn't happen cuz somebody said, “Let's do JLABS.” It was an entrepreneurial venture inside of J&J to say, “Let's do something that's different. [00:22:24] Let's take this boundary between internal and external and let's make it porous and let's use our big corporate resource infrastructure for good, for early-stage innovators” because they're the ones creating all the new crazy ideas that could transform care, that can really save lives and change lives, and let's say, how can we help them? [00:22:52] How can we give them the power of everything that we have? So we can take down all of those boundaries that usually cause every entrepreneur to fail at some point. Whether it's I can't get access to capital equipment. I can't get access to permitted lab facilities. I can't get access to operational expertise. [00:23:12] I don't know even how to get the right insurance. I don't know how to get a bunch of funding for all this infrastructure I would have to create for myself. So let's do that for you. And then you come in with a big, bold idea, and you pay as you go, like a gym membership. You get access to all of this stuff, and you work on something that's big and bold and you're not gonna risk your entire life savings for it. [00:23:37] And we will give you expertise that only comes from people who have been working in the industry for years and years. You don't see it in textbooks. You get it from the experience of people who've been there and done that. And by doing that, we give these entrepreneurs the best possible chance of getting their solutions to market. [00:23:58] And in turn, we learn a lot. We grow a lot. Our experts in our R&D organization love working with the entrepreneurs. They get to live vicariously through them and share their ideas and their learnings from taking things to market themselves, and so when we have something like that, we really can make the impossible possible. [00:24:22] Stacy Feld: I'm chuckling a little bit because I get about an email a week from internal colleagues who are interested in being this so-called JPAL. This is what we call our mentors that are really tailored and handpicked to partner and serve as a mentor to our JLABS companies. And it really does kind of bring together the expertise and the resources that we have internally with this desire to look outside and to help entrepreneurs drive their ideas forward. [00:24:57] Jason Scharf: This is kind of the perfect segue as we move up a level from South by to Austin and Texas. Melinda, I agree with something that you said earlier. That's something I've been shouting from the rooftops that when you came here, I do think that Texas is the next big biohub, and I know one of the big assets that we have is the Texas Medical Center in Houston, and there is a JLABS there. [00:25:23] Jason Scharf: So I'd love to start off with if you could talk a little bit about what is the JLABS down there. A little bit of the history on it and how you see it being more than just what's in Houston. I know something that, for me personally, that I think that when I think about the Texas triangle, when I think about Austin, San Antonio, Houston, Dallas, the fact that there is that inner connectivity and we can start leaning into the talent, strengths, and capabilities of each piece, it makes a unique opportunity that we have, especially in the biohealth sector. [00:25:59] Melinda Richter: Yeah. Let me start by refining something that you said. I would say Texas is a big biohub. [00:26:09] Jason Scharf: I love it and I agree with it. [00:26:11] Melinda Richter: Yeah. Yeah. And again, when I first met with Bobby Robinson and Bill McEwen, I was blown away by the assets that Houston itself offered. So you have the Texas Medical Center, you have 10 million patients a year coming through the doors. [00:26:33] You have people coming from all over the world to be experts in the hospitals there. So the clinical pro is unparalleled. The research institutions there are amazing. And you had that spirit of we can do this, like go big or go home, right? That's Texas. And that was certainly their vision. And one of the reasons that I was so convinced that this was the right place to be. And then they started taking me on a road show across Houston, not just across Houston, but Dallas, Austin, San Antonio North Texas. And Then they started sharing with me some of the stats around. Texas has I think five of the 10 fastest-growing cities in the United States. [00:27:26] They're the most diverse cities. And that's another thing for when you're doing research and clinical care, you wanna know that you're serving all populations. That everything is based on all populations. And what better place than Texas with the most diverse cities in the world? Well, most diverse cities in the United States. [00:27:48] So for me, that meant this was a place we had to be. We hosted ourselves in the cookie factory of the Texas Medical Center. And again, talk about refurbishing something that was once great and making it great, but in a different way. We created our JLABS there about 30,000 square feet. [00:28:12] We made it so that all types of life