Celebrating

Years

JJDC 2018 Newsletter

this year across pharmaceutical, medical device and consumer health sectors. Our investments represent a flexibility and openness to new ideas and business models and, through our resulting portfolio, we gain visibility to some of the most innovative solutions poised to positively impact a diverse healthcare ecosystem.

As we close 2018, I applaud the entire JJDC team and our growing family of portfolio companies as they produce truly transformative solutions. Let’s keep making history together in the year ahead. Patients are counting on us. And I have no question we will deliver.

Cheers to All,

Tom HeymanPresident and Chair, JJDC

This year marks an important milestone for JJDC as we celebrate our 45th anniversary as strategic investors for the Johnson & Johnson Family of Companies. Today, most major companies embrace corporate venture investment as a means to fuel innovation. However, 45 years ago, this was not the case. When Johnson & Johnson launched JJDC in 1973, we became the first dedicated corporate venture arm in healthcare — and among the first of any industry. JJDC set the stage for this increasingly vital source of funding to help advance innovation.

It’s been a humbling journey to say the least and an incredibly uplifting experience to be able to support and nurture potentially transformative companies and products that may go on to make important differences in the lives of patients and consumers. I encourage us all to take a step back to remember why we’re here and why it matters. Amidst even our busiest days, we must never lose sight of the contributions by the global entrepreneurial community which is bolstered by venture investing.

In fact, this year brought its share of record setting in venture capital healthcare investing, with unprecedented investment in biotech companies and the most funding ever for digital health startups. I am personally excited to share with you in this newsletter a snapshot of just some of the strategic investments JJDC made

Celebrating 45 Years as Strategic Healthcare Investors

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JJDC By The Numbers in 2018

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and start-up CEO of both Epizyme (NASDAQ: EPZM) and Mitobridge (acquired by Astellas Pharma), and was managing director of MPM Capital, an early-stage life science venture firm.

With headquarters in Cambridge, Mass. — a mere two blocks from the Boston Innovation Center — 28-7 Therapeutics will now be able to benefit from the knowledge of J&J Innovation’s team. And J&J Innovation, meanwhile, will be able to plug into the world-class healthcare innovation that’s happening in its own neighborhood.

“We need to respect and trust the teams and what they are doing, and they need to believe that we are value-add investors. That is exactly what we have with 28-7. It’s a team we believe can make it happen.

When Johnson & Johnson Innovation was presented with the opportunity to invest in the stealth startup Twenty-eight Seven (28-7) Therapeutics, it wasn’t just the company’s remarkable science that invited a closer look. It was the strength of its team.

In September, Johnson & Johnson Innovation – JJDC (JJDC) participated in 28-7’s Series A financing, a $65 million round from multiple investors that will help advance the company’s lead program into cancer indications. Along with JJDC’s investment, Johnson & Johnson now has a seat on 28-7’s board of directors.

The company’s core technology stems from the breakthrough RNA research of its four founding scientists, who all happen to hail from Harvard: Drs. George Daley, Richard Gregory, Frank Slack and Piotr Sliz. The team discovered the Let-7 microRNA pathway plays a key role in cancer growth when its activity is hindered by the Lin28 protein. The company’s lead drug program will seek to block the activity of Lin28 so that Let-7 can do its job suppressing cancer.

“The approach is creative and attractive since it leverages standard small molecule protein-targeting technology,” says Marian Nakada, Ph.D., vice president of venture investments, who led the investment from JJDC. “The pathway has been validated by genetics, and now they’re taking a very novel approach to drugging the pathway to develop a cancer treatment.” The company is led by serial entrepreneur Kazumi Shiosaki, Ph.D., who has earned a reputation for creating successful business ventures. She was the founder

“Not only is a brilliant woman leading this company as president and CEO, but women hold more than half of its board seats,” Nakada said.

“Being successful in this intense innovation environment is all about relationships,” Nakada said, speaking to one of JJDC’s guiding principles.

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JJDC ‘Plugs in Early’ to Cancer Innovation with 28-7 Therapeutics

JJDC Feature Stories

Many former smokers say that quitting was one of the hardest things they’ve ever done. Challenges are stacked against them, from severe nicotine withdrawal to social triggers. That’s why the majority of smokers are unable to extinguish their habit — and why smoking remains the leading cause of preventable illness and death worldwide, accounting for nearly 6 million lives lost each year.

This fall, Johnson & Johnson Innovation - JJDC, Inc., led a $25 million investment round in the emerging digital health start-up Carrot Inc. Based in Redwood City, California, Carrot is on a mission to save millions of lives by delivering a tech-enabled smoking cessation program that can scale to the 40 million people in the U.S. — and 1 billion globally — who smoke.

“Clinical and behavioral science tell us that to successfully quit and abstain from smoking, consumers need many avenues of support, whether it’s coaching, support through their social network or personalized recommendations. There is no single silver bullet,” said Stacy Feld, Vice President of Consumer Venture Investments and External Innovation at JJDC.

