CES 2016

January 5-8; Las Vegas, NV Day #1 Highlights - Draft

Executive Highlights

Hello from Las Vegas, where we kicked off our time at CES 2016 at the gargantuan Venetian hotel and Sands show floor. The highlight of the day came from IBM CEO Ms. Ginni Rometty’s keynote address, who shared – alongside Medtronic CEO Mr. Omar Ishrak – that the first product to come out of the companies’ partnership (a predictive hypoglycemia mobile app) is slated to launch this summer. It's excellent that corporate America not in diabetes is getting involved in fighting hypoglycemia. On the exhibit hall floor, Dexcom had a more spacious booth than at prior CES meetings, which focused on the recently launched G5 Mobile system (no product updates). On a positive note, NeuroMetrix announced that it has received FDA 510(k) clearance for an upgraded version of Quell – it will launch in March with improved sleep tracking, battery, app-based control of the device, and other features. This is fantastic to see, in particular, improved products coming to help fight complications, like the Quell. See below for our full top seven highlights from the day.

1. During her p-a-c-k-e-d keynote lecture, renowned IBM CEO Ms. Ginni Rometty invited Medtronic CEO Mr. Omar Ishrak on stage to co-announce that the first product to come out of the companies’ partnership –a predictive hypoglycemia mobile app – is slated to launch this summer (2016). The app uses the Watson supercomputer to analyze CGM data, glucose trends, carb data, insulin data, and patients’ glucose history to predict future hypoglycemic events within three hours of bolus insulin delivery. And, it makes complete sense - shouldn’t a computer be able to figure this out better than a person? See below for our questions, more details, and a picture of the app.

2. In the exhibition hall, Dexcom featured a more spacious booth than at previous CES meetings, which focused on the recently launched G5 Mobile system. So far, there have been no product updates.

3. NeuroMetrix announced that it has received FDA 510(k) clearance for an upgraded version of its Quell Wearable Pain Relief device; the next-gen product with improved battery life, sleep tracking, and other features will launch in March 2016. See diaTribe.org next week when we publish our “Test Drive” of the Quell – we interview five patients using the  innovative product.

4. Philips’ booth featured its new diabetes platform prototype, a connected mobile app, and online community for type 1 diabetes management developed in collaboration with Radboud University Medical Center and Salesforce. The added value here remains a question mark, though clinical trials are ongoing and it sounds like an FDA submission is in the plans.

5. In a broad discussion of what aspects of digital health generate the greatest anxiety for those in academia and industry, Valencell President Dr. Steven LeBoeuf put it well: “It’s the non-technological problems that keep us awake at night. Not the technology problems. You know what we say – if it’s a technology problem, we can solve it … unless it’s non-invasive glucose monitoring!” We continue to believe that Abbott’s Freestyle Libre is effectively non-invasive glucose monitoring – there are many geographies where it hasn’t been submitted, of course, or approved, of course, and there are many capacity and access issues, but the product? Yes, the product basically has all the benefits of a noninvasive glucose monitor, from our view.

6. We had a fun and dizzying time exploring the vast health, wellness, and fitness sections of the exhibit hall, coming upon valuable updates from connected BGM companies Visiomed (new to us) and iHealth, and activity tracker companies Fitbit and Misfit.

7. Discussions during Wednesday’s FitnessTech Summit repeatedly returned to the exponential growth of the digital health movement, raising questions about whether self-monitoring and self-sensing have gone overboard. We do point out the funding, though it skyrocketed from 2013 to 2014, was basically the same from 2014 – 2015.

