Diabetes technology makers Insulet (NSDQ:PODD) and Dexcom Inc. (NSDQ:DXCM) abandoned a 5-year-old joint development deal that would have merged Dexcom’s continuous glucose monitoring technology with Insulet’s OmniPod insulin delivery system, officials confirmed with MassDevice.com today.

The pair parted ways over differences in their vision for the future of diabetes management technology. Each wants to lower the quantity of devices a diabetic patient must carry in order to manage the disease, but are pursuing diverging avenues for integrating existing monitoring and treatment technologies.

Insulet aims to reduce the number of skin-worn devices while Dexcom is looking to shift its monitoring systems onto the smartphones that patients already have in their pockets.

Insulet’s already moved on to the next potential partner, an unnamed private company with technology that aims to allow OmniPod technology to deliver insulin and gather continuous blood glucose data through a single site rather than through 2 devices attached to the skin.

Insulet had hinted at the change in direction earlier this year when presenting at the J.P. Morgan conference in San Francisco.

"We think we can put 1 thing on the body, that will sense and deliver insulin all in the same space," DeSisto told the J.P. Morgan audience. "People want 1 thing on the body."

Insulet CFO Brian Roberts reiterated those sentiments in an email conversation with MassDevice.com today. One of the largest barriers to adoption of diabetes management technologies, Roberts told us, is the need to wear multiple items on the body all day, every day.

"Research that we have completed suggests that while more than 90% of people living with insulin dependent diabetes are willing to wear 1 thing on their body 24/7, that the number drops below half when people are asked if they’re willing to continuously wear 2 items on the body," Roberts said. "We’re focusing our time and efforts on what we believe to be the best solution for a person living with insulin dependent diabetes, a solution where the CGM sensor is contained within the OmniPod, thus providing an answer of only one thing on the body and one device in hand."

The development deal with Dexcom would have pared down the hand-held systems from 2 to 1, but the CGM sensor would have remained separate from the infusion site. An all-in-1 technology does not yet exist, which may mean that the regulatory pathway for a true 2-in-1 technology may mean blazing a new trail through the FDA, Diabetes Mine reported.

Insulet’s eying a combined CGM/infusion system that will gather data and deliver insulin through a single hand-held device and using a single transmitter/sensor site on the body. Other combination devices in development are similar to that proposed in the now-defunct Dexcom/Insulet R&D agreement; they aim to merge monitoring and treatment software into a single hand-held device but still require separate transmitters and infusion sites on the body, Roberts noted.

CEO Duane DeSisto told investors last month that it had joined forces with a new CGM partner and that it hoped to sign a formal agreement in short order to further pursue its all-in-one technology. Roberts said today that the company "believes" it has a partner in place to develop a "truly integrated pump/CGM solution."

Dexcom is moving forward with its next-generation CGM sensor, which transmits directly to a smartphone rather than working through an independent hand-held system. Dexcom CEO Terry Gregg showed off the Gen 5 CGM at the 2013 International CES in Las Vegas late last month, where he showed reporters an smartphone app that was connected to a continuous glucose monitor he was wearing on his own skin. The app shows real-time data and trends for up to 24 hours and can send texts to caregivers if the glucose levels were outside of safe ranges, Gregg said.

"What Dexcom has clearly stated is that they want to basically have their CGM go directly to a phone," DeSisto told the J.P. Morgan audience. "Well, if it’s going to go directly to a phone I’m not going to spend a year, year-and-a-half, integrating that into our particular product."

The integration of Dexcom and Insulet technology into a single hand-held system became "redundant" when Dexcom decided to pursue smartphone technology, Insulet’s Roberts told us.

"While we would have enjoyed the opportunity to continue to work with Dexcom to see if their sensor would have met the technical requirements necessary for integration into our OmniPod, that was not something that they were interested in doing at this time," Roberts said.

Representatives for Dexcom did not respond to requests for comment.