By Thomas Lee
Medtronic Inc. (NYSE:MDT) first gained fame by developing devices that could automatically zap an errant heart back into rhythm. Now the medical device giant wants to apply the same approach to the wayward pancreas.
Earlier this month, the Food & Drug Administration approved Medtronic’s Revel technology, the company’s second-generation diabetes management system that allows patients to better monitor blood sugar levels and adjust insulin therapies.
Revel is a major step toward the holy grail of medical device makers targeting the vast diabetes market: A fully automated “closed loop” system in which sensors monitor glucose levels, advanced software crunches the data and feeds it to pump, which delivers the right dose of insulin, according to Medtronic senior vice president and diabetes division head Katie Szyman.
Szyman said Revel is the first system to integrate sensors with a pump, alerting patients when their glucose levels falls out of a desired range. Patients can then adjust the pump accordingly. Eventually, a closed loop system could approximate the way a computer guides an airplane in autopilot mode, she said.
Despite advances in treatment and promising research into drugs and organ replacement, diabetes remains a top health problem in the United States. As many as three million Americans live with Type 1 diabetes, in which the immune system attacks islet cells in the pancreas, destroying the body’s ability to produce insulin. There is no cure; the Mayo Clinic recently announced a major initiative to collaborate with Minnesota companies to eventually find one.
Treating the disease has been a boon for Medtronic and peers Johnson & Johnson (NYSE:JNJ) and Abbott Laboratories (NYSE:ABT), companies that make insulin pumps and continuous glucose monitoring devices. The latter category makes up a increasing share of the $8 billion “finger stick” market, growing at double-digit rates.
In fiscal 2009, Medtronic’s diabetes segment revenues jumped 11 percent to $1.11 billion, thanks to a strong surge in sales of its CGM devices, which grew 30 percent alone in the fourth quarter. The company is also reporting strong sales of Revel’s overseas counterpart, Paradigm Veo, in Europe.
But for medical devices makers, the ultimate prize remains the artificial pancreas, which could cost up to $10,000 per unit. Earlier this month, the Juvenile Diabetes Research Foundation said it’s forming a consortium with Johnson & Johnson and European companies and academics to develop and test an artificial pancreas in four years.
Realizing that goal will be tricky. A diabetic’s blood sugar level can be influenced by a host of factors — for example, diet, exercise and sleep. Companies must not only develop powerful sensors to monitor glucose level fluctuations, but create a complex mathematical algorithm to instruct the pump to deliver the right therapy based on the real-time data generated by the sensors.
And the system must perform with near-perfection, as a single glitch would prove disastrous for the patient, said Joseph Galatowitsch, president and managing director of Dymedex Consulting in St. Paul, Minn. At the same time, anything short of a fully automated system will not gain much traction in the market, because patients are unlikely to be willing to perform extra tasks, Galatowitsch said.
Medtronic’s strategy is to roll out gradual improvements to the Revel until it becomes a fully closed-loop system, Szyman said. The next step is developing a system that can automatically shut down insulin therapy for two hours if blood sugar levels fall too low. Then the company will look to create a system that maintains a specific glucose range, followed by independent systems for nocturnal and daylight use.
Some experts say a closed-loop system might benefit only the most severe cases of the disease, in patients suffering complete pancreas failure. Others could use less-expensive treatments, according to Dr. Harold Katz, an endocrinologist with Allina Medical Clinic in St. Paul.
“The majority of Type 2 [patients] don’t need it,” Katz said. "How much better does [the system have to be compared to other treatments] to justify putting in a $10,000 device?”
What’s needed are large studies that examine the technology’s costs and benefits to patients, he said.
Medtronic’s Szyman agrees. In June, at the American Diabetes Assn.’s annual scientific meeting, the company will release the results from a randomized clinical trial comparing Revel users to patients who need multiple daily insulin injections.
The company believes a closed-loop system can benefit all Type 1 patients and a good share of Type 2, she said.