DexCom CEO Discusses Q3 2010 Results

First of all, don't ask me what the heck this is.  I'm not a financial guru.  I know nothing about stocks, bonds, and trading.  


All I know is that our Animas warranty is set to expire soon. 


Like...


REAL soon.


I started thinking about the fact that I'd better get on the ball to get her renewal process rolling after the Ping remote fell out of her diabetes bag yesterday afternoon...

Well darn.


That ominous streak down the center of Santa-Ping is NOT good.  


Sigh.


At least we can bolus from the pump itself so she doesn't have to go back to shots until the replacement arrives.  (ETA:  Wednesday, btw)  But still.  I've gotten lazy in my old age and I LOVE THAT STINKIN' REMOTE!


OH, yeah....back to the Dexcom thing I'm posting about today...


So, ANYway...before I make the call to get a new pump warranty, I wanted to make sure that I haven't missed anything about the release of the Animas/Dex combo pump.  You know...brush up...Google around a little.


And that's how I found THIS...


Apparently it's a transcript of the Dexcom 3rd Quarter 2010 earnings conference call, dated 11/9/10.


Hmmmm....very interesting....


It starts off with a little introduction followed by a cautionary statement basically stating that the statements made are "forward-looking" and essentially subject to change.


It goes on to give a financial statement about revenues...yada, yada, yada...  By the way, it's worth mentioning the fact that this section reports Flextronics (the contract manufacturer) is relocating the Dexcom production line from California to China...as a result, the internal sensor manufacturing line is expected to be shutdown for 2 weeks during the 1st Quarter of 2011.  It looks like they're increasing sensor production during the 4th Quarter of 2010 to prepare for this shutdown. 


Moving on...


The next section talks about the fact that the FDA is "undergoing sweeping changes to its review and approval policies and procedures, and has set forth as a priority an effort to improve the level of regulatory science the agency applies to all medical devices to better assess, evaluate, and review products." 


and


"As a result, the medical device industry is in the midst of a sudden and dramatic shift in the requirements for product approvals. This has created an atmosphere of unpredictability and uncertainty surrounding the submissions process and in many instances it is not altogether clear what the agency will require or expect of new submissions, particularly for companies seeking clearance under the 510(k) regime."


Then they begin to address the Gen4 sensor, stating..."In fact, we believe we have identified an opportunity to accelerate review of our next-generation hardware platform as part of an amended Gen4 filing. Specifically, when we conducted the pivotal trial to support our Gen4 sensor filing, our next-generation hardware platform, which includes a smaller receiver form factor with a color screen and a modified transmitter with more robust transmission frequency, were still in the development stage. Due primarily to the manufacturability and scalability benefits provided by the Gen4 sensor, we elected to move forward with the trial and subsequent filing of the Gen4 sensor paired with our legacy hardware platform. Now, as part of a comprehensive response to the FDA, we intend to include not only the additional information requested by the agency concerning the Gen4 sensor, we expect to include data to support approval of our next-generation hardware platform. This would enable us to launch a more robust fourth generation system."


And this section also says "So while our timeline for launching the Gen4 system will be slightly delayed, through an open and transparent dialog with the agency, we believe we will be in a position to provide the additional information requested of us regarding the Gen4 sensor, and at the same time, accelerate review of our next-generation hardware platform, which would position us to launch yet another best-in-class CGM system during the second half of the year."


Then we get to the nitty gritty...


"Shifting to our combination product, the regulatory uncertainty facing the insulin pump market is particularly daunting. Insulin pump companies today are faced with the likely prospect of having their pump products regulated under a new subset of class two devices where approval standards are in a state of flux and human clinical data requirements are unclear.

This changing landscape will certainly impact approval timelines in the United States for integrated systems with Animas and Insulet as I suspect it will for Medtronic and the numerous small privately funded pump companies seeking to bring new pump products to market.

As you know, we filed a PMA supplement seeking approval of an integrated insulin pump continuous glucose monitoring system with Insulet Corporation earlier this year. We've now received a formal written response from the agency regarding our submission, and much like the response to our Gen4 submission, the FDA has requested substantial additional information including additional human clinical trials data concerning the safety of insulin delivery by the system.

We are working with Insulet to formulate an appropriate response to the agency, but due to the time and expense associated with conducting an additional clinical trial, Insulet is evaluating whether it makes sense to move forward with the existing combination product that uses our SEVEN Plus, and the current OmniPod, or whether it would be more beneficial for potential patients to incorporate our current or future generation CGM technology into Insulet's next-generation OmniPod platform and conduct a more expansive trial as requested by FDA.

We are also exploring the opportunity to submit an IDE relating to the existing combination product for research purposes, which would allow us use of the system in various artificial pancreas studies in the near term. With respect to our integrated system with Animas Corporation, we are pleased to report that we have concluded development, and are nearing completion of final systems testing.

However, in light of the uncertain clinical and regulatory landscape I just mentioned, and based on our review of the additional information requested by FDA in response to our PMA supplement filing with our combination product with Insulet, we are seeking a pre-IDE meeting with the agency to determine the best clinical path to support approval of our combination product with Animas in the United States.

While this path will not enable us to file a PMA supplement for the Animas system this calendar year, we believe that working on a collaborative basis with FDA prior to conducting a human clinical study is the most prudent course of action from a timing perspective, and certainly the most cost-effective way to proceed."

In the Q&A section, it would appear that Animas is contracted to release a combo product with the newest technology, currently awaiting FDA approval: the Gen4 sensor.  Obviously, that sensor needs to finish the FDA approval process and then the combo pump will have to go through the FDA process before it hits the market.

There's further discussion about Insulet's combo product with the Dexcom SEVEN Plus that is currently awaiting FDA approval.  The discussion seems to be whether or not Insulet is going to release it or wait to upgrade the technology, stating "Our current contract does not provide for access to our future technologies, but certainly we're open to discussing that with them." It would appear that this is a decision that Insulet needs to make.  The commenter does state "I'll just tell you my opinion is if I were driving the ship, I'd be launching with the SEVEN Plus, because I would certainly want to have some cannibalization going on of the existing pump combo by Medtronic. But I don't make that decision."

Anyway, I just found it all very interesting.  

And, in case you're wondering, I'll be calling to start the paperwork process to get our Animas pump warranty renewed ASAP.

Here's the link, once again, so you can read it all for yourself...

DexCom CEO Discusses Q3 2010 Results - Earnings Call Transcript