Memorandum

J&J 2Q18 – Invokana dips another 27% YOY; No comments on very positive CREDENCE news; LifeScan-Animas sales decline 18% YOY; No mention of LifeScan or Calibra acquisitions – July 17, 2018

Executive Highlights

  • J&J reported 2Q18 financial results this morning, and it was another challenging quarter for the company’s SGLT-2 business (Invokana, Invokamet, and Invokamet XR). Invokana franchise sales fell 27% YOY to $215 million (dropping 13% sequentially). In the US, revenue dipped 34% YOY to $169 million (-17% sequentially), while OUS sales climbed 18% YOY to $46 million (+5% sequentially). J&J’s presentation offered three reasons for this sluggish financial performance, the same three reasons that management has been citing since Invokana sales began to plummet in 1Q17 (and they haven’t stopped falling): (i) rising patient discounts; (ii) high rebating from PBMs/payers; and (iii) share loss (primarily to Lilly/BI’s Jardiance, and to a lesser extent to AZ’s Farxiga).

  • Notably, there was no out-loud mention of Invokana during prepared remarks or Q&A, not even in the context of CREDENCE. Just yesterday, CREDENCE was stopped a full year early because an Independent Data Monitoring Committee found that canagliflozin has already demonstrated significant renal benefit (meaning it’s no longer ethical to keep patients in the placebo arm). We couldn’t help cheering at this news – what a win for patients (DKD is notoriously difficult to treat), for providers, and for J&J. Given the meaningful boost that this could bring to the Invokana business, we were surprised not to hear anything on CREDENCE from management. That said, it’s possible that the news came too recently and we’ll have to wait for J&J to plan out next steps. When will management bring CREDENCE data to FDA, and what indication will they seek? Could Invokana be the first SGLT-2 inhibitor with a renal indication on its label?

  • Global LifeScan/Animas sales of $355 million declined 18% YOY operationally on an easy comparison to a 10% YOY decline in 2Q17. Global revenue increased 5% sequentially from a record-low base of $339 million in 1Q18. Per usual, the slide deck cited Animas’s exit from the pump market (shut down in October), BGM price declines in the US, and category and share softness in EMEA as contributors to the poor performance. 2Q18 US sales of $129 million decreased 19% YOY, while OUS sales of $266 million decreased 16% YOY operationally. Both reflected accelerated declines from 2Q17, when sales dropped 10% operationally. From the all-time high of $681 million in 2Q11, LifeScan/Animas sales are now down nearly 50%; two-thirds of the losses have been in the US business, which is down 61% (-$204 million) since 2Q11.

  • Prepared remarks briefly mentioned Platinum Equity’s ~$2.1 billion offer to acquire LifeScan. As noted in early June, J&J accepted the offer, which will close by the end of 2018. There was no mention of CeQur’s bold acquisition of Calibra Finesse (OneTouch Via) announced just hours before the call, and the highest-upside J&J diabetes device asset in our view. J&J is now completely out of the diabetes device business, in line with May’s Medical Device business review (to divest by the end of the year) and a process that has publicly unfolded since January 2017. It’s disappointing to see a company like J&J leaving diabetes devices, reflecting the higher pressure to innovate quickly, shift more innovation to software, rising adoption of CGM, etc.

Kicking off another earnings season, J&J provided its 2Q18 update this morning in a call led by CEO Mr. Alex Gorsky and newly-appointed CFO Mr. Joseph Wolk. Click for the press release and presentation slides. Read on below for major highlights on the therapy side as well as the device side.

Janssen Highlights

1. Invokana Sales Fall Once More, Dropping 27% YOY Globally ($215 Million) and -34% YOY in US ($169 Million)

Worldwide sales of SGLT-2 inhibitor Invokana (canagliflozin) dove 27% YOY to $215 million, which reflects the lowest quarterly revenue for the franchise since 2014. This was an easy YOY comparison, as sales fell 23% YOY in 2Q17 to $295 million. In fact, 2Q18 marks the sixth consecutive quarter of double-digit decline for Invokana, Invokamet, and Invokamet XR (fixed-dose combinations with metformin). Sequentially, global franchise revenue fell 13% from $248 million in 1Q18; this was another easy comparison, as sales dropped 7% sequentially between 4Q17 and 1Q18. By geography, US Invokana sales totaled $169 million in 2Q18 (another low point since 2014), diving 34% YOY from $256 million in 2Q17. Sequentially, US revenue dropped 17% from $204 million in 1Q18. Meanwhile, OUS sales of canagliflozin products totaled $46 million, rising 18% YOY from $39 million in 2Q17 and climbing 5% sequentially from $44 million in 1Q18. This performance continues trends we’ve seen over the past ~two years, with the Invokana business struggling in the US while OUS revenue holds steady or grows slightly. It follows that J&J management continues to blame pricing pressure, which is particularly strong around diabetes drugs in the US.

