SAN FRANCISCO — Google’s ambitious health startup is teaming up with biotechnology drugmaker AbbVie in a $500 million joint venture that will try to develop new ways to treat cancer and other diseases such as Alzheimer’s.
The alliance announced Wednesday calls for Google Inc. and AbbVie Inc. to each invest $250 million in the project. An additional $1 billion may be poured into the project. The two companies will split all expenses and any profits generated by the venture.
Calico, a company hatched by Google last year, will manage a team of scientists who will work at a research-and-development lab in the San Francisco Bay Area. The precise location and size of the new lab hasn’t been determined.
North Chicago-based AbbVie will oversee the marketing of the drugs. The company already has been working on drugs to fight Parkinson’s disease, Crohn’s and other ailments.
Google set up Calico as a separate business last year to pursue medical breakthroughs that would enable people to live longer. Toward that end, Calico is doing extensive research to get a better understanding about how the human body ages and working on technology that could cure cancer.
Calico is run by Arthur Levinson, a former CEO of biotech pioneer Genentech and a former member of Google’s board. He is also chairman of Apple Inc., which is expected to provide further details to help people manage their health next week when the company unveils its latest iPhone. The expansion into health also could include a new Apple device that could be worn on a person’s wrist.
After U.S. markets closed, AbbVie revised its earnings outlook for the third quarter and full year under generally accepted accounting principles. The company lowered its third-quarter GAAP earnings by 27 cents a share, to between 41 cents and 43 cents a share. AbbVie trimmed its full-year GAAP earnings forecast by 58 cents a share, to between $2.11 and $2.21 a share.
AbbVie confirmed its adjusted earnings forecasts of between 77 cents and 79 cents a share in the third quarter and between $3.06 and $3.16 a share for the full year. All of the company’s earnings forecasts exclude any effects of its pending takeover of Shire Plc. or potential revenue from the U.S. launch of its hepatitis C therapy.
AbbVie shares rose 44 cents to $55.51.
THE ASSOCIATED PRESS