AbbVie partners with Google to develop new drugs for aging

By Peter Frost, Chicago Tribune:

A startup backed by Google, the Silicon Valley powerhouse whose innovations range from its eponymous search engine to self-driving cars, is teaming up with a North Chicago drug company to develop treatments for diseases tied to aging.

Drugmaker AbbVie and Calico, which is funded by Google but operates independently, said Wednesday that they've formed a partnership to spend up to $1.5 billion to research and bring to market novel drugs and treatments for everything from cancer to Alzheimer's disease.

As part of the deal, AbbVie and Calico each will provide $250 million to launch the venture, which includes establishing a research and development center in the San Francisco Bay area and hiring an unspecified number of researchers. Each could invest up to $500 million more if the collaboration progresses.

“The potential to help improve patients' lives with new therapies is enormous,” AbbVie Chief Executive Richard Gonzalez said in a statement. The collaboration “demonstrates our commitment to exploring new areas of medicine and innovative approaches to drug discovery and development.”

AbbVie, which specializes in bringing drugs from development to consumers, said it was the first pharmaceutical company to partner with Calico.

It will provide scientific and clinical development support and commercial know-how, offering Calico, a year-old startup, a shot of credibility and institutional expertise.

Calico, which stands for California Life Company, was launched as “a long-term bet” on leveraging technology to find answers to “threatening diseases that exact a terrible physical and emotional toll and individuals and families,” Google Chief Executive Larry Page said last year in a blog post.

The startup is led by Arthur Levinson, the former longtime CEO of Genentech, a prominent maker of cancer drugs, and current chairman of Apple.

In a statement on Google's social network, Google Plus, Levinson said the AbbVie pact will “turbocharge” Calico's efforts to bring new therapies to market that “help people stay healthier for longer.”

AbbVie said the collaboration augments its internal research and development efforts, most of which are focused on drugs in the latter stages of development.

AbbVie, whose multiuse drug Humira is the world's top-selling drug, also has treatments for cancer, thyroid disease and heart disease.

The company in July said it would buy Irish drugmaker Shire in a $55 billion deal that would allow it to diversify its drug portfolio and cut its corporate tax bill by moving its legal address to the United Kingdom.

AbbVie, spun off from Abbott Laboratories last year, had drugs in development that include treatments in neuroscience, liver disease, kidney disease, ophthalmology and women's health.

“Strategically, it makes a lot of sense for AbbVie, and optimistically, it's the best way to approach drug development,” said Damien Conover, a pharmaceutical industry analyst for Morningstar, a Chicago-based investment research firm.

He said Calico's focus on cancer and neurodegeneration are two of the three most-important target areas in drug development.

Still, he said, the partnership doesn't immediately catapult Calico into major player status in the pharmaceutical industry.

“The amount of money they're providing initially is not a small amount, but in the scope of drug development, it's on the smaller side,” he said. “I think we're kind of in the early stages of people actually perceiving Google as having a life sciences component.”

Levinson, also a Calico investor, stepped down from Genentech when it was acquired by Roche in 2009. Since he took the helm at Calico last year as its lone employee, he has landed a handful of high-profile hires.

He told media outlets last year that he had been considering a partnership with Switzerland-based Roche, a global health care company that competes in some of the same spaces as AbbVie.

“Our relationship with AbbVie is a pivotal event for Calico, whose mission is to develop life-enhancing therapies for people with age-related diseases,” Levinson said in a statement. “It will greatly accelerate our efforts to understand the science of aging, advance our clinical work, and help bring important new therapies to patients everywhere.”

The partnership's structure is similar to other drug-development deals in which one company — typically a startup or smaller drug-discovery firm like Calico — handles early research and development efforts until a treatment reaches midstage human clinical trials.

From there, the larger biotech firm — AbbVie — has the option to take over late-stage development to bring the treatment through the final clinical trials, through regulatory approval and to the market.

AbbVie, which has a research facility in Redwood City, Calif., said its scientists also will help Calico with early drug development.

Though Google hasn't said how much money it has put into Calico, Page said it is “very small by comparison to our core business.”

But the company's deep pockets and willingness to innovate provide it with cachet among researchers, said Andrew Steen, who leads MetaCyte Business Lab, an incubator and business accelerator funded by the University of Louisville Foundation.

Forming Calico and the subsequent partnership with AbbVie “tells me that they have the capacity and resources to be able to put some money behind some fairly sophisticated people,” Steen said. “It takes a pretty big idea and a pretty big bucket of money to put together a team to target the aging space.”