Memorandum

FDA approves Tandem Basal-IQ (PLGS) pump with Dexcom G6 iCGM! US launch in August; free software update for in-warranty X2 users – June 21, 2018

Executive Highlights

  • FDA has approved Tandem’s t:slim X2 pump with Basal-IQ (predictive low glucose suspend algorithm) and Dexcom’s G6 iCGM for users 6+ years. A US launch is expected in August, including a free software update for in-warranty t:slim X2 users. Basal-IQ will only work with G6 and is not backwards compatible with G5; FDA technically approved both sensors, but Tandem went forward with G6 for software simplicity – a tough call but the right one to go with no-calibration and the latest CGM.

  • Basal-IQ brings a number of milestones for the field: the first automated insulin delivery device approved with a no-calibration CGM; the first pump compatible with an iCGM sensor cleared for interoperability; and the first AID algorithm to be launched via software update without needing new hardware (current users simply need a new prescription and a 45-minute online training). Following the MiniMed 670G, Basal-IQ is the second AID device in the US. It is also Dexcom’s first AID partner launch.

  • FDA deserves tremendous credit for this approval, allowing iCGM (G6) compatibility even though the submission and pivotal trial used G5. This is excellent news for Tandem users, who won’t see a multi-year time lag between Dexcom model integrations. It’s also fantastic for the field as a whole – a regulatory beacon that future pumps/software now have a faster pathway (via iCGM) to keep up with new CGMs. For Tandem, it also likely means future iCGMs will quickly be integrated into its pumps.

  • From a competitive perspective, Tandem’s Basal-IQ/G6 brings stronger competition to Medtronic’s MiniMed 670G hybrid closed loop (>100,000 systems shipped). Basal-IQ also brings tougher competition to Insulet’s just-cleared Omnipod Dash, which does not have automation nor G6 integration on the handheld.

    This afternoon, Tandem announced FDA approval of its t:slim X2 pump with Basal-IQ (predictive low glucose suspend algorithm) and Dexcom’s G6 iCGM for users 6+ years old. A US launch of the Basal-IQ algorithm is expected in August, including a free home software update for current in-warranty t:slim X2 users (same pump hardware). It is terrific to see no upgrade fee, as Tandem promised! Basal-IQ will launch with G6 and will not be backwards compatible with G5; more on that below.

    The surprise approval for use with Dexcom’s no-calibration G6 is huge for the automated insulin delivery field, a big victory for Tandem and Dexcom, and was not expected nearly this quickly. Tandem submitted Basal-IQ in February with Dexcom’s G5, and its April call hoped to add G6 before the end of the year. FDA clearly took a very forward-thinking move with this approval, leveraging G6’s brand-new iCGM designation with interoperability in mind (cleared in March); not requiring a new Basal-IQ submission or trial with G6; and approving the first AID system with a no-calibration CGM. This approval suggests future sensor-integrated pumps will indeed be able to keep up with innovation via the new iCGM pathway – an advantage for Dexcom right now, but one we fully expect Senseonics, Abbott, and Medtronic to obtain over time. FDA’s Dr. Courtney Lias and team deserve tremendous credit for rethinking this regulatory paradigm! As CEO Kim Blickenstaff told us by phone, “Wow is this FDA different; it’s incredible.”

    Tandem/Dexcom users will be excited, as they previously endured a ~2-year launch delay between t:slim G4 and t:slim G5. The Basal-IQ launch in August should come as G6’s commercialization ramps up – we’ve heard some anecdotal reports about big demand for G6, resulting in ship dates later in the summer. Users will also need time to cycle through G5 supplies.

    Technically, the FDA did approve the t:slim X2 with Basal-IQ for both G5 and iCGM sensor compatibility (G6). However, software development was most efficient for Basal-IQ using a single CGM system vs. trying to integrate two systems with different requirements (e.g., two daily calibrations with G5 vs. factory calibrated with G6). Tandem believes that launching Basal-IQ only with G6 ultimately brings the most user benefit in the long run. We agree. This also means a current user could decide not to upgrade to Basal-IQ and stay on the current t:slim X2/G5.

    The Basal-IQ timing is right in line for the planned “summer 2018” launch – strong execution on a plan shared 11 months ago, and a tight schedule following positive pivotal results at ATTD. The FDA review of this device was roughly five months, including the recent pivot to add G6; while twice as long as Medtronic’s MiniMed 670G three-month priority review, it did come in line with Tandem’s expectations.

    Below, we include the device’s key features (mostly covered previously), a SWOT analysis, competitive implications, and questions.

    Basal-IQ Key Features

    We’ve previously covered t:slim X2/Basal-IQ’s feature set and PLGS algorithm performance, though here’s the topline summary now that G6 is included:

    • Basal-IQ PLGS algorithm – Using CGM values, the algorithm looks ahead 30 minutes and suspends insulin when glucose is predicted to drop below 80 mg/dl or if glucose is currently below 70 mg/dl and falling. The system resumes insulin once glucose values start to rise – without alarms. The pivotal trial was presented at ATTD in February and showed a 31% relative reduction in time spent below 70 mg/dl, with no rebound hyperglycemia. This algorithm is simple, well-tested, and effective at avoiding lows.

    • No fingersticks G6 + insulin automation – With Dexcom G6 integration, Basal-IQ will operate without fingersticks for calibration or mealtime dosing – the first commercial AID device to do so. The G6 system will be sold separately from the t:slim X2, similar to the G5 now. The G6 transmitter can be paired with one medical device (Dexcom receiver OR t:slim X2) and one consumer device (phone or tablet) at the same time, meaning CGM remote monitoring will still be possible with Basal-IQ.

