Dexcom and Verily Amend Collaboration Agreement with $250 Million Upfront Payment to Accelerate Next-Gen CGM Development
Image source: Dexcom official website
VCBeat (WeChat: vcbeat) has learned that on November 20, 2018, Eastern Time, Dexcom (NASDAQ: DXCM) announced it had entered into an amended collaboration and license agreement with Verily, the life sciences division of Alphabet, to accelerate Dexcom’s research and development efforts in type 2 diabetes monitoring. Under the amended agreement, Dexcom is required to pay Verily a $250 million upfront payment, followed by $280 million in milestone payments.
Yesterday, Dexcom filed a prospectus with the U.S. Securities and Exchange Commission, proposing to issue up to 38.66 million shares to support the transaction.
Verily, founded in 2015 and headquartered in California, USA, is a life sciences company under Alphabet, Google’s holding company, also known as Google Life Sciences.
Currently, Dexcom and Verily are collaborating on the development of second-generation continuous glucose monitoring (CGM) systems, aiming to minimize the cost and size of the wearable components while providing patients with more connected, actionable information to help them enhance their diabetes management in a more timely and effective manner. Under the latest amended agreement, the two companies will also cooperate on the development of other products and software.
Key Provisions and Implications of the Agreement:
1. Accelerated the product development timeline for Dexcom’s second-generation CGM system.
2. The new agreement structure grants Dexcom exclusive rights to Onduo, a product under Verily, and designates Dexcom as the preferred CGM device supplier for Verily’s type 2 diabetes management program.
3. The two companies have expanded the options for entering into cooperation agreements regarding other products and software.
4. The royalty fees payable to Dexcom under the original agreement, including any royalties previously owed by Dexcom, have been waived.
Kevin Sayer, Chairman and Chief Executive Officer of Dexcom, stated, “This partnership positions us to deliver our next-generation CGM product by the end of 2020. Furthermore, the new agreement will enable the application of Dexcom’s CGM technology to a broader population of patients with diabetes.”
Continuous glucose monitoring (CGM) devices are regarded as the most significant breakthrough in diabetes management over the past 40 years, with Dexcom standing out as a leader in this field. Diabetes affects the health of nearly 30 million Americans and is the seventh leading cause of death in the United States. CGM not only replaces traditional blood-sampling methods for glucose testing but, more importantly, helps patients maintain stable blood glucose levels by enabling adjustment of medication delivery dosage and rate via a button, while also alerting users when their blood glucose levels are too low or too high.
About Dexcom
Dexcom, founded in 1999 and headquartered in California, USA, was listed on the NASDAQ stock exchange in 2005. The company is dedicated to providing continuous glucose monitoring (CGM) products and tools for adult and pediatric patients, helping people better manage their diabetes.
About Verily
Verily, founded in 2015 and headquartered in California, USA, is a life sciences company under Alphabet, Google’s parent company, also known as Google Life Sciences. The company had previously raised $800 million in funding from its supporter, Temasek Holdings.