OK so what?
Yesterday Unilife (NASDAQ:UNIS) launched their Imperium patch pump. Yes Unilife is one of the many companies who believes they have built a better mouse trap and further believes there is a viable market for these wearable insulin delivery devices. Devices which deliver insulin at preset dosing amounts combined with the ability for the patient to dose additional insulin with the touch of a button. Others in this category include Valeritas, which was supposed to go public but has yet to do so, Calibra which was acquired by Johnson and Johnson (NYSE:JNJ) and CeQur.
The Imperium does have some differences with the others in this space as the device is pre-filled and has Bluetooth connectivity. Like everyone in this space they are positioning the Imperium as a low cost insulin delivery system targeted at insulin using Type 2 patients. Patients who currently either inject using a syringe or insulin pen. Patients who are also being aggressively targeted by every GLP-1 company. These are also the same patients targeted by MannKind (NASDAQ:MNKD) and Sanofi (NYSE:SNY) for Afrezza.
It should also be noted that Medtronic (NYSE:MDT) and quite frankly every other conventional insulin pump company is also targeting insulin using Type 2’s. Or put simply nearly every company in diabetes is targeting insulin using Type 2’s.
The supposed selling point for these non-programmable patch pumps is less frequent insulin injections. Rather than injecting multiple times per day patients on such a system the patient would inject or should we say insert the cannula once every three days.
It should go without saying that every company in this space projects huge revenues by capturing a small percentage of a very large market. During the call by Unilife the company presented multiple slides on the various market opportunities which showed some very attractive revenue PROJECTIONS. Keep in mind that so far no one in this space has ever come close to hitting these PROJECTIONS and Valeritas the one company most active in this space has had to put their IPO on hold.
We also got a good chuckle listening to the company talk about the many exciting partnership opportunities they are working on. Now it is possible that Unilife is having very productive discussions with potential partners but these are just discussions and as Momma Kliff used to say anyone can talk but until the money is the bank that’s all it is, talk.
Just for grins and giggles let’s assume for a moment that Unilife does find a partner and let’s further assume they can get the Imperium on formulary. The next task is to get physicians to prescribe it, to choose the Imperium over syringe or pen delivery, two systems which physicians are very comfortable with and not just because they are widely covered. Another reasons these delivery systems are popular is not just cost/coverage but patient education. Although these patch pumps are not as complex as real insulin pumps they still deliver insulin at preset levels continuously.
Patients would have to understand how this continuous delivery of insulin, even at preset amounts, changes how they manage their diabetes. This is a far different approach then say injecting Lantus once each day and then taking a short-acting insulin during meals and/or snacks. Heck if a physician is going to take the time to explain concepts such as duration of action, time to action and carb counting they might as well put them on a real insulin pump.
What no one seems to understand is that like it or not physicians can dumb down multiple daily injection therapy (MDI). They can and do provide these patients with preset doses which are injected rather than pumped into the body. Even though this may not be the best method these physicians also understand that the majority of these patients don’t monitor their glucose regularly, don’t count carbs properly and even with way cool apps don’t do bolus calculations. They understand the simpler they make insulin therapy the more likely the patient will be compliment with their therapy.
This is one reason Diabetic Investor has always been a strong supporter of GLP-1’s, they are next to oral medications the most friendly. No glucose monitoring, no carb counting, no calculations just dial out a preset dose and inject. Heck if these patch pump companies think it’s better to insert a cannula once every three days they must understand that it’s even easier for a patient to use a once-weekly GLP-1.
This is another factor that seems get to lost in every presentation we see, the many options a physician has for their Type 2 patients. As if once available these physicians will switch their MDI patients to a patch pump and automatically prescribe them for patients moving to MDI.
Diabetic Investor is not in any way against a patch pump as we do see a place for such a system. Yet just as we see Afrezza as a niche drug we see these patch pumps as a niche device. They also have the same problem as Afrezza as the niche they fulfill is not large enough to sustain a commercially viable business unit. Like Afrezza this is not about the possible therapeutic benefits of a patch pump, this is about can these systems make money.
The Type 2 market may be large and growing but this fact which each company uses as a selling point can also be used against them. Given the size and continued growth of the market cost not therapeutic benefits becomes a major concern. For all the talk about outcomes the harsh reality is cost plays an equally important role in whether a drug or device is commercially viable. In this way these patch pumps share something else in common with Afrezza, in that patients can achieve comparable outcomes using a device or drug which is cheaper.
Yes Unilife has built a different mouse trap but it’s still a mouse trap and quite frankly there are plenty of mouse traps already on the market that do the job just fine and are cheaper to boot.
