Memorandum

Bigfoot Biomedical raises $35 million in Series A financing; mid-2017 pivotal trial of smartloop automated insulin delivery system – October 18, 2016

Executive Highlights

  • Bigfoot Biomedical has raised an impressive $35.5 million in Series A financing to support final development activities for its smartloop automated insulin delivery service.
  • The first clinical trial started in July and a pivotal trial is expected to start in mid-2017. FDA PMA submission is expected in “early 2018,” back slightly from the previous “end of 2017” plan. This company is moving seriously fast (it’s just two years old) and now number 40 employees, 40% of whom have a personal connection to type 1 diabetes.
  • Bigfoot’s vision to automate insulin delivery remains highly compelling: a smartphone app to view/operate the closed-loop system, an Asante pump with an embedded closed loop control algorithm (no screen or buttons), a CGM (likely Dexcom), and a BGM all accessed with one prescription and reimbursed as a service for one monthly fee.

Ahead of the official announcement tomorrow, Bigfoot Biomedical shared with us today that it has raised an impressive $35 million in Series A financing to support final development activities for its smartloop automated insulin delivery (AID) service. Quadrant Capital Advisors led the round, with participation from Cormorant Asset Management, Senvest Capital, and Visionnaire Ventures. Bigfoot started its first clinical trial in July (n=50 at Stanford, Sansum, Barbara Davis Center – what a trio!), a key proof point for securing this funding and just 1.5 years following the company’s founding in late 2014 – talk about serious speed and execution from an impressive team that is now 40 people and has needed less than $15 million to date.

A pivotal trial of smartloop is expected to start in mid-2017, roughly on par with previous expectations for “1H17.” FDA PMA submission is now expected in “early 2018,” back slightly from the previous “end of 2017” plan. However, given the three-month FDA priority review for Medtronic’s MiniMed 670G hybrid closed loop, we expect a smartloop launch in 2018 is still very possible – on par with plans of Insulet and Tandem, and slightly behind Animas (assuming its pivotal begins this quarter; see our competitive landscape).

Bigfoot’s AID vision, first shared at JPM 2016, remains compelling: a smartphone app to view/operate the closed-loop system, an Asante pump with an embedded closed loop control algorithm (no screen or buttons), a CGM (likely Dexcom), and a BGM all accessed with a single prescription and reimbursed as a service for one monthly fee. Bigfoot is characterizing smartloop “the world’s first Internet-of-Things medical device system delivered as a monthly service.” The press release announcing this news is among the most interesting we’ve read in recent memory, emphasizing multiple key components about the system: the design for simplicity and security; cloud connectivity (over-the-air updates; machine learning for personalization, remote monitoring); the ability to save HCPs time; and its propensity to make better use of data. We like Bigfoot’s idea to offer AID as a subscription service, which could mean greater accessibility for patients and payers than current sensor-augmented pump therapy that requires increasingly large patient investments, given higher co-pays and higher deductibles that are all the rage.

Bigfoot currently has a development agreement with Dexcom for the ongoing clinical trial, though a commercial agreement has not been signed. CEO Jeffrey Brewer hopes this can be done soon, and that Dexcom will see the value in accelerating this field, as it will be critical for helping patients, improving the safety of insulin dosing, and keeping competitive pace with Medtronic. Most type 1s are on MDI for now (as well as many still on human insulin, given the cost advantage), but as the value proposition of AID improves with subsequent generations (and real-world data shows the value), we hope and expect to see the pump market expand.

  • Aside from the company’s vision and rapid progress, one thing is clear to us: this company is nailing the marketing as well as anybody in the field. In looking over Bigfoot’s updated website, Facebook page (19,847 likes), and Twitter and Instagram (thousands of followers), the social media presence is patient friendly, engaging, inspiring, and dissatisfied with the status quo – impressive for a company without a product or marketing budget to speak of. See some of our favorite examples below.
  • Bigfoot shared with us its latest user interface for the mobile app, which is warmer and very different than most medical devices: “Well hello Sunshine. What’s for breakfast?” The product looks sleek and a big move away from the clinical feel of pumps to date. 

