Google's Mystery Biotech Calico Cuts Local Longevity R&D Pact

Google (GOOG)'s Mystery Biotech Calico Cuts Local Longevity R&D Pact
March 25, 2015
By Riley McDermid, Breaking News Sr. Editor

Google Inc.-backed research company Calico Life Sciences LLC is entering into a new partnership with QB3, a University of California institute advancing biotechnology, to study the effects of aging and how to prolong longevity, the two companies said Wednesday.

The new four-year pact sees committed funding from Calico that will support a sponsored research agreement between Calico and multiple QB3 laboratories on specific research programs related to aging, as well as a grant mechanism to support innovation in longevity research led by QB3.

Under the terms of the deal, Calico has the option to obtain exclusive rights to discoveries made under the sponsored research agreement.

"We are all aging and we will all benefit from the discoveries made in this program and the therapies that will result,” said QB3 Director Regis Kelly in a statement. "We are grateful to Calico for recognizing the deep expertise at the University of California that attracts so many scientists of exceptional ability. Tackling aging requires a translational perspective and multidisciplinary approach that QB3 is well-placed to coordinate."

QB3 public/private venture that has 250 scientists at UC San Francisco, UC Berkeley and UC Santa Cruz. It is one of four institutes created in 2000 by former California governor Gray Davis, and has so far launched “hundreds of biotech startups and significant job creation” in the San Francisco Bay Area.

QB3 is also affiliated with Mission Bay Capital, an $11.3 million seed-stage venture capital fund investing in startups in the UC ecosystem.

Calico already grabbed headlines this winter for coming to South San Francisco, with local media reporting that the company has signed a sublease for about half of Rigel Pharmaceuticals 's space just north of Oyster Point Boulevard at 1170 Veterans Blvd.

Calico is a closely watched darling of the Bay Area biotech scene, both because of Google’s undisclosed stake in the anti-aging firm and because its CEO, Art Levinson, used to be chief executive of Genentech and chairman of Apple ’s board.

Calico has also recently been on somewhat of a hiring spree. The lean startup started advertising for six new research positions earlier in December and analysts have said it will likely grow to 100 employees by 2016.

That means all the space in this sublease will come in handy; Rigel has said in regulatory filings that it would splash out $14.4 million this year for the 147,000 square feet of research and office space at the site, a cost it can now how offset by Calico’s contribution.

The terms of the lease having the cost ballooning to $16.15 million by 2017, a not uncommon raise in SSF’s white hot zip codes. The site was originally leased from SoCal company HCP Inc. and expires in January 2018, with renewal options for up to two additional five-year periods.

Calico itself debuted to great fanfare in 2013 as TIME magazine asked if Google was trying to find ways to “cheat death” via the life sciences--and noted that Google had joined the ranks of groups that spend $31 billion spent on biomedical research each year by the National Institutes of Health (NIH).

It has trial candidates currently in the pipeline for the treatment of Parkinson's disease and Lou Gehrig's disease, so hunkering down now in a locked-in lease makes the most sense for its upcoming development.

Google executives have long said that they have enormous faith in Calico, even if its mission seems a bit off its usual beaten path of tech innovation.

“OK … so you’re probably thinking wow! That’s a lot different from what Google does today. And you’re right,” CEO Larry Page wrote on his blog when Calico was announced. “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.”

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