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| DreaMed's GlucoSitter technology analyzes glucose levels and directs a pump to deliver correct doses of insulin.--Courtesy of DreaMed |
Medtronic ($MDT) snatched up artificial pancreas technology from Israel-based DreaMed Diabetes for its insulin pumps, the company's latest deal as it looks to diversify its diabetes offerings and cash in on a growing market.
DreaMed will receive undisclosed royalties from future sales of each Medtronic device using the company's technology, and Medtronic will oversee development and marketing of the pumps, Reuters reports. Dublin-based Medtronic is also sinking $2 million into the Israeli devicemaker as part of the deal. DreaMed's GlucoSitter product, which is based on an artificial pancreas algorithm, analyzes glucose levels and prompts the pump to deliver the correct dose of insulin to the body, mimicking the function of a normal pancreas to reduce the risk of low and high blood glucose episodes.
"We believe that a fully automated artificial pancreas will provide greater freedom and better health for many people with diabetes by eliminating some of the burden of glucose management," Alejandro Galindo, general manager of the intensive insulin management business at Medtronic, told the news outlet.
The deal helps Medtronic grab a bigger piece of a growing sector, as the global market for products to manage diabetes is $41 billion and is estimated to exceed $114 billion by 2018, Reuters reports. And insulin-dependent patients represent half of the market, potentially opening the door for companies like Medtronic with innovative devices that could better monitor and stabilize glucose levels.
Medtronic's deal with DreaMed also comes a few months after the company revealed changes to its diabetes unit. In November, Medtronic said its fastest-growing business would comprise three components: an intensive insulin management business with its Type 1 and intensive Type 2 diabetes products, a nonintensive business centered on devices for Type 2 diabetes, and a services and solutions business.
"The genesis of the structure is really for us to become a much more holistic diabetes company, not just a Type 1 pump and sensor company but a truly global diabetes care organization. And that is the emphasis behind the organizational changes," Hooman Hakami, EVP and president of the Diabetes Group, said in a conference call.
Medtronic has not wasted anytime forging ahead with new plans for the unit this year. In January, the company rolled out its MiniMed 640G in Australia, the beginning of a global launch for the product and a stepping stone in the development of an artificial pancreas. Last week, Medtronic snatched up Netherlands-based Diabeter, diving into the diabetes care market and getting its hands on the company's innovative technologies for disease management.
- read the Reuters story