  • There was no mention of Invokana during prepared remarks today, but J&J’s presentation listed three reasons for the product’s weak financial performance: (i) increasing discounts; (ii) higher rebates; and (iii) share loss due to competitive pressures (slide 10). These same three factors were cited on J&J’s 1Q18 call. To be sure, diaTribe found J&J to be one of the most generous diabetes manufacturers in offering patient assistance funding (see the highly read “How to Get Diabetes Drugs for Free”), and larger discounts to patients would lower the company’s realized price on Invokana. High rebating from PBMs/payers is most certainly posing a challenge for J&J Diabetes as well. Invokana is preferred over Lilly/BI’s Jardiance (empagliflozin) on the CVS Health national formulary for 2018, and we suspect the PBM negotiated a larger rebate from J&J vs. Lilly/BI, though we can only speculate about this because PBMs remain a huge black box with little transparency surrounding how they set prices and the cut they take. Preferred status on the CVS Health formulary was supposed to be a tailwind for the Invokana business in 2018, and yet J&J’s SGLT-2 continues to lose share to Lilly/BI’s Jardiance franchise: In 1Q18, Jardiance captured 45% of the $1 billion SGLT-2 inhibitor market vs. Invokana’s 25%, and this compared to 31% vs. 40% in 1Q17 (one year before). Although management hasn’t specifically named amputation risk as a reason for sluggish sales since J&J’s Pharmaceutical Business Review Day in May 2017, we imagine the black box warning added by FDA last year is a pretty substantial obstacle to uptake. Indeed, after CANVAS reported at ADA 2017, Dr. Daniel Drucker predicted a gradual attrition away from Invokana onto other SGLT-2s, namely Jardiance given its CV indication in the absence of amputation concerns. J&J is also seeking a CV indication for Invokana (amputation signal aside, CANVAS was very positive in showing significant CV risk reduction). Unfortunately, we learned late last week that FDA has delayed its decision on this by three months to review additional material that was requested from the sponsor, but we’re holding out hope that Invokana will be approved for CV risk reduction by the end of October. We’ll be back with a pooled analysis of the SGLT-2 class after Lilly, AZ (Farxiga), and Merck (Steglatro) all report their 2Q18 financial results; these calls are scheduled for next week on July 24, July 26, and July 27, respectively.

  • It’s interesting to note that J&J’s Cardiovascular & Metabolism (CVM) portfolio grew overall in 2Q18 (+7% YOY), despite a sluggish performance by Invokana. This speaks to the strength of Bayer-partnered blood thinner Xarelto, which was listed by J&J as a “key catalyst for growth” in the pharmaceutical segment. Also of note, there was no mention of Invokana or diabetes on this slide of pharmaceutical bright spots (slide 20).

Invokana Franchise Sales (1Q14-2Q18)

2. Invokana Shows Renal Protection in CREDENCE! Trial Stopped Early Due to Clear Demonstration of Efficacy; Surprisingly, No Commentary from J&J

