Sanofi, Google parent form $500 million diabetes joint venture

PARIS (Reuters) - French drugmaker Sanofi (SASY.PA) and Verily, the life sciences unit of Google parent Alphabet Inc(GOOGL.O), on Monday said they would invest about $500 million in a joint venture combining devices with services to improve diabetes care, an example of growing ties between the pharma and tech sectors.

Sanofi said last year it was working on a partnership with Google in diabetes.

"The company will leverage Verily's experience in miniaturised electronics, analytics, and consumer software development, with Sanofi's clinical expertise and experience in bringing innovative treatments to people living with diabetes," the two companies said in a statement.

The Sanofi deal comes after British drugmaker GlaxoSmithKline (GSK.L) and Verily - formerly Google Life Sciences (GOOGL.O) - created a new company focussed on fighting diseases by targeting electrical signals in the body, a novel field of medicine called bioelectronics.

Verily is also working on development of a smart contact lens in partnership with Swiss drugmaker Novartis (NOVN.S) that has an embedded glucose sensor to help monitor diabetes.

Diabetes is an illness that involves keeping track of blood sugar levels, diet, multiple medications and other health issues, noted Verily Chief Medical Officer Jessica Mega.

"It's an area where we think new tools and sensors will be incredibly helpful," Mega said in a telephone interview.

"The idea is creating best-in-class biocompatible small sensors" that could, for example, monitor blood glucose, she said.

"We want to ... figure out the right mechanisms to get information to patients. Over time we hope to get information to people that is actionable," Mega said.

Nearly 400 million people worldwide have diabetes, with type 2 accounting for more than 90 percent of cases. Without proper treatment, it can lead to a wide variety of serious health complications.

The JV, called Onduo, "will initially focus on the type 2 diabetes community, specifically on developing solutions that could help people make better decisions about their day-to-day health, ranging from improved medication management to improved habits and goals," the companies said.

A spokeswoman for Sanofi said products on sale would include connected objects such as insulin pens and online services.

She said Sanofi had invested $248 million in the joint venture, in which the French group controls a 50 percent stake.

Sanofi is working hard to revive declining sales in its diabetes division, hurt by sustained pricing pressure in the United States, the world's largest health market.

(Reporting by Matthias Blamont and Andrew Callus in Paris and Bill Berkrot in New York; Editing by Geert De Clercq and Andrew Hay)