Medtronic signs exclusive agreement with DreaMed Diabetes to license MD Logic closed-loop algorithm for future insulin pumps – April 6, 2015

This morning, DreaMed Diabetes announced the signing of an exclusive worldwide development and license agreement with Medtronic. Under the deal terms:

• Medtronic will incorporate DreaMed’s MD-Logic artificial pancreas algorithm into future generation insulin pumps (i.e., beyond the MiniMed 670G);
• Medtronic will be responsible for the development and marketing of MD-Logic-integrated pumps.
• DreaMed will receive undisclosed royalties from future sales of each device utilizing the MD-Logic algorithm;
• Medtronic has made a $2 million minority investment in DreaMed Diabetes.

The news is major step for the artificial pancreas field, as DREAM is the first academic group to form a company and publicly license its closed-loop algorithm to an established insulin delivery company. [We say “publicly” because it’s possible that some academic groups have privately licensed their algorithms to insulin delivery companies. This is the first public announcement we have heard.] To date, the “academic-commercial” chasm has been a major unanswered question in the closed-loop field. The type of licensing deal DreaMed/Medtronic announced today has always struck us as a very viable and synergistic commercialization strategy – it combines academia’s clinical trial and algorithm expertise with industry’s ability to secure regulatory approval and commercialize products. 

As we understand it, the MiniMed 670G hybrid closed loop system is far along in development, so this agreement concerns Medtronic closed-loop systems beyond that. This morning’s press release quotes Alejandro Galindo (VP of Medtronic’s Intensive Insulin Management business), who uses the term “fully automated artificial pancreas” – consequently, we assume the ultimate goal of an MD-Logic-integrated Medtronic pump is a 24-hour system that requires no user input. Medtronic has never announced timing on devices beyond the MiniMed 670G, which is slated to launch in the US by April 2017 and in Europe by April 2018 (per JPM 2015).

Today’s agreement gives Medtronic responsibility for further development, which will likely entail further clinical trials and perhaps tweaks to the algorithm (or combining MD Logic with its own algorithms). “Exclusive” means DreaMed will not make the MD Logic algorithm available to other manufacturers; however, the group is developing additional algorithms for future products in diabetes, for which it will seek industry partners. The DREAM consortium has used Paradigm pumps and Enlite sensors in its trials to date (MD Logic running on a portable laptop), so the choice of Medtronic was not a major surprise. Still, we believe it’s a great sign for patients, who should now get quicker and more widespread access to an algorithm that has shown great promise in 15,000 hours of use in clinical trials.

• Meals are still challenging for the MD Logic algorithm. This is one of the issues DreaMed expects to address in its partnership with Medtronic. According to DreaMed, patients find the system easy to use, since it “speaks” the same treatment language that they use every day – the “basal-bolus” language. 
• Today’s update follows our first introduction to DreaMed Diabetes at ATTD 2015 in February, where Dr. Moshe Phillip announced that the group had received a CE Mark for the overnight MD-Logic closed-loop algorithm. This marked the software as the first closed-loop algorithm to receive regulatory approval anywhere in the world. That approval was for an overnight system, though the group has completed 24-hour studies with the MD-Logic algorithm. We assume a new CE Mark would be required for a future Medtronic-integrated system.
• DreaMed Diabetes was established in March 2014 to develop and commercialize diabetes treatment and management solutions. The company’s flagship product is the MD Logic artificial pancreas algorithm, known as the “GlucoSitter.” DreaMed is also working on other development programs, including insulin-treatment-profiling systems for diabetic clinics and patient decision-support and educational apps. As we understand it, there is potential to work with other industry partners for these applications.
• The DreaMed Diabetes team is five full-time employees, including CEO Eran Atlas, Chief Scientific Officer Dr. Moshe Phillip, and Drs. Tadej Battelino and Thomas Danne. The company intends to double its team in the next year. Medtronic’s investment of $2 million was characterized as “minority,” though it is the sole investor in DreaMed Diabetes as a company. Previous activities, under the Diabetes Technology Center at Schneider Children's Medical Center and under the DREAM consortium, were supported by grants and other industry players.
• The MD Logic algorithm (“GlucoSitter”) has been tested in more than 220 patients and more than 15,000 hours of operational use. Trial have taken place in hospitals, diabetes camps, and home settings, with the most notable publication in NEJM in 2013 (Nocturnal Glucose Control with an Artificial Pancreas at a Diabetes Camp). The team started developing the algorithm in 2007. Eran Atlas, Dr. Revital Nimri, Shahar Miller, and Dr. Moshe Phillip were there from day one. The DREAM consortium with Drs. Thomas Danne and Tadej Battelino was established in 2008.

