FDA OKs Minimed’s Blood-Sugar Monitor

Minimed Inc., a Sylmar-based maker of high-tech products to treat diabetics, said Wednesday it has won Food and Drug Administration approval to sell its continuous blood-sugar monitor, giving it a foothold in the $3-billion market now dominated by giants Johnson & Johnson and Bayer.

The device is designed to measure blood-glucose levels more precisely than the current finger-pricking method.

Minimed will initially be permitted to market the device only to doctors for use in making treatment decisions. The device consists of a tiny needle-like sensor that pricks the skin and connects to a data-recording monitor that can be worn much like a pager on a patient’s waist. After three days of use, a doctor can download the data from the unit to prepare a treatment regimen.

“This is an important first step,” said Arch Smith, an analyst at U.S. Bancorp Piper Jaffray, who said limiting the use of the monitors to doctors means the product won’t initially be a large moneymaker for the company.

“It is a product that represents a meaningful move toward tighter control of diabetes,” Smith said.

“That said,” he added, “it is not a product that we expect to generate dramatic levels of revenue in the first 12 to 18 months on the market.”

Shares in Minimed rose $2.31 to $75.06 in Nasdaq trading.

Though the physician market is limited, analysts said the company will be able to build a following for the new sensor device. A consumer version of the sensor is expected to become available in the next two years.

Until that version wins FDA approval, the monitor will have negligible sales, according to Kurt Kruger, an analyst at Banc of America Securities.

A consumer version--one that would allow patients, not doctors, to monitor the readout from the device--could generate sales of as much as $1 billion a year, according to Lisa Doh, an analyst at Brean Murray & Co. Kruger also said he thinks peak sales could touch the $1-billion mark.

“This is the absolute Holy Grail in the massive market for diabetes,” Kruger said, noting that several other companies had failed to bring continuous glucose monitors to the market. “It’s just not an approval, this is a landmark.”

FDA Commissioner Jane Henney also lauded the monitor’s potential, calling it a “breakthrough technology that could revolutionize the care of diabetics.”

Diabetes patients use the finger-prick method to measure blood sugar levels an average of about 1.8 times a day, according to Minimed. The company says its sensor takes 288 readings a day, which could improve treatment decisions.

An FDA advisory panel voted unanimously in February to recommend agency approval of the device, though they suggested the company continue to gather data on the way the pump works in patients with diverse ethnic backgrounds, as well as in patients with Type II diabetes.

Minimed, which also makes tiny, portable insulin pumps for diabetics, could face competition from Cygnus Inc., which is planning to market a product that also offers continuous monitoring of glucose levels.

Cygnus said it completed its marketing application to the FDA this month for the product, called GlucoWatch.