Thursday, December 06, 2007

Pelikan Scoops up a Pouchful of Cash

A wonderful bird is the pelican. In his beak, he can hold food for a week.

And also great wads of cash such as that gathered up by the bird’s namesake, Pelikan Technologies.

Pelikan (that’s the German word for pelican) announced this morning that it raised $69 million in cash and another $20 million in venture debt, bringing funds raised to date to a grand total of more than $150 million.

That sounds like an enormous amount of cash for a device start-up, but it’s not really, not for a company trying to take on the Big Four (Roche, Johnson & Johnson, Abbott and Bayer) in consumer glucose testing, a $7 billion world wide market.

Besides its great big maw, the pelican has other fine attributes. CEO Dirk Boecker told us, “The sea bird is perfectly adapted to its environment and is particularly efficient at catching fish just below the surface of the water, never diving deeper than necessary, nor causing excess ripples or waves.”

That’s how Boecker wants people to see Pelikan Technologies, which is trying to improve compliance in glucose testing. Today, diabetes patients generally don't comply with the clinical recommendations for testing, understandably, since conventional blood sugar tests require them to stick their fingers with a sharp object several times a day to draw blood.

Spun out of Agilent in 2001, Pelikan Technologies is developing a single small device that, with a single push of a button, can draw out a blood sample in a pain-free manner, feed it through microfluidic channels in the device for analysis, and read out results.

The company is still developing this integrated testing platform, which will get rid of all the paraphernalia that patients with diabetes have to carry around today—separate lancing devices, lancets, test strips and a glucose meter--but it has already introduced, as a first stage, a pain-free lancing device, the Pelikan Sun, which it is selling over the Internet.

Pelikan Sun has been launched in Australia and Europe, and the company is on the eve of its US launch. The device still pokes people in the finger, but the company claims it doesn’t hurt because it lances at an exact pre-determined and adjustable depth to reach the capillary loops without perturbing nerve endings, thereby avoiding pain altogether (so they say), and it only needs a tiny blood sample to do its job—60 nanoliters, the smallest requirement in the industry, Boecker says.

Not just any diabetes start-up working to make glucose testing pain-free and convenient can command the kinds of funds that Clarus Ventures LLC, HBM BioVentures Ltd. Global Life Science Ventures, Mannheim Holdings LLC, and Bio*One Capital have put into Pelikan. Non-invasive glucose monitoring companies, for example, are pretty much anathema to VCs because so many have failed, or if they haven’t failed yet, have consumed ten years worth of cash with still nothing to show for it.

Pelikan is attractive because it’s innovating along the same lines as those other icons of success in glucose monitoring, MediSense, and TheraSense, which made incremental but meaningful improvements to conventional blood glucose testing. Both were acquired for a premium by Abbott Laboratories.

MediSense introduced a biosensor-based point-of care blood glucose meter for home use that was more accurate and less expensive than competing products. TheraSense moved testing off the sensitive finger tips to other sites of the body that were less painful to puncture. In fact, this has been the most successful strategy since the very beginning of consumer glucose monitoring back in the 1980's; pioneer LifeScan’s success was due to added convenience; its test strip didn’t need to be blotted and wiped like the tests that came before.

Pelikan still has to face the demands of manufacturing a medical-grade device on the scale of consumer electronics--the challenge of making a complex but robust product in high volumes-- but it doesn’t have to break new ground here either.

Insulin pump manufacturer Insulet Corp., which was struggling to meet an overwhelming demand for its disposable pods of insulin, recently signed an agreement with contract manufacturer Flextronics International, which will help it get up to its goal of producing 200,000 pumps per month by the end of 2008 to meet demand. Coincidentally, Flextronics is Pelikan’s manufacturer too. (Check out the next issue of START-UP for more on glucose monitoring start-ups.)

1 comment:

Anonymous said...

The Pumpers: Better compliance for Insulin-dependent diabetic patients?

With some diabetic patients, the hormone insulin may be absent, yet necessary for their survival. As I recall, a man named Pauescu developed the concept of insulin replacement, and discovered a method of using insulin secreted from pigs as a replacement method for humans, which was effective at that time. Legend has it that this concept originated in a dream this man had on a night soon before his idea became reality several decades ago. Yet presently, this hormone which is naturally produced by the pancreas normally has advanced as far as treatment goes for the diabetic patient through synthetic engineering, as they are dependent on insulin for their treatment, and those are type 1 diabetic patients.

Recently, the Denver Bronco’s quarterback, Jay Cutler, was recently diagnosed with diabetes, a disease that affects over 20 million people. As I recall, part of his treatment regimen involves what is called an insulin pump.

They are approximately the size of a cell phone, and the users of such pumps are called, in the diabetic community, ‘pumpers’.

Developed primarily for type 1, or insulin-dependent diabetic patients, the pumps can be used by some type 2 diabetic patients if they have some dependence on insulin replacement, which has steadily increased over the years. The importance of the device is improved management of the disease, which can cause life-threatening consequences if the disease of diabetes is not controlled properly.

