Sanofi SNY and the life sciences team at Google GOOGL announced a collaboration focused on improving care and outcomes as well as reducing the risk of complications for patients with type I and type II diabetes.

The collaboration focuses on bringing together Sanofi’s experience in developing diabetes treatments and devices and Google’s expertise in analytics, miniaturized electronics and low power chip design. The companies will discover ways to improve diabetes care by developing new tools that bring together many of the previously siloed pieces of diabetes management and enable new kinds of interventions. Health indicators include blood glucose and hemoglobin A1c levels, patient-reported information, medication regimens and sensor devices.  

Both companies will bring to the table their respective expertise in science and technology and work toward ways to collect, analyze and understand multiple sources of information impacting diabetes. The goal is to make it easier for patients to successfully manage their disease – this would cut the risk of complications, improve outcomes and ultimately reduce costs.

The deal with Google Life Sciences comes shortly after Sanofi signed up with Evotec EVTCY for the development of beta cell-modulating diabetes treatments, which may reduce or remove the need for insulin injections.

We note that Sanofi’s diabetes business is under significant pressure with its best-selling diabetes drug, Lantus, facing increasing competitive pressure at the payor level and biosimilar competition in some eastern EU countries.

Sanofi’s diabetes segment recorded global sales of €3.8 billion in the first half of 2015, reflecting a decline of 3.5% year over year. Sanofi is looking to make up for the loss of revenues in the diabetes segment with the launch of new products including Toujeo and Afrezza.

Going forward, Sanofi is looking to file for FDA approval of LixiLan, a combination of Lantus and Lyxumia, for the treatment of patients suffering from type II diabetes, in the fourth quarter of 2015.

Sanofi currently carries a Zacks Rank #3 (Hold). Gilead Sciences Inc. GILD is a better-ranked stock in the health care sector carrying a Zacks Rank #1 (Strong Buy).

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