In early 2020, the Memphis-based startup Diatech Diabetes was raising its first funding round. The money was expected to help Diatech further develop its software platform SmartFusion — meant to help people with diabetes obtain proper amounts of insulin. Its young leaders were excited.
The startup had completed Epicenter’s Zeroto510 Medical Device Accelerator in 2019, and as Diatech CEO John Wilcox said, they were “feeling ready to go and get started on the journey.”
But then the COVID-19 pandemic battered the economy, and many potential investors took a major financial hit, causing them to pull funding opportunities from groups like Diatech.
“It was really tough,” Wilcox said. “We were relying on this next round of funding to get us to a point where we could talk to companies about our product for them to use. And that was completely displaced.”
Wilcox and co., however, managed to pivot. They secured a $300,000 award from the National Institutes of Health (NIH), gained momentum, and inked a partnership with an insulin pump manufacturer.
Now, with the pandemic slowly fading into the history books, Diatech has again hit a big fundraising milestone via an award from JDRF, a global nonprofit that funds Type I diabetes (T1D) research. The award comes through JDRF's Industry Discovery & Development Partnership program.
For Wilcox, who was diagnosed with Type 1 diabetes on his 9th birthday, the award is significant both professionally and personally.
He’s been involved with JDRF for years, and it’s particularly special, he explained, for Diatech to receive funding from an organization that’s had a notable impact on his life.
The award isn’t taken lightly.
“It really is put toward projects that [JDRF] believes in,” Wilcox said. “And we know how much dedication the diabetes community gives to providing that funding to them, for real research to be done. So there’s a sense of responsibility that we have to really deliver on this funding award.”
The funding from JDRF is set to support the research and development for SmartFusion, Diatech’s infusion monitoring software for insulin pump platforms.
There’s an upcoming animal study, which is slated to start in about a month in Memphis, and its first human study, which is set to start patient recruitment next year and could take place overseas. This is because Diatech is considering pursuing regulatory clearance both in the U.S. and internationally.
The pumps themselves are expected to be provided by Diatech’s manufacturing partner — which Wilcox declined to name — and though the startup is also in talks with another insulin pump manufacturer, this is the one it’s progressed furthest with.
“They provide the pumps and the disposables, and then we do the testing and demonstrate that compatibility of our software with their pumps,” Wilcox explained.
“JDRF supports the development of technologies to improve health outcomes and quality of life for people with T1D,” Jonathan Rosen, Ph.D., JDRF director of research, said in a release. “Diatech’s SmartFusion technology, by rapidly identifying pump infusion set failures, has the potential to help users avoid hyperglycemia and DKA [diabetic ketoacidosis] as well as reduce the daily hassle of living with T1D.”
And this type of testing could ultimately help lead to major licensing agreements — or a chance to pursue an M&A opportunity.
“We’re open to both opportunities,” Wilcox said. “There is an opportunity for us to potentially do a software royalty payment, where it obtains a license for the software to be used. … But also, on the other end of it, there may be an M&A situation, where we have one manufacturer that is like, ‘We really do appreciate this technology, and … we may just outright acquire the IP for exclusivity.”
