Google announced one of the company's biggest and most important reorganizations in the whole history of the company just two days ago. Larry Page and Sergey Brin, launched a brand new company called Alphabet, which will serve as an umbrella to the many smaller branches that Google used to have so that the internet giant can focus mainly on improving its own products and overall ad business. The whole idea of Alphabet, is that Alphabet will be able to invest in any company that could be helpful to both Alphabet as a whole and humanity itself. Today, the first hint of what Alphabet will be doing over the next few years has come to light, as a completely new deal has been struck with a healthcare company called Dexcom. Alphabet has a vision to create miniature blood monitoring devices so that people suffering from diabetes or any disease that requires the levels of glucose in the blood to be frequently checked.
Alphabet will now closely collaborate with Dexcom in order to design and manufacture an innovative Continuous Glucose Monitoring (CGM), which although is a type of technology that is already available in the market and used by numerous devices, it could be significantly improved to be a whole lot smaller, which is the main goal of both Alphabet and Dexcom. In order to join Alphabet's forces, Dexcom will have to make an upfront payment of $35 million in its own stock and up to $65 million fo R&D milestone payments in either cash or stock. But this great investment will ultimately pay off for Dexcom as Alphabet will only get between 5 to 9 percent of the product's total revenue.
But the company will not be joining Alphabet per se, instead it will be teaming up with Life Sciences, which is a subsidiary of Alphabet. This means that even if Alphabet itself was the company that signed the deal, Dexcom will be working with Life Sciences, an entity owned by Alphabet thoroughly committed to health care. "We're committed to developing new technologies that will help move health care from reactive to proactive. This collaboration is another step towards expanding monitoring options and making it easier for people with diabetes to proactively manage their health", stated Andrew Conrad, head of Life Sciences at Alphabet. Life Sciences will be a big part of the whole Alphabet family, and this new deal is just the first hint of what's coming in the future.