Another OmniPod Competitor?
This is almost too much to take as besides the surprising Orexigen (NASDAQ:OREX) vote yesterday by an FDA panel, the FDA also has approved the V-Go™ Disposable Insulin Delivery Device made by Valeritas. According to a press release issued by the company, “Valeritas, Inc., a medical technology company committed to the development and commercialization of innovative drug delivery solutions, announced today that the US Food and Drug Administration has cleared the company’s V-Go Disposable Insulin Delivery Device for the continuous subcutaneous delivery of insulin in preset basal rates and with on-demand bolus dosing for adult patients requiring insulin. V-Go devices will be available in a preset basal rate to deliver 20, 30 or 40 Units of insulin in one 24-hour period (0.83 U/hr, 1.25U/hr or 1.67U/hr respectively) and on-demand bolus dosing in 2 Unit increments (up to 36 Units per one 24-hour time period).”
The V-Go now joins the Solo as possible competitors to the OmniPod from Insulet (NASDAQ:PODD), in the growing patch pump segment of the insulin pump market. In a separate announcement yesterday Insulet stated they would be selling another 3 million shares of stock. According to a press release issued by Insulet, “Insulet currently expects to use the net proceeds of this offering for general corporate purposes, which may include the repayment of certain outstanding debt obligations.”
Before we get into how the V-Go may impact Insulet and the insulin pump market in general, the news from Insulet should provide further evidence of just how difficult the insulin pump business is. Many, including Diabetic Investor, never imagined that Insulet would still be an independent company ten years after launching the OmniPod. Yet here we are more than ten years later and Insulet once again needs more capital. While the company has done a good job validating the patch pump market, they continue to struggle with cost of goods. As good as the OmniPod is no one wants to buy a company whose cost of goods does not allow for higher margins. The simple fact is as a stand-alone company, Insulet’s revenues alone are not enough to fund the operation of an insulin pump company. The critical question facing the company is how many times can they go the capital markets?
Getting back to the V-Go impact on Insulet and the insulin pump market in general, Diabetic Investor expects the V-Go to face several issues. Besides the normal issues like reimbursement, customer support and actually getting this product into a physician’s office, there are some structural issues with the V-Go. Unlike a conventional insulin pump which is programmed by the patient, the V-Go delivers insulin with preset basal rates as the press release notes the V-Go comes with three different basal rates “20, 30 or 40 Units of insulin in one 24-hour period.” Another key difference is unlike a conventional pump which is either worn for three days or refilled every three days, the V-Go is worn for one day and then thrown away and another V-Go is then attached. Also unlike conventional pumps which allow the users to specifically dose additional insulin, bolus, the V-Go allows patients to bolus in 2 unit increments.
In reality the V-Go is hybrid product, a cross between an insulin pump and insulin pen. Like a pen, the V-Go is not electronic, like an insulin pump it delivers insulin on a continuous basis. The question is where does this hybrid product fit in? Just as important, how will the company position the product with physicians?
With no electronics the patient will not have the ability to suspend or change the V-Go’s basal rate, a critical and frequently used feature with conventional insulin pumps. The same is true with bolus rates. In the real world Diabetic Investor can see the scenario developing where the patient will have to make a difficult decision; what happens when they need an odd number of units? With no bolus calculator, another frequently used feature with conventional insulin pumps, the patient must calculate by hand the number of units they need when the eat. What happens when this calculation tells the patient they need 5 units? Do they risk hypoglycemia and administer 6 units or do they risk hyperglycemia and deliver only 4 units? In the real world bolus rates do not always fall into an even number of units.
With no electronics another problem occurs as the patient will not have the option of using extended-bolus. In a conventional pump the patient can program their pump to deliver insulin over an extended period of time, for example based on the type of food they are eating they can program their pump to deliver 5 units immediately and another 3 an hour later. This is another frequently used feature with conventional pumps as different food groups breakdown at different times and patients use this extended bolus feature so that insulin is available when glucose is spiking thus preventing hyperglycemia. For a patient using the V-Go this would have to be done manually and place a greater burden on the patient, where in a conventional pump this is done automatically.
In the real world it is actually easier for a patient to use Lantus as their basal insulin and a short-acting insulin to cover their mealtime needs. An insulin pen also offers the additional benefit of exact dosing as the patient can simply dial out the dose needed and is not limited to delivering insulin in 2 unit increments.
The reality of the situation is insulin pump therapy is enhanced by electronics as it makes pump therapy more patient friendly. Take away the electronics and you are placing a greater burden on the patient. Diabetic Investor can only imagine how difficult a patients’ life would be using the V-Go. Take a normal everyday occurrence, eating a meal. Before eating the patient checks their glucose levels and calculates the amount of carb intake which helps determine the amount of insulin they need to remain in their target glucose range. A patient using an OmniPod places a test strip in their personal diabetes manager (PDM), once the glucose test is complete the patient presses the next button and the PDM asks the patient a simple question; Are you going to eat now? If the answer is no it tells the patient how much insulin, if any, they need. If the answer is yes it asks the patient to enter the carb intake. It then provides the patient with a recommended dose of insulin, which can be delivered immediately or over an extended period of time, a dose which can manipulated by the patient.
A patient using a V-Go would have to do all the calculations manually and would have little control over how much insulin is dosed and when it should be delivered. Essentially the V-Go patient is doing the same thing as a patient using an insulin pen but with less control over their insulin dosing. This has always been the problem with the many insulin patches seen by Diabetic Investor, as they limit patient options for insulin delivery. Diabetic Investor is also concerned that patients will get a little tired of putting on a new V-Go patch on every day. Both insulin pumps and insulin pens can be used for three or more days without the need for refilling. Simply put there is less patient interaction with their insulin delivery system and when it comes to patient interaction with their insulin delivery system less is better than more.
In the real world Diabetic Investor can envision a situation where the patient is given three options for insulin delivery, pen delivery, insulin pump or the V-Go. The physician or more likely the nurse educator explains the differences between them and how they would work in a real world setting. Given the complexities of insulin therapy insulin pump therapy offers the patient the most advanced delivery system, the main drawback being learning how to use a pump effectively. An insulin pen is simple to use but lacks the tools provided by a pump which help the patient manage their diabetes more effectively. (This will change when Sanofi Aventis (NYSE:SNY) comes out with their insulin pen which communicates with a glucose monitor that is equipped with a bolus calculator.) Given the many limitations of the V-Go system, even if the patient used a glucose monitor equipped with a bolus calculator or a bolus calculator app, the patient will have fewer options as to how much and when insulin is dosed. Or put another way, instead of making insulin delivery easier for a patient it becomes more difficult.
In many respects the V-Go reminds Diabetic Investor of the Solo, as like the Solo it seems to have been designed by engineers who have no idea what an insulin using patient goes through each and every day. Frankly, Insulet, Animas and Medtronic (NYSE:MDT) should want the V-Go on the market as it will only make their pumps look better by comparison. When placed side by side and looking at all the different features and benefits of conventional insulin pumps, the V-Go just doesn’t stack up. The truth is the V-Go has no place in the market and in reality is less functional than an insulin pen.
Perhaps one day companies like Valeritas and Medingo, now owned by Roche, will actually think about the patient BEFORE they design their systems. Insulin therapy is complex enough already and we don’t need systems that deliver insulin that make this therapy option even more complex. The goal should be to make the patients’ life easier and provide them with more tools that can help them effectively manage their diabetes. Medingo missed the target with the Solo and Valeritas missed with the V-Go, the question remains of all the insulin pump wannabes out there will anyone actually hit the target? Given what Diabetic Investor has seen so far we’d be happy if they even came close.