Vertex’s Type I Diabetes Treatment: Pharmaceutical Moonshot

Made famous in the tech industry, moonshots are ambition ventures with the promise of near-term profitability. In the pharmaceutical industry, Vertex Pharmaceuticals, known for its robust cystic fibrosis treatments (CF), is currently undertaking a moonshot of its own, the treatment of Type 1 Diabetes.

Type 1 Diabetes afflicts 1.5 million Americans and requires a rigorous routine of insulin maintenance. If patients do not monitor their insulin levels, they can lose limbs, become blind, or die. In fact, diabetes is the leading cause of blindness in the U.S. Short of a transplant of the cells in the pancreas that produce insulin, there is no cure for Type 1 Diabetes.

Nevertheless, Vertex Pharmaceuticals recently made headlines for curing a man of Type 1 Diabetes. According to the New York Times, “Mr. Shelton, now 64, may be the first person cured of the disease with a new treatment that has experts daring to hope that help may be coming for many of the 1.5 million Americans suffering from Type 1 Diabetes.” The Times article explores how Mr. Shelton, a retired postal worker, enrolled in a Vertex study that infused enrollees with insulin-producing cells grown from stem cells.

Once infused, Mr. Shelton has to take immunosuppressant drugs to prevent his body from rejecting the infused cells. Ostensibly, the treatment appears to have worked because Mr. Shelton has not experienced a rapid rise or reduction in his insulin levels.

Experts caution that more time and data is needed in order to prove efficacy. Key caveats to the treatment include the length of time the infusion cells last, the long-term effects of the infusion, and the effects of the immunosuppressant drugs.

Despite these caveats, the treatment has granted Mr. Shelton a whole new way of life. In fact, Vertex’s treatment has the potential to improve hundreds of thousands of patients’ lives and radically upend the insulin market.

A Change to the Insulin Market

For diabetes patients, insulin represents life and death. Without insulin, diabetes patients can die quickly. In the U.S, Mordor Intelligence expects the insulin market to reach a value of $12 billion by 2025.

In addition to being a life-saver for diabetes patients, insulin generates billions of dollars of revenue for pharmaceutical and medical device firms each year. According to Morningstar, Novo Nordisk owns half of the $20 billion insulin market. When it comes to medical device treatments for diabetes, Medtronic and Abbot are the leading suppliers of diabetes devices.  The global diabetes monitoring market size was over $26 billion in 2020.  Diabetes is a huge revenue generator for companies.  If Vertex’s treatment were successful, patient lives would improve, insurance costs would be reduced, and patients would visit physicians less frequently. However, a segment of the industry would have to find a new disease. 


Years ago, the March of Dimes was founded to raise money to fight Polio.  When Jonas Salk invented the Polio vaccine the disease was eradicated.  March of Dimes shifted the mission to prevent birth defects.  One has to wonder what companies will do if Vertex is successful.  


Likewise, more substantially, a key unknown is whether Vertex’s treatment, if approved, can be used to treat Type II diabetes patients, a far more significant market. The Type II Diabetes market is expected to grow by $30 billion from 2021-2025. 


Despite being relatively novel, Vertex’s diabetes treatment presents a real threat to Novo Nordisk and other companies involved in diabetes care such as Eli Lilly and Sanofi. Insulin has long been a cash cow for pharma companies because of its chronic use, meaning patients must purchase insulin for the rest of their lives.

However, Vertex’s treatment would present a one-time cure for Type 1 Diabetes, which means that potentially hundreds of thousands of people would be able to get off of insulin. With the market demanding substantially less insulin, companies like Novo Nordisk would need to pivot or reposition their products.

Caveats for Vertex

While Vertex’s treatment does have the potential to upend the insulin market, it does not come without caveats. Like its CF assets, Vertex’s Type 1 Diabetes treatment would cost within the hundreds of thousands of dollars per year. For reference, Vertex’s three leading CF treatments command pricing upward of $230,000-250,000 a year according to Morningstar.

A high cost would prevent the majority of patients from receiving the treatment, leaving the wealthy with the most likely access. Additionally, the high cost would keep insulin producing firms in the market.


Vertex’s treatment truly presents a moonshot in the pharmaceutical industry. While it has the potential to rapidly improve the lives of hundreds of thousands of patients, its economic impacts will send shockwaves through the industry.  

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