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Medtronic’s Artificial Pancreas Approved for U.S. Diabetics

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Sept. 27 (Bloomberg) -- Medtronic Inc. the world’s largest maker of heart-rhythm devices, won U.S. regulatory approval for the first artificial pancreas that shuts itself off when a patient’s blood sugar levels get dangerously low.

The device, called the MiniMed 530G, combines an insulin pump with a sensor that halts insulin delivery for two hours if a patient’s blood sugar falls below preset levels. It’s a step toward a fully automatic artificial pancreas that adjusts insulin delivery continuously as glucose levels change.

The pancreas produces the hormone insulin, which converts blood sugar to energy. Type 1 diabetes occurs when insulin- releasing beta cells in the pancreas are destroyed. Patients repeatedly test their glucose levels throughout the day, then inject insulin to control blood sugar. The Medtronic system is an advance over existing machines that sound an alarm to wake sleeping patients when their blood sugar gets too low.

The device “can help people gain better control of their diabetes versus multiple daily injections,” said Katie Szyman, president of diabetes at Minneapolis-based Medtronic, in a statement announcing the approval today.

Medtronic rose less than 1 percent to $53 at the close in New York. The shares have gained 22 percent in the past 12 months.

Early Approval

The approval came about six months earlier than investors expected, said Danielle Antalffy, an analyst at Leerink Swann Research in New York, in a note to clients today. It could spark a turnaround in Medtronic’s diabetes business during the next several quarters, averting expected declines, she said.

“Now with 530G in hand, Medtronic is better positioned to reinvigorate its U.S. Diabetes sales growth, which has declined now for three consecutive quarters,” she wrote. “Most importantly, the 530G should help Medtronic address a backlog of patient upgrades that have likely built over the last few quarters in anticipation” of approval, she said.

About 5 percent of the 25.8 million American diabetics have Type 1, which is most often diagnosed in young people and needs lifelong management. High blood sugar can led to heart disease, nerve and kidney damage, and amputations. Hypoglycemia, or low blood sugar, can cause confusion, blurred vision and loss of consciousness. The danger is exacerbated if a pump continues to deliver insulin to someone experiencing hypoglycemia.

Monitor Use

Almost one-third of Type 1 diabetics use continuous glucose monitors and the number should grow as improvements lead to better control, said Aaron Kowalski, vice president of treatment therapies at JDRF, a New York-based advocacy group, in an interview in June.

The market for the monitors sold by Medtronic and San Diego-based DexCom Inc., as well as the insulin pumps that replace repeatedly daily injections, is about $2.4 billion a year. Insulet Corp. of Bedford, Massachusetts, makes an insulin infusion system that competes with MiniMed, while Johnson & Johnson is developing its own version of an artificial pancreas.

DexCom shares fell 6.7 percent to $27.23, while Insulet declined 2.1 percent at $35.84. New Brunswick, New Jersey-based Johnson & Johnson dropped less than 1 percent to $86.73.

The MiniMed 530G is the first device approved through a new U.S. Food and Drug Administration program designed to clarify the steps the industry needs to follow to bring a replacement pancreas to the market. It has been sold outside of the U.S. since 2009 as the MiniMed Veo System.

The machine is approved in the U.S. for patients who are at least 16 years old, and should be available in the next several weeks, Medtronic said. The company plans more tests in children as a young as 2. Medtronic will conduct a post-approval study to track the device’s performance and communicate directly with patients monitor their experience.

Manufacturing Adjustments

The company will make manufacturing adjustments to comply with a Sept. 19 warning letter from the FDA. The company said it has addressed many of the agency’s observations already and will resolve the others as quickly as possible.

Medtronic will continue to work on computer systems, blood sugar monitoring and insulin delivery technology to bring a totally artificial pancreas to the U.S., Szyman said.

The next generation device will be designed to anticipate blood sugar levels and administer insulin accordingly to keep patients in an ideal range with little patient involvement.

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