Dexcom and Verily Amend Collaboration and License Agreement
Amendment intended to reinforce joint product development targets, accelerate Dexcom’s efforts in Type 2 diabetes and improve its long-term profitability
Agreement strengthens product development timelines for the second
generation CGM system.
Dexcomwill continue to evaluate near-term opportunities for the first generation product, and the company’s focus shifts to commercializing the second generation offering.
Agreement structure increases synergy with Verily’s Onduo franchise,
Dexcomwill be the preferred CGM device supplier into Onduo’s Type 2 diabetes management program.
Dexcomand Verily have expanded options to collaborate on the development of additional products and software pertaining to Dexcom’s products.
The royalty payments set forth in the original agreement have been
eliminated in the amended agreement, and
Dexcomwill not owe any royalties pursuant to the terms of the amended agreement (see “Financial Terms” below).
“Our collaboration remains on track to deliver our next generation CGM
platform by the end of 2020,” said
"This amendment strengthens our long-standing R&D collaboration with
In consideration of Verily’s performance of its obligations under the
joint development plan, the licenses granted to
Dexcomand the amendment of the original agreement, Dexcomwill make an upfront payment, as well as potential future milestone payments upon the achievement of certain goals, as follows: Dexcomwill make an initial payment of $250 millionin shares of its common stock. The issuance of shares of common stock is subject to customary closing conditions, including expiration of any waiting period under the Hart-Scott-Rodino Act, and, if these conditions are not met, Dexcomwould be obligated to make this payment in cash.
Additional milestone payments of up to
$280 millionmay become due and payable by Dexcomupon the achievement of future product launch and revenue milestones. Dexcommay make up to $275 millionof these milestone payments in shares of its common stock, subject to customary closing conditions, including any required antitrust approvals applicable to the issuance of such shares.
CGM devices are considered the most significant breakthrough in diabetes
management in the past 40 years1 and
Cautionary Statement Regarding Forward Looking Statements
The information in this press release contains forward-looking
statements and information within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, which are subject to the “safe harbor”
created by those sections. This press release contains forward-looking
statements that are not purely historical regarding DexCom’s or its
management’s intentions, beliefs, expectations and strategies for the
future, including statements about the issuance of shares of our common
stock, potential expiration or termination of the waiting period under
the Hart-Scott-Rodino Act and any other antitrust laws, the achievement
of any future milestone events and milestone payments upon achievement
thereof, future CGM systems, DexCom’s efforts to advance into the Type 2
diabetes space, any potential improvements to its future profitability
profile and any collaboration on the development of additional products
and software pertaining to DexCom’s products. All forward-looking
statements and reasons why results might differ included in this press
release are made as of the date of this release, based on information
currently available to
1. Clarke SF and Foster JR. A history of blood glucose meters and their role in self-monitoring of diabetes mellitus. Br J Biomed Sci. 2012;(3)2:83-93.
2. 2014 National Diabetes Statistics Report.
3. Hyperglycemia (High blood glucose).
4. Hypoglycemia (Low blood glucose).
Steve Pacelli, 858-200-0200