Welcome to the arms race

Welcome to the arms race

This morning Sanofi (NYSE: SNY) and Google officially announced their joint venture in diabetes which will be called Onduo. According to a jointly issued press release;

“Sanofi and Verily Life Sciences LLC, (formerly Google Life Sciences), an Alphabet company, today announced the launch of Onduo, a joint venture created through Sanofi and Verily’s diabetes-focused collaboration. The joint venture is based in Kendall Square in Cambridge. Onduo’s mission is to help people with diabetes live full, healthy lives by developing comprehensive solutions that combine devices, software, medicine, and professional care to enable simple and intelligent disease management.”

The release goes onto state;

“Initially, Onduo will 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. Over time, the company plans to expand its focus to include the type 1 diabetes community, and eventually to people at risk of developing diabetes with the goal of helping them better prevent the onset of the disease.”

Before we go on here we find the name Onduo somewhat ironic as it reminds Diabetic Investor of the InDuo device which was a joint venture between Johnson and Johnson (NYSE: JNJ) and Novo Nordisk (NYSE: NVO). At the time we thought the InDuo was just the beginning and that Novo and JNJ would end up collaborating on a complete diabetes management system. Needless to say the InDuo didn’t set the world on fire and as so often happens in this wacky world this once promising collaboration fizzled out.

Frankly this announcement shouldn’t be news to anyone who reads Diabetic Investor as we have been writing about this for some time. Nor do we need to restate our views on what type of partner Sanofi will be. As we have noted many times when it comes to partnerships in diabetes Sanofi has a less than impressive track record. Be that as it may this official announcement signals the start of an arms race in diabetes.

Medtronic (NYSE: MDT) is partnered with Watson Health and Qualcomm, while JNJ is attempting to build their diabetes echo system. And let’s not forget about Google’s neighbors Apple who as we have been stating is getting more public with their move into healthcare. Anyone who watched the launch of Apple’s latest iPhone should have also noticed that the company is repositioning the iWatch as a healthcare tool.

As we have been stating all along the epicenter of diabetes has moved to the Valley. These high tech cash rich companies see healthcare as the next frontier. Again as we have stated before these companies don’t need to be in diabetes they want to be in diabetes. They have the vision thing in abundance which when combined with their vast resources can forever transform diabetes management. Needless to say all the legacy franchises in diabetes better get religion in a hurry or risk being run over by the juggernaut coming out of the Valley.

Simple put welcome to the diabetes management system arms race. An arms race where companies like Google and Apple have nuclear capabilities while everyone else only has F15 fighter jets.  This arms race will have wide ranging implications and could foster some strange bedfellows. Suffice it to say no company in diabetes will NOT be impacted by this race.

Once again this wacky world is transforming, a transformation that has some very exciting potential. So fasten your seat belts, put your tray tables in the upright and locked position – this flight is about to take off.