Tandem says manifestations of the anomaly are rare and have not resulted in any reportable adverse events
Shares of Tandem Diabetes (TNDM) are slipping after the company said that it will use the company’s remote software update tool to fix a Control-IQ technology software anomaly identified during the ongoing DCLP3 phase of its IDCL clinical trial. After speaking with management at Tandem, Baird analyst Jeff Johnson said he believes the software bug in its Control-IQ clinical trial is small, has not impacted a single patient, is easy to fix, and may not delay launch of Control-IQ at all, or if it does it would be by a couple or a few weeks at most.
SOFTWARE ANOMALY IN CLINICAL TRIAL: Tandem Diabetes announced that it intends to use its remote software update tool, the Tandem Device Updater, to resolve a Control-IQ technology software anomaly identified during the ongoing DCLP3 phase of the International Diabetes Closed Loop, or IDCL, clinical trial. The company anticipates that the software update will be available to study sites before the end of March. The anomaly relates to how the t:slim X2 insulin pump with Control-IQ technology handles continuous glucose monitoring data under specific conditions, which could then impact the system’s prediction of future blood glucose values and automated insulin delivery. Manifestations of this anomaly are rare and have not resulted in any reportable adverse events; however, due to an increased risk of hypoglycemia, use of the Control-IQ software feature in the IDCL study will be temporarily suspended until the software update is available. The company is currently in discussions with the IDCL study investigators to evaluate any impact of the software update to the clinical or regulatory strategy for the t:slim X2 insulin pump with Control-IQ technology. Currently, approximately 120 out of 168 trial participants have completed the 6-month DCLP3 study. Tandem has also notified other clinical trial sponsors using Control-IQ technology of the anomaly and that a software update will be made available. The DCLP5 study, which is the pediatric arm of the IDCL study, will commence following availability of the updated software.
TRIAL ‘HICCUP’ SHOULD BE FIXED EASILY, QUICKLY: After speaking with management at Tandem Diabetes, Baird’s Johnson told investors that his understanding is that the software bug the company announced in its Control-IQ clinical trial is small, has not impacted a single patient, and is easy to fix. The issue may not delay the launch of Control-IQ at all, or if it does it would be by a couple to a few weeks at most, Johnson contended. The analyst noted that the issue was identified as something in the software that “could happen” under a very unique set of circumstances when a patient is either trending toward hypoglycemia or the CGM is mis-reading a hypo event. In essence, several unusual things would have to be happening, all at the same time, for the system to incorrectly calculate and/or provide an insulin bolus, he added. Overall, Johnson believes that with no adverse events tied to this issue, no patients needing to restart the 6-month Control-IQ trial due to this issue, and the trial only suspended a few weeks, the news should be seen as nothing more than a “small hiccup.” Noting that the selloff on this news appears “overdone,” the analyst reiterated an Outperform rating and $65 price target on the stock.
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