Medical Device Link.

Originally Published IVD Technology April 2003

INDUSTRY NEWS

Jennifer Zakroff

Both Medtronic (Minneapolis) and Roche (Basel, Switzerland) expect to develop a closed-loop artificial pancreas by 2007. This device would provide a complete management system for diabetes patients. As they move toward this goal, the companies are attempting to draw customer loyalty by providing a one-stop shop for patients that includes glucose meters, strips, pens, and pumps.

Medtronic is currently the market leader, holding 82% and 30% of the United States and European insulin pump markets, respectively. However, Roche recently offered $1.18 billion to purchase Disetronic (Burgdorf, Switzerland), an insulin pump manufacturer that has 17% and 70% of the market share in the respective regions.

The offer, which would provide an estimated 55% premium over Disetronic’s asking price, is likely to be accepted. Willy Michel, chairman of Disetronic, said “even though Disetronic is a strong company, both from a financial and technological point of view, its size is not optimal to compete effectively against multinational players in the long term.” 

If Roche is able to offer a full line of diabetes maintenance tools, the company expects to drive insulin pump market growth from 4–7% in the United States and from 1–5% in Europe.

Johnson & Johnson (New Brunswick, NJ) stepped into the forefront of the insulin pump market with its 2001 acquisition of Inverness’ diabetes management segment, which included licensing rights to an insulin pump developed by Debiotech S.A. (Lausanne, Switzerland).

Second-tier players in the glucose management market include Abbott (Abbott Park, IL) and Bayer (Leverkusen, Germany). These companies are in a strong position to purchase additional technologies and boost their market status. However, with Medtronic’s and Roche’s plans for an integrated diabetes management system in the works, aggressive attempts at acquisitions may prove risky for other companies.

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