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GSK Starts Venture Fund for Nerve-Signal Devices, Medicines

Currency dice (MD4 Group/Flickr)The pharmaceutical company GlaxoSmithKline is starting a venture capital fund to invest in companies making therapeutic devices and medications harnessing the body’s electrical signaling system. The fund, called Action Potential Venture Capital (APVC) Ltd. will have $50 million, with its first investment in a California company developing a device to regulate nerve signals for treating inflammatory disorders.

Action Potential Venture Capital — the name comes from “action potentials,” the mechanism used by nerve cells to transmit signals — will invest in companies developing therapeutics addressing the body’s electrical signaling network. These therapeutics can be miniaturized hardware or pharmaceuticals designed to read these signals and change them as needed to treat diseases arising from interrupted or irregular signaling patterns.

Some of the disorders associated with nerve signaling disruptions are inflammatory bowel disease, rheumatoid arthritis, asthma, chronic obstructive pulmonary disease (COPD), and Type 2 diabetes. The company believes medications targeting the nerve signaling system can treat some diseases that up to now have been untreatable, or address conditions more precisely, with fewer side-effects.

The fund, based in Cambridge, Massachusetts, aims to invest in new start-ups devoted to creating bioelectronic therapeutics and existing companies with programs underway to develop technologies that stimulate or block nerve signals. Investments into companies making technology platforms supporting or enabling these therapeutics will also be considered.

Action Potential Venture Capital’s first investment is in SetPoint Medical in Valencia, California. SetPoint Medical is developing implantable devices that stimulate the vagus nerve as a treatment for inflammatory disorders including rheumatoid arthritis and Crohn’s disease. Kevin Tracey, the company’s co-founder, discovered the anti-inflammatory pathway activated by vagus nerve stimulations.  The amount of the investment was not disclosed.

In April 2013, GlaxoSmithKline started an initiative to explore bioelectronics technologies and medications, including funds for 20 research grants from an open-innovation campaign. The company also sponsored a crowdsourced challenge to identify a specific disorder that can serve as a proof-of-principle test for bioelectronic medications. The deadline for submissions to that challenge was 11 May.

Update: Fortune’s Term Sheet page says today that SetPoint Medical raised $27 million in new venture funding from Covidien Ventures and Boston Scientific, as well as Action Potential Venture Capital, and existing investors Morgenthaler and Foundation Medical Partners.

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Hat tip: FirstWord Pharma

Image: MD4 Group/Flickr

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