DreaMed will receive undisclosed royalties from future sales of each device using its technology. Medtronic will be responsible for the development and marketing of the pumps.
The U.S. medical device maker has also invested $2 million in DreaMed.
DreaMed’s GlucoSitter, which is based on the MD-Logic Artificial Pancreas algorithm, is an automated system for controlling glucose levels.
It analyses the body’s glucose levels and directs the pump to deliver the correct dose of insulin to the body, mimicking the behaviour of a healthy pancreas. This minimizes the risk of suffering 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," said Alejandro Galindo, general manager of the intensive insulin management business at Medtronic.
The global market for products to manage diabetes stands at $41 billion and is estimated to surpass $114 billion by 2018. Insulin-dependent patients represent half of this market.