Google Signs Controversial Deal With Pharmaceutical Giant Novartis
July 16, 2014 7:32 PM
Diabetes-monitoring contact lens should be sped to market, thanks to licensing deal
For many people in the U.S. suffering from diabetes mellitus or (clinical) hypoglycemia have to undergo a painful and time consuming daily ritual, pricking themselves to test their blood sugar to see if various forms of intervention is necessary. The process of home blood glucose monitoring (HBGM) is crucial to the health of insulin dependent diabetics (virtually all Type I diabetics, and many Type II diabetics). But with monitoring regimens typically requiring 3 to 10 pricks to draw blood a day, the treatment regimen can be both painful and onerous.
I. A New Tool for Treating One of the World's Most Widespread Epidemics
Google Inc. (
) may have a better answer. It has
an experimental contact lens design
that's outfitted with tiny low-power electronics capable of measuring blood glucose and alerting the user when it is too high or too low, with multiple warning thresholds at each end to indicate the severity.
After broadly publicizing the technology in January, Google
that it has licensed the technology to the world's largest pharmaceutical company, Switzerland's Novartis International AG (
) and Alcon, Inc. (
) a Swiss eyewear company that Novartis now wholly owns, after slowing buying up shares in the company from its former majority owner Nestle SA (
), starting in 2008 with the purchase of a 25 percent stake.
Diabetes mellitus -- perhaps an
unfortunate inheritance from humans (
) and Neanderthal (
-- is one of the world's most common diseases with roughly 382 million afflicted worldwide. Every six seconds, according to recent statistics, a diabetic dies. Roughly 1.5 million people die due to diabetes a year, making it the world's eighth leading cause of death. Diabetes is caused by a failure of the body's hormonal system that regulates the body's glucose levels and reserves.
It can be caused by the partial or complete inability to produce insulin -- a pancreatic hormone that triggers cells to store glucose from the bloodstream. It can also be triggered by the cells of the body becoming unresponsive to insulin.
So-called "genetic" (Type I) diabetes is typically caused by defects in insulin production, while "acquired" (Type II) diabetes is typically caused by cells becoming unresponsive to the hormone, often due to an unhealthy diet and/or a sedentary lifestyle (
as well as genetic predispositions
roughly 90 percent
of diabetics are estimated to be Type II diabetics.
Insulin vials circulate at the Eli Lilly and Comp. (
) [Image Source: Diabetes Mine]
Nearly 1 in 10 Americans suffers from diabetes.
The Centers for Disease Control
estimates that in 2012 there were roughly 21 million diagnosed diabetics and 8.1 million undiagnosed diabetics in the U.S., as well as roughly 57 million prediabetics (people showing signs of diabetes, but not the full symptoms). Of these, roughly 6 million -- or roughly 1 in 50 Americans -- required insulin medication.
Overall, diabetes costs the nation roughly $130B+ USD in medical expenses in 2012, according to figures from the
The National Diabetes Information Clearinghouse
II. HBGM -- the Flawed Mobile Meter
For those on insulin, HBGM is typically a necessity. Even for diabetics not requiring insulin, HBGM devices could be helpful for adjusting their lifestyle to better maintain their blood sugar -- if those devices were not a major inconvenience as they are currently.
Most HBGM monitors detect blood glucose by drawing a small amount of blood and testing it. Since they began testing in the 1970s, digital blood glucose meters have slowly evolved to need less blood going from a so-called "hanging drop" to a tinier droplet of fluid. The size of the meter has also gone from a desktop unit about the size of a PC power supply to handheld meters. And costs have fallen somewhat for the meter and the test strips which are used to chemically test for the amount of glucose in the blood.
Today's meters are lighter, cheaper, and less bloodthirsty than their ancestors, but still require some human blood to operate. [Image Source: Bayer]
But overall the underlying problem of HBGM meters remains the same -- they require blood. This is a major reason why
an estimated 42 percent
of patients don't achieve their hoped for blood sugar goals set by their physician.
The quest for blood-free glucose testing has led some to consider spectroscopic (light-based) sensors (near infrared (NIR) detection). But lab and preclinical tests have produced poor results as the beams typically don't penetrate deeply enough to measure the true blood glucose concentration; they show the concentration in the tissue.
