The COVID-19 crisis and its economic effect have now claimed a first victim in the diabetes device industry. Senseonics, makers of Eversense, the first and only implantable continuous glucose monitor (CGM), announced on March 26 that the company would be “restructuring” and halting sales to new customers.
This comes just 18 months after Eversense snagged approval from the Food and Drug Administration (FDA) and launched here in the United States.
As of March 27, the company has laid off about half of their workforce, retaining only researchers, quality control experts, and a few salespeople — while they search for new investors, partners, and/or a possible acquisition, according to Senseonics Chief Medical Officer Dr. Francine Kaufman.
“I guess you could say the company is now hibernating,” said Kaufman, who just took the leadership role at Senseonics in early 2019 after serving in a similar role at Medtronic Diabetes for a decade. “Our primary focus now will be R&D and maintenance of our commitments to those who were interested and innovative enough to try the system over the last 18 months.”
Existing customers currently using the Eversense CGM are promised they can continue getting supplies and support “for the foreseeable future.”
Ever since Eversense got FDA approval and launched its 90-day implantable sensor in 2018, the Maryland-based company has been working hard to carve out a place in the burgeoning CGM market. It had to compete against established players Dexcom, Medtronic Diabetes, and Abbott’s FreeStyle Libre system — all external “wear on your skin” sensors that don’t require a surgical procedure for use.
The need for surgical insertion and removal procedures was a hard sell for many patients and doctors alike. Diabetes doctors typically do not have expertise in this area.
Just as the company was starting to gain some traction, and just as they had closed the deal for Medicare coverage, their investors basically pulled the plug, according to Kaufman.
Investors had been nervous because Senseonics was still in early stages, struggling to ramp up, “and then COVID-19 happened,” Kaufman tells DiabetesMine.
She says investors “called in” the company’s $50 million debt, which matches up with public filings indicating they were nearing default on a multi-million loan, and it couldn’t be waived.
“The meltdown all happened over a one-week period. We just didn’t have a big enough runway to get to a strategic place… that wouldn’t jeopardize the whole company,” Kaufman explained.
To be clear, COVID-19 and the resulting economic effect are not the entire reason Senseonics is in this position. The company already faced cash flow trouble before this all began; the pandemic just pushed Senseonics closer to the brink, more suddenly than anyone expected.
Eversense was something entirely new in glucose sensing — with its tiny sensor that must be inserted underneath the skin in a surgical procedure, initially FDA approved for 3 months’ wear. Users have to wear a black oval transmitter on top of the skin to connect the system and transmit data. Not everyone liked the idea of having something implanted, that additionally requires the user to wear an external device attached to the skin. And the need for a fresh surgical procedure every 3 months could be burdensome.
To improve the procedures, the company has been training dermatologists, general surgeons, and even gynecologists — doctors who are already “proceduralists” and whose offices are already geared toward having a “sterile field.”
“There was enthusiasm by many to do it, especially with an increasing number of payers reimbursing for the procedure,” Kaufman says, noting that the patient cost is about $250 for a single insertion or removal and about $350 for a bundled package.
The company had been pushing hard to get more insurance companies to cover the procedure costs, and also pushing toward FDA approval of a 180-day wear sensor that was already OK’d in Europe in 2017.
Some might say Senseonics was trying to push a boulder uphill in the United States in competing with the existing devices and trying to get payers on board. There was also a product recall in late 2019, which didn’t help.
Earnings calls over the past year illustrate how challenging the market was for Senseonics, as it tried to raise more money from investors. In particular, the company got hit hard by a revamped deal with Roche Diagnostics, which was the sole Eversense distributor outside the United States. Overseas, Eversense couldn’t compete with the FreeStyle Libre, and as a result Roche had a stockpile of Eversense CGMs it couldn’t sell because of lower-than-expected demand. They reworked the agreement, but in early March 2020, Senseonics noted that the impact would be a third less sales in for this year.
Then, things got even worse with the onset of COVID-19.
On March 23, Senseonics issued a statement saying it will now focus solely on core activities while exploring strategic options, hoping to find new investors, or possibly even an acquisition by a Big Pharma company. A regulatory filing followed on March 26 with the Securities and Exchange Commission about paying off a loan and having no secured debt.
