Medtronic is buying up leading smart insulin pen and connected phone app maker Companion Medical as it looks to shore up its growing weakness in the pump market.
The med tech major gets access to Companion's InPen, a so-called smart insulin pen that not only delivers insulin, but also tracks insulin on board, provides an meal bolus calculator and shares information with connected systems.
The InPen last for around a year and works with short-acting insulins, although work is being done on long-acting insulins. The company made around $11 million in 2019 sales and was looking to triple that this year, after launching in late 2017, though its market penetration is pretty low.
“This acquisition is an ideal strategic fit for Medtronic as we further simplify diabetes management and improve outcomes by optimizing dosing decisions for the large number of people using multiple daily injection (MDI),” said Sean Salmon, EVP and president of the Diabetes Group at Medtronic.
“We look forward to building upon the success of the InPen by combining it with our intelligent algorithms to deliver proactive dosing advice personalized to each individual. This smart CGM system can help people think less about diabetes and be able to live life with more freedom, on their own terms.
”Our goal is to become a trusted partner that offers consistent support whether an individual wants to stay on MDI, transition to automated insulin delivery or take a break from their pump.”
Analysts at Jefferies said the buyout was a “bold move” and a “source of growth” for Medtronic, and could add $200 million in incremental revenue.
It points out that Medtronic has “been floundering in diabetes,” losing around a point of share a month in the pump market. The Companion deal will help offset this, and allows Medtronic to serve not only the current and future pump market, but also those that chose to stay on pens, Jefferies said in a note the clients.
The plan now is to combine its diabetes tools (from its Nutriono and Klue buyouts) with InPen and integrate its own continuous glucose monitoring (CGM) system.
Jefferies notes however that the future of insulin delivery “remains a debate.” They firm muses whether smart pens “provide enough of a clinical leap for patients such that pumps prove too much of a relative burden for their benefits.”
Financial details of the deal were not made public. Medtronic’s shares were up nearly 2% Tuesday.