Top Seven Highlights

1. During her p-a-c-k-e-d keynote lecture, IBM CEO Ms. Ginni Rometty invited Medtronic CEO Mr. Omar Ishrak on stage to co-announce that the first product to come out of the companies’ partnership – a predictive hypoglycemia mobile app – is slated to launch this summer (2016). The software uses the Watson super computer to analyze CGM data, glucose trends, carb data, pump/insulin data, and patients’ glucose history to predict future hypoglycemic events within three hours of bolus insulin delivery.  This partnership was announced last April (pretty fast movement!) and we first saw this exploratory analysis at DTM 2015, where Dr. Rebecca Gottlieb, longtime research leader at Medtronic, said the hypoglycemic prediction has 80-90% accuracy following bolus insulin delivery. Today’s mockup of the “glycemic advisory” function that Mr. Ishrak shared was the first we’d ever seen – see an image below! The app will be compatible with both Android and Apple iOS systems over time, though we assume it will support only Apple iOS at launch. The hypoglycemia prediction will leverage real-time data coming from MiniMed Connect near-term, though management said that as more connected devices come to market, they will share this capability. The trget market is for those not on automated insulin delivery, where the hypoglycemia prediction could be valuable in certain circumstances – e.g., eating a meal of a given carbohydrate content and receiving a notification that “You are likely to go low” within the next few hours. We would note that the system – as it was presented – seemed reliant on accurate carb counting, which is a challenge for all patients. Of course, we all have to walk before we can run! At launch, the app will function exclusively with Medtronic CGM and pumps, though the company’s vision is to make it usable “more broadly” in the future. Medtronic and IBM do not yet have regulatory clearance, though presumably interaction with the FDA has been positive enough to forecast a launch this year. As we understand it, the first version represents the beginning of a cadence of releases, with those requiring less regulatory oversight preceding those that require more stringent review. Overall, this looks to be a very safe foray into real-time diabetes decision support – an uber CGM prediction alarm for lows – and we look forward to seeing how effective it is, how many false alarms it generates (will Medtronic's sensor get more accurate?), how burdensome information entry is at the start, how frequent the notifications will be, if there are associated hassles and what they are, and how much better it is than CGM-only based hypoglycemia prediction alarms. Certainly, it’s outstanding to see Medtronic and IBM moving quickly to bring actionable software to market, and this has important potential to address a massive problem in diabetes.

  • It shouldn’t be underestimated the power of the IBM CEO (!) announcing this, building on her characterization last year of healthcare as IBM’s “moonshot.” It’s also great to see Mr. Ishrak getting more involved in chatting about diabetes, and we’d love to see even more of this to follow Medtronic’s goal to serve 20 million patients by 2020. Although hypoglycemia has traditionally been thought of as more of a type 1 problem by many, it’s a major issue for so many type 2 patients and will be a problem to even more type 2 patients as so many more live longer. So it’s not only an unmet need – it’s a growing need.
  • Following Dexcom’s partnership with Verily and Medtronic’s partnership with IBM, we’re wondering what Abbott Diabetes Care has in mind for augmenting FreeStyle Libre. The sensor also has continuous data and will presumably be worn by so many more people with type 2. Abbott’s LibreLink is not widely available yet in Sweden or in Europe, so we’ll have to wait and see what the company ultimately does on the Big Data and analytics fronts.  
  • Notably, Mr. Ishrak characterized the app as the “tip of the iceberg” in a broader diabetes ecosystem. He shared a compelling vision for the future in which Medtronic would leverage technology adjacencies (e.g., activity trackers) and Watson’s population-level analytics (e.g., “What has happened to other patients like me when they have taken X boluses of insulin at a glucose level of Y?”) to generate even more clinically relevant insights. This is really exciting, isn’t it? More than anything else, it was clear from both his tone and passion that the hypoglcyemia app is just a starting point for Medtronic – not simply in terms of expanding to other disease areas but delving into more intricate analytics within diabetes itself. This was great to hear from Medtronic’s CEO, as the company’s Diabetes division post-Covidien acquisition is now just ~6% of company sales – but it will impact healthcare in such a big way if more patients can do meaningfully better with its tools.
  • Ms. Rometty herself shared big-time enthusiasm for the dawn of the “new cognitive era” (e.g., computers that can learn like Watson), which she believes will be the most transformative trend in the future of the internet of things (IoT). Ms. Rometty explained that cognitive IoT involves infusing connected devices with the ability to understand, reason, learn, and generate their own hypotheses and confidence levels to help people make data-driven decisions. She emphasized that technology and data are everywhere, and that the challenge is to go beyond capturing and storing data to understanding it. According to Ms. Rometty, this will require cognitive IoT like IBM’s Watson, which now has 32 different functions and 50 different technologies available via API. The company is expanding Watson to have other senses such as sight, and is opening it as a cloud platform so anyone can “build thinking into their devices.” Ms. Rometty ended her keynote with the big statement, “I believe every decision mankind makes will be better because of Watson cognitive technology.” We appreciated Ms. Rometty’s vision and clear optimism, and are eager to see Watson’s cognition translate into truly improved real-world outcomes.
  • For more on Watson’s potential capabilities in diabetes, see our coverage of the Novo Nordisk partnership from December (not mentioned today) and the original Medtronic partnership announcement

