Recently, Abbott and Medtronic announced a collaboration on continuous glucose monitoring products (CGM). Abbott possesses an advanced CGM platform, while Medtronic excels in smart insulin delivery devices and software. The strategic partnership between these two medical device giants is expected to accelerate the development of the CGM market.

The joint effort of these medical device leaders in the CGM market signifies the high technological barriers within the CGM industry and the continuous expansion of technological competitive advantages among CGM brands. Since 2021, domestic CGM brands have also begun to rise, gradually moving from the domestic market to the international market as technology evolves and products mature. Concurrently, key players in the CGM industry chain, such as Bluetooth chip and sensor manufacturers, will also benefit from the growth of this market.

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The rise of domestic brands in a nearly $5 billion market "Warring States" period.

Blood glucose monitoring devices include continuous glucose monitoring devices (CGM) and traditional blood glucose monitoring devices (BGM). BGM requires multiple fingerstick blood samples to obtain a single point of blood glucose concentration data at a time. To acquire more blood glucose information, multiple fingerstick blood glucose monitoring tests are needed.

The working principle of CGM is based on the electrochemical principle of enzyme biosensors that measure the glucose concentration in the interstitial fluid, converting the body's glucose concentration into an electrical signal. This signal is then calibrated through algorithms to convert the electrical signal into the measured glucose concentration. Data indicates that CGM can monitor a blood glucose value approximately every 5 minutes, storing nearly 288 blood glucose values in a continuous 24-hour period.

CGM systems are categorized based on the method of data acquisition: retrospective CGM (blind CGM), scanning CGM (using NFC transmission), and real-time CGM (using Bluetooth transmission, which can automatically and real-time store blood glucose data).

In terms of wear, the small glucose sensor on the product is implanted into the subcutaneous tissue, with common sites including the back of the upper arm and the abdomen. The sensor can be worn for up to 14 days, which is due to the sensor's lifespan issue, as most current CGM sensors need to be replaced every 14 days. However, compared to traditional blood glucose monitoring, patients can obtain a continuous 14-day blood glucose fluctuation trend chart, adjust medication and diet according to the blood glucose trend chart, and achieve blood glucose control.

In comparison, continuous glucose monitoring is more convenient than traditional blood glucose monitoring and offers smarter management, thus gaining increasing consumer acceptance. A report from market research firm Grand View Research indicates that the global CGM device market size was approximately $4.6 billion in 2023, with an expected compound annual growth rate of 7.19% from 2024 to 2030.

This is a single-product market that no one wants to give up, with international players such as Dexcom, Abbott, and Medtronic. Domestic CGM product approvals started later than overseas, but began to significantly accelerate from 2021, with domestic brands such as Sinovation Bioelectronics, Yuyue Medical, Sanuo Biotech, and MicroTech Medical quickly positioning themselves in the market, expanding market share through controlling stakes, obtaining CGM registration certificates, and enriching product lines. It can be said that the global CGM industry has entered a phase of rapid growth, and it is also a period of brand "free-for-all."

According to publicly available financial report data, in 2023, Abbott achieved a record sales amount of $5.3 billion, with the Freestyle Libre series being its core product. In the second quarter of this year, FreeStyle Libre sold $1.6 billion globally, reporting an 18.4% increase and an organic growth of 20.4%. The total sales for the first half of this year reached $3 billion, a year-on-year increase of 21.8%.In the domestic market, Si-based bionics is like a "dark horse." The company's CGM product, Si-based Kinetic, received approval for Class III medical device registration in 2021, and the production line was also approved for a manufacturing license in the same month, with an annual production capacity exceeding one million units. One of the thresholds for the CGM industry is mass production capability, and a production capacity of one million is the "entry threshold." In August of this year, Si-based Bionics announced that Flextronics had completed the production and delivery of six million sets of Si-based Kinetic continuous glucose monitoring systems (CGM).

As a leading domestic blood glucose monitoring company, Sannuo Biological has completed the registration of CGM in seven global regions and launched it domestically. In 2023, the company achieved a revenue of 4.059 billion yuan, and in the first quarter of this year, the revenue reached 1.014 billion yuan, a year-on-year increase of 14.92%. The company has repeatedly emphasized that it will cultivate growth based on the second curve with CGM as the foundation. In 2023, its product "Sannuo Ai Kan" became the first CGM approved for marketing with third-generation sensor technology (CGMS technology).

Breaking through technical challenges, domestic CGM has evolved to the third generation of sensor technology.

The research and development barriers for CGM technology are extremely high, so domestic brands must be prepared for high R&D investment if they want to enter this market. The aforementioned "Sannuo Ai Kan" is a CGMS technology that Sannuo Biological began investing in R&D in 2009, and after four years, it was finally approved for marketing.

Data shows that early CGM products had issues such as poor monitoring accuracy, short sensor lifespan (about 3 to 5 days), hard needles, and the need for fingerstick blood calibration. From a technical iteration perspective, algorithms and sensors are key to ensuring monitoring accuracy, especially in the field of sensors, which are the core components of CGM products and have relatively high barriers.

