Diabetes: Insulet inks deal with J&J’s LifesScan for next-gen OmniPod

Updated: February 17, 2012 10 a.m.

Insulet
LifeScan

The next generation of Insulet’s (NSDQ:PODD) OmniPod insulin pump, which is awaiting 510(k) clearance from the FDA, will be compatible with the LifeScan blood glucose monitoring technology made by Johnson & Johnson (NYSE:JNJ).

The 2 companies inked a deal for LifeScan’s OneTouch technology to be incorporated into a new personal diabetes manager that patients use to control the OmniPod. Insulet’s chief commercial officer, Peter Devlin, told MassDevice.com that the company is targeting a mid-2013 commercial release.

"It’s essentially a new device that will require 510(k) clearance," Devlin explained. "By having the BGM integrated in the PDM, it simply makes that aspect of controlling your diabetes a bit easier."

Insulet already has a deal with Abbott (NYSE:ABT) and its FreeStyle BGM, but that pact is set to expire in 2013, he said. The OneTouch agreement with LifeScan runs through 2017 and has a trigger that would make it exclusive at Insulet’s discretion, according to a press release.

The next-generation OmniPod, the Eros, is awaiting a decision from the FDA’s Center for Devices & Radiological Health on its bid for clearance for the U.S. market. Although Devlin said Insulet "is not in the business of projecting when the FDA is going to approve anything," the company is hoping for a mid-2012 launch for that device as well.*

"The Eros system will be compatible with both the Abbott strip, because it is a platform we intend to launch this year," he said. "When the OneTouch-integrated device is available, we have the option to either maintain 2 PDMs with different strips in them, or to select exclusivity with LifeScan and just sell that on a go-forward basis. That’s a decision we’ll make as we get closer to 2013."

Insulet shopped around for a deal before settling on LifeScan, largely for the scale of its market access, Devlin added.

"There were a number of BGM companies that we spoke to that expressed interest in being a partner, and ultimately when we looked at LifeScan as a potetial suitor, the big value that it brings to us is simply access to a larger portion of people. LifeScan is the blood glucose monitoring market leader in the U.S.," he noted.

David Kliff, publisher of the Diabetic Investor,, an internet based informational source covering the business of diabetes, wrote that the deal could position Insulet and J&J for a run at Medtronic (NYSE:MDT), which has a hold on about 70% of the U.S. insulin pump market.

"Medtronic owns the market and no one, so far, has figured out a way to steal away share and give them a run for their money," Kliff wrote. "The question today is really no different than it was 5 or even 10 years ago: ‘Can anyone knock Medtronic off its pedestal?’"

Devlin said Insulin continues to increase its market share due to a confluence of several factors, not just its latest deal.

"Our next-generation pod continues to position us very well to continue to grow share in the U.S. market," he said. "Having the LifeScan strip incorporated in our device would clearly make our device attractive to a larger group of potential users, bit it’s really a combination of things that continues to position us well for market share growth here in the U.S."

*Correction, February 17, 2012: This article originally stated that the Eros OmniPod is expected to launch in 2013. It is expected mid-2012. Return to the corrected sentence.

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