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Thursday, Mar 28, 2024

Medtronic Pushes Forward

Medtronic’s diabetes unit leaped ahead of its competitors six years ago with the first ever integrated insulin pump and continuous glucose monitoring system, leaving competitors such as Johnson & Johnson in the dust. With 450,000 customers, the pump and monitor made the company a clear market leader in the $7 billion business of fixing the country’s diabetes epidemic. Now the unit that employs 1,300 people in Northridge is racing toward the next innovation in diabetes care: an artificial pancreas. While developing that device is at least five years away, the company unveiled the concept and other ideas — such as a television display that alerts the family if glucose levels are too high or too low — at the new showroom it opened at its headquarters this month. “The vision is to eventually have no human interaction in the management of diabetes — a fully automated system that acts like the human pancreas,” said Katie Szyman, president of the diabetes unit. Staying ahead is critical for the division, which eliminated 468 jobs last summer, moving lower-paying customer service jobs to Texas. While sales rose 7 percent to $367 million in the latest quarter compared to the same year-ago period, the diabetes care market is a highly competitive space and Medtronic will have to work hard to maintain its leadership position. Johnson & Johnson’s Animas Corp., Roche and Insulet Corp. are just some of the companies chasing what Global Data estimates will be an $11 billion worldwide market for insulin delivery devices by 2017. J&J introduced its own integrated sensor and pump system last year, giving Medtronic more competition. Also giving the company a run for its money are the new so-called tubeless, patch pumps introduced recently by Insulet and Roche, which eliminate the tube between the insulin pump and the device that delivers the insulin. The product combines the pumping mechanism with a sensor and insulin reservoir into one small, waterproof pod that’s programmable with a wireless remote control device. It’s just two pieces, rather than Medtronic’s three. In addition, a host of other device and pharmaceutical manufactures are working on ways to manage a disease that some have called an epidemic. Simplified insulin pens are now available and Valencia-based MannKind Corp. is working on a drug-device for inhaling insulin, which is currently in trials. Companies such as Amylin Pharmaceuticals are working on saliva from lizards to treat the diabetes epidemic. “Medtronic may be a market leader, but they can’t rest on their laurels,” said Les Funtleyder, portfolio manager at Miller Takak and author of the book “Health Care Investing.” He said the diabetes unit is one of Medtronic’s better performers, but it can do even better, given the huge opportunity in diabetes. “The competition is great because it means more products and choices and more innovation for those with the disease,” added Kellie Rodriguez, director of education services at the Diabetes Research Institute at the University of Miami. The need is certainly there. Rodriguez noted that diabetes drugs and the technology for delivering insulin have never been better. Still, of the 26 million people with diabetes in the U.S., just 12 percent have their sugar, blood pressure and cholesterol fully under control, she said. “What we want and what we have are very different,” Rodriguez said. The reason, she said, is rooted in self-management of the disease. Diabetes can’t be controlled with five or six health care visits a year. “It’s what happens between each of those visits that matters,” she said. Easier self-management is precisely the goal behind the big push for something like the artificial pancreas. According to Global Data, the infusion pump business alone will be worth $11 billion globally by 2017. Funtleyder said the artificial pancreas could be a blockbuster device — if it gets out of the lab. “It’s one of the holy grails,” he said. Szyman said there are some critical missing pieces that R&D is trying to solve before it has a product that functions like the human pancreas. “We have to get the sensor technology to be more accurate and to be able to develop the algorithm to fully close the loop,” said Szyman, referring to the ability of the pump and sensors to communicate seamlessly. “It’s really a data challenge.” She said some 400 R&D employees in Northridge, along with some 20 academic research centers globally, are working on the challenge. New Customer Experience Center Szyman said one role of the unit’s new Customer Experience Center will be to connect more closely to Medtronic customers. In the past, she said, products were developed mostly with physicians in mind. Today, those products have to address consumer needs and conveniences, she said. The center also will serve as an educational resource in the community — a place where people can come to learn about living with diabetes, she said. And it will function as an innovation lab, said Jeffrey Hubauer, general manager of the insulin delivery business unit of Medtronic. Medtronic plans to invite consumers, health care practitioners and researchers to brainstorm new ideas on how to improve diabetes care. The center includes a mock-up living room, bedroom and kitchen, as well as a hospital room. “Instead of a focus group meeting in a room with all white walls, they are in an interactive facility that’s more conducive to generating new ideas or experimentation,” Hubauer said. “It’s more of a real world lab.” Szyman said Medtronic modeled the center after Microsoft’s Home of the Future, which displays sensor and touch-pad technologies that, in all likelihood, will not become a reality for some time to come. By contrast, some of the ideas on display at the Medtronic center are already available, such as the mySentry Remote Glucose Monitor, which hit the market in January. It is the first FDA-approved monitor that allows parents or caregivers to monitor the integrated pump system on an electronic display in real time. The system is similar to a baby monitor, allowing parents to have peace of mind at night, when a diabetic child’s sugar levels can fluctuate without warning, sometimes to deadly effect. Also on display are some products getting ready to launch, such as a new sensor for the European hospital market, which will continuously monitor a diabetic patient’s blood sugar, making hospital finger pricks a thing of the past. Szyman said she hopes new ideas will emerge from the center as customers who already use Medtronic products are invited to meet with research and development staff. “It’s a place to share ideas and generate new ideas.”

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