FDA OKS MINIMED DEVICE FOR DIABETICS.

Byline: Dave McNary Staff Writer

Diabetic-treatment specialist MiniMed Inc. reached a key milestone Wednesday as the federal government issued final approval of its potentially blockbuster system for monitoring blood sugar.

``Continuous tissue glucose monitoring is breakthrough technology that ultimately could revolutionize the care of diabetics,'' said Jane E. Henney, Food and Drug Administration commissioner. ``This new system is a first step in that direction.''

Wall Street cheered the FDA move, boosting MiniMed stock 3 percent, or $2.3125, to a record of $75.0625. The issue has more than tripled in less than a year, mostly on optimism over the continuous glucose monitoring system.

Industry trackers believe the system - which can help doctors make a precise determination of when patients should take insulin and how much to inject - eventually could become a powerful addition to MiniMed revenues, on track to hit $200 million this year. By closely regulating glucose, diabetics are less likely to suffer from complications such as blindness and heart disease.

Archie Smith, an analyst with U.S. Bancorp Piper Jaffray, said the device could boost revenues by $10 million in the first year. ``It's the first step in what will be a significant product line, but it will be at least 24 to 36 months before it makes a major contribution,'' he added.

About 16 million people in the United States have diabetes. MiniMed executives have indicated they plan to develop more complex devices that would constantly monitor blood sugar. ``There's been a tremendous anticipation for this type of product,'' said Senior Vice President Eric Kentor.

Sylmar-based MiniMed will formally introduce the system for commercial use at this weekend's meeting of the American Diabetes Association in San Diego and could start selling devices to doctors by next month. Initial rollout during the third quarter will be gradual, with the first systems available through a physician's prescription at a few selected diabetic treatment centers.

The device - a tiny electrode fitted under the abdomen's skin and connected to a monitor attached to a belt or waistband - gives a precise reading of glucose levels every five minutes. The information can be gathered for up to 72 hours and downloaded on a computer, leading to customized treatment.

Diabetics now monitor glucose by testing blood samples from finger pricks several times a day. The FDA warned Wednesday that MiniMed's system won't replace that painful procedure.

Kentor said pricing has not been set but added that MiniMed's goal will be to make it competitive with conventional blood-testing systems. He also said MiniMed will boost its work force of 1,100 as production of the device increases.