Carrot’s program, called Pivot, includes an FDA-cleared carbon monoxide breath sensor, an engaging smartphone app, personalized in-app coaching, pharmacotherapy, and a social community to deliver proven quit methods. Notably, Feld said, the program is designed to help not only those smokers who are trying to quit, but also those who haven’t yet made the quit decision.

“One of Carrot’s key differentiators from the other cessation apps and programs is their mobile breath sensor. The sensor measures carbon monoxide in exhaled breath to help smokers visualize how their smoking affects their lung health,” she said. “The breath sensor and the app work together to inform and engage individuals about their smoking behaviors and lung exposure and to empower them to develop the intrinsic motivation to quit.”

In addition to breath samples, smokers log their cigarettes into the Pivot app, which displays a range of metrics, including time and money spent on smoking. The personal dashboard helps participants see changes to their smoking behavior in realtime.

JJDC’s investment came after years of communication with the leaders of Carrot, starting when the company was in its formative stages.

Feld gives credit to Carrot’s founder and CEO David S. Utley, M.D., for keeping Johnson & Johnson Innovation California team informed of the company’s key milestones, such as its 510k FDA medical device approval, the evolution of its business model and the expansion of its board and scientific advisors to include some of the nation’s leading behavioral scientists and tobacco-cessation experts.

“Deals like this don’t just happen overnight,” Feld said. “Persistence and relationship-building are so critically important.”

“With Carrot, we saw a clear alignment with J&J around purpose and mission, especially with our cross-sector Lung Cancer Initiative and our Nicorette smoking cessation franchise.”

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JJDC’s Latest Consumer Investment in Carrot Advances a Novel Digital Solution to Help Smokers Quit

Seeing the transformational promise that 3D printing technology holds for healthcare, Johnson & Johnson Innovation – JJDC, Inc. made a significant investment in Carbon, a leading Silicon Valley company that’s already disrupting the manufacturing industry.

In early 2018, JJDC participated with other investors to raise $200 million in Series D funding for Carbon, a company that has developed Digital Light Synthesis, a novel liquid-based approach to digital fabrication that is unlike conventional 3D printing approaches, which predominantly use layer-by-layer printing methods that can be inconsistent and difficult to scale.

The strategic investment builds on a two-year collaboration between Carbon and Johnson & Johnson to leverage Carbon’s Digital Light Synthesis technology for surgical instruments, orthopedics and other medical devices.

Based out of the California Innovation Center, Ryan supports investments in medical device and healthtech companies. Carbon popped onto the California Innovation Center’s radar in 2015.

As Ryan explains it, JJDC’s relationship with Carbon grew out of J&J’s 3D Printing Center of Excellence program, which leverages J&J’s breadth and scale to

accelerate 3D printing innovations along the design and manufacturing continuum. Carbon was among the inaugural members of the center’s network of partners.

After working on a handful of projects together, Ryan and her team were quick to recognize the power of Carbon’s speedy and precise technology. Though Carbon had worked successfully with consumer companies such as Vitamix and Adidas, Ryan saw immense potential for personalized healthcare solutions, including implantable devices and surgical tools. Investment became an obvious choice.

The additional capital is helping Carbon fast-track its global expansion plans and double down on its commitment to moving customers to real-world, mass digital production at scale.

As part of JJDC’s investment, it also gained a board observer seat and exclusive rights to use Carbon’s technology for a number of high-demand surgical applications. In addition, J&J will have the first right of negotiation to applications in certain specific healthcare fields.

“With Carbon’s technology, it’s possible to create all sorts of structures that are otherwise extremely difficult to engineer,” says Renee Ryan, Vice President of Investments JJDC.

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J&J Med Device Gains Innovation Advantage with JJDC Investment in Carbon, Inc.

closed a $35 million Series B financing led by JJDC to accelerate product development, invest in strategic research and development, and advance the future of sleep technology.

closed a $3 million financing led by JJDC to help accelerate development and broaden clinical trials for its smart, robotic external fixation system for orthopaedic treatments.

completed a $30 million Series C financing with participation from JJDC to further advance the company’s efforts around its deep learning image analytics platform for the medical industry.

JJDC Featured Transactions

launched with a $31 million Series A financing with participation from JJDC to support the company’s development of a new class of neuroprotective therapies.

closed a $54.5 million Series A financing with participation from JJDC to enable the company to advance its therapeutic programs targeting a novel mechanism for the treatment of neurodegenerative diseases.

closed a $7.8 million Series A financing led by JJDC to help the company develop novel combination products to treat chronic peri-prosthetic joint infections.

launched following a €17 million Series A financing from an investor syndicate that includes JJDC to help fund the clinical development of the company’s first-in-class small molecule compound licensed from UCB.

was acquired by DePuy Synthes after an initial JJDC investment. The company is focused on building a next-generation robotic-assisted orthopaedic surgery solution that is cost-effective, time-efficient, and user-friendly in a variety of care settings.

raised over $12 million Series C financing to conduct clinical trials of its eye imaging system for Alzheimer’s Disease using retinal autofluorescence to detect amyloid beta plaques in the eye.

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