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Bloomberg
GlaxoSmithKline Plc, the UK’s biggest drugmaker, is forming a joint venture with Google parent Alphabet Inc.’s life-sciences business to explore using electrical signals to treat diseases.
Glaxo will hold a 55 percent stake in the venture, called Galvani Bioelectronics, and Alphabet’s Verily Life Sciences LLC will hold 45 percent, according to a statement on Monday. The companies will invest up to 540 million pounds ($715 million) over seven years if the research and development efforts meet certain goals.
Glaxo is seeking new sources of revenue growth as its blockbuster respiratory treatment Advair faces the threat of competition from generics in the U.S. Bioelectronic medicine is a new field that aims to tackle chronic diseases using miniature, implanted devices that modify electrical signals that pass along nerves in the body. Glaxo’s researchers are betting conditions like arthritis, diabetes and asthma could be treated using these devices, and the first such medicine may be ready within a decade.
Verily aims to develop software and hardware for the health-care field. It is one of Alphabet Inc.’s most important new ventures, residing in the tech giant’s Other Bets division alongside smart-home device maker Nest and fast internet service provider Fiber. In the second quarter, Other Bets generated $185 million in revenue and Alphabet Chief Financial Officer Ruth Porat said that mostly came from Nest, Fiber and Verily, in that order.
Shares of Glaxo rose 0.7 percent to 1,699 pence at 9:35 a.m. in London trading. They have climbed 23 percent this year. Verily has worked extensively with traditional pharmaceutical companies on projects such as developing smart contact lenses that can measure glucose with Novartis AG and helping Biogen Inc. study the progression of multiple sclerosis with sensors and data analysis tools. In December, it funded a robotic surgery company with Johnson & Johnson.
INITIAL TARGETS
Verily will bring to the joint venture with Glaxo its expertise in the miniaturization of low power electronics and device and software development. Initial work will center around inflammatory, metabolic and endocrine disorders, including type 2 diabetes.
Kris Famm, Glaxo’s vice president of bioelectronics R&D, was appointed president of the Galvani joint venture. The companies are also setting up a seven-member board, led by vaccines chairman Moncef Slaoui and including Verily Chief Executive Officer Andrew Conrad.
Since 2012, Glaxo has had a dedicated team led by Famm researching bioelectronic medicines, and invested $50 million in a related venture capital fund. The idea is to create implants the size of a grain of rice, or smaller, that can be bolted onto nerves to treat diseases, augmenting or replacing drugs. With internal batteries to send tiny electric pulses, the implants could alter nerve signals to loosen up airways in asthma sufferers, for example, or reduce inflammation in the gut from Crohn’sdisease.
The company anticipates having the first bioelectronic treatment ready for regulatory approval within the next ten years.