The two companies are working to develop a second-generation continuous glucose monitoring system. The updated deal also notes that the companies could collaborate on additional products and software.
The new agreement structure makes Dexcom the preferred CGM device supplier for Verily’s Onduo franchise and its Type 2 diabetes management program, the San Diego, Calif.-based company added.
According to the terms of the deal, Dexcom is slated to make an upfront payment of $250 million in shares of its common stock, with additional milestones of up to $280 million contingent upon product launch and revenue milestones.
“Our collaboration remains on track to deliver our next generation CGM platform by the end of 2020,” chairman, president & CEO Kevin Sayer said in prepared remarks. “This updated agreement aligns Dexcom’s and Verily’s mutual interests in bringing Dexcom CGM technology to a broader diabetes population.”
“This amendment strengthens our long-standing R&D collaboration with Dexcom and enables Verily to contribute more deeply to the Dexcom portfolio,” Verily CEO Andrew Conrad added. “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. I am thrilled to see Dexcom and Onduo partner to broaden adoption by people who need help managing their diabetes.”
Earlier this month, Dexcom raised its full-year outlook after the medical device maker topped expectations on Wall Street with its third-quarter financial results.