science companies could find infrastructure, equipment, services, people that could care for them, whether they're doing, the next therapeutic for oncology patients or whether they're coming up with the next robotic device or whether they're coming up with a new microbiome solution so that we can have better immune systems. [00:28:37] It can serve all of those kinds of companies. And we have served all of those kinds of companies. We have 70 alumni companies. We have about 45 companies in residence today. That place when you go there is bustling with activity and passion, and all of those companies are supporting each other, and those companies are coming from all over Texas, but they're also coming from all over the United States. [00:29:00] We have companies from Oklahoma, from Denver. We have a company from Columbia. We have a company from Austin. Yeah. So they are coming from everywhere because there's so much there. Add on to that. You have Seabrook and there's great focus of the state on oncology care and cures. So yeah, it was a no-brainer to be there. [00:29:27] I’ve actually seen the most amount of promise from companies doing deals and getting financing in the last year, actually, when times were really tough. So 2022 was a good year for Texas. So there's definitely a real cacophony of skills and people and ideas that are all hosted there in Texas. [00:29:50] Stacy Feld: I wanna pull on one thread. I think Melinda really commented accurately on the richness of the academic and clinical community, which is obviously a really core ingredient of any thriving biohub. And we've talked a bit about how entrepreneurship thrives in cities like Austin and in the Texas Triangle. I think one thing that we pay attention to in any of the innovation hubs at J&J is what's fueling that entrepreneurial culture. And some of it is about sitting here in Silicon Valley, some of it is about the ideas that were born out of one or two people in the so-called garage that then become the Facebooks and Googles and the tech giants. [00:30:47] And if you look in Texas, you have some homegrown tech giants like Dell, and then you have significant influx, if that is a fair word or posting, of the Googles, and Amazons, and Samsungs and Facebooks that are continuing to anchor Texas as a place of entrepreneurship and new ideas and really, really anchoring it as a talent hub, which I think is another really important piece of this melting pot of life science and biohub communities. [00:31:28] Melinda Richter: Actually, speaking of big players, one of the biggest players we work with that has seen the potential of innovations to solve really big world problems is BARDA. So we work with BARDA, which is a department within the US Health and Human Services Organization that is focused on pandemic preparedness, actually focused on coming up with 21st-century solutions to biological, radiological, nuclear, chemical attacks, and pandemics and epidemics. So just that. And one of the things that we work on together is this program called Blue Knight, and what we do is we look to find innovations and innovators that can anticipate the next potential threat and that can activate their solutions to go after those threats. [00:32:24] And if those solutions work, then we wanna amplify those solutions around the world. And we've found some amazing solutions right there in Texas. And in fact, one of the key ones that we're really excited about called Jurata Thin Film is coming out of University of Texas in Austin. [00:32:40] Jason Scharf: It's also the first investment by the UT Austin Seed Fund as well. [00:32:47] Melinda Richter: Oh, right. Yeah. It's an exciting technology when you think about—And by the way, started by Dr. Maria Croyle. So a female founder, which I love, but think about the problem. Some of the biggest problems with getting vaccines to the people who need them around the world. Vaccines need to be refrigerated. [00:33:07] You think about it as such a little problem, but it is such a big problem. How do you get these vaccines to developing countries when you don't have a lot of temperature control on supply chains and in delivery locations. And so when Jurata came up with their solution of being able to thermal stabilize their vaccines and be able to administer 'em, not just with IV, but with transdermal applications, talk about revolutionizing what could have happened with COVID and all of their vaccines. We have another company called BioCold from Columbia that's also come to JLABS there in Houston. And what they do is they're able to freeze with this bionanotechnology vaccines to a temperature that you don't need to continually freeze it so it can keep it stable. [00:34:04] Melinda Richter: These kinds of technologies from BARDA’s perspective can help save the world. And so those are the kinds of things when you can find that innovation, especially, there in Houston where we can cultivate it, surround it with amazing people both within the community, from the J&J community, then we can really talk about making an impact to the world. [00:34:27] Jason Scharf: And so how do you start as from the anchor point