Predictive Hypoglycemia App Mockup

2. In the exhibit hall, Dexcom featured a surprisingly spacious booth relative to previous CES meetings, which focused on the recently launched G5 Mobile system. Reps ran through the new mobile app, transmitter, and updated receiver (see diaTribe’s test drive), and reiterated that the company continues to work on many improvements: an iPhone app update (including a widget for the iPhone lock screen) and Apple Watch compatibility. Dexcom’s booth was significantly more expansive than in past years – the company’s prominent green signage was visible from across the expansive exhibit hall floor (we’ve had to search for the smaller kiosk previously) and the strategic investment seemed to be paying off – the booth was packed every time we walked by. Indeed, to a certain extent (and from listening to awed booth-goers), we wonder whether its unique presence as a diabetes technology company in the midst of back-to-back-to-back activity trackers drew attention in and of itself.

  • There was no commentary on pump partners or automated insulin delivery, though large signage at the back of the booth did remind attendees of the ever-growing list of closed-loop integration partners (Animas, Tandem, Insulet, Bigfoot) and data management platforms and apps (Diasend, Glooko, Tidepool, Training Peaks, Databetes). Non-profit Tidepool even had a tiny bit of real estate in the back of booth where the company’s logo was displayed in big block letters … a potential signal of the commitment to that partnership. We’ve been impressed with Dexcom’s own web-based Clarity software for viewing CGM data, though Tidepool adds integration with pumps and some other notes features that Clarity does not have. As a reminder, Dexcom’s plans for 2016 include Android G5, a new insertion device, a smaller transmitter, and a new receiver.

3. NeuroMetrix announced at CES that it has received FDA 510(k) clearance for an upgraded version of its widely praised Quell Wearable Pain Relief Technology; the next-gen product will launch in March 2016. The device features a number of new capabilities relative to the first-gen product: (i) extended battery life (~one day longer); (ii) the ability to control Quell through a mobile app, meaning that users can power on/off the device and increase/decrease therapy levels through their phones rather than having to physically press buttons on the side of the device; (iii) more sophisticated sleep tracking technology; (iv) more detailed therapy tracking over three months; and (v) an alternative stimulation mode that gives users a fast gentle pulse instead of constant vibration for more customizable pain relief. We assume the price will will be the same ($249 initially + $30 per month for sensors), and current Quell users will be able to upgrade for free. NeuroMetrix’s exhibit hall booth did not actually advertise the FDA clearance, though reps were more than happy to share the good news in person, stressing the big impact Quell has already had in users. As a reminder, the company reported diabetes portfolio revenue of $1.5 million in 3Q15, marking an all-time record reflecting the success of Quell’s recent launch in 2Q15. We believe Quell is a terrific, well-designed device that is helping a lot of patients with neuropathy, some to life-changing effect. We hope this product can scale widely and help many, many more people with diabetes.  

