GSK and Alphabet's Verily create $715M joint venture in bioelectronics

London

GlaxoSmithKline ($GSK) has announced a major new joint venture with Verily--once Google Life Sciences--as the two join forces with the hope of creating the first generation of bioelectronic medicines for chronic diseases.

GSK has been working on this bioelectronic approach since 2012--an approach that aims to disrupt certain electronic signals in the body through tiny implanted devices in the hope of altering the pathways of a number of diseases and conditions.

It’s stumped up around $50 million in VC cash in that time, but today is taking a much larger leap into this burgeoning area where tech meets biology by putting down £540 million ($715 million) over the next 7 years into a JV with Verily, which will focus on building devices that target arthritis, diabetes and asthma.

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Verily, a part of Alphabet ($GOOG) and graduating from its secretive Google X division, has recently become its own unit, with a focus on big data and devices, such as a "smart" contact lens and surgical robots.

The company has already attracted the attention of a number of Big Pharmas, having tie-ups with Sanofi ($SNY) in diabetes and already signing a JV with J&J ($JNJ) to create a company known as Verb Surgical, which aims to make new kinds of robotic surgical systems. It also has a deal with Dexcom ($DXCM) that has seen the two publicly declare their ambition to launch a mini glucose monitor by 2018.

Its latest iteration, called Galvani Bioelectronics (after the Italian 18th century pioneer in the field of bioelectricity Luigi Aloisio Galvani), will be 55% owned by GSK and 45% by Verily. The R&D arms will be split between GSK’s research base in Stevenage, U.K., and Verily’s facilities in South San Francisco--but its official headquarters will be in the U.K.

It will start life with around 30 staffers, including scientists, engineers and doctors, but will seek to grow over the coming years with new funds earmarked for collabs with both parent companies, as well as with academia and other R&D companies.

Kris Famm, GSK’s VP of bioelectronics R&D, has been appointed as president of the new company, while Moncef Slaoui, GSK’s chairman of global vaccines--who was instrumental in establishing GSK’s investments in bioelectronics--will chair its board.

Slaoui said: “Many of the processes of the human body are controlled by electrical signals firing between the nervous system and the body’s organs, which may become distorted in many chronic diseases. Bioelectronic medicine’s vision is to employ the latest advances in biology and technology to interpret this electrical conversation and to correct the irregular patterns found in disease states, using miniaturised devices attached to individual nerves. If successful, this approach offers the potential for a new therapeutic modality alongside traditional medicines and vaccines.

“This agreement with Verily to establish Galvani Bioelectronics signals a crucial step forward in GSK’s bioelectronics journey, bringing together health and tech to realise a shared vision of miniaturised, precision electrical therapies. Together, we can rapidly accelerate the pace of progress in this exciting field, to develop innovative medicines that truly speak the electrical language of the body.”

GSK said it believes that the first generation of bioelectronic medicines could be ready for approval within the next decade. This forms part of a growing interest from GSK in the field, and recently took its plan to the next level as it looks to start trials next year for implantable devices that can help ease autoimmune disorders and metabolic diseases, with Verily now set to help it with the tech know-how needed for this task.

But Verily has been under pressure this year, with reports of an exodus of staff coming as a result of difficulties with its CEO, Andrew Conrad, and his management style. Medical news site STAT reported from internal sources that all is not well within the unit.

Tufts chemistry professor David Walt, while talking to STAT a few months back, had a withering assessment of Verily, saying: “What [Verily is] really good at is physical measurements--things like temperature, pulse rate, activity level. They are not particularly good at … the chemical and the biological stuff.”

With GSK as its partner, Verily will hope to start filling in the perceived gaps (and concerns) in its current business model, and not become, as some analysts have feared, another Theranos. 

- check out the release

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