Merck, J&J Back Stanford Student Incubator as Innovation Farm Team

10/3/13Follow @Tansey_Xconomy

A veteran biotechnology reporter once complained privately that covering the industry was like watching grass grow—companies seemed to inch by slow degrees toward products and profits, sustained by a dwindling stream of funding.

For an antidote to that dreary picture, consider the swift developments at StartX Med, a life sciences accelerator program founded by Stanford University students in 2012. It’s a health care-oriented offshoot of StartX, the original student-initiated incubator program for researchers and others affiliated with Stanford.

The 25 startup companies that have passed through StartX Med’s two accelerator classes over the past year have raised a total of $81 million, and one company, Gauss Surgical, has scored FDA clearance to market a medical device, says StartX Med co-founder Divya Nag.

“Every one of the top 10 pharmaceutical companies is a paying customer of at least one StartX company,” says Nag, 22.

Now, StartX Med has signed up two New Jersey drug giants as its first corporate sponsors: Whitehouse Station, NJ-based Merck (NYSE: MRK) and Johnson & Johnson Innovation, a sort of talent scout unit of New Brunswick, NJ-based Johnson & Johnson. The J&J innovation unit opened an outpost close to Stanford’s medical school in June.

Both drug companies are pitching in financial support for the non-profit campus accelerator—though the amounts have not been disclosed—and are eagerly offering mentorship and feedback to the students, professors, and other entrepreneurs who are launching companies under StartX Med’s guidance.

Dr. Sachin Jain

Dr. Sachin Jain, chief medical innovation officer at Merck

“The opportunity was too good to pass up,” says Dr. Sachin Jain, chief medical innovation officer at Merck. The drug giants stand to gain as well as give.

Jain’s innovation group at Merck is on the hunt for entrepreneurs developing new ways to improve health care or enhance the value of the company’s drugs. That could include digital health technologies to nudge patients to stick with their drug regimens, or to monitor their own symptoms, Jain says. Fledgling companies might also find ways to help doctors make treatment decisions, by tapping into the vast banks of stored medical data.

“This is the next frontier of clinical care,” Jain says. He said he was impressed by Gauss Surgical’s invention, which tracks the amount of blood loss during surgery or childbirth. He says the system could prompt surgeons to administer transfusions.

Merck experts can help young, healthy entrepreneurs understand the complexity of delivering health care to patients who may suffer from multiple disorders, take multiple medications, and face difficult family and social issues that can interfere with treatment, Jain says.

Diego Miralles, who heads J&J’s new California Innovation Center near the Stanford campus, says his unit’s contributions to StartX Med will give the company greater access to Stanford’s entrepreneurial culture, including the students who … Next Page »

Bernadette Tansey is Xconomy's San Francisco Editor. You can reach her at btansey@xconomy.com. Follow @Tansey_Xconomy

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