Dexcom and Verily Amend Collaboration and License Agreement

The change aims to reinforce joint product development targets, accelerate the CGM products developer's efforts in type 2 diabetes, and improve its long-term profitability

Dexcom, Inc, a leader in continuous glucose monitoring (CGM), and Verily, an Alphabet company, announced an amendment to the collaboration and license agreement related to the continuing development efforts between them.

The revised terms are intended to reinforce the companies’ mutual product development goals, while expanding options for future collaborations.

The agreement also accelerates Dexcom’s efforts to advance into the type 2 diabetes arena (T2D) and may improve its future profitability, according to a company statement.

The agreement strengthens product development timelines for the second-generation CGM system. Dexcom will continue to evaluate near-term opportunities for the first-generation product, and the company’s focus shifts to commercializing the second-generation offering.

The agreement structure also increases synergy with Verily’s Onduo franchise, where Dexcom will be the preferred CGM device supplier into Onduo’s T2D management program.

Additionally, Dexcom and Verily have expanded options to collaborate on the development of additional products and software pertaining to the former’s products.

The royalty payments set forth in the original agreement have been eliminated in the amended agreement, and Dexcom will not owe any royalties pursuant to the terms of the amended agreement.

“Our collaboration remains on track to deliver our next-generation CGM platform by the end of 2020. This updated agreement aligns Dexcom’s and Verily’s mutual interests in bringing Dexcom CGM technology to a broader diabetes population,” Kevin Sayer, Dexcom's chairman, chief executive officer (CEO), and president said in a statement.

"This amendment strengthens our long-standing [research and development] collaboration with Dexcom and enables Verily to contribute more deeply to the Dexcom portfolio," Andrew Conrad, Verily's CEO said in a statement.

"As evidenced by our new equity position in Dexcom, we continue to believe CGM will have a significant impact on management of type 2 diabetes and that Dexcom is poised to lead the way," he said. "I am thrilled to see Dexcom and Onduo partner to broaden adoption by people who need help managing their diabetes."

In consideration of Verily’s performance of its obligations under the joint development plan, the licenses granted to Dexcom and the amendment of the original agreement, Dexcom will make an upfront payment, as well as potential future milestone payments upon the achievement of certain goals.