4. Philips’ booth featured its new diabetes platform prototype, a connected mobile app and online community for type 1 diabetes management developed in collaboration with Radboud University Medical Center and Salesforce. We had a chance to see a demo of the platform, which consists of an online community for private physician-patient messaging, and a simple blue and white mobile app display for patients. The app is built on the Philips HealthSuite digital platform and CareCatalyst, which securely collects and integrates patient data from BGMs, fitness trackers, and electronic medical records. It provides banner alerts reminding users to check their blood glucose, and users can also manually enter blood glucose levels, carbohydrate intake, insulin doses, stress level, heart rate, and other metrics – we’re skeptical that either of those strategies is sustainable or effective over time. Reps shared that the platform prototype is currently in clinical trials, with plans of FDA submission at an undisclosed date. We like the idea of integrating patient and physician data in the same platform, though it remains to be seen whether Philips will be able to overcome the many challenges of pulling data from disparate sources, making the data useful, and encouraging patients to stick with the app. In general, we’d love to see more patients be made more aware that some of the technology at hand is using “baby steps” and that personal responsibility is important in learning how patients use technology, giving feedback, and helping push it forward – we want to see way more, with all the new systems, than patient complaints – companies should try to use patients to figure out how improvements can be made. We assume they are trying to – sometimes we feel we hear too much about how “user – unfriendly” new technology is and we want to make sure patients also work to improve products, because no one, least of all patients, should be satisfied with the status quo. Diabetes data aggregation is a crowded space, and indeed, Philips will need to set itself apart with something compelling and useful for doctors and patients – and we hope that these populations try to work to improve a variety of products. 

5. In a broad discussion of what aspects of digital health generate the greatest anxiety for those in academia and industry, Valencell President Dr. Steven LeBoeuf put it well: “It’s the non-technological problems that keep us awake at night. Not the technology problems. You know what we say – if it’s a technology problem, we can solve it … unless it’s non-invasive glucose monitoring!” The remarks were right on the mark based on this field’s history, and it will be interesting to see what happens in the coming years with Google/Novartis’ contact lens, or with Dexcom/Google’s efforts to make a bandage CGM (minimally invasive). And of course, many would consider Abbott’s available FreeStyle Libre sensor to be close to non-invasive – from our own use, we think the benefits of non-invasive are basically there (two “pokes” a month that do not hurt). For context, Dr. LeBoeuf is quite the powerhouse in the wearable space and certainly a leading thinker when it comes to digital health. In 2006, he co-founded Valencell, a wearable technology company that develops physiological monitoring technology and licenses this technology to industry leading partners for integration with brand-name products. He boasts an even more impressive resume in digital health that includes dozens of patents in the wearable space and prior experience leading the optoelectronic biosensor program at GE Global Research.

6. We had a fun and dizzying time exploring the vast health, wellness, and fitness sections of the exhibit hall, coming upon valuable updates from connected BGM companies Visiomed (new to us) and iHealth, and activity tracker companies Misfit and Fitbit.

