Hot on the heels of its $805 million development deal with Infinity, AbbVie Pharmaceuticals ($ABBV) has followed up today with a plan to partner with Google's ($GOOG) closely watched biotech upstart Calico on a new research operation that will cost up to $1.5 billion to get started.
Google-backed Calico, helmed by the legendary Art Levinson, and AbbVie are each investing an initial $250 million in a new research facility in the Bay Area that will focus on the discovery and development of new drugs focused on diseases related to aging, with a spotlight on neurodegeneration and cancer. And they say they're each prepared to sink another $500 million into the project, with Calico taking the lead on early-stage work through Phase IIa during the first 10 years. AbbVie will have an option to take projects further. And they'll split development costs.
The deal marks a major leap for AbbVie, as it partners with one of the most intriguing--and least understood--biotech startups in the country. When Google launched the company under Levinson, the giant corporation did little to explain what it wanted to accomplish, aside from tackling diseases associated with aging. And its website does little to clear up the mystery.
One thing is certain, though. Calico is taking the long view with its decade-long startup plans, and AbbVie appears ready to invest heavily for the chance to participate. Hal Barron, who left a senior R&D position at Roche ($RHHBY) to work with Levinson again, is in charge of research at Calico. Levinson is the former CEO at Genentech, which emerged under his leadership as one of the premier cancer drug developers in the world.
Levinson took a seat on Roche's board after the big merger. But now that he's working with AbbVie--after Roche clearly must have decided to take a pass--Levinson handed in his resignation and cut his last ties to Genentech.
While cancer has been a hot R&D field for some years now, neurodegeneration has proved to be a radically different story. Attempts to develop a new drug for Alzheimer's, one of the biggest targets in that field, have been running a 99% failure rate, with some expensive programs failing badly in Phase III. Analysts agree on one thing, though. Any company which can develop an effective therapy for the ailment will be able to cash in the industry's biggest lottery ticket.
"Our relationship with AbbVie is a pivotal event for Calico, whose mission is to develop life-enhancing therapies for people with age-related diseases. 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," said Art Levinson, CEO and founder of Calico, in a statement.
Noted AbbVie CEO Richard Gonzalez: "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."
- here's the release