of JLABS connecting across, so you mentioned BARDA and I know that the Texas Biomedical Research Institute in San Antonio, but just became a—I think it's a BARDA Prime contractor. You have different kind of companies. I mean, you said, you mentioned Everly Health, Wheel, Colossal. [00:34:45] The kinds of companies that are growing in Austin are much more of that convergence tech, a little bit less of the traditional types of things. At the same time, when you see the influx, the venture community does seem to be congregating here, a lot more of of that. And I think of traditional device and pharma that meets much more of Houston's bread and butter, the clinical. [00:35:12] So when you have the very diverse, and I think of that from a diverse sector perspective across the board. But then you have one of the things in Austin we lack is that wet lab and clinical space, we have almost none. Thankfully Alexandria has started to move in, so hopefully they'll start building much more. [00:35:31] So how do you see a capability in an institution like JLABS being able to—while you can't, you're not gonna build a JLABS Austin, the JLABS San Antonio—but being able to stretch across and being part of the broader community while obviously still being based in Houston. [00:35:52] Melinda Richter: I think there's a couple things to it. One is we wanna be part of all of the community. So you'll see our JLABS team either coming to events or hosting events at these different locations because it is all one big community, and it's sharing of ideas and it's sharing of solutions. But it's also this opportunity to say, we can help you get your own incubators started. [00:36:17] There's a lot that we can do that we can share that is supportive of saying this is something that we were able to do, but we're here to help you as well. And so you've seen a proliferation of incubators around the United States and certainly around the world [00:36:35] Jason Scharf: For better or worse. Some are good. Some are you know… [00:36:39] Melinda Richter: And I think it's just a, a matter of time. When you think about Silicon Valley, Silicon Valley was mostly in tech and then was the emergence of biotech. And then together you have the convergence of the two. I think it's just a matter of time for Austin, for San Antonio. There's certainly a lot going on in Dallas, North Dallas. [00:37:00] I think it's a journey. It's evolving and it will continue to evolve. And I think what's important about that is those disciplines need to learn from each other. So it can't be just about CAR-T therapy because CAR-T therapy also requires understanding of delivery. [00:37:22] And how do patients wanna get their care? Do they wanna go somewhere remote to get their care? Do they wanna get their care at home? How can we serve this care at home? How can we innovate around how we deliver healthcare as much as the solution itself? Because think about ourselves as patients. [00:37:38] Who are we? How do we live our lives? What's our challenges? Whether it's kids going to school or older parents you need to support, whatever it is, we need to start thinking about how people live their lives, our lives. And then how do we deliver care? So first of all, they can take care of themselves and not get sick in the first place, if possible. [00:38:00] But then when they do get sick, how do we do it in a way that preserves their life and their dignity and their community's support. So I think that's why this convergence of all of these different disciplines, whether it's the therapeutic side or the device side, or the technology side, or the consumer health side, are important. [00:38:23] Stacy Feld: Coming back to your question about how do we tap into that, certainly JLABS is a platform that does, in the instance that you describe, where there is a gap in wet lab incubators and there is also, I would say, a desire to want to tap into our community and our ecosystem within J&J and understand how large companies work. [00:38:50] I think wrapping around, and in addition to our life science and health technology incubation capabilities that we've scaled through JLABS, we also have the breadth of an offering to entrepreneurs and to academics in flexible ways that we partner and collaborate and have flexibility around funding as well. [00:39:16] SoJ&J has a strategic venture arm. It's celebrating its 50th year this year called JJDC. And so when we think about pulling together what are the resources and the expertise that an entrepreneur needs? We have the flexibility and the breadth of bringing together capital and clinical and regulatory expertise, manufacturing expertise, and the opportunity to really build a partnership to help de-risk some of those technologies. [00:39:54] Particularly, we tend to look more at sort of first, best in class and, and novel transformative things that are really going after tough healthcare challenges. [00:40:04] Jason Scharf: And it's funny, Melissa, you brought up CAR-T and then as you said the changing way that we are all thinking about this. [00:40:13] And it gets me to think about how innovation is changing. And one of the