Friday, July 18, 2008

IdeaPoint manages the R&D product pitch machine

By Ryan McBride

Every year Johnson & Johnson is inundated with new product ideas from outside research institutions, inventors and would-be inventors. (A J&J executive recalled one such pitch from someone who wanted the health products giant to fund development of tuna-flavored dental floss for cats. The company passed.) 

About five years ago, J&J hired Devine & Pearson, a Quincy communications agency, to create an Internet-based system to field, manage and store the influx of product proposals. With the Web-based application up and running, Devine & Pearson spun out a software startup to market the system to other health care firms in spring 2007. Johnson & Johnson agreed to transfer the technology behind the system for reduced software licensing fees.

The startup, ideaPoint Inc., also in Quincy, has begun to make noise about its Web application recently and is looking to raise between $3 million and $5 million in venture capital, said company CEO Scott Shaunessy, the former vice president of Internet strategies for Devine & Pearson.

“We’ve really proven the model (with J&J),” Shaunessy said, “and we need to build out a sales force and support staff.”

Shaunessy said the firm, which now consists of four employees, has gained New York drug powerhouse Pfizer Inc. as its second major client, and J&J has implemented the startup’s Web application in six of its divisions. He estimated that the innovation software has a global market of $400 million annually from the roughly 2,500 health care companies with $750 million or more in yearly revenue. 

Life sciences firms, as well as corporations in other industries, depend on external research and development to complement internal R&D efforts that fuel their product pipelines, said Dave Bowser, vice president of the corporate office of science and technology at J&J. For example, the research behind J&J’s blockbuster drug Remicade, which generated 2007 revenue of $3.3 billion, was done in a lab at New York University.

Bowser said the ideaPoint software enables J&J, which does not have a stake in ideaPoint, to track the ideas it decides to fund and provide a way to respond to pitches it decides not to pursue — like tuna-flavored dental floss for cats.