As noted, Senseonics plans to continue supporting existing customers for the time being.
But they are suspending their Eversense Bridge Program, an access and affordability program launched in March 2019 offering the CGM system for $99 plus the cost of a healthcare insertion/removal procedure. The company has warned it may nix that program entirely.
When it comes to insertion and removal procedures, access right now may have a lot to do with where you are, as in “it may be easier in Idaho than in New York,” Kaufman told DiabetesMine.
“We have seen a reduction in access to clinics, sales and sensor insertions following the pandemic,” said Mirasol Panlilio, vice president and general manager of global commercial operations at Senseonics. “People are doing their part in sheltering and social distancing, but it means delays and postponement in patient’s insertions. In certain areas, we have identified certified providers who are still doing procedures, and we’ve been working with patients to redirect them to those providers during this unprecedented time.”
Kaufman adds that up until the day before Senseonics made the announcement, they had new patients starting on the Eversense CGM system.
Now, Senseonics has slashed its salesforce, clinical team, and inside sales folk, and that means they are down to roughly half of the 200+ employees. Those remaining work largely in R&D, quality control, and clinical research, Kaufman says, and they’re focused on finishing up the 180-day sensor studies by early April.
A small group of sales employees remain to “service what we’ve got going now,” she says. That means supporting patients and providers who are already using the Eversense CGM system.
As to its 90-day sensor, Senseonics was hoping to apply for
While the future is uncertain, even aside from COVID-19 and the subsequent ripple effects, Senseonics isn’t calling it quits at this point and hopes to continue serving the diabetes community.
“It’s a difficult dance, but I think we can do it with the people in-house,” Kaufman says.
Moving forward, Kaufman says they’ll focus on predetermined pipeline plans:
- 180-day implantable sensor, which is already available outside the United States as the Eversense XL (extra-long) version. Panlilio says they are wrapping up the 180-day sensor PROMISE study as quickly as possible and, barring any delay due to COVID-19, they still expect to submit data from that to the FDA by end of the year.
- 365-day wear sensor, a future version that would need calibration just once a week and would use a battery, so if you took the transmitter off, it saves the data. Kaufman also says that roughly 35 patients involved in the ongoing 180-day sensor trial have been approved to extend their use for another 6 months to test out the 365-day wear. She emphasizes this is not official FDA research, but rather a feasibility study the company’s conducting.
- No transmitter at all? Senseonics is also exploring this idea for future iterations, where the sensor might be paired with an external dongle or the transmitter could be BLE-enabled to send data.
“These concepts are not decades away… with the right funding it could be just 5 years or less,” Kaufman says.
Those who’ve been using Eversense CGM or were curious about it were bummed to hear the news, of course.
In Glendale, Arizona, longtime type 1 Ron Fodor says his endocrinologist canceled his appointment for a sensor replacement in mid-March, and he isn’t able to find any other doctors to remove or replace it. As a result, he has a “dead” sensor in his upper arm and has been without CGM data, and isn’t sure how long that may last.
With COVID-19 just starting to move through Arizona at that time and a possible lift of social distancing restrictions at least 60 to 90 days away, Fodor says he’s not optimistic.
“Eversense could be in terrible shape by then,” he observes. “This pandemic affects so much.”
Kevin Metcalfe in Salt Lake City, Utah, who’s been using Eversense CGM since last August, says: “I’ll be very heartbroken if something were to happen to this company. It’s understandable, and I hate to see any business be in this situation, but especially one that for me personally has provided life-changing technology.”
Indeed, this is quite a surreal time for all of us, especially those of us with diabetes who must be concerned access to our supplies and medications.
We send our best to the Senseonics team, and hope that this move will allow them to endure over time. Kaufman for one finds herself in disbelief just like the rest of us.
“I’ve been practicing medicine for over 40 years, and I’ve seen some significant things and some epidemics — HIV AIDS, SARS, H1N1 flu, and others — but I never imagined there could be something that would shut us all down like this,” she says. “These are unprecedented times.”