Alphabet, the parent company of Google, is joining with Sanofi, a french pharmaceutical company, to work on products that aim to help with the treatment of Diabetes. The new company, called Onduo is being formed as a joint venture between Sanofi and Alphabet-owned Verily Life Sciences, and is said to be receiving $500 million in initial investment from the two companies.
The initial focus of the new company will be in developing products to help tackle Type 2 diabetes, which is by far the most common form of the condition. Type 2 is said to affect around 90% of all individuals who develop diabetes. It is a condition which means that the body doesn’t process insulin properly, leading to a drop in blood glucose levels and while it's most commonly associated with middle or old-age, it is now becoming increasingly common in younger age groups as well. Once developed, it requires careful monitoring of exercise, diets and glucose levels, and often can requires drugs to help in treating the disorder.
These monitoring requirements are likely to be where the potential opportunities for Onduo are. Sanofi is already one of the largest producers of drugs for the treatment of diabetes, but is thought to be under pressure from increased competition from other drug producers and increasingly cost-conscious healthcare providers. The development process for new drugs is notoriously long and expensive, and Verily Life Sciences has experience with software development and miniaturized electronics that could enable a much faster development lifecycle for new monitoring products. It isn't unusual to see pharmaceutical and technology companies seeking to combine their expertise with the aim of developing innovative new products. IBM has already partnered with Novo Nordisk and Alphabet itself has already entered into collaborative projects with both GlaxoSmithKline and Johnson & Johnson.
Diabetes is a huge issue with 368 million thought to be suffering from Type 2 diabetes in 2013. A figure which is estimated to rise to 592 million by 2035 and in part due to an aging population in many countries including the US. As a result, it is also a huge market opportunity for a company that is able to bring new and effective products which could help the treatment of those affected. Alphabet and Sanofi will hope that Onduo can do just that.