In tremendously exciting news, the CREDENCE renal outcomes trial for Invokana was stopped early this week because of a clear demonstration of efficacy (update: see full results and WCN presentation from April 2019) – we were a bit surprised and disappointed not to hear anything on this from J&J. In the past, management has pointed to CREDENCE as an upcoming bright spot, one that could favorably tip the benefit/risk profile for Invokana. This is the first major renal outcomes study to report for an SGLT-2 inhibitor (while the renal data was positive in CANVAS and EMPA-REG, everything related to the kidneys was a secondary outcome in these earlier CVOTs), and it could give J&J a head start over other SGLT-2 manufacturers in promoting renal benefit (most thought leaders seem to believe renal protection is a class effect). We’d love to know what J&J’s plans are for getting CREDENCE data on the label; when will they file with FDA, and what indication will they seek? Presumably, the company has saved on clinical trial costs by ending CREDENCE ~one year ahead of schedule (the trial was expected to complete in June 2019, according to ClinicalTrials.gov). This is a huge win – and opportunity – for J&J. Amputation concerns have dominated the conversation around Invokana since last year, when FDA issued a black box warning on all canagliflozin products (in May) and CANVAS confirmed this amputation signal (at ADA in June). J&J now has more evidence to focus attention on Invokana’s CV/renal protective effects. Even if lower limb amputation is a risk inherent to the canagliflozin molecule, it’s important to keep in mind that the overall rate of amputations was low in CANVAS and it’s low in the real world, meaning the positives outweigh the negatives and patients could still benefit immensely from Invokana. We hope management’s silence doesn’t imply a weaker company commitment to diabetes, and we won’t read too much into this since we understand J&J has many products and different business segments to discuss on its earnings calls. That said, we have previously noticed some signs of wavering focus on diabetes: During Pharmaceutical Business Review Day, CEO Mr. Alex Gorsky underscored that Invokana is a “very small piece,” comprising only ~4% of total pharmaceutical sales. During J&J’s 2Q17 update, Mr. Gorsky assured that the company “remains very interested, and wants to make sure patients continue to have options in type 2 diabetes,” but then added, in the same breath, “we also recognize the competitive nature of the category.” These statements don’t exactly inspire confidence... Nevertheless, we remain optimistic about Invokana’s future growth prospects following this early stop to CREDENCE. We look forward to seeing full results from the outcomes trial (no timing has been shared). Hopefully, Invokana will have a new CV indication on its label by year-end as well, and the one-two punch of CV and renal protection could boost volume and sales.

  • Near-term, we hope to see swift movement from J&J on submitting CREDENCE data to FDA, so that busy patients/providers have ready access to important information on renal and CV protection. We’re in the midst of a paradigm shift in diabetes toward less glucose-centricity and more outcomes-based medicine, and a drug that prevents further kidney damage fits right into this new (better) approach to diabetes care.

  • Ongoing clinical development projects for Invokana are summarized in table below. Our sense is that most of these programs, besides the DKD indication, are on hold until Invokana sales stabilize or return to growth. When we spoke to Janssen’s Dr. James List at ADA 2017 (he’s the Global Therapeutic Head of CV & Metabolism), he explained that the company would have to pause and re-evaluate each canagliflozin development project following the CANVAS amputation finding. We haven’t heard anything from management on canagliflozin for type 1 or obesity in more than two years now. We were so excited about the prospect of a prediabetes CVOT when J&J first announced it, but management hasn’t followed-up with concrete plans for this study since the 3Q16 earnings call. Increasingly, it seems like SGLT-2 inhibitors could have very broad applications beyond glucose-lowering. These agents offer profound weight loss, and other molecules in the class have already been submitted to FDA and/or EMA for a type 1 diabetes indication (namely, Sanofi/Lexicon’s sotagliflozin and AZ’s dapagliflozin). We wonder if J&J will move forward with phase 3 trials of canagliflozin in type 1 after some of the key regulatory concerns (i.e. DKA) are ironed out with Sanofi/Lexicon’s and AZ’s candidates – in a way, waiting could be a smart strategy on J&J’s part, so that Invokana might come to market for type 1 diabetes when some of the DKA issues have been settled, when the field has established consensus on how to manage and treat DKA. This is only our speculation as we’ve heard nothing concrete from management on the status of this type 1 program, but we can’t contain (!) our excitement at the prospect of oral adjunct therapies becoming available to patients with type 1 diabetes. As a reminder, a phase 2 trial of canagliflozin in type 1 was presented at ADA 2016.

    • Management has previously stated that J&J won’t conduct a dedicated heart failure outcomes trial for Invokana, given that a key secondary endpoint in CREDENCE encompasses CV death + hospitalization for heart failure. This only amplifies our excitement to see full CANVAS results. Heart failure benefit has also been touted by many thought leaders as a class effect of SGLT-2 inhibitors, and to this end, Lilly/BI and AZ have launched dedicated investigations of Jardiance and Farxiga in chronic heart failure (with or without diabetes).

