Hyderabad: Ventureast has invested $4 million in the US and Indian entities of medical diagnostics company DiabetOmics Inc., which has devised a non-invasive, saliva-based glucose monitoring test for diabetes patients.

Entrepreneur K.I. Varaprasad Reddy, who sold his company Shantha Biotechnics Pvt. Ltd to French pharmaceutical firm Sanofi SA in 2009, will be investing an additional $1 million in DiabetOmics. Reddy, who is awaiting clearance from the Reserve Bank of India (RBI), will become the chairman of DiabetOmics’ India unit once his investment is formalized.

Venkatadri Bobba, general partner at the venture capital firm, and Reddy declined to reveal the stake they will get in DiabetOmics.

The Oregon, US-based DiabetOmics plans to use the money to set up its first manufacturing facility in India, and for obtaining regulatory approvals in the European Union, the US and emerging markets such as India, Srinivasa Nagalla, president and chief executive officer of DiabetOmics said in an interview.

“We will use Prasad’s expertise to set up manufacturing of product in India itself, so we can produce the product in India and sell globally," Nagalla said.

Manufacturing in India will give the company a decisive pricing advantage and maximize profitability when selling abroad, said Reddy, who has been in the business of making low-cost vaccines since 1993.

DiabetOmics plans to begin production in rented premises and gradually move into its own facility as it scales up. This approach will allow for making modifications in the manufacturing processes, and to optimize production, said Reddy. “The implementation is in rented premises; perfection is in our own premises."

The company is yet to finalize the location of the facility and is evaluating options in Andhra Pradesh and Telangana. It expects to roll out the product in a year’s time, after obtaining necessary approvals and clearances. It will initially produce 10,000 strips a day and 10,000 devices annually.

As it prepares for a launch in early 2016, DiabetOmics is in talks with “two major players" in the US for global distribution, said Nagalla, without identifying them.

DiabetOmics has developed portable devices that allow diabetics to detect and monitor glucose levels. Its patented, non-invasive technology uses saliva samples to identify Type-II diabetes and also helps pregnant women detect gestational diabetes. The company holds six patents for its core technology, India-born Nagalla said.

Diabetes is typically monitored using blood or serum samples by pricking oneself with a pin attached to a glucometer—a painful procedure that often dissuades patients from regularly monitoring their glucose levels.

“We see this as a gamechanger because some people are phobic to pricking their fingers and getting the blood out. It’s a lot easier to do this," Ventureast’s Bobba said.

Diabetes is a prominent non-communicable disease affecting close to 382 million people around the world. India alone accounts for over 65 million cases, according to data from International Diabetes Federation. The number of people with diabetes is expected to rise to 592 million globally with 109 million in India by 2035, Belgium-based International Diabetes Federation estimates. Type-II diabetes is the most prevalent form of diabetes, accounting for 85-95% of the cases.

DiabetOmics had earlier raised $15 million in two rounds from Rogue Venture Partners, Dudley Foundation and government grants. The latest investment is the third round for the company. DiabetOmics will also use the money raised from the latest round to advance product development and for business development activities.

Bobba explained that data collected from DiabetOmics devices can be shared over the phone or transmitted real-time to doctors over the cloud—to enable efficient diagnosis. “The future is going to be personalized medicine coupled with molecular diagnostics," Bobba observed.