Or from a broad perspective the ideal solution would be to "cure" the disease via simple surgery or gene therapy. The effort to
grow human pancreas tissue
advancing rapidly using stem cells
as a source for the tissue. However, it will be some time before the technology is safe enough to implant into humans do to issues such as vascularization of the tissue and the predisposition of differentiated derivatives of induced pluripotent stem cells (ipSCs) to form cancerous tumors.
III. Going Blood-Free
Hence near-term hope for a blood-free solution has focused on one of three technologies.
The first is rather expensive and intrusive, but requires less maintenance on the patient's part -- small monitoring implants. Three such devices exist on the market. Minneapolis, Minn.-based Medtronic, Inc. (
) (the world's fourth largest medical device maker) offers
a meter called the MiniMed Paradigm
, which uses a subcutaneous sensor reimplanted every 2-3 days under the patient's skin. That device received clearance from the
U.S. Food and Drug Administration
DexCom, Inc. (
) received FDA approval for a similar hypodermal implanted sensor that same year -- the DexCom STS System. The DexCom solution in some ways is more attractive as it only needs to be reimplanted
every 7 days
, and it also features a slick smartphone-like wireless interface.
The third available option in the implant category is the FreeStyle Navigator from Abbott Laboratories (
). The Abbott sensor is more similar to the DexCom sensor, with a wireless handheld receiver, combined with a hypodermally implanted sensor. Its receiver unit isn't as attractive and it only lasts for 5 days before needing to be reimplanted, but it carries with it the proven track record of one of the diabetes market's longest standing pharmaceutical and medical device firms.
Combined with an insulin dosing device, these continuous monitors
form a so-called "artificial pancreas"
, a promising but imperfect solution.
A second possible solution is to somehow draw blood up from capillaries without physically damaging the patient's skin. The process uses an electrical current to draw up plasma from the capillaries, a method called reverse iontophoresis. A single device -- the GlucoWatch Biographer from Cygnus, Inc. -- received FDA approval in 2002.
Cygnus received FDA approval to sell the GlucoWatch Biographer in 2002. [Image Source: Diabetes Manager]
But the first generation model was painful to wear and the marketing partner -- Sankyo Pharmaceutical -- did a poor job selling physicians and insurance companies on the relatively expensive alternative monitor. Other problems included the bulkiness of the device, inaccurate readings, and its inability to function if the user was sweating. After dropping Sankyo, Cygnus was forced to sell the technology to Animas -- another startup -- in 2005.
Animas released the GW2 GlucoWatch Biographer in 2006 and was planning a followup, the GW3. But running low on cash it was bought by Johnson & Johnson (
). Johnson & Johnson ultimately decided the project was too problem prone and decided to
end sales in 2007
and support in 2008.
Still the technology is promising and was actually once commercially available, so it's possible that someone could revive the concept in a slicker modern form.
IV. Google Lens Exploits Physiological Fluke
Google's contact represents a third, rather outside-the-box solution.
The cornea in the human eye -- the transparent layer over the pupil and iris which accounts for two-thirds of the eye's optical power -- is the only living tissue in the human body not to be innervated with capillary bloodflow (the outer layers of skin also lack bloodflow, but consist mostly of dead cells). The reason for this special circumstance is transparency; even a tiny amount of capillary flow would interfere with the transparency, reducing vision in the eye.
The cornea is fed glucose and oxygen via your tears. [Image Source: Wheaton Eye Clinic]
Thus the body has to resort to alternative methods to transport metabolic chemicals to the corneal cells -- tears. Not just for "the feels", tears serve a vital medical dual purpose for your vision. First, they dissolve oxygen from the air transporting it to the corneal cells at an enhanced rate. Second they transport glucose to the corneal cells, giving them fuel to maintain the tissue.
Google's sensor leverages that curious nutrient transfer scheme. As tear glucose levels are relatively closely correlated with blood glucose, they can be measured to track dangerous drops or rises.
The technology has been in development since at least early 2012. In Q3 2012 Google quietly filed for a patent on the technology, which was recently
by Patently Mobile. The patent describes techniques for making a "plurality" of electronic contact lenses, including one with a glucose sensor.
The finished product -- like most
other circuitized contact lenses
-- is passively powered. It consists of a large antenna loop, which receives a signal from a handheld computer, powering up the tiny circuits of the lens.
The signal activates a glucose sensor, which measures the glucose levels in the tear fluid. These signals are sent to a tiny low-power circuit, which then retransmits a response to the handheld device (albeit a weaker one).