Artificial Pancreas Efforts in Industry

• Today’s news continues Medtronic’s industry-leading commitment to automating insulin delivery. The MiniMed 640G (predictive low glucose suspend) has already launched in Europe and Australia, and a pivotal study of the device is underway in the US (PMA submission expected this calendar year). Meanwhile, the MiniMed 670G hybrid closed loop system is well into development, with launch expected in the US by April 2017 and in Europe by April 2018 (per JPM 2015).
• Other companies in the field are certainly thinking about artificial pancreas efforts, though none appear to be as far along as Medtronic in terms of product development and clinical data:
  
  • Tandem has initiated an artificial pancreas project to commercialize a predictive low glucose suspend (PLGS) or basal closed-loop system. The company plans to file an IDE in 2H15 with the FDA for a clinical study involving its first artificial pancreas product – management said both PLGS and basal closed-loop system are options, and discussions with the FDA will help define the regulatory pathway and product configuration. In the 4Q14 call’s Q&A, a “late 2017” launch was deemed “not an unreasonable timeline,” given the major steps that need to happen (clinical work in 2016 + a ~12 month regulatory review). Tandem will use the Dexcom sensor (we assume Gen 5, given the references to the t:slim’s built-in Bluetooth) and take on the PMA submission.
  • Insulet plans to be involved in artificial pancreas development and shared in its 4Q14 call that it is working on the CGM and algorithm fronts. Management mentioned the Dexcom Gen 5 partnership, as well as potential to work with Abbott or others in CGM.
  • J&J originally signed a partnership with JDRF in 2010 to develop a first-gen automated insulin delivery system; a small in-clinic feasibility study was presented at ADA 2014, less ambitious than the one shown at ADA 2013. The Animas Vibe has finally launched in the US, so perhaps the company will move on to more automated efforts now.
  • Asante has expressed public interest in an artificial pancreas (see AADE 2014), though no concrete plans or timing have been announced. The company’s planned IPO was withdrawn last week.
  • Roche is working on its own CGM, but it’s still at least a year away from commercialization, and we assume an artificial pancreas application is beyond that. The company has alluded to some internal discussion (see JPM 2015), so there may indeed be something to report on in the coming year or two.
  • Bigfoot Biomedical: There are no product specifics that we could persuade the team to disclose right now, but given the collective experience and drive of Jeffrey Brewer (CEO), Bryan Mazlish (Chief Technology Officer), Lane Desborough (Chief Engineer), as well as recent hires George Crothall (Director of Hardware Development) and Bethany Salmon (Director of Business Development, formerly of JDRF), we imagine some sort of automated insulin delivery system is certainly possible. See our February interview for more details.
  • Dexcom: “We will continually evaluate our own path to the artificial pancreas closely. We have the world’s most accurate and reliable system. We intend to play in this arena.” This remark by CEO Kevin Sayer in Dexcom’s 4Q14 call continued some of the positive remarks from JPM 2015 – the question going forward is how the company will engage with the various efforts out there. We wonder if/how Dexcom could engage with academic players like UVA and the Bionic Pancreas, who are clearly thinking about regulatory and commercialization as their studies advance to the pivotal stage. Said management in the February call, “We haven’t found anything we want to commit to yet.”

ATTD 2015 Coverage of DreaMed’s MD-Logic System

Integration Of The MD-Logic System Into Daily Management Of Diabetes

Revital Nimri, MD (Schneider Children's Medical Center, Petah Tikvah, Israel)

Dr. Nimri presented a host of never-before-seen data, including the latest interim results from the consortium’s three-month overnight study and recent findings from a four-day fully closed-loop study.

• Interim results from DREAM’s randomized three-month overnight study look promising. The trial is evaluating the safety and efficacy of long-term overnight home use of MD-Logic vs. sensor-augment pump (SAP) therapy. The study has reported data from 12/36 patients (six on closed-loop; six on SAP). Patients on MD-Logic have spent 63% time-in-range, with only 1.3% of the time in hypoglycemia (< 60 mg/dl); patients in the control arm have spent only 43% time-in-range despite using more insulin (10.3 units vs. 7.9 units), with 3.4% of the time in hypoglycemia. So far, the data looks largely consistent with previous overnight findings, something the full results from other centers will confirm.
• The DREAM consortium has completed its first day-night closed-loop study. This “over-the-weekend,” four-day trial was new to us and investigated fully closed-loop control for 60 hours compared to SAP at three centers across Europe. The crossover design consisted of a three-week run-in period on SAP before randomizing patients to 60 hours of closed-loop or SAP therapy. Average glucose in the closed-loop arm was 144 mg/dl, with 68% of the time spent in range (70-180 mg/dl). In the SAP arm, average glucose was a bit higher at 159 mg/dl, with 58% of time spent in range. Patients in neither arm experienced much hypoglycemia (0.9% CL vs. 0.8% SAP). We would highlight that these are motivated patients in excellent control to begin with, and MD-Logic was able to bring them safely into even tighter control. On the insulin front, patients on closed-loop used significantly less total basal insulin (54 units CL vs. 62 units SAP) and significantly more bolus insulin (64 units CL vs. 47 units SAP) than those on SAP, though it was notable to see that total daily dose was not significantly different between the two arms.

-- by Adam Brown and Kelly Close