When Embecta spun out from BD just over a year ago, the newly formed diabetes giant already carried breakthrough designation for an insulin patch pump that would specifically target the Type 2 diabetes population—though CEO Devdatt Kurdikar, Ph.D., has warned that it could be quite some time before the patch pump is commercially available, as Embecta has left it out of all revenue forecasts through fiscal year 2024.
In the meantime, the company is still working on perfecting the pump. Case in point: It has now teamed up with Tidepool to add an automated insulin delivery (AID) algorithm to the pump to create a closed-loop diabetes management system for Type 2 users.
“A large segment of the diabetes community is made up of people living with T2D. However, the existing AID systems are not tailored to meet their unique needs,” Henry Anhalt, D.O., Embecta’s chief medical officer, said in an announcement about the partnership Friday. “We believe that the combination of the Embecta and Tidepool teams will lead to the development of a user-centric T2D AID system that fills a need for improved glucose management.”
Anhalt specifically cited Tidepool’s recent success in scoring FDA clearance for its automated insulin dosing app. That regulatory nod came earlier this year, about two years after Tidepool submitted the Loop app to the agency for review at the end of 2020.
The prescription-only tool essentially allows people with diabetes to create their own artificial pancreas systems. They start by wirelessly connecting their various glucose monitors and insulin pumps to the app; the Loop algorithms can then use the monitors’ blood sugar readings to automatically tweak the pumps’ insulin doses and to predict future glucose spikes that may require suggested doses of bolus insulin.
Tidepool Loop was cleared only for use by people with Type 1 diabetes who are aged 6 and older. Embecta, meanwhile, will tap into Tidepool’s software expertise to develop an automated algorithm for its own patch pump system for Type 2.
To date, most automated diabetes management tech has been aimed at the Type 1 population, but several makers of those technologies are increasingly moving into the Type 2 space, too—allowing them to reach a group that makes up around 90% of all diabetes patients, many of whom will ultimately need multiple daily injections of insulin to help regulate their glucose levels.
Embecta’s announcement of the collaboration on Friday came alongside its latest earnings report, covering the second quarter of fiscal year 2023, a period that ended March 31.
For the quarter, Embecta tallied revenues of just over $277 million, contributing to a first-half total of nearly $553 million. Those totals, respectively, represent a year-over-year increase of almost 1% and a decrease of 2%, though the company has repeatedly warned against comparing its current progress to its earnings before the spinout date of April 1, 2022, as they are “not meaningfully comparable.”
The slight uptick in quarterly earnings—helped along by ongoing tailwinds from increases in the price and volume of its goods sold, as well as contract manufacturing revenue that kicked in after the spinout—led Embecta to bump up its forecasts for the full year. Now, it’s expecting to rake in between $1.101 billion and $1.113 billion, up from a previous range of $1.084 billion to $1.107 billion.
The lower end of the new range represents a drop of about 2.5% from the previous year’s revenues on an as-reported basis. Controlling for fluctuating currency exchange rates, however, would keep Embecta’s revenues flat compared to fiscal 2022.