Johnson & Johnson's Artificial Pancreas May Be Launched Earlier Than Expected

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J&J's diabetes division, Animas, recently launched its latest combo device Animas Vibe in Canada.

The company didn't disclose exactly when its artificial pancreas would hit the market.

I believe that J&J's artificial pancreas will be launched much earlier than anticipated.

Johnson & Johnson's (NYSE:JNJ) diabetes division, Animas, launched its latest combo insulin pump and continuous glucose monitoring device in Canada earlier this year, known as the Animas Vibe. However, J&J didn't disclose when its much-awaited artificial pancreas system ("APS") would hit the market. Animas revealed positive results from the second phase of clinical trials for its artificial pancreas candidate a year ago. Since the device maintained safe glucose levels overnight in the trials, it seems that the company is into the later stages of developing a functioning APS.

Meanwhile, J&J's number one competitor, Medtronic (NYSE:MDT) is claiming that it has won the race to get an APS to the US market with getting approval of its MiniMed 530G system. The 530G system is a combination of a continuous blood glucose sensor and an insulin pump. However, the device is not a full-functioning APS, although it's the first product approved through a new FDA designation intended to smooth the regulatory path for these devices. The device has been classified as "OZO: Artificial Pancreas Device System, Threshold Suspend."

What is an Artificial Pancreas?

An artificial pancreas is not intended to replace the entire pancreas. Rather, it aims at replacing the beta cells of the pancreas, the primary function of which is to store and release insulin. In patients suffering from type 1 diabetes, beta cells are destroyed by a malfunctioning immune system, which in turn results in a shortage of insulin in the body, leading to high blood glucose levels.

Johnson & Johnson's APS may not be far away

Although Medtronic has strong plans for developing an artificial pancreas, J&J has also made considerable progress in the field, of late. J&J has partnered with San Diego-based DexCom (NASDAQ:DXCM), a prominent player in developing CGM (continuous glucose monitoring) systems, to use the latter's technology into its Animas Vibe pump. The pump has been approved for commercial use in Europe. A year ago, J&J submitted the pump to the FDA for obtaining US approval. DexCom already obtained FDA approval for its G4 Platinum CGM, which will be an integral part of the Vibe pump. In an article on Seeking Alpha a few months ago, I discussed why G4 Platinum has huge chance to succeed in the treatment of type 1 diabetes. When the Vibe pump will be commercially available in the US, it will have the G4 Platinum sensor that has been approved in the US, instead of the older G4 sensor used in Europe.

I believe that J&J's artificial pancreas may not be far away. My belief is based on a recent clinical trial that has revealed successful results in testing the effectiveness of the artificial pancreases in patients suffering from type 1 diabetes. In the trial, insulin and glucagon were administered by a fully automated, bihormonal artificial pancreas. The artificial pancreas system consisted of Apple's (NASDAQ:AAPL) iPhone 4S that ran the control algorithm and DexCom's G4 Platinum CGM connected by a custom hardware interface.

In the trial mentioned above, researchers from Boston University and Massachusetts General Hospital examined the safety and efficacy of artificial pancreases for a period of five days on 20 adults and 32 adolescents diagnosed with type 1 diabetes. Study participants were allowed to manage their blood sugar levels and insulin either through artificial pancreases or through standard insulin pumps.

It was observed that adults using the artificial pancreases maintained glucose levels around 133, compared to an average glucose level of 159 when insulin pumps were used. Adolescents using artificial pancreases maintained glucose levels around 138, compared to 157 when an insulin pump was used.

The results of the trial make me believe that J&J's artificial pancreas system should be on the verge of release, particularly since J&J's system is almost similar to the one used in the trial. Both the systems have one thing in common, DexCom's G4 Platinum CGM. I feel that J&J's artificial pancreas is on pace to hit the market within a year or so, while the general expectation is that the device wouldn't be available before three years.


Apart from Medtronic, J&J's primary competitors Becton, Dickinson & Co. (NYSE:BDX) and Tandem Diabetes Care (NASDAQ:TNDM) are also working hard to develop artificial pancreases. Furthermore, in a separate project, MannKind's (NASDAQ:MNKD) inhaled insulin Afrezza is also being used in an APS research trial.

The Bottom Line

Type 1 diabetes therapeutics market is forecast to grow at 6.1% annually for the next few years, reaching $4.4 billion by 2017, according to a research report by GlobalData. The growth will be fueled by the rising average cost of type 1 diabetes therapy, along with an increasing treatment seeking population. Once commercially available, J&J's artificial pancreas will generate huge revenues for the company.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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