The passively powered IC is also connected to tiny LEDs, which illuminate if safety thresholds are crossed, giving users an immediate and visually observable confirmation of dangerous states on the lens itself.
V. Novartis -- a Pharmaceutical Juggernaut -- Rocks Market Veterans With New Tech
The deal with Novartis was somewhat unexpected, but not altogether surprising. Google needed a licensing partner and Novartis -- with the world's largest pharmaceutical portfolio (with nearly $60B USD in annual sales in 2013) -- is an ideal fit, particularly since it's looking to expand its medical devices presence.
Today's traditional HBGM vendors -- which account for the vast majority of sales -- are largely derived from a handful of early market pioneers.
The first was Ames Laboratories, which -- led by research pioneer Anton Clemens -- developed testing strips and early digital meters, beginning in the mid-1950s. Ames Labs was a subsidiary of Indiana-based Miles Laboratories. Boehringer Mannheim Corp. (BMC) -- a division of large German pharmaceutical firm Corange, Ltd. -- came onto the scene in the mid 1970s. It offered up a meter capable of using calibrations for more acccurate results.
Boehringer Mannheim Corp. glucose meters from 1974 and 1984 (right) are pictured.
[Image Source: British Journal of Biomedical Science]
Shortly after Ames produced the first battery powered meter in 1980 (which also was the first "modern" meter in the sense of having a digital display) Lifescan Corp., a UK startup, jumped in. LifeScan launched a rival battery powered digital meter of its own, the Glucoscan. In 1987 a fourth firm -- MediSense -- launched the meter to use an enzyme to measure glucose.
Today the successors of these firms still
dominate around 90 percent
of the HBGM business.
Germany's Bayer AG (
) scooped up Miles Laboratories (and with it Ames' upcoming product line) in 1978 for
a cool $253M USD
($923M USD in 2014 dollars). Johnson & Johnson set the industry standard in 1986 paying $100M USD ($217M USD in 2014 dollars) for LifeScan -- 50 times its annual revenue.
Not to be left out, Abbott Labs
paid $876M USD
($1.328B USD in 2014 dollars) in 1996 for Medisense. In 1997 BMC was transfered to Roche Diagnostic, a subsidiary of F. Hoffmann-La Roche Ltd. (Roche Holding AG (
)) in a
deal worth $11B USD
(~$16.3B USD in 2014 dollars).
While Novartis owns 33 percent of Roche's shares, it has no direct glucose meter presence of its own. Still, it's hardly a new face in the broader diabetes treatment space. It has estimated revenues of $1.5-2B USD from several
for Type II diabetics including Starlix (Nateglinide), Eucreas/Galvus Met (vildagliptin/metformin), and Galvus (vildagliptin). These treatements activate or improve insulin/glucagon response in those with partial pancreas function. In the U.S. the CDC estimates 15 million diabetics depend on these kind of medications to improve their living conditions.
VI. Novartis + Alcon -- The World's Biggest Contact Lens Firm
The Google deal is just Novartis' latest maneuver its is campaign to try to consolidate and maintain a hegemony in the world contact lens, eye surgical equipment, and presciption eye treatment markets.
Merged into Novartis
in H1 2011
as a wholly owned subsidiary, the Hünenberg, Switzerland-based Alcon is a giant in its own right. The second largest division of Novartis, Alcon does around $10.5B USD worth of business in 2013 -- roughly a third of Novartis' total revenue for the year.
The unit -- based on Novartis's purchase price -- was valued at around $51.4B USD in 2011. Novartis fought hard to acquire the unit. Now, it controls 70 percent of the global vision care sector,
The merger combined Alcon's ophthalmic (eye) surgery product portfolio with Novartis's CIBA Vision contact lens lines and "advanced eyecare solutions". Alcon had a relatively strong-selling contact lens subunit of its own; together the merge unit accounts for roughly 60 percent of contacts sold globally, according to one recent business journal
The diverse contact lens line contains popular fashion lenses such as the colored "FreshLook" line.
FreshLook is among Novartis' popular eyeware products.
It also includes disposable DAILIES and the irritation-reducing AIR OPTIX line.
VII. The Good, The Bad, and The Ugly
As the world's largest pharmaceutical firm, Novartis, has the power to quickly push Google's technology through FDA approval, a process that can take several years for startups or market newcomers. In the U.S., medical approval system money, sadly, often trumps merit. Hence, the clear upside of the deal is that by choosing such a powerful ally customers should get access to the device in the U.S. market sooner.
