Devices & Diagnostics, Patient Engagement

Why Google and DexCom will change the Type 2 diabetes market

Google and DexCom are building a better glucose sensor; this will impact the Type 2 diabetes market and help usher in a new era of artificial pancreases.

The new partnership between DexCom and Google to build out a new class of continuous glucose monitors spells out an interesting future for Type 2 diabetes care – and market dynamics in that space.

To that end there are three new DexCom deals that are worth watching: This new Google partnership to build a smaller and cheaper glucose sensor, a deal with Apple that will build out CGM monitoring apps on the Apple Watch, and an agreement with San Diego-based Tandem Diabetes to work towards a new artificial pancreas.

“Some of our real competitors are Medtronic and Abbott, but this relationship allows us to leapfrog in terms of leveraging some of Google’s advanced technologies,” said Steve Pacelli, a vice president at DexCom. “This gives us a big leg up in the market in terms of product configuration.”

This trifecta could very soon herald very exciting products that would be ripe for a wide market – innocuous blood sugar monitoring system for those with mild diabetes, or an artificial pancreas that’s smart phone enabled for more serious cases.

Type 2 diabetes- an ever-growing market that’ll have an associated cost burden of $627 billion worldwide by 2035 – needs better solutions that stretch beyond medication, particularly among an overweight population that’s increasingly suffering from “diabesity.”

While there will be plenty of space for business growth in the expanding CGM market, this deal puts DexCom uniquely ahead of its main competitors. By working with Google, DexCom will be better able to reduce the cost and size of the continuous glucose monitor sensor – and integrate that technology with smart devices, in theory improving patient engagement and adherence.

Healthcare will be a big focus of this new Alphabet reorganization at Google; this is why it’s particularly interesting that it announced the deal with DexCom in tandem with the Alphabet announcement. The DexCom/Google partnership will also track health data and analyze these metrics on both an individualized and population-wide scale. Marrying Google’s data analytics and electronics with DexCom’s top-notch sensors could really accelerate outcomes.

Some estimates place DexCom at holding about 60 percent market share right now in continuous glucose monitoring; it tends to win out among consumers as well. Other competitors include Medtronic, Abbott, Glysens, Insulet, Animas, Omnipod, Roche, Senseonics and Yposomed.

Today, DexCom’s disposable sensors sell around $70 apiece; however, it still contains a durable electronic transmitter that isn’t thrown away. That comes separately – it costs about $400 and lasts about six to nine months.

“Today, we don’t throw the transmitter away because we don’t sell enough volume,” Pacelli said.

However, as DexCom shifts into the Type 2 diabetes market, the sheer volume of CGMs being developed will offset the cost of the individual electronics.

“To make this a true home run, we need decent-sized outcome patient outcomes,” Pacelli said.”

 

 

The device sector is speeding toward the development of an artificial pancreas – that is, a continuous glucose monitor that’s melded with an on-demand insulin dispensation system.

The continuous glucose monitoring market is projected to generate a revenue of about $2.9 billion across all players, according to a new report from Allied Market Research. The cost of sensors accounted for two-thirds of this revenue.

“The improved efficacy and high disease prevalence has brought these devices to center stage to glucose monitoring,” the report says. “Increasing awareness, FDA approval to the novel and innovative products such as bionic pancreas and focus on developing CGM devices to serve new end user segments are prime drivers to the growth of the CGM market.”

Europe will be a lucrative market for CGMs thanks to its speedy regulatory process; the Asia Pacific region, however, is also ripe for an inexpensive diabetes monitoring option. On that note, actually, there was an interesting deal in June – when Bayer offloaded its diabetes unit to Panasonic in light of the growing CGM market.

“This deal is partly about cost, and partly about miniaturization,” Pacelli said.

DexCom’s relationship with Google is focused on diabetes, but the applications stretch to prediabetes monitoring and obesity.

“Imagine applying this technology – using it together with analytics to identify at-risk populations with pre-diabetes and intervene,” Pacelli said. “That could be huge.”

[IMAGE: Flickr user stevendepolo]

Shares0
Shares0