Ongoing Invokana Clinical Trials

Trial/Indication

Status

Timeline

Diabetic kidney disease (CREDENCE)

Complete/positive results

Trial stopped ~one year early, in July 2018, after IDMC finds clear demonstration of efficacy

Investigating mechanism of weight loss (CARAT trial)

Recruiting (aiming for 36 participants)

Expected to complete in July 2018; Still recruiting per ClinicalTrials.gov

CVOT for prediabetes

Planned as of J&J’s 3Q16 financial update; No mention since then/unclear if still on the docket

No timing information shared

Type 1 diabetes

Phase 2 trial completed; No word on possibility for phase 3

Phase 2 results presented at ADA 2016

Canagliflozin/phentermine co-administration for obesity

Phase 2 trial completed; No word on possibility for phase 3

Phase 2 results presented at ADA 2016

3. No Updates on Diabetes, Obesity, NASH Pipeline or Partnerships

J&J’s early-stage pipeline features two GLP-1/glucagon dual agonists, a CB1 inverse agonist, and a PYY agonist, though none of these candidates came up on today’s call. A phase 2 trial of the company’s more advanced GLP-1/glucagon dual agonist, JNJ-64565111, was launched in April 2018, and aims to enroll 440 patients with obesity. The study’s primary outcome is percent change in body weight over 26 weeks of treatment (three doses of the study drug vs. placebo vs. Novo Nordisk’s GLP-1 agonist Saxenda), and it’s expected to complete in March 2019 according to ClinicalTrials.gov. In our view, this phase 2 trial represents a strong sign of J&J’s commitment to obesity as a therapeutic area; the company has also invested substantially in the Janssen Human Microbiome Institute, which is searching for earlier intervention opportunities in treating type 2 diabetes, prediabetes, and gestational diabetes (there’s a core obesity component to the Institute’s work as well). No active studies for the other three candidates in the table below appear on ClinicalTrials.gov. In collaboration with UCSF, JDRF, and others, Janssen’s Disease Interception Accelerator (DIA) initiative is working to identify biomarkers for type 1 and gestational diabetes. Again, there was no mention of this in any of J&J’s prepared materials, but it is a good sign of the company’s ongoing commitment to diabetes and to metabolic disease more broadly.

Janssen Diabetes/Obesity Pipeline Summary

The table below reflects the latest updates, as far as we are aware, on Janssen’s diabetes/obesity pipeline products.

Candidate

Indication

Phase

Timeline/Notes

JNJ-64565111 (GLP-1/glucagon dual agonist)

Obesity, type 2 diabetes, NASH

Phase 2

Phase 2 trial in obesity launched April 2018, expected to complete March 2019; Phase 1b study in type 2 diabetes completed February 2018; Phase 1 results presented at ADA 2015; Preclinical data presented on ADA 2016 poster; Licensed from Hanmi November 2015

JNJ-2463 (CB1 inverse agonist)

NASH

Phase 1

Phase 1 study underway; Collaboration with BirdRock Bio

JNJ-54728518 (GLP-1/glucagon dual agonist)

Type 2 diabetes

Preclinical

Data presented on ADA 2016 poster showing efficacy vs. Novo Nordisk’s Victoza (liraglutide)

JNJ-9321 (once-weekly PYY agonist)

Type 2 diabetes, obesity

Not listed

No timing information shared

LifeScan/Animas Business Highlights

1. Global LifeScan/Animas Sales Down 18% Operationally to $355 million

Global LifeScan/Animas sales of $355 million declined 16% YOY as reported and 18% operationally. The challenging performance also came on an easy comparison to 2Q17, when sales of $421 million decreased 10% operationally YOY. Global LifeScan/Animas revenue has now declined or remained flat for 25 straight quarters (~six years). Revenue increased 5% sequentially, albeit from a record-low base of $339 million in 1Q18. As we’ve come to expect, the slide deck (slide #11) cited Animas pump discontinuation last October, BGM price declines in the US, and category and share softness in EMEA as contributors to the poor performance. J&J reported a $3 million diabetes asset impairment in net earnings. This business has faced a perfect storm of industry trends (rising CGM penetration, falling price for BGM), and did not deliver on enough innovation to stem the tide (automated insulin delivery, digital/human coaching and feedback, insulin titration, etc.). Can Platinum Equity turn LifeScan around as a privately held company?

  • From the all-time high of $681 million in 2Q11, LifeScan/Animas revenue is now down nearly 50%. Most of the loss has come in the US business, which is down 61%, -$204 million, over that seven-year time period. By contrast, the OUS business is down 35%, -$110 million (about half as much absolute loss), since 2Q11.

Global, US, International Quarterly Sales (1Q12-2Q18)

  • We estimate that global 2Q18 LifeScan (BGM-only) sales were ~$354 million, reflecting our guess that Animas pump revenue is now down to ~$1 million from residual OUS sales. As a reminder, Animas exited the US market in October, but some residual sales remain from outside the US (excluding Canada). Medtronic is the preferred transition partner and (as far as we can tell) is now selling Animas supplies for US customers still on Animas pumps. As of January, J&J expects Animas to exit the global market by this September, with complete divestiture of its diabetes device segment anticipated for the end of 2018 as LifeScan moves over to Platinum and CeQur picks up the yet-to-launch Calibra. For context, our 2Q17 global LifeScan-only (BGM) revenue estimate was ~ $401 million, reflecting 95% of total Diabetes Care revenue vs. 5% for Animas (~$20 million).

