Hunting for Tech Ties, a Swiss Drugmaker Goes to Silicon Valley

(Bloomberg) -- Novartis AG is looking to strengthen its ties with tech startups as giants like Apple Inc., Google and Amazon.com Inc. advance rapidly into the health-care field.

The Swiss drugmaker is setting up innovation labs in cities around the world, starting with San Francisco, Chief Digital Officer Bertrand Bodson said in a phone interview. As part of the new project called the Novartis Biome, the company is collaborating with outfits including Mekonos, a developer of cell- and gene-therapy technology, and Medable, a digital health firm. Both are based in the Silicon Valley town of Palo Alto, California.

“Technology, data and science are all starting to come together,” Bodson said. “You see it with the moves from Google, Microsoft and Amazon, and also a lot of startups and entrepreneurs. But health care is not an easy space to crack.”

On one side, drugmakers are pushing to become faster and more efficient as the costs of research rise and pressure increases to produce drugs that make a noticeable difference in people’s lives. The tech titans at the same time see a significant opportunity to develop new tools based on artificial intelligence and mobile technology that give companies a window on patients’ needs and responses to drugs.

Moonshot Projects

Chief Executive Officer Vas Narasimhan is boosting Novartis’s focus on data and new technology, bringing in Bodson, a former Amazon executive, in January. The drugmaker last month contributed to $31 million in funds for StartUp Health, a company that invests in “moonshot” projects, and signed a partnership agreement with Chinese tech giant Tencent Holdings Ltd. Bodson said Novartis is keen to pursue more deals in the digital realm as it expands in China, the world’s second-biggest drug market.

Other drugmakers are following a similar path: GlaxoSmithKline Plc last year tapped Hal Barron, a former executive at Roche Holding AG’s Genentech and Calico, backed by Google parent Alphabet Inc., to lead research. The U.K. company is also scouting research-and-development business opportunities from a new office in San Francisco.

Meanwhile, pharma companies ranging from Roche Holding AG to Pfizer Inc. are turning to apps focused on multiple sclerosis, eye disease and other ailments in a bid to get direct access to patients and huge amounts of valuable data.

Novartis’s Biome has also formed a partnership in New York with Hitlab, a digital health organization, and is working with firms called Veta Health and ConversationHealth on projects in heart failure and cancer, respectively. The project should make it easier for tech players to work with Novartis and get into the complex health-care realm, Bodson said.

“We really wanted to build a bridge,” he said.

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