Dexcom’s G6 continuous glucose monitoring system
Many have been following San Diego-based Dexcom’s partnership with Alphabet’s Verily, and in November the continuous glucose monitoring maker announced that it has changed the financial terms of the partnership.
The partnership was first announced in 2015 and subsequent news reports point to the fact that the first generation product would launch in 2018 with more innovative products – CGM sensors like Band-Aids – to follow thereafter. The possibility of a miniaturized sensor beefed up with data analytics is appealing to those who view managing diabetes, especially type 2 diabetes, as key to bringing down the costs of managing this expensive chronic disease. And in turn, overall healthcare costs.
But at the annual J.P. Morgan Healthcare Conference on Monday, Dexcom executives were asked whether that first-gen product is being shelved.
“We may still launch that product outside the U.S. in small markets just to gain some experience, said Steven Pacelli, executive vice president of strategy and corporate development at Dexcom.
He added that the amended licensing agreement with Verily — announced in November — provided the company some flexibility regarding what it may do with the first-gen product.
But “don’t expect a big U.S. commercial launch,” Pacelli said, nonetheless.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Per the new agreement with Verily, Dexcom will pay Alphabet’s life science business $250 million in shares of its common stock upfront, with additional payments of up to $280 million contingent upon achieving product launch and revenue milestones.
Meanwhile the second-generation product — the G7 CGM system — will be launched at the end of 2020. Dexcom’s relationship with Verily also cements the possibility that the company’s CGM devices are what Onduo, a software platform set up as a joint venture between Sanofi and Verily, will sell to their customers. Onduo offers an app offering virtual care to type 2 diabetes patients.
Dexcom executives were also asked about the possibility for the G7 CGM system to be sold over the counter.
While calling it a “good question” Sayer dismissed the chances for that saying the FDA would never allow such a device to be sold over-the-counter. But he left open the possibility of some other products that might have potential for such a sales strategy.
“To the extent that we explore an application of CGM whereby its for health and wellness versus diabetes management” that may be possible,” Sayer said. “We aren’t there yet. We have had initial discussions. We think it could be a great use of the technology going forward.”
Photo: exdez, Getty Images