big things we learned out of the pandemic is some of the unsexy pieces. How we deliver, how we—we all realized some of this is like, “Oh wow, this is harder than we thought.” I don't know how true or not this is, but I'd heard this through the grapevine. [00:40:32] For instance, kite farming, because I know they were in like Santa Monica and I was like, that is such a random place for a biotech to be. And what I had heard, again, maybe anecdotal, was why are they there? Oh, because it's near an airport and with CAR-T, you have to ship the sales there. [00:40:49] They gotta do the magic and then ship them back. The logistics of gene therapy is, we're not at that point we can do it in the lab yet. And then what are the things that came out? Resilience came out because we needed to understand doing biomanufacturing when you do shutdowns and can't worry about some of the basics. [00:41:08] And then Houston now BioPortal doing these very basics of tubing in mask manufacturing. So we're seeing these very different ways that we need to be thinking about rather than, can I just make the new great drug or the new great device? The companies that are coming to you, or they are coming into JLABS or that you guys are investing in, are you seeing either them solely beginning to focus on those questions or the ones that are new therapeutics or new devices starting to incorporate that? Or is J&J having to kind of go out and pull that in? [00:41:46] Melinda Richter: Obviously, there's so many little problems to solve as you noted. What usually gets attention is—you're right—is it CAR-T, it's big attention, or a new cardiovascular therapy, or whatever the case is. [00:42:06] The big diseases get all the attention, but it's really about how do we get the care to people, so not just thinking about that. First of all, how do we develop more efficiently, and then how do we get the solutions to the patients in a way that serves how we're gonna live going into the future? [00:42:26] And one of the biggest innovations that we've been looking for over the past few years is through our early-stage R&D group, we call it DPDS, about how do we actually innovate better? How do we do more efficient discovery? How do we think about manufacturing better? And those are not sexy questions or problems to be thinking about, but they're so crucial to actually getting the solutions to patients. [00:42:56] And that's the problem. It's not just about the early stage discovery, but you have to think all the way down the line. And in healthcare that's really tough cuz you're thinking like 10, 12, 15 years down the line. And so that's where the expertise of people in a big company is really helpful. [00:43:12] And that's why circling back to SXSW, having conversations in the hallways where entrepreneurs can ask our R&D experts, what are your biggest problems? What do you need to solve? How could I help solve that problem? Or our folks talking to clinicians. What are the biggest problems you're seeing in delivering the care, and how can we think about solving those problems? [00:43:37] The conversations are so important to uncovering what are the big systemic issues that could unlock so much more potential. And that's why having the community come together in a period of time to say that's all we're gonna do is have conversations during this time and discover and learn, and then from there go to the next phase of how do we make this a reality. [00:44:04] Stacy Feld: Jason, you touched upon something that I just wanna come back to kind of laying out the spectrum of how we work, which is when we're talking to a company about their technology or their solution, and we pull on something that maybe they haven't thought about, but it's based on an internal insight or an internal body of research. [00:44:28] And it's not yet announced. So I won't name names, but we did just enter into a collaboration with a clinical-stage company in a new area of cognitive health where the company was focused on one serious medical condition, and based on the same pathway, we had done some research over the years where we saw that this particular pathway could work in another serious medical condition. [00:45:04] And so the partnership came together to really allow us to maximize the opportunity of this collaboration and of the technology across multiple areas of clinical medicine where the company didn't have that insight, didn't have the resources to be able to do that, and I think that’s where the magic happens, where big companies and small companies can come together to not just collaborate, but to innovate and to really maximize the opportunities that an initial small idea can really become. [00:45:40] Jason Scharf: Stacy, one of the things, you talked initially about this and seeing the trend over South by over the years. Something that I've seen clearly over the last, we'll call it six months with Amazon One Medical, CVS, and their 15 different gigantic acquisitions. The consumerization of health, which I think is a good thing, right? [00:46:01] And a lot of it's changing in the business model. I know J&J has a consumer division, and I think