Because monitoring glucose levels is the cornerstone of managing diabetes, Echo Therapeutics’ (ECTE) needle-free, wireless, transdermal glucose-monitoring system represents a significant breakthrough for the more than 25 million diabetes sufferers in the U.S.
Echo’s stock price, recently battered by bad biotech sector performance in general, seriously undervalues its short- and long-term potential. “When you consider Echo’s technology and our current market valuation of $114.98 million, we’re a fraction of the value of our nearest competitor, and we think we have a superior technology,” said Dr. Patrick Mooney, Echo’s CEO. Echo’s ground-breaking technology helps diabetics keep track of their glucose levels more precisely, in a more timely fashion and more painlessly than has been possible since the beginning of insulin therapy. Indeed, Echo’s monitoring system, according to some analysts, represents the most disruptive technological advance since the introduction of the syringe needle, nearly 160 years ago.
Until Echo’s glucose-monitoring device, called the Symphony TCGM (transdermal continuous glucose-monitoring) System, gets final Food and Drug Administration clearance for use with diabetics, which is expected in 2013, the state-of-the art are pocket-sized monitoring devices that draw blood with a needle to produce a blood sample to be analyzed. Based on reading the glucose levels on the blood sample, doctors determine each diabetic’s diet, exercise and insulin therapy regimen. Currently, the readings are taken several times daily. Finger pricks hurt. In contrast, Echo’s Symphony TCGM System, is the only device that monitors by biosensor—without pricking the skin—and provides readings continuously to catch sudden spikes or drops in glucose levels, which might otherwise go undetected.
Echo CEO Dr. Patrick Mooney says: “The bottom line is all the glucose monitoring devices on the market are somewhat invasive involving lancing a patient’s fingertips to draw blood or wearing a continuous glucose monitor that has an invasive wire sensor. Nevertheless they are used by millions and have sales in the billions of dollars.”
To work in conjunction with the Symphony monitoring technology and to prepare the skin for its use without pricking it with a needle, Echo developed a device, the Prelude SkinPrep System, which shaves away by microdermabrasion the dead outermost surface of the skin, leaving a dime-sized spot. Then, a glucose biosensor is applied to the spot, which is generally on the chest, abdomen or upper back.
While the Prelude SkinPrep removes skin and hair that could interfere with the biosensor's reading, it passes tiny electric pulses into the skin. Based on the response to these pulses, the Prelude stops acting when it has reached live underlying skin cells that enable the biosensor to provide a highly accurate reading.
What is occurring is that the biosensor detects the glucose levels as the glucose diffuses out of the capillaries and comes in contact with the biosensor. This is possible because the biosensor contains an enzyme that reacts to the glucose in the blood and relays those readings as an electric signal.
Then, the impulse passes wirelessly to a handheld device, which records the information and monitors the glucose-level readings, relaying the information as an electric signal. Most importantly, the device simultaneously can transmit the readings to a cell phone, emitting an automatic alert should there be a critical rise or fall in the level of a blood-sugar reading.
Echo’s Symphony tCGM was developed based on another technology, originally conceived at Massachusetts Institute of Technology (MIT) by Dr. Robert Langer, a foremost expert on transdermal technology. However, Langer’s focus was on a system for administering drugs. In contrast, Echo’s Symphony tCGM is essentially proving that a process based on his original concept can safely be reversed to read blood glucose levels. (Dr. Langer is the chairman of Echo’s Scientific Advisory Board.)
The Symphony System has been tested in six pilot studies in which the device has consistently demonstrated its high level of accuracy. The clinical studies demonstrate the device is appropriate for use both at home and in the hospital critical care units for patients with diabetes.
Echo is currently perfecting the next generation design of the Symphony, and is expected to conduct a pivotal study of the device early next year. This should position the device to receive FDA approval in 2013.
The Symphony technology has other important advantages over the current technology, in addition to the elimination of the painful needle pricks:
It is continuous, giving readings 24/7, not just when the skin is pricked
Each sensor can be used for one day (possibly 2-3 days in the future) before being replaced by a fresh one (an attractive source of recurring revenue); and
The needleless technology reduces the risk of infection, particularly in hospitals where contamination risk currently is critical.
Reducing the risk of infection is important because as CEO Mooney notes all existing FDA-approved continuous glucose monitoring systems use sensor wires inserted into the patient’s skin, increasing the risks of infection, inflammation or bleeding at the insertion point.
Echo’s Symphony System’s arrival could not be timelier. Some 8.3% of Americans -- 25.8 million adults and children—are diabetics. And almost two million more Americans are diagnosed with diabetes every year. Moreover, diabetes complications--heart disease, strokes, lower limb amputations, high blood pressure, blindness, glaucoma, nerve damage, to name a few—cause more than 250,000 deaths every year. The loss in medical and associated costs is $218 billion.
Therefore, Echo Therapeutics with its platform for needle-free drug delivery and a wireless biosensor is a major game changer, one that gives Echo a shot at the $10 billion market of diabetes monitoring. In addition, the Symphony platform has enormous potential for use in other markets, such as continuous monitoring of other important blood attributes, particularly in hospital critical care units.
The Prelude SkinPrep System is usable to deliver a whole range of drugs, painlessly. Echo expects to launch in the third quarter, along with its partner Ferndale Pharmaceutical, an FDA-cleared version of the Prelude SkinPrep’s drug delivery component to deliver 4% lidocaine cream, which has significant market opportunity in the cosmetic botox market. Consequently, Echo should begin realizing revenue before year-end.
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