Following a major sales bump in the second quarter of 2019, Abbott Laboratories is planning to significantly ramp up manufacturing for its FreeStyle Libre continuous glucose monitoring system, the company shared during an investor’s call this morning.
Specifically, the company highlighted a 72.9% increase in organic sales growth during the three-month period, reaching a worldwide total sales figure of $43 million. What’s more, Abbott CEO and Chairman Miles White said that the system is becoming increasingly adopted by payers due to its relatively low cost and impact on health outcomes.
“We also continued to make excellent progress in the US, where Libre is now reimbursed for approximately 75% of people with private pharmacy benefit insurance,” he said during the call. “Libre offers a unique value proposition, and that’s by design — it provides great clinical benefits, and we priced it to ensure affordability. Payers recognize that value and are increasingly providing reimbursement coverage for Libre, which helps lower out-of-pocket costs for patients.”
As a result, the company said that in the coming months it will be focusing its efforts on increasing its manufacturing capacity for the system, both to meet demand for the current product and to clear the way for the eventual US launch of the FreeStyle Libre 2. Abbott told Reuters earlier this week that it is aiming for a three- to five-fold ramp up, and anticipates sales of the system to reach $1.5 billion by the end of the year.
“The first wave of that expansion will come online in the next couple of months, followed by a cadence of incremental capacity after that,” White said. “There’s a massive population that needs help managing diabetes, and our intent is to make Libre broadly accessible to all of them.”
In regards to the system’s successor, Abbott told investors that it does not anticipate any regulatory hiccups will affect its ongoing US regulatory submission, particularly regarding its decision to file the FreeStyle Libre 2 as an integrated continuous glucose monitoring (ICGM) system.
“The standards and special controls for the ICGM, they’re very clear and they’re very transparent as it relates to accuracy thresholds, alarms, sensor shutoffs, etc. And we wouldn’t have filed an ICGM if we felt that we were going to fall short of those special controls. In fact, we were encouraged by the agency to file as an ICGM,” Robert Ford, president and COO of Abbott, said during the call. “We’re not going to speculate on an exact date here, but we expect it relatively soon.”
WHY IT MATTERS
Abbott’s FreeStyle Libre is a frontrunner of the digital diabetes market, and is one of many products that can substantially reduce the burden on patients managing their condition. More units on the market, growing payer coverage and a smooth launch of the system’s updated version all will likely lead more patients to adopt the technology and, ideally, avoid costly high or low blood sugar events.
What’s more, the company isn’t ruling out the possibility of implementing the same low-cost core technology into another device targeting conditions outside of diabetes.
“I think [Libre has] got enormous potential, and it’s got potential beyond glucose. It’s got potential as a wearable and other analytes and other products over time. We have R&D programs underway not only for the repeated enhancements, improvements, expansion of Libre, but also into other categories beyond diabetes,” Brian Yoor, EVP of finance and CFO at Abbott, said during the call. “I think there’s a lot of things that’ll evolve over the coming years that today people aren’t even contemplating with the product.”
THE LARGER TREND
As the digital diabetes management industry continues to grow, Abbott’s 2018 was highlighted by the European clearance of its FreeStyle Libre 2 and the US clearance of a new companion mobile app for the system. But the company is hardly alone in the CGM market — Dexcom’s G6 ICGM has done well for the company, while Senseonics’ Eversense CGM is picking up steam with new approvals.