On the other hand, the decision is an eye-brow raising one, ethically speaking, as Novartis has faced broad criticism for various unethical practices including paying physicians kickbacks to prescribe its drugs, some of which were much more expensive than equally effective alternatives. It also has faced criticism for pushing products to market that either weren't as effective as it indicated or created serious health risks.
Novartis has faced charges for systematic sexual discrimination in the workplace and for paying physicians kickbacks to prescribe its drugs to patients at inflated prices.
[Image Source: AmericanIdle/Flickr/Wikimedia Commons]
The kickbacks are a particularly thorny issue, given that many of the most severe accusations stemmed from Novartis's diabetes drug line, which accounts for around 2-3 percent of the company's overall annual revenue. After failing to heed several state prosecutions, the
U.S. Department of Justice
(DOJ) in April 2013
. That case is still pending and has been joined by 28 state attorney generals, plus the attorney general for Washington, D.C.
A final controversy stems from the lens itself. While Google has made no assertions about the lens tech's market readiness (or lack thereof), rival implant-monitoring device maker DexCom was talking trash about Google's lenses in February, well before the Novartis purchase.
Dexcom Executive Vice President of Strategy and Corporate Development Steve Pacelli opined:
That Google Glass thing? That’s a science project. Lots of companies have tried and failed noninvasively to sense glucose in tears. You can measure glucose in tears, the concentration is a lot lower, there’s going to be huge time lag issues, the consistency of measurement is going to be a challenge. I don’t know how they’re going to power it, my guess is they’ll power it externally, but if you power it externally, it’s not really continuous realtime reporting. … I’m just not sure that it’s reality.
It’s a little frustrating for us who are actually trying to help patients when Google comes out with something that’s a science project. And they kind of admit it. They say ‘we’re not going to do this on our own, we need to partner with industry, partner with experts.’ Ok, fine, but now you’ve got the mainstream media picking it up just because it’s Google, saying ‘Google’s going to eliminate the need to prick your finger, you can just wear a contact lens around.’ It’s not fair to patients. It’s disingenuous.
In the same interview,
CEO Rick Altinger also voiced skepticism, albeit in a less vitriolic fashion. Glukko
produces cloud tracking
for Bayer, Roche, and a handful of other manufacturers' meters. Mr. Altinger states:
If you look to Google, they announced they’re five years away from a commercial product. And even then, what will the price point be? Others have tried to use tears and not been successful. Then again, if anybody can do it, Google can do it.
Of course both DexCom (and to a lesser extent Glukko) could be displaced by a Google-Novartis monitoring device alliance, so this criticism may be somewhat biased.
VIII. Coming Soon to a Drug Agency Near You
For better or worse Novartis' eye division, Alcon, will now assume the role of front-line pusher of Google's novel diabetes monitoring technology. Both companies were much more enthusiastic about the partnership than their critics.
Novartis CEO Joseph Jimenez comments:
We are looking forward to working with Google to bring together their advanced technology and our extensive knowledge of biology to meet unmet medical needs. This is a key step for us to go beyond the confines of traditional disease management, starting with the eye.
Google cofounder and technologist Sergey Brin -- the informal leader of Google X labs, where the lens was developed -- commented:
Our dream is to use the latest technology in the miniaturization of electronics to help improve the quality of life for millions of people. We are very excited to work with Novartis to make this dream come true.
Alcon's head, Jeff George, adds:
Alcon and Google have a deep and common passion for innovation. By combining Alcon’s leadership in eye care and expertise in contact lenses and intraocular lenses with Google’s innovative “smart lens” technology and groundbreaking speed in research, we aim to unlock a new frontier to jointly address the unmet medical needs of millions of eye care patients around the world.
The press releases around the agreement refer to the deal as a "development" deal, so it's unclear how long a wait it will be until Novartis (via Alcon) submits products to the FDA. However, given what we saw in the 1980s and 1990s, licensing/acquisitions typically come when a major product is just a year or two away, at most.
In that regard, it's fair for diabetics to hope that the lens will arrive before more long term solutions, like lab-grown tissues,
pending pills to cure Type I diabetes
, or maintenance via
the controversial and coveted insulin pill
"It seems as though my state-funded math degree has failed me. Let the lashings commence." -- DailyTech Editor-in-Chief Kristopher Kubicki
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