    • Given these Animas assumptions, we estimate LifeScan BGM sales declined ~12% YOY as reported in 2Q18, on an easy comparison to an estimated ~4% decline in 2Q17. The J&J press release announcing the Platinum offer confirmed that our prior estimates of 95% LifeScan-5% Animas revenue split were in the ballpark, as 2017 “LifeScan net revenue” was reported at ~$1.5 billion (we had ~$1.6 million). With Animas sales near-zero now, not to mention sustained BGM pricing pressure and rising use of CGM (and fewer corresponding fingersticks), we wonder how the headwinds have individually impacted revenue. Collectively, the effect has been devastating, particularly in the US business.

2. US LifeScan/Animas Sales Decline 19% YOY to $129 million

US revenue of $129 million decreased 19% YOY on an easy comparison to a 10% decline in 2Q17. US sales have now declined YOY for 13 consecutive quarters, including five straight quarters with a double-digit decline. As noted above, the entire business has been hard hit, but the US has played a bigger role (nearly double) in the worldwide business’s absolute decline over the past seven years. Sequentially, US sales increased 10% in 2Q18, albeit from a record-low base of $117 million in 1Q18.

  • We estimate US LifeScan-only BGM sales of ~$129 million fell ~16% YOY on an easy comparison to a ~3% YOY decline in 2Q17. Our model estimates that LifeScan accounts for 100% of the US revenue now that Medtronic has taken over Animas supply reordering. For context, a year ago, we had LifeScan at ~95% of the business (~$152 million) vs. 5% for Animas (~$20 million).

3. OUS LifeScan/Animas Sales Decline 16% Operationally to $226 million

International sales of $226 million fell 13% YOY as reported and 16% operationally on an easy comparison to 2Q17, when sales declined 11%as reported and 10% operationally. International revenue has now declined YOY for all but one of the past 16 quarters (four years) – the lone exception being 2Q16, when sales grew 5% on a very easy YOY comparison. Revenue increased 2% sequentially from a record low base of $222 million in 1Q18.

  • We estimate international LifeScan-only BGM sales fared similarly to the US, declining ~10% YOY as reported to ~$225 million. This performance came on an easy comparison to 2Q17 when we estimated OUS BGM sales of ~$249 million declined ~5% YOY. We estimate OUS Animas sales for 2Q18 totaled ~$1 million, which could be an over- or underestimate (though probably not of huge magnitude). Of the $261 million reported in OUS sales in 2Q17, we estimated ~$249 million from LifeScan (95%) and $12 million from Animas (5%).

LifeScan/Calibra Pipeline Updates

1. No Mention of CeQur’s Acquisition of Calibra Finesse (OneTouch Via) Announced Hours Before the Call (US Launch in Mid-2019)

There was no mention of CeQur’s acquisition of Calibra Finesse (OneTouch Via) from J&J, announced three hours before the call this morning – see our detailed report. CeQur reported the news in a press release, with no corresponding acknowledgment in J&J’s press release, slide deck, prepared remarks, or Q&A. Acquiring the three-day-wear, bolus-only (2-unit), 510(k)-cleared, super slim disposable insulin patch device is a huge win for CeQur, and we’re delighted to see that this highly-anticipated product will finally make it into patients’ hands. A US launch under a new name is expected in mid-2019 via pharmacy distribution (another big positive) and with CeQur’s own US sales force. The Calibra device is already FDA-cleared with a very broad label: subcutaneous bolus insulin delivery in adults requiring insulin – meaning both type 1s and type 2s are likely to use it. CeQur will immediately begin transferring manufacturing equipment from the existing OneTouch Via plant in Puerto Rico to a “world-class” undisclosed contract manufacturer. No new FDA submission is needed, and J&J has already done some legwork with payers. Positive data was presented at ADA 2018, showing a robust 1.6% A1c reduction from baseline (n=278, 62 sites) that was similar to insulin pens (-1.7%), but with stronger patient and healthcare provider preference for Calibra. Financial details were not disclosed, although our team is speculating that CeQur paid J&J between $5 million and $20 million for Calibra.