To break through technical barriers, domestic CGM brands are constantly making attempts. In terms of sensors, there has been the development of the first-generation sensing technology, the second-generation sensing technology, and the third-generation sensing technology. Sannuo Biological stated during investor relations activities, introducing the characteristics of different sensor technologies:

The first-generation sensing technology uses O2 as the electron transfer medium, measuring the current generated by H2O2 on the platinum electrode during the reaction process, converting glucose concentration into H2O2 concentration. However, this technology is limited by the high impurities and low O2 environment in the interstitial fluid, and it has high requirements for the outer membrane, theoretically requiring higher production processes and costs.

The second-generation sensing technology uses artificial redox agents as the electron transfer medium, arranging osmium complexes in a tight and orderly manner to form an electron transfer chain, and connecting redox enzymes and carbon electrodes, thereby transferring electrons generated during the oxidation of glucose through osmium complexes to the carbon electrode. The second-generation sensor technology, in principle, gets rid of the limitations of impurities and O2 concentration, and has a lower production cost.

The third-generation sensor technology is direct electron transfer technology, which modifies glucose oxidase to directly have electron transfer functions. This technology does not rely on an electron transfer medium, has high glucose oxidation efficiency, and has advantages such as low potential, oxygen independence, few interferents, good stability, and high accuracy.

Before 2022, the market generally adopted the first-generation sensors, and now products with the second-generation sensor technology have gradually matured. Products with the third-generation sensor technology have also been launched with the technological investment of brand manufacturers.Silicon-based bionics adopts the second-generation sensor technology as its research and development direction, using metal-polymer redox polymers as electronic mediators. Its product, Silicon-based Motion, integrates sensing electrode technology with low-power design, enhancing the monitoring accuracy and stability of blood glucose levels. It is understood that Silicon-based Bionics has achieved independent research and development in sensor materials and medical-specific chips, and has made breakthroughs in key technologies such as substrate electrodes and sensors.

Figure: Silicon-based Motion

Sinocare launched its third-generation sensor technology CGM product in 2023, improving monitoring accuracy and reducing production costs. It can achieve continuous blood glucose monitoring for 15 days, complete 7,200 blood glucose measurements with a single wear, and provide real-time alerts when blood glucose instability is detected.

Breakthroughs in underlying technology have given domestic CGM brand products a competitive edge in performance. The MARD value is an indicator of product accuracy, with a smaller percentage indicating closer proximity to reference glucose values. According to the official website of CGM brands, the MARD value for Abbott FreeStyle Libre is 10.7%, for Silicon-based Motion GS1 it is 8.83%, and for Sinocare I3 it is 8.71%.

Development of AFE technology and calibration algorithms leads to improved monitoring precision

It is noteworthy that CGM is a product that combines low-power Bluetooth (BLE) and low-power low-noise analog front-end (AFE) technology, hence AFE technology also plays a crucial role in the monitoring process. Currently, companies like Goodix Technology and Letop Technology have introduced BLE+AFE CGM solutions.

Goodix Technology's CGM solution includes: 3V CGM solution GH7800+GR5331, 1.5V low-voltage CGM solution GH7800+GR5310. Goodix Technology states that the AFE can support electrochemical applications with four electrodes, providing a current detection accuracy of up to one-thousandth.

Letop Technology's latest CGM solution, released in March this year, consists of Letop Technology's CGM AFE, PMIC, MCU, and BLE chip set, with an average power consumption of less than 25uA, and a battery life of up to one month. The company's previously launched continuous blood glucose measurement AFE chip LTCGM1272 features a low-noise operational amplifier, reference/source/DAC/ADC, SAR ADC+oversampling algorithm, and an effective bit of 12bit+.

In the field of algorithms, calibration algorithms are also one of the keys to the monitoring reliability of CGM products. This is because the data measured by the CGM system and blood glucose concentration are also affected by physiological states such as pre-meal, post-meal, exercise, and respiration, as well as external environmental factors and the length of sensor implantation, which can lead to a decrease in sensitivity. Calibration algorithms can solve these problems to a certain extent.It is understood that the "Smart" CGM algorithm system developed by the CGM brand DeKang Medical—software algorithm 505 can reduce the MARD value of Dexcom G4 from 12.6% to 9.0%.

In summary, the International Diabetes Federation (IDF) estimates that by 2045, the number of adults with diabetes worldwide will rise to 783 million, with prevalence rates also increasing to 11.3% and 12.2%. The current blood glucose monitoring industry is still in a stage of rapid development, but the penetration rate and monitoring frequency of blood glucose monitoring in our country are far below those of developed countries and the global average.

Looking at the domestic CGM industry, domestic CGM brands are accelerating their layout, with brands such as SiliBionics and Sannuo launching new products and achieving technological breakthroughs, which will win more consumer favor.

On the other hand, looking at the global market, domestic CGM brands are going international. For example, Sannuo Biotech already has two overseas subsidiaries, Trividia and PTS, and its CGM products also obtained the qualification to enter the European market in 2023. The global CGM market is welcoming competition between international and domestic manufacturers. Abbott is no longer limited to medical CGM products, launching consumer-grade products, attempting to expand market share. How the future industry market structure will change is worth looking forward to.