from my perspective, one of the hardest parts about it is what's the right business model, right? When we think about if I have a traditional pharma, if I have a billion-dollar-a-year drug, then the business case to run rigorous evidence-based clinical trials is pretty easy to do, right? [00:46:29] I can spend the money on that. I have a consumer model where I have a little less base. Either a subscription model or something where my interventions are less monetizable, it's harder for me to be actually doing the gold standard. Right. But obviously, all of us talk about we want more early-stage preventative care behavior change. [00:46:53] That makes a lot of sense, right? And at the same time, you also have certain groups that I will say, put out a lot of bad science in the wild west and just kind of say like, oh yeah, just do this and it'll cure cancer. And so you're dealing with that side, and so one of the big things I think is we think about this, and I agree with like Andreessen Horowitz has put out, the company that solves the consumerization of health is a trillion dollar company. [00:47:26] I think that's out there, right? So how do we think and how does J&J think about the consumer market and that evolution as we've seen now some of the big CVS, Amazon really get in and going deep into that? [00:47:41] Stacy Feld: Yeah, so the interesting thing just to come back to the Andreessen Horowitz piece, the interesting thing about how they framed that was the next consumer company is going to be the one that solves the healthcare system. [00:47:55] So it was like even more impactful to think about how the consumerization is gonna solve what we've all been sort of picks and shovels trying to solve. I think that there's a lot that can be said. One very simplistic framework that I think about in the consumerization of health and business models is on the one hand, there's the existing healthcare system and all of the complexities of the CVSs and the strange bedfellows over the last 10 years of getting married with PBMs and so on and so forth. Not to mention, obviously Amazon and its journey to pick up pharmacies and primary care and so on and so forth. [00:48:49] So there's sort of the existing healthcare system and how you innovate to help the plumbing and the infrastructure so that it works better. And then on the other side of the spectrum, there's how you go around that and you solve problems for patients. And some of those patients aren't yet patients. And as to your point, they're trying to solve and prevent disease. [00:49:14] And that's certainly where over the last couple of years, particularly with COVID, the importance of telehealth, which is demonstrating some sustainability, has really helped not necessarily to enable a new business model cuz it was there before, but it has allowed patients and consumers to access care in a new way and both care delivery as well as healthcare solutions, products, and services. [00:49:50] The so-called sort of virtual care space. And so I think that J&J Consumer Health is at its core focused on delivering science-based products that are endorsed by professionals and enabling consumers to take better care of themselves. And through partnerships and through some of the investments that are in the equity portfolio, exploring how those virtual care models and direct-to-consumer models can enable consumers to, one, access those solutions at a more affordable opportunity and to access a greater number of solutions. So obviously, we've talked about health equity and affordability and access, and I think one of the things that there is, is hope about, as telemedicine continues to scale, is that it will allow consumers and patients to access care where they haven't before. [00:51:01] But I feel like that is scratching the surface on what is a really robust topic. And probably one that will be having sort of fiercely at South by, I think South by, as we've said over the last couple of minutes, has been not only a convergence of technologies around innovation but how new business models come together. [00:51:28] Melinda Richter: So that's where I think one of the great privileges of my role is to see technologies all over the world. And one of the things that I saw happen in China. I remember China wasn't known for healthcare technologies. And then overnight, it turned into a health tech powerhouse, and I think it was like 2015, 2016, I was over there and I learned about this solution called We Doctor, which was founded and invested in by Tencent and the government of China. [00:52:07] And it was this whole online healthcare system that had something like 3000 institutions on it, 10,000 doctors, and it was all served from either a small portal in your home or your phone, and you'd go on your phone and say, “I have this problem. What kind of doctors can I go see that are in my area that could solve this kind of problem?” [00:52:32] And you could go on your phone and you could see how much they cost. You could schedule yourself right there. You could do an online, call telemedicine, or if you had to go into a facility, there were these very standardized, very