The OmniPod is going global.
Bedford, Mass.-based Insulet Corp. (NSDQ:PODD) signed a five-year, $100 million international distribution deal with Ypsomed AG (SIX:YPSN) to exclusively distribute the insulin management system in 11 countries, including China.
Ypsomed, a Swiss distributor of insulin pumps, blood glucose meters and diabetes care supplies, has networks around the globe, according to a press release. The terms of the deal give Ypsomed the exclusive right to promote, advertise, market, distribute and sell Insulet‘s OmniPod, starting in Germany, France and the U.K. in June and then other parts of Europe and Australia shortly thereafter. In 2011, the company will begin marketing the Omnipod in China.
The deal also gives Ypsomed a right of first refusal on distribution rights in all other countries except the U.S., Canada and Israel, according to a securities filing. The Swiss firm must makes annual purchases totaling $100 million over the five-year term of the deal, weighted toward the end of the term. That means the agreement isn’t likely to have a material impact on Insulet’s books this year, according to the filing. Ypsomed also agreed not to manufacture, sell or distribut any other insulin infusion devices which adhere to a user’s skin; according to the filing, the companies are likely to co-brand the OmniPod slated for distribution by Ypsomed with the Swiss company’s MYLIFE diabetes care brand. And 15months before the deal expires, the companies plan to “negotiate in good faith to enter into an amendment to the Agreement which would include a renewal term. Upon termination or expiration of the Agreement, [Insulet] has agreed to pay certain termination/expiration fees. These fees would be based on sales of the [Insulet]’s products made during the twelve months following such termination or expiration to customers who had purchased the Company’s products from Ypsomed during the term of the Agreement,” according to the filing.
Insulet won CE Mark approval in April, 2009, for its flagship product. At the time, vice president of clinical research Rob Campbell told MassDevice that the company had “outgrown our manufacturing constraints in the U.S., which led us to look to outside markets.” The company was actively working to set up a distribution deal at the time, Campbell said.