Clif Alferness has made a long and decorated career out of inventing medical devices. But until about five years ago, he never thought seriously about a practical invention for his own illness—Type 1 diabetes. Now, after years in stealth mode, the latest startup he helped launch is on the verge of creating a new category of device that delivers insulin cheaply, easily, and effectively.
The company, founded as Seattle Medical Technologies in 2006, is now based in Redwood City, CA, and goes by the name Calibra Medical. CEO Jeff Purvin, one of the featured speakers at “San Diego’s Fight Against Diabesity” coming up this Thursday, recently gave me a demo of how this new technology is designed to work. The big idea is to stake out a middle ground between the cheapest and easiest options for delivering insulin (syringes, pre-filled pens) and the more discreet, but complex and expensive alternatives (insulin pumps).
“The mantra that Jeff repeats at every opportunity is ‘small and simple,'” Alferness says. “But, in fact, it is very difficult to make something simple that works really well. That is what the engineers at Calibra have accomplished. It is small and simple for the patient, but works really, really well. I am anxious to try it myself since I inject insulin many times daily using syringes.”
Purvin adds: “We’ve really got something nobody else has.”
Entrepreneurs like Alferness and Purvin have been trying for years, and mostly failing, to deliver insulin a more convenient way than with a syringe. No one has had any luck in the market with making insulin inhalable or turning it into a nasal spray or something else less invasive. An estimated 6 million people in the U.S. rely almost entirely on classic vials and syringes, or more convenient pre-filled syringes to get their insulin.
Many more people are heading down this road to insulin dependency, as one leading insurer, UnitedHealth Group, has warned that about half of the U.S. population could have diabetes or pre-diabetes by 2020. So anyone who can invent a better mousetrap for delivering insulin, cheap and easy enough for millions of people to use, obviously could have a megahit.
Calibra got its start when Alferness, Daniel Hawkins, and John Adams put their heads together on a new concept for insulin delivery in about October 2006. The company got going with $8.6 million in Series A venture capital financing from Three Arch Partners and Frazier Healthcare Ventures. It has now raised two more rounds of capital that have brought the company’s total financing to $44 million, Purvin says. Canaan Partners and InterSouth Partners have joined the syndicate.
The R&D effort has resulted in a pair of FDA approvals of Calibra’s system, which is branded under the name Finesse. The tool is cleared to deliver two major forms of insulin—Novo Nordisk’s Novolog, and Eli Lilly’s Humalog. Calibra hasn’t yet started marketing its device in the U.S., because it wants to make one more design modification to bring down the cost of raw materials more, so it can have larger gross profit margins, Purvin says.
A lot of engineering, and intellectual property, is packed into a very small “patch” style package, Purvin says. The device is two inches long, one inch wide, and about one-quarter inch thick—it’s a tad bigger than an iPod nano. In that tiny package, Calibra has found a way to sock away three days’ worth of insulin. The device has a cannula, or a little tube on the back, which the patient has to stick into the body to anchor the device in place. It can easily go in around the beltline, like an insulin pump, or some other place on the body, Purvin says.
Once on the body, the patient has to squeeze two buttons on each side simultaneously to deliver a dose of insulin.
There are a couple of things that make this device different, Purvin says. Having a “patch” on the body means patients only have to give themselves one needle stick every three days—instead of one or more every day. They can also dose themselves discreetly, without pulling out needles in front of other people at mealtime. That’s always been one of the selling points of insulin pumps, like those marketed by Bedford, MA-based Insulet (NASDAQ: PODD) or Medtronic (NYSE: MDT).
What’s really different here is that the Calibra machine is made entirely of mechanical parts—unlike standard pumps which have electronics in them that make them bigger, more expensive, and trickier to operate, and which require recharging of batteries, Purvin says.
Going with entirely mechanical parts means the Finesse system can be made cheap enough to compete on price with pre-filled syringes, Purvin says. He wouldn’t say exactly what the device will cost, not yet anyway.
Like Alferness says, getting this far required taking on some serious engineering challenges. Giving patients too much or too little insulin can be a dangerous thing, so those basic mechanical parts had better be smart. Calibra found a way to discreetly alert patients when the device has run out of insulin, by retracting the buttons. And the engineering team found another way for the device to quietly signal to the user when the cannula is clogged up—which happens regularly with insulin pumps.
I didn’t have a lot of time to press Purvin about the body of evidence to support this tool. He did say that it has been tested in a controlled clinical trial of 38 patients, who used the Calibra device for six weeks, and then switched over for another six weeks on conventional pre-filled syringes, or “pens.”
Researchers on the study, including American Diabetes Association president Richard Bergenstal, saw positive results, Purvin says. There was significantly less fluctuation in blood sugar levels for those on the Calibra device, and what Purvin called a “strong directional improvement” in overall blood sugar control. The company also captured quality of life data through a questionnaire, asking patients which device they preferred. About 76 percent said they wanted the Calibra device, Purvin says.
Purvin also stressed the convenience advantage the Calibra tool has over insulin pumps. “After 12 weeks, we didn’t get one customer service call,” he says. “We made it so simple that nothing screwed up in the study that required anyone to call and say ‘I don’t understand the instructions.'”
Complexity, Purvin says, has been one of the things holding back insulin pumps from true mainstream use. Many doctors don’t want to bother with training patients how to use them, and many patients can’t afford to make co-pays that can run around $1,000. Patients also don’t want to have to stop to think a lot each day about how to manage their pump, Purvin says.
Like most small companies, an 18-person shop like Calibra doesn’t have all the expertise it needs to make this thing fly. Purvin is out trying to raise one more round of capital, and he’s working with an investment bank to see if he can strike a deal with a big company with the sales, marketing, and distribution muscle it would take to maximize such a product aimed at a mass market like diabetes.
Calibra still isn’t done with the engineering, either. It is making one more push to squeeze down its cost of raw materials, which will be critical to establishing the kind of gross profit margin it wants, Purvin says. He says he’s wary of pushing Finesse onto the market too soon, based on what he considers a mistake Insulet made, by launching a new insulin pump before it had done enough to clamp down on the cost of raw materials. “Nobody wants to buy them now because they aren’t profitable,” Purvin says.
The last engineering trick has something to do with how the device gets placed on patients. If it works, then Calibra should be able to reach break-even as a company in about 18 months after market launch, Purvin says. Part of the calculus involves reaching out beyond Type 1 diabetics—who really depend on insulin—into the bigger population of Type 2 diabetics, many of whom develop diabetes later in life and don’t tend to get insulin through pumps. Kelly Close, the editor of diatribe.us, a newsletter for diabetes patients, wrote last May that the Calibra device’s potential for Type 2 diabetes could be a “big step” forward.
To Purvin, the impact of a simpler insulin-delivery device will be in better “adherence” to doctors’ instructions to keep blood sugar under control. And more stable blood-sugar levels means fewer long-term complications of diabetes—blindness, heart attacks, strokes, amputations.
“There are, of course, complicated electronic pumps for the small percentage of patients who can afford them and that are willing to learn and keep up with the technology advances and hassles that go with it,” Alferness says. “Calibra is focused on making it easy for millions of diabetics like me.”
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