    • Works silently in the background without “modes” – No additional alerts or alarms are required to use Basal-IQ, and users can choose whether or not to receive alerts when insulin is suspended/resumed – a big win, especially overnight. Additionally, the Basal-IQ feature is only toggled ON or OFF, operating without a need juggle modes. Both of these are advantages over the MiniMed 670G hybrid closed loop, which some find quite alarm-heavy and attention-demanding to remain in auto mode.

    • Approval for 6+ years old, slightly ahead of the MiniMed 670G’s pediatric indication that was just approved today for 7+ years old. (Of course, MiniMed 670G has hyper/hypoglycemia mitigation, while Basal-IQ only minimizes hypo.) Tandem does not have publicly disclosed plans for <6 years; 670G’s 2-6 year-old study should be wrapping up soon (and possible already has).

    • First pump integrated with an “iCGM,” enabling faster iteration and stronger interoperability with less regulatory hassle. This could also imply that if another company (e.g., Senseonics) obtains iCGM designation, the t:slim X2 with Basal-IQ will be compatible with that sensor too – but without the need for a separate FDA submission or a contract between the companies. (This remains to be seen, but is theoretically the idea.) See our complete overview on the iCGM pathway here.

    • Simple Basal-IQ training and onboarding for current X2 users – The Basal-IQ feature will require a new prescription, but otherwise, users only need to complete a 45-minute online training module. The software update only requires a personal computer.

    • Paradigm-shifting remote software feature updates – With t:slim X2, Tandem can roll out innovation via a home software update tool without expensive new hardware. Tandem showcased this with the launch of t:slim X2/G5 last year, and we expect a similarly enthusiastic response with Basal-IQ/G6.

    • Embedded Bluetooth lays groundwork for a t:slim X2 mobile app – this was most recently slated to launch in the second half of this year, uploading pump data to the cloud and enabling smartphone viewing of insulin on board and pump status. Presumably it could also upload insulin data to Apple Health, improving data integration in other apps.

    • Can be used with or without the Basal-IQ feature or CGM – When advanced features are turned off, the t:slim X2 pump removes the CGM chart from the screen and puts the Bolus and Option buttons front and center.

    Basal-IQ: Strengths, Weaknesses, Opportunities, Threats

    Strengths

    • Basal-IQ algorithm avoids hypoglycemia well and operates silently without alarms or finicky “modes”

    • G6 integration – automated hypoglycemia avoidance (PLGS) without fingerstick calibrations

    • First pump compatible with an iCGM

    • Free software update for current t:slim X2 users, no new hardware

    • Approved for 6+ years at launch

    • Simple training: current users only need 45-minute online training module

    Weaknesses

    • Basal-IQ is not compatible with Dexcom G5 (a tough choice near-term, but the right one in our view)

    • Hybrid Closed Loop (Control-IQ) with TypeZero slated to launch in 1H19 – will Tandem hit the timing? Can it launch Basal-IQ and Control-IQ within nine months of each other?

    • Users must order supplies separately from Dexcom and Tandem

    • No disclosed plans for a <6 years indication

    Opportunities

    • Integration with future iCGMs without needing a new FDA submission? (e.g., Senseonics’ Eversense)

    • Mobile app launch in 2H18 for automatic data upload, pump status viewing on phone

    • Early experience before launch of Control-IQ hybrid closed loop with TypeZero

    Threats

    • Will Dexcom’s G6 rollout and installed base conversion take a while?

    • More preferred pump agreements with payers, such as Medtronic/UHC?

    • Many users in the market for a new pump choose either 670G hybrid closed loop or tubeless Insulet Omnipod Dash?

    Competitive Implications

    • In the US pump market, Basal-IQ gives Tandem more firepower and a far more competitive system to sell against Medtronic’s MiniMed 670G hybrid closed loop and Insulet’s Omnipod Dash.

      • Relative to MiniMed 670G, Basal-IQ does not have hyperglycemia mitigation (the obvious disadvantage), but it does have the hypoglycemia avoidance without alerts/alarms, a no-calibration CGM, a touchscreen interface, Bluetooth, a much smaller pump, and the remote software-update feature – a strong feature combination to sell against 670G. We’d also wonder if the Basal-IQ algorithm will appeal to those frustrated with 670G’s more conservative 120 mg/dl target – Basal-IQ suspends under conditions with a high likelihood of hypoglycemia (e.g., if <80 mg/dl is predicted within 30 minutes), and then resumes once glucose levels start to rise. This could theoretically result in less overall hyperglycemia relative to the 670G’s fixed 120 mg/dl target – of course, the systems have not been tested head-to-head.

      • Insulet’s Omnipod Dash handheld is definitely an improved user experience, but it will not have Dexcom G6 integration on the Dash PDM itself – only on the phone via side-by-side lock screen widgets. On the automation front, Insulet is going straight for hybrid closed loop with Horizon, which is still roughly 1.5-2 years away from launch based on the “probably 2020 timeframe” launch estimate (JPM). Dash will only be in a limited market release later this year, giving Tandem runway to promote Basal-IQ ahead of Dash’s wider launch in early 2019.

    Close Concerns’ Questions

    Q: What is the international timing for Basal-IQ/G6? Or will Tandem wait for Control-IQ hybrid closed loop? (Currently, t:slim X2/G5 is what’s approved OUS.)

    Q: How will users choose between Tandem, Medtronic, and Insulet in the US? Will Tandem’s software update feature mitigate some of the pump choice risk? Will the G6 integration prove a meaningful advantage for Tandem?

    Q: Will Basal-IQ users “hack” a hybrid closed loop by artificially raising their basal rates, knowing they have the PLGS backup in case of lows?

    Q: Will Control-IQ with TypeZero launch as expected in 1H19? Will the pivotal get underway as expected this quarter (i.e., in the next nine days)?

     

    --by Adam Brown and Kelly Close