San Diego’s Dexcom will pay $250 million in stock to Verily – a subsidiary of Google parent company Alphabet – as part an amended deal.
The companies partnered on developing next-generation glucose monitoring technology due out in roughly two years.
The $250 million in stock is an upfront payment, with additional milestones of up to $280 million, dependent on product launch and revenue milestones. Dexcom may make up to $275 million of these milestone payments in shares of its common stock.
The original agreement stated Dexcom would pay royalties, a provision that has been eliminated in this updated deal.
"Our collaboration remains on track to deliver our next generation CGM platform by the end of 2020,” said Dexcom CEO Kevin Sayer in a news release. "This updated agreement aligns Dexcom’s and Verily’s mutual interests in bringing Dexcom CGM technology to a broader diabetes population.”
The deal accelerates Dexcom’s move into Type 2 diabetes, per the companies. Dexcom’s G6 smartphone-linked monitoring system primarily serves Type 1 diabetes patients.
Dexcom is the preferred continuous glucose device supplier for Verily’s Onduo Type 2 diabetes management program, the agreement states.