  • In the press release, CEO Jeffrey Brewer notes that as of July, Bigfoot was only the second company to embed a closed-loop control algorithm in a fully integrated sensor augmented insulin pump (aside from Medtronic). Indeed, other players’ studies have used smartphones/tablets running the algorithm (e.g., Animas’ studies from prior ADAs), external CGM receivers (e.g., Insulet’s first feasibility study), or not tested hybrid closed loop (e.g., Tandem’s PLGS study completed in August). Notes Mr. Brewer, “From a standing start it took Bigfoot a year and a half to reach this milestone; to design, develop, manufacture, and begin human trials with a fully integrated automated insulin delivery system.” They had a big headstart with the work of now Chief Technology Officer Brian Mazlish and his wife Dr. Sarah Mazlish; see the diaTribe.org interview with three Bigfoot leaders last year, Jeffrey Brewer, Bryan Mazlish, and Lane Desborough as well as related pieces in Wired and DiabetesMine. Although Dr. Mazlish is not an employee of the company and although the product she and son Sam Mazlish wear is not an exact replica of Bigfoot’s product in development, and although she does not actively work on development as we understand it, she is still viewed by many as a genius pediatrician whose perspectives have had a meaningful impact on the company.
  • As part of the Series A Financing, Bigfoot’s two-person Board of Directors (CEO Jeffrey Brewer and CTO Bryan Mazlish) will expand to include Thomas Brener (Managing Director of Quadrant Capital Advisors) and Bob Kavner (a director or board chairman for many successful private and public entities, including Pandora Media, Earthlink Networks, Overture Services, and Ticketmaster-Citysearch). Quadrant Capital Advisors is the lead investor in the Series A and now Bigfoot’s largest shareholder.
    • Quadrant previously funded Bigfoot via debt financing and does not have other diabetes investments from what we can tell. The firm seems pretty young based on its Crunchbase page (eight investment in six companies).
    • Cormorant Asset Management is larger investor, with 27 investments in 26 companies under its belt, including nine IPOs – see its Crunchbase page here. It is focused on healthcare, though the only company we recognize in its portfolio is the obesity player Gelesis (last raised $32 million in December 2015) – admittedly, we don’t watch life science investments closely outside our field.
    • Senvest Capital is Canadian-based and has a broad portfolio mostly focused in technology and finance. We did not see any diabetes or obesity investments in its portfolio. 
    • Visionnaire Ventures is San Francisco-based and the most traditional VC-looking of Bigfoot’s Series A investors. The firm invests in “next generation and disruptive technologies to evolve and create new internet and mobile experiences.” Its most notable investment is Square (IPO’d), though it’s portfolio includes self-driving cars, e-commerce, artificial intelligence, robots, and more.
  • The press release is fascinating to read, sharing Bigfoot’s bold vision for what automated insulin delivery should do:
    • “With its smartloop service, Bigfoot seeks to change the paradigm of care for insulin-dependent diabetes by leveraging data, connectivity, automation, and machine learning to reduce the burden on people with diabetes and maximize the leverage of health care providers.” We love focus on making HCPs more efficient and on working with PCPs, which is a clear goal of the system.
    • “The core of the service is a cloud-connected ecosystem for diabetes disease management, interfacing with wearable insulin delivery and glucose monitoring tools, all accessible through a secure mobile app on a smartphone.” This sounds very “open access.”
    • “Designed from the ground up to be user friendly and utilizing a safety driven design process, Bigfoot’s smartloop system incorporates features such as over-the-air upgradeability and passive data capture to enhance all aspects of chronic disease management. Bigfoot’s sophisticated machine learning engine personalizes therapy and provides automated decision support to both patients and providers.” Again, nice to see the nod to providers, whom we believe are as in dire straits as patients.
    • “...bring a disruptive business model, consumer usability, secure connectivity, and powerful machine learning automation systems to the world of medical devices while maintaining the highest level of safety required for Class III medical devices.”

  • The press release doesn’t mention a smart insulin pen, though a graphic on Bigfoot’s website does include one in its “connected device ecosystem.” We see very high potential for Bigfoot’s data/algorithm expertise (Bryan Mazlish, Lane Desborough, many from the DIY Nightscout community) to port closed loop algorithms over to open-loop therapy, which could change public health substantially.
    • As we have discussed in recent months, the smart pen landscape is heating up, with Companion Medical’s InPen FDA cleared (launching in 2017), Common Sensing’s Gocap starting a 125-patient study as Joslin, and Patients Pending announcing the Timesulin Dose Capture Device (regulatory filing in 2017).

  • Bigfoot has been active on social media discussing the MiniMed 670G. The tweet below highlights some expected user experience advantages relative to Medtronic’s just-approved hybrid closed loop: the expectation is by Bigfoot to have no need to carb count (only announce meals, we assume qualitatively) and no initial run-in phase to optimize hybrid closed loop parameters (the 670G needs 48 hours of open loop therapy before closed loop can start). We look forward to watching how all of this could play out. We’re a bit surprised in these tweets not to see reminders that this product is in development only; that said, it is very clear from Bigfoot’s website that this is a product in development and we see the company as a beacon of responsibility on that front overall.

 

--by Adam Brown and Kelly Close