high-tech, small, rural clinical facilities that you could go to, and they were all connected to the larger facilities. [00:52:58] And so you could go through and have your standardized checkup, everything would go into your portal, all your data. You could pay from your phone, but on the back end of it, so it was better patient care on the backend. You could see, we went to their demo facility and you could see population health statistics up on a screen. [00:53:19] So basically on the back end they were saying, “Okay, here are all these hotspots of flu. Here are all these chronic disease areas, et cetera, et cetera.” And then they would plan their healthcare agenda and investment portfolio for the years to come based on all this stuff they were seeing. So not only was it better care, But it was a better way to manage the entire healthcare system, which as we know is very expensive. [00:53:45] And I would put a challenge out to all the people coming to SXSW and certainly in Austin that that next entrepreneur that's coming up with that next system for us here in the United States could come from Austin, could be there in Austin. Cuz we need that here. We have such a fragmented system. [00:54:05] We need that holistic, systemic approach. We haven't corrected here yet, not even close. And if we could do that, imagine how much money we could save and imagine how much better we could direct our investment dollars to solve healthcare problems in the United States. So that's the kind of conversation I'd like to see happening in the hallways at South by. [00:54:27] Jason Scharf: So we always like to ask the same question at the end of every podcast. I'm gonna give it two slight variations. So the question we always like to ask is, what's next, Austin? So that's one. And the second is what's next for J&J in Austin? [00:54:43] Stacy Feld: I will jump in. So obviously, with South By right around the corner, what's next Austin for J&J is to be in town and continue the conversation. [00:54:55] Build on the conversation. We're always looking into building new early relationships with entrepreneurs. We're a learning environment. We're a learning organization just like so many at Austin and it is back to the dialogue. In terms of what's next Austin, it's not a particularly sexy answer, but I think it's really grounded in the ethos of how we find and nurture relationships. [00:55:27] And that's really about continuing to unlock the value of the rich academic and clinical institutions, not just, you know, with UT and Austin, but across the Texas Triangle and to find the synergies and pair our disease area expertise and the resources that we have with entrepreneurs and with academics that are in some ways, still in a publication mindset and to help bring them into more of an innovation launching in the industry mindset, helping them with their proof points—proof of principle, proof of concept—and really helping to either accelerate existing companies or form new companies out of academia. So this is a really rich part of the Texas ecosystem. It's an area that venture investors have put a lot of focus into translating assets out of academia. [00:56:29] And it's an area that J&J continues to really invest in and building long-term relationships. And we have a great home to give these companies in Houston at JLABS and in other JLABS across the globe. [00:56:46] Melinda Richter: Great answer. So what's next for Austin and J&J? Obviously, as we said, there's gonna be an amazing hub SXSW. [00:56:59] Lots of J&J folks from around the company in different disciplines, and so we really wanna have these conversations with everybody. So please reach out, come see us, and certainly, we wanna continue to grow that conversation over time. [00:57:14] What's next for Austin? I'd say what's next for Austin do what China did. Become that next big player for health tech where everybody says, if you wanna know what's going on in health tech, that's really changing patient care. That's changing patients' lives. That's solving equity and access issues. That's really helping us understand on the backend, where are the biggest problems that we need to invest in as a healthcare system, you gotta go to Austin. [00:57:44] So I want Austin to own that space. I want them to say,” China, move over. This is us. We got this.” And we can, right? Because you've got everything you need there in Texas, cuz it's not just about tech or clinical care or research or communities. All of those things together combined with a second diverse population, people coming from all over the world. I'd like to see Austin leading the charge. [00:58:14] Jason Scharf: Love it. Melinda Richter, Stacy Feld, thank you for joining the podcast. [00:58:17] Stacy Feld: Thanks, Jason, hope to see you in the next couple weeks. [00:58:22] Jason Scharf: So what's next? Austin, we're glad you've joined us on this journey. Please subscribe at your favorite podcast catcher. Leave us a review and let your colleagues know about us. This will help us grow the podcast and continue bringing you unique interviews and insights. Thanks again for listening and see you soon.