Nanalyze

There Won’t be a Calico IPO

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It’s coming up on a year since we first wrote about Google’s anti-aging startup called Calico. Last year, Google announced their intentions to invest up to $750 million into Calico, a company looking to solve one of the most common afflictions known to man; that of aging. At the time of our first article, Calico was operating in stealth mode and had published just one press release about their 10-year R&D collaboration with AbbVie (NYSE:ABBV). Since then, 6 more press releases have been issued with updates about who Calico is is choosing to work with in their quest to fight aging. Google’s recent announcement that they plan to create a holding company called Alphabet bodes well for Calico since now the Company can operate as its own vertical. We’d also hope to see some breakdowns in Alphabet’s financials which provide some transparency into what sort of money is being invested into Calico. Since our last article, it looks like Calico is moving quickly to establish relationships with leaders in the field of anti-aging research.

The University of Texas Southwestern is working on P7C3 compounds which they licensed to 2M Companies, a life sciences investment firm. These compounds will be used to combat nerve cell death. A new license agreement was put in place last year where Calico will be responsible for developing and commercializing these compounds.

In March of this year, Calico announced three additional partnerships. One was with the Broad Institute of MIT to support research efforts at Broad to help understand aging. The second was a 4-year partnership with QB3, a University of California research institution. Calico will fund research projects focused on aging and has the option to obtain exclusive rights for any discoveries made under the sponsored research agreement. The third was an agreement with UC San Francisco for Calico to receive an exclusive license to certain technology discoveries associated with cognitive decline in the aged. This involved an undisclosed up-front fee with potential milestone and royalty payments.

In April of this year, Calico entered into an agreement with the Buck Institute for Research on Aging. With 21 laboratories, Buck is the world’s foremost independent research organization devoted to the study of aging and takes in $6 million a year from their trust fund alone. Buck researcher made the news a few years ago when they used genetic mutations to extend the lifespan of earthworms to 400 – 500 human years. Financial terms of the agreement were not disclosed.

Lastly, in July of this year Calico announced that they will partner with AncestryDNA to evaluate over one million anonymous DNA samples in an attempt to better understand the effects of genetics on aging. It’s interesting that Calico chose AncestryDNA over 23andMe. Financial terms were not disclosed.

Given the new structure of Alphabet, it’s hard to see how Calico could ever IPO. They have all the cash they will ever need with Google sitting on over $69 billion as of their last filing. If you developed a cure for aging, would you sell that at any price? There is no reason for Calico to IPO unless Google decides they want to exit perhaps one of their most ambitious endeavors. Even if Google wanted to exit Calico, they could very easily sell the Company via a private transaction. In the absence of an IPO, the only other way to get exposure to Calico is to buy Google stock, since soon those shares will be converted to shares of Alphabet.

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