Three years ago, in August 2013, Global Corporate Venturing’s Big Deal analysis said: “GSK electrifies with first deal” referring to UK-based drugs maker GlaxoSmithKline’s $50m bioelectronics fund, Action Potential Venture Capital (APVC).
That deal was for SetPoint Medical, which subsequently raised a $43m series C round last year also including APVC.
APVC’s other portfolio companies listed on its website include Axon Therapies, Cala Health, which closed an $18m round earlier this year, NeuSpera, which raised $8m in May, and an ‘APVC Newco’.
This latter company might refer to Galvani Bioelectronics, although Juan-Pablo Mas, partner at APVC, in a brief email during his family holiday only said: “Yes, we are peripherally connected to this.”
His ultimate boss, Moncef Slaoui, has had a closer connection as he still oversees GSK’s other corporate venture capital unit, SR One, and other venture capital partnerships such as APVC, as well as its bioelectronics R&D strategy, and will retain a relationship with Galvani even after his retirement from GSK next year.
Galvani has just been funded with $715m over seven years by GSK and Verily Life Sciences – known as Google’s Life Sciences unit until last year’s creation of the US-listed search engine’s Alphabet holding company.
GSK will own 55% of Galvani, with Verily taking the remainder. Galvani will develop miniaturised, implantable devices that can modify electrical nerve signals. The aim is to modulate irregular or altered impulses that can occur in illnesses.
Brian Otis, chief technology officer at Verily, in an interview with Fierce Biotech summed up how the two firms will work together to develop Galvani, saying: “The best way to think about what the complementary expertise will look like when it comes to who is doing what is by looking at a couple of the bigger things we need to do at Galvani.
“One is to figure out a better map for what these neural circuits actually are that are flowing through the body, and understanding what the differences are between the healthy state and disease state. There are a couple of different ways that needs to be looked at, i.e., through the anatomy–understanding where in the human body should these therapies go, and what will these signals actually look like.
“And also, what are the signals and the processing needed to actually decode these signals and modify them to restore healthy organ function? GSK is bringing a lot of the expertise in that department.
“On the Verily side, we need to be at the forefront of medical device technology to make these miniaturised devices, and there are a couple of different elements to this. If you think well OK, there is the electronics – and that is true, we need to have very low power, integrated circuitry to do this – but there is also the need for it to be biocompatible in precision nerve interfacing.
“Importantly, that signal processing that we need to understand about the body, we need to be able to execute on that in real time to listen to that data; interpret it; extract knowledge from it; and then feedback the appropriate signals, again all in real time. So getting that signal processing integrated and getting the results are really important, and Verily is working on that as well.”
GSK was the first big pharma company to make a significant investment in bioelectronic medicines, setting up a dedicated R&D unit in 2012 headed by Kristoffer Famm and publishing a paper in the journal Nature the following year, before setting up APVC and a $5m fund for external researchers working in the area of bioelectronic medicines.
Through its GV (formerly Google Ventures) corporate venturing unit run by Bill Maris, Alphabet has been one of the most interested companies in healthcare. Life sciences and services has taken the largest share of GV’s money of any sector since 2014 (36% that year and 31% in 2015) and this year has included large investments, such as leading Quartet’s $40m B round.
But its reach and interest goes further than GV, with Verily and Calico two of Alphabet’s holding companies and former Googler Jeff Huber now CEO of startup Grail, which raised $125m in its series A round in January 2016 from genomics company Illumina and VC firm Arch Venture Partners.
Grail accounted for nearly half of the $263m raised by 24 US-based medical diagnostics and tools startups in the first half of the year, according to research by Silicon Valley Bank (SVB). This was more than all of last year’s $165m raised by 17 companies, a similar pattern to medical device investing, SVB said.
But bioelectronics is still a novel area, attracting interest from a wide range of thinkers, such as quantum physicist Fotini Markopoulou, CEO of startup Doppel.
Galvani’s seven years of funding is to take its first products to the regulators and is an amount and partnership likely to galvanise peers into action.