Google (GOOGL -1.76%) (GOOG -1.57%) has started making a significant push into wearables, with medical/health care-related applications among the prime targets. Some readers may already have heard of the company's efforts to develop a glucose-sensing smart contact lens that could continuously monitor glucose levels and interface with mobile devices, allowing diabetics more freedom and convenience.

Count eye care giant Novartis (NVS -0.58%) among those who have noticed. Novartis and Google announced on Tuesday that they would work together on smart contact lenses targeting both glucose monitoring and presbyopia. It's hard to say how close to reality (or clinical trials) a functional device might be, but this partnership just may change the landscape of the glucose monitoring market presently dominated by companies like Johnson & Johnson (JNJ -0.27%), Abbott Labs, Roche and Medtronic.

A match that makes sense

On Tuesday, Novartis and Google announced an agreement that will see Novartis license smart lens technology from Google's Google[x] team for the development of medical smart lenses. From the announcement, it seems that this is intended to be a close collaboration with both companies working on product development and Novartis then taking over clinical development and marketing/commercialization.

That Google and Novartis would come together to develop smart contact lenses is not a tremendous surprise. Alcon, the eye care business of Novartis, is one of the world's largest players in both contact lenses and more sophisticated intraocular lenses. What's more, Novartis has made its own attempts in the past at developing smart lenses but hopes that Google's know-how in miniaturization can lead to a commercial product.

It may sound startling that Novartis has worked on a smart/diagnostic contact lens before, but I think many readers would be surprised to learn just how often companies like Novartis try to develop breakthrough technologies like this. Many med-tech companies encourage or at least passively tolerate "mini-skunkworks" within their R&D efforts where engineers and scientists work on more speculative projects.

Diabetes represents a large opportunity

Glucose monitoring is a huge market – worth over $8 billion by Roche's estimation – and one where better technology is still needed. Continuous glucose monitoring can play a crucial role in driving better clinical outcomes, but the market is only about a $350 million today (largely Medtronic and DexCom (DXCM)) and I estimate that at best only about 10% of U.S. Type 1 diabetics currently use continuous monitoring.

Make continuous monitoring easier and painless (put in a lens once a day or perhaps these lenses can stay in for extended periods of time), and the market growth potential is very large. That said, cost is very much a factor. Johnson & Johnson, Abbott, and Roche have all seen their glucose monitoring businesses get pummeled on reimbursement pressures and a smart contact lens is likely to be a pretty exclusive product at first.

Novartis' CEO believes that a prototype could be available early in 2015 and on the market in five years. That's likely a bit ambitious given that the FDA is exceptionally rigorous with the trial demands for new monitoring products, and especially those that feature new technology.

Time for electric eyes?
While the glucose monitoring application of this partnership is likely to get the most media attention, the companies also intend to work on products for presbyopia. These seems like the more "gee whiz" application, with Novartis' CEO Joe Jimenez talking about a lens that could autofocus and automatically adjust as a person looks at close or distant objects.

Maybe I'm indulging a bit too much in my love of scifi here, but if this can work (and management acknowledges it is the less-developed technology today), is it too much to think (hope?) that these lenses could actually enhance vision or offer features like thermal imaging or image recording?

The bottom line
For the here and now, this is just another interesting R&D project within Alcon/Novartis. Even so, it wouldn't surprise me if Johnson & Johnson, which has substantial operations in both glucose monitoring and eye care, took note and perhaps companies like Johnson & Johnson, Roche, and Abbott (which also has some involvement in eye care, including intraocular lenses, but not contacts) get more involved as well. With hundreds of millions of dollars in revenue potential for the right product, it is definitely something to watch over the coming years.