  • Visiomed – a relatively new France-based medical device company – displayed its FDA cleared and CE Marked BewellConnect MyGluco Bluetooth-connected BGM and paired app. According to reps, the device was FDA cleared in September, though we cannot seem to find the clearance page on the FDA website. The fairly basic meter and paired app will be made “available soon” for purchase online (~$100) though it does not sound like there are currently plans to bring it to pharmacies. Reimbursement is the name of the game in BGM, and asking patients to pay $100 for what looks like a very basic connected meter and app seems like an incredible long shot to us. (For context, LifeScan’s OneTouch VerioSync meter is at least half that price or even cheaper with far better strip reimbursement and a more robust app with pattern recognition, and a trusted, even beloved brand, and iHealth’s BG5 is a quarter of that price.) In testing the meter in the booth, it synced with both Android and Apple devices in about five seconds. The app was user-friendly and intuitive, including the usual color-coding of glucose results and documentation and graphing that has become relatively common across BGM apps – see a video here. There was really nothing special about the meter, which has a grayscale screen and cannot do much of what traditional meters do. Representatives could not speak to the accuracy, though presumably it met ISO 2013 criteria to be cleared so recently.
  • iHealth’s large booth displayed its family of sleek connected health devices, including its BG5 Wireless Bluetooth-enabled BGM, and the Align BGM that plugs directly into the headphone jack of a user’s smartphone and displays and stores results on the free iHealth Gluco-Smart app. The company has other connected health devices (blood pressure, fitness trackers, connected scales), and always has a large presence at CES. Though the strips and connected meters are very inexpensive ($8 for 50 strips, $16.95-$29.95 for the two meters), we don’t think this meter has gotten huge traction in the broader diabetes market (that said – given how big diabetes is coming, enormous traction isn’t any longer needed – just traction with some segment of some sub-population, as long as the economics are right, which we’re also not sure about in this case).
  • Fitbit’s just-announced fitness smart watch, Blaze, was the center of attention at its packed booth. We had a chance to try the device up-close, and we especially liked its onscreen workouts powered by FitStar, a fitness app that Fitbit acquired last year. Blaze has a large, square, color touchscreen face like the Apple watch, which is the product’s main competitor and a clear concern for newly public Fitbit. Other key features include connected GPS, music control, continuous heart rate monitoring, and select phone notifications (call, text, calendar – intentionally fewer than notifications on the Apple Watch, which are overwhelming for some). Blaze is available today for pre-order at $199.95, with global retail availability starting in March 2016. It is by no means a groundbreaking product, and it will be interesting to see how Fitbit does in the first two quarters of 2016. While the company should have a strong 4Q15 (holiday season), the activity tracker space is extremely competitive (one walk around the exhibit hall confirms that), and Fitbit’s dominance stems heavily from brand awareness and social features. Can it sustain its revenue and profitability momentum with a cadence of outstanding and affordable new products that appeal to a wide spectrum of consumers – from fitness geeks to sedentary folks? See our 3Q15 report for more.
  • Misfit’s booth boasted two new products: Ray, a cylindrical aluminum fitness tracker available on a sleek leather or rubber wristband, and Specter, a set of fitness-tracking smart headphones. Notably, in addition to tracking activity and sleep, Ray has a vibration feature that “nudges” users when they have been inactive for too long and vibrates for incoming calls and text messages – we’ll be interested to see user feedback on this (it will be a big win if the feedback can be seen as useful but not too annoying – presumably it’s all customizable and the great trick would be if it actually would prompt significantly greater activity than the device without the nudge – that would be a public health “win” in addition to “cool”). Like previous Misfit products, it has a replaceable battery that lasts for up to six months. Spector provides audio, while simultaneously monitoring fitness and exercise via Bluetooth. According to Misfit reps, Ray will starting shipping this spring for $100, and Spector is expected to launch sometime in 2016 for $100-$200. As a reminder, Fossil Group acquired Misfit in November for $260 million, aiming to merge fashion with connected devices. For Fossil, the move was a bold one in the context of business challenges: sales declined 14% in 3Q15, and the company expects a further 7%-16% decline in 4Q15.

7.Discussions during Wednesday’s FitnessTech Summit repeatedly returned to the exponential growth of the digital health movement, raising questions about whether self-monitoring and self-sensing have gone overboard. Multiple panelists suggested that data is only as useful as it is insightful. Said Stacey Burr, “This QS [quantified self] movement is not just about collecting data. It’s about feedback and making it intuitive to make changes.” This point is probably 10+ years old at this stage, and we’re not sure the repetition is making things any better although products have certainly improved as has, at least to some extent (we need much more) public health understanding of the urgency of the two biggest public health problems of our time, type 2 diabetes and obesity. Let’s get to the real questions as well: Who is making data truly actionable right now? What is the single most outstanding example of biometric data leveraged for insight? What data and insight are really changing behavior in meaningful ways and which are poised to do that? And who can help make this happen faster?

--by Ava Runge, Varun Iyengar, Adam Brown, and Kelly Close