Dexcom and Verily Amend Collaboration and License Agreement
SAN DIEGO--(BUSINESS WIRE)--Nov 20, 2018--DexCom, Inc. ( NASDAQ:DXCM ), a leader in continuous glucose monitoring (CGM), and Verily, an Alphabet company, announced an amendment to the Collaboration and License Agreement surrounding the ongoing development efforts between the companies. The revised terms are intended to reinforce the companies’ mutual product development goals, while expanding options for future collaborations. The agreement also accelerates Dexcom’s efforts to advance into the Type 2 diabetes space and improves its future profitability.
Key Updates:Agreement strengthens product development timelines for the second generation CGM system. Dexcom will continue to evaluate near-term opportunities for the first generation product, and the company’s focus shifts to commercializing the second generation offering. Agreement structure increases synergy with Verily’s Onduo franchise, where Dexcom will be the preferred CGM device supplier into Onduo’s Type 2 diabetes management program. Additionally, Dexcom and Verily have expanded options to collaborate on the development of additional products and software pertaining to Dexcom’s products. The royalty payments set forth in the original agreement have been eliminated in the amended agreement, and Dexcom will not owe any royalties pursuant to the terms of the amended agreement (see “Financial Terms” below).
“Our collaboration remains on track to deliver our next generation CGM platform by the end of 2020,” said Kevin Sayer, Chairman, President and Chief Executive Officer of Dexcom. “This updated agreement aligns Dexcom’s and Verily’s mutual interests in bringing Dexcom CGM technology to a broader diabetes population.”
“This amendment strengthens our long-standing R&D collaboration with Dexcom and enables Verily to contribute more deeply to the Dexcom portfolio,” stated Andrew Conrad, CEO of Verily. “As evidenced by our new equity position in Dexcom, we continue to believe CGM will have a significant impact on management of Type 2 diabetes and that Dexcom is poised to lead the way. I am thrilled to see Dexcom and Onduo partner to broaden adoption by people who need help managing their diabetes.”
Financial Terms:In consideration of Verily’s performance of its obligations under the joint development plan, the licenses granted to Dexcom and the amendment of the original agreement, Dexcom will make an upfront payment, as well as potential future milestone payments upon the achievement of certain goals, as follows: Dexcom will make an initial payment of $250 million in shares of its common stock. The issuance of shares of common stock is subject to customary closing conditions, including expiration of any waiting period under the Hart-Scott-Rodino Act, and, if these conditions are not met, Dexcom would be obligated to make this payment in cash.Additional milestone payments of up to $280 million may become due and payable by Dexcom upon the achievement of future product launch and revenue milestones. Dexcom may make up to $275 million of these milestone payments in shares of its common stock, subject to customary closing conditions, including any required antitrust approvals applicable to the issuance of such shares.
CGM devices are considered the most significant breakthrough in diabetes management in the past 40 years 1 and Dexcom has been a leader of those innovations. Diabetes affects nearly 30 million Americans and is the seventh leading cause of death in the United States 2. The traditional standard-of-care for glucose monitoring has been a fingerstick meter, which is painful as some patients needed to test their blood up to 12 times a day. CGM is important because, in addition to providing the glucose level, it provides the direction and rate of glucose change with the push of a button and alerts users when glucose levels are too low or too high. People with diabetes who take insulin must monitor their blood glucose levels frequently. Uncontrolled glucose can cause health complications and even death 3,4. To learn more about CGM, visit www.dexcom.com.
About DexCom, Inc.
DexCom, Inc., headquartered in San Diego, CA, is dedicated to helping people better manage their diabetes by developing and marketing continuous glucose monitoring (CGM) products and tools for adult and pediatric patients. With exceptional performance, patient comfort and lifestyle flexibility at the heart of its technology, users have consistently ranked DexCom highest in customer satisfaction and loyalty. For more information on the Dexcom CGM, visit www.dexcom.com.
Cautionary Statement Regarding Forward Looking Statements
The information in this press release contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections. This press release contains forward-looking statements that are not purely historical regarding DexCom’s or its management’s intentions, beliefs, expectations and strategies for the future, including statements about the issuance of shares of our common stock, potential expiration or termination of the waiting period under the Hart-Scott-Rodino Act and any other antitrust laws, the achievement of any future milestone events and milestone payments upon achievement thereof, future CGM systems, DexCom’s efforts to advance into the Type 2 diabetes space, any potential improvements to its future profitability profile and any collaboration on the development of additional products and software pertaining to DexCom’s products. All forward-looking statements and reasons why results might differ included in this press release are made as of the date of this release, based on information currently available to DexCom, deal with future events, are subject to various risks and uncertainties, and actual results could differ materially from those anticipated in those forward looking statements. The risks and uncertainties that may cause actual results to differ materially from DexCom’s current expectations are more fully described in DexCom’s annual report on Form 10-K for the period ended December 31, 2017 and the quarterly report on Form 10-Q for the period ended September 30, 2018, as filed with the Securities and Exchange Commission (“SEC”) on February 27, 2018 and November 6, 2018, respectively, and in future periodic reports filed by DexCom with the SEC from time to time. Except as required by law, DexCom assumes no obligation to update any such forward-looking statement after the date of this report or to conform these forward-looking statements to actual results.
1. Clarke SF and Foster JR. A history of blood glucose meters and their role in self-monitoring of diabetes mellitus. Br J Biomed Sci. 2012;(3)2:83-93.
2. 2014 National Diabetes Statistics Report. Centers for Disease Control and Prevention. http://www.cdc.gov/diabetes/pubs/statsreport14/national-diabetes-report-web.pdf. Accessed March 31, 2015.
3. Hyperglycemia (High blood glucose). American Diabetes Association Web site. http://www.diabetes.org/living-with-diabetes/treatment-and-care/blood-glucose-control/hyperglycemia.html. Updated August 5, 2013. Accessed December 3, 2013.
4. Hypoglycemia (Low blood glucose). American Diabetes Association Web site. http://www.diabetes.org/living-with-diabetes/treatment-and-care/blood-glucose-control/hypoglycemia-low-blood.html. Updated July 16, 2013. Accessed December 3, 2013.
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Steve Pacelli, 858-200-0200
KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA
INDUSTRY KEYWORD: HEALTH MEDICAL DEVICES DIABETES
SOURCE: DexCom, Inc.
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PUB: 11/20/2018 05:12 PM/DISC: 11/20/2018 05:12 PM