business

Diabetes Sentry Products Inc. has overcome a lot of hurdles.

The Orono-based company has received Food and Drug Administration approval for a device that straps on like a watch and sends out an alarm when diabetes patients are in danger of excessively low blood sugar. There's proven demand, with 300 to 400 pending orders.

The problem is, there aren't any devices to sell.

Device Sentry sold out of its remaining inventory last year, and since three or four months ago has been trying to raise $250,000 to manufacture and market more devices. The company is still waiting for the right investor.

"Because of the economy, we ran into a wall," said Michael Russin, vice president of sales and marketing.

The company's watch-like device measures the perspiration and body temperature of people with insulin-dependent diabetes while they are sleeping. The plan is to market it as a cheaper alternative to more sophisticated devices that several larger companies offer.

Some say it could be challenging to create that niche. Critics say the technology could be seen as outdated compared with competing products such as continuous glucose monitoring systems, which provide information on whether a patient's blood sugar levels are trending up or down and send an alarm when there's a problem.

Larger companies such as Abbott Labs, Dexcom and Medtronic are already prominent players in the field. And Fridley-based Medtronic said it is looking at ways to improve its technology to send information on blood sugar levels to a cell phone or monitor, primarily for patients' families to observe.

"One of the concerns that could come up [is] the technology was great in its day, but it needs an upgrade to fit [in]," said Steve Parente, a health finance professor at the Carlson School of Management at the University of Minnesota.

Take the Medtronic MiniMed Paradigm Real-Time Revel System, which the company says is the only integrated insulin pump and continuous glucose monitoring system for diabetes management. The monitoring system can report trends in blood sugar levels through a quarter-sized sensor with an insertion point that goes underneath the patient's skin.

"It is really the best of both worlds," said Dr. Scott Lee, medical director, global clinical research and medical affairs of Medtronic Diabetes. "I've had patients tell me ... they have learned more from a glucose sensor in one month of wearing it than they have in a lifetime of having diabetes."

But the product is more expensive than the $500 Diabetes Sentry. Medtronic estimates the integrated system will run about $1,500 in initial start-up fees, plus an additional $1,000 to maintain the system each year, depending on a patient's insurance.

Russin says he believes there is a market for Diabetes Sentry, arguing that it is cheaper than competing devices, could save customers money by preventing emergency room visits and doesn't require piercing the skin. Russin also pointed out that patients are still advised to do a traditional finger stick test to record blood sugar levels even if they have a continuous glucose sensor or use Diabetes Sentry's product.

"There is a market where this fits," Russin said. "Simplicity sometimes is the beauty of the product."

Lengthy history

The technology that led to the creation of Diabetes Sentry has changed hands over the years. It was first developed by an engineer affiliated with Teledyne Avionics, which sold a version of the product in the 1980s. In the early 1990s, Houston doctor Eric Orzeck purchased the technology and later founded Diabetes Sentry with Canadian businessman Marvin Meier.

Orzeck sold his ownership in the company 2 1/2 years ago, and Meier sold part of his share to former pharmacy chain owner Tim Hayes. Today, Hayes owns 80 percent of Diabetes Sentry, and Meier owns 20 percent.

The company said it invested about $700,000 of the owners' personal savings on purchasing the technology, getting FDA approval and other regulatory and corporate expenses. It estimates about 1,500 to 2,000 of the devices have been in use.

Russin said the company started trying to raise the $250,000 three or four months ago and plans to make more of the devices once it has the money.

Diabetes Sentry, which has four employees, is projecting that once the products are available, it will sell 2,500 units in its first year and have sales of $1 million. The company says it plans to later update the device, possibly recording the time a patient's alarm goes off and sending the information to their smart phone.

The company says demand for diabetes management products will continue to grow, pointing to statistics published in the American Diabetes Association's journal Diabetes Care, which estimates that by 2034 annual diabetes-related spending will increase to $336 billion.

Satisfied customers

Customers who have used Diabetes Sentry's product say it works, with only 10 to 15 percent false alarms, which some doctors say is reasonable for this type of product.

Merrick Brown, a 65-year-old New Brighton resident, said he puts on his Diabetes Sentry every night before he goes to bed, adding that it has helps prevent seizures related to his Type 1 diabetes while he is sleeping.

"It's just a better way of life," said his wife, Ruth. "He gets sleep. I get sleep."

Still, Brown said if Medicare were to cover Medtronic's continuous glucose monitoring system, he would prefer that over Diabetes Sentry because it can tell him if his blood sugar levels are moving up or down.

Allina Medical Clinic's Dr. J. Ward Godsall said Diabetes Sentry's product could be a good fit for patients who are concerned about having low blood sugar at night but aren't worried about blood sugars climbing too high. In contrast, patients who have a hard time tracking when their blood sugar is too high or low may want to consider a glucose monitoring device. He estimates that his recommended group for Diabetes Sentry represents about 10 percent of Type 1 diabetes patients.

Meanwhile, Suzanne Stillman has been on the waiting list for Diabetes Sentry's product for the past few months. Her son Jason, 39, has Type 2 diabetes and glycogen storage disease, a metabolic disorder that requires constant monitoring of the amount of glycogen in his body. Stillman says Diabetes Sentry will help give her peace of mind when her son sleeps at night.

"Every night from 10 p.m. to 6 a.m., I'm a wreck, wondering if something will go wrong in his body and he will die," Stillman said.

Wendy Lee • 612-673-1712