  • We believe Calibra’s unparalleled, slim on-body profile and simplicity has strong potential to make mealtime insulin more convenient, both for MDIs (subtracting three mealtime injections per day) and for transitioning basal-only users to easily add mealtime insulin. Read our complete deep dive on the acquisition here, with a particular focus on its target market.

  • With this news, J&J is officially out of the diabetes device business. The process has been ongoing since the January 2017 announcement to explore “strategic options” for LifeScan/Animas/Calibra. Since then, J&J has gradually been chipping away at the segment, exiting the pump market last October and completing the $2.1 billion sale of LifeScan to Platinum Equity in June. Per J&J’s Consumer and Medical Device Business Review day in May, the company expects complete divestiture of its diabetes device segment by the end of the year – at this rate, it would appear that the target will be met with time to spare. J&J has had several opportunities to build a compelling insulin delivery device ecosystem (at its 2016 Medical Device business review, OneTouch Via was pegged as a ~$1 billion global opportunity!) but ultimately did not execute. We look forward to watching CeQur bring Calibra to market, and hope that LifeScan can persevere under Platinum.

  • As a reminder, J&J originally acquired the Calibra device in 2012 (price not disclosed), and Calibra received its first FDA clearance for the Finesse in 2010. Since then, it obtained subsequent clearances in 2012 and 2017, with meaningful delays in the launch timeline – first from “early 2017” (ADA 2016), then from 1H17 (per a November email exchange), and lastly in May 2017, when a rep at AACE told us the OneTouch Via was expected to roll out in a focused US launch in the coming months.

2. LifeScan-Platinum Transaction to Complete by End of 2018; No Further Details Provided

The sole mention of Platinum Equity’s acquisition of LifeScan came during Mr. Gorsky’s prepared remarks, when he confirmed that the transaction is expected to complete “by the end of this year.” The agreement was briefly mentioned in the press release, but no further details were provided. The proposed ~$2.1 billion offer was first announced in March and later accepted in June. As of March, J&J Diabetes Care President Ms. Valerie Asbury was slated to continue leading LifeScan, with the goal of creating “a global standalone business… for continued investment in growth and innovation.” Presumably, Platinum Equity’s ultimate plan is to turn the LifeScan business around and sell it at a higher premium, although we can’t be sure. We wonder what Platinum will do with the business and how will it compare to what Panasonic/KKR has done with Ascensia. Read our deep dive of the offer here, including our thoughts on Platinum Equity, a leading private investment firm with a portfolio of 30+ operating companies and 200+ acquisitions since 1995. Platinum does not have much healthcare experience, which could be an asset or a handicap, depending on one’s take on where traditional glucose monitoring is going… 

  • At ADA, the dedicated LifeScan booth featured the OneTouch Verio BGM and OneTouch Reveal app, as it did at ATTD. Representatives could not comment on J&J’s acceptance of the Platinum agreement, besides reassuring that everything will be “business as usual.” Will LifeScan recover with the right investment? The OneTouch Reveal app is very highly-rated on the App Store (4.7/5 stars; 15,600 ratings) and Google Play (3.9/5 stars; 6,121 ratings), and the OneTouch Verio Flex integration with WellDoc’s Bluestar could bring valuable education and support to type 2s – however, there have been very few updates on this front; see below.

  • There were no updates on the OneTouch Verio Flex BGM-WellDoc BlueStar app integration for type 2 diabetes. This will clearly move over in the Platinum acquisition. The integration went live mid-March 2017 (three months post FDA clearance), allowing data from J&J’s Bluetooth-enabled OneTouch Verio Flex meter to passively enter the BlueStar app. We learned last month that patients who get BlueStar through a health plan are eligible for a free Verio Flex meter. There’s definite potential here to enhance traditional BGM and scale BlueStar’s education, feedback, bolus calculator, upcoming basal insulin titration via Voluntis, and provider relations, not to mention make a dent in type 2 diabetes healthcare expenditure – a Truven (IBM Watson) modeling analysis estimated that BlueStar could cut type 2 costs by $254-$271/user/month. How will Platinum prioritize this partnership? Meanwhile, WellDoc continues to move ahead on other fronts, incorporating hypertension and weight management features into BlueStar for type 2 diabetes, announcing plans to launch a type 1 diabetes WellDoc app in 4Q18, and rolling out a major consumer-facing 12-week diabetes program with Samsung Health in March.

 

-- by Payal Marathe, Maeve Serino, Adam Brown, and Kelly Close