The three elements The Pumpers:

A New Paradigm in diabetes management of an insulin pump include the pump itself and its components, such as the insulin tube for delivery of insulin, and a catheter that delivers basal and bolus doses, which are dependent on preset calculations. The amount of insulin is fast or rapid acting to ensure maximal pharmacokinetics to create intensive insulinotherapy for required diabetes management.

These insulin amounts are ultimately determined by the patient’s doctor, who is usually an Endocrinologist, including bolus doses determined by the patients glucose level calculated with their carbohydrate intake, also known as the meal- time dose. Furthermore, the amount of insulin delivered by these methods is quite small due to the nature of the medication being rapid acting.

The makers of such pumps tend to partner with associations relevant to the disease of diabetes, as well as local chapters of such organizations as the ADA and Endocrinology societies that may exist, along with contacting diabetes educators frequently at different locations throughout the country. Unfortunately, there are few Endocrinologists in the United States, as it is not one of the more lucrative specialties of a doctor, so treatment of diabetes is dependent on many others who are not doctors, but patient care specialists regarding this disease.

Competing companies are few, as there are approximately 5 insulin pumps in the market, with Medtronic having the largest share of 30 percent, as I understand. In addition, some pumps avoid the possibility of metabolic action therapy due to their dosing precision, in addition, there is at least one pump that has long acting lithium battery that averages about a 6 week lifespan, yet a pump user should have a battery replacement with them at all times. The personalized insulin and carbohydrate ratio provided by insulin pumps greatly reduces any incidence of such complications as hypoglycemia.

Also, in addition to storing and recording glucose and carbohydrate values with a back up mechanisms, some insulin pumps have a low basal rate, which I understand is an advantage as well. Regardless, and in my opinion, the ultimate advantages of insulin pumps exist with all that are available to patients presently.

The cartridges of the insulin pumps hold a large number of units of insulin, which is an additional benefit. Further benefits include the fact that the pumps are convenient and reliable- especially if damage is avoided to the pump. Most importantly, the personal service provided to the patients by the caregivers of existing diabetic teams in health care facilities from hospitals to health care centers dedicated to the disease of diabetes ensures proper management of their disease, much to the benefit of those who have diabetes.

The market growth of insulin pumps is anticipated at over 10 percent a year, as only 20 percent of type 1 diabetic patients have utilized these pumps out of over a million type 1 diabetics in the United States. The market is speculated to be greater than one billion dollars and is expected to increase due to speculated growth of the Insulin pump market. Many believe this therapy is superior in comparison with previous treatment options available to diabetic patients, along with being less cumbersome for these patients. Because of this, there is decreased mortality along with increased quality of life for diabetics, as they are assured of better control of their disease in this rather convenient way. This has been proven by better A1C blood tests and glycemic control of diabetic patients.

The steady dosing maintains the patient’s metabolic requirements and decreases long term consequences associated with diabetics. It has also been proven that insulin pumps result in fewer hospitalizations, ER visits, and episodes of hypoglycemia due to the excellent control provided by the insulin pumps while providing the necessary intensive therapy for their disease state. The fast acting insulin used in these pumps is created through genetic engineering, I believe. In addition, patients are encouraged to check their blood sugar greater than three times a day while on the insulin pump. So this system is both friendly to the user and is clearly a very convenient form of treatment for them. The A1C test, by the way, is a blood test that reflects the diabetic patient’s average blood sugar over a period of a few months.

Those who may be interested in insulin pumps will include those described already, along with hospitals, long term care facilities, home health care agencies, pediatricians, and possibly dialysis clinics, to name a few. Most likely, those considered for insulin pumps will be diabetic patients that are unable to achieve compliance with their current treatment regimen, along with other benefits of insulin pumps stated so far.
The diabetes team for a diabetic patient may include an Endocrinologist, a diabetes educator, a dietician, along with the insulin pump representative. Follow ups with this team may include review the progress of the insulin pump for the patient and how the patient is tolerating the treatment. Often, classes can be scheduled through an institution or center regarding insulin pump training a few times a month. Education and training about the insulin pump may include the following:

1. Glycemic control importance and how to prevent and treat as needed
2. Basal and bolus concepts and how they contribute to the treatment
3. Pump basics and strategies. Negative effects stressed to pt. if their pump is not used properly.
4. Importance of knowing blood sugar and why. Definitions of terms like A1C
5. How to deliver a bolus dose after checking carbohydrate intake
6. How to check the pump’s memory
7. Troubleshooting, phone number access, and how to replace battery
8. Emphasize the safety of the insulin pump if operated correctly
9. Keeping a glucagon injection and spare battery with you

Ultimately after training others, it is important that the patient acknowledges understanding of how the device works, as well as the consequences that may occur if directions are not followed that are ultimately determined by the patients doctor. And fortunately, doctors and others who treat diabetes now have a new tool or device to assure compliance and longevity of these patients.

Innovation is a wonderful thing, such as what has been described. Control of such a large and devastating disease is of great importance, so there seems to be a much desired need for pumpers now and likely in the future. Especially for those patients who slack on following their prescribed treatment regimen. And this will have to do until relevant transplants to reverse diabetes become more frequent and less complicated.

Dan Abshear

Author’ note: What has been annotated is based upon information and belief