Google Inc.'s Startup Calico Forges Pact With AbbVie, New R&D Facility In San Francisco

Google Inc.'s Startup Calico Forges Pact With AbbVie, New R&D Facility In San Francisco

September 3, 2014

By Mark Terry, Breaking News Staff

AbbVie and Google Inc.’s startup, Calico, announced a collaboration agreement, which will include an R&D facility in the San Francisco Bay area. AbbVie, headquartered in North Chicago, IL, is a research-based specialty biopharmaceutical company with a major portfolio of drugs in the areas of immunology and virology. The company’s best-known product is Humira, a treatment for rheumatoid arthritis, which creates about $13 billion a year annually. Calico (California Life Sciences LLC) was founded by Google with an R&D focus on controlling lifespan and developing new drugs and therapies for age-related illnesses, including neurodegeneration and cancer.

As part of the collaboration, Calico will establish an R&D facility that focuses on drug discovery and early drug development. AbbVie will work on scientific and clinical development support as well as commercialization expertise and infrastructure. Both companies will each pony up $250 million initially, with both companies possibly tossing an additional $500 million into the collaboration. During the first five years, Calico will handle R&D and advance projects through phase 2a for a ten-year period. AbbVie will support early R&D, and after completion of phase 2a studies, will have the opportunity to manage late-stage development and commercialization. Both companies will split costs and profits equally.

Founded by Google, Calico is led by Arthur D. Levinson, PhD, former chair and CEO of Genentech and Hal V. Barron, MD, former EVP and Chief Medical Officer of Genentech.

“This collaboration demonstrates our commitment to exploring new areas of medicine and innovative approaches to drug discovery and development that augments our already robust pipeline,” said Richard A. Gonzalez, Chair and CEO of AbbVie in a press release. “We are pleased to be working with such outstanding scientists as Art Levinson, Hal Barron and their team. The potential to help improve patients’ lives with new therapies is enormous.”

Calico also announced it will begin hiring for critical positions and rounding out its scientific and research team in the San Francisco Bay area. Not a lot is known about Calico’s business model or approach to R&D. Not long after the company was founded, Google CEO Larry Page posted on Google-plus an explanation of the company that included, “But as we explained in our first letter to shareholders, there’s tremendous potential for technology more generally to improve people’s lives. So don’t be surprised if we invest in projects that seem strange or speculative compared with our existing Internet businesses. And please remember that new investments like this are very small by comparison to our core business.”

This new collaboration could total a combined $1.5 billion dollars in investments from Calico and AbbVie. In 2013, Google reported $55.5 billion in revenue. The company also has ties to Apple, with Arthur Levinson remaining as non-executive Chairman of the Board of the tech company, as well as a founding investor.

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