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Roche, Lifescan and the insulin pump market: an update

Following recent news that Roche is to pull out of the US market in relation to insulin pump technology, according to Reuters news agency, the company is in fact looking to expand its $2 billion-per-year diabetes business, not sell it or spin it off. Diagnostics division head Roland Diggelmann on Wednesday dismissed reports the Swiss drugmaker was considering options for the diabetes business he oversees, calling them “false.”

Speculation may have been triggered by Johnson & Johnson’s (J&J) announcement last week that it aims to divest a similar unit, he said. Instead, Diggelmann is hunting for technologies outside his company to potentially bolster a portfolio that now includes glucose monitoring products and insulin pumps as he seeks to arrest a revenue slump heading into its third year.
“We basically have all of the technologies we need in-house in varying degrees of development, so we have to ask ourselves, ‘How far are we along?'” Diggelmann said in an interview. “We’re looking around: Are there new possibilities, are there alternatives?”

Diggelmann’s pledge to keep the diabetes business, which is the world’s biggest ahead of J&J’s, chimes with a similar commitment Roche made last year. Sales of Roche’s diabetes products in 2016 slipped 4 percent to 2 billion Swiss francs ($2 billion), hurt by price pressure in the United States and extending a slide that began in 2015.
Reuters news item.

Meanwhile, as part of ongoing portfolio management, Johnson & Johnson announced in it’s quarterly earnings news release that the company is engaging in a process to evaluate potential strategic options for the Johnson & Johnson Diabetes Care Companies, specifically LifeScan, Inc., Animas Corporation, and Calibra Medical, Inc.
The statement says that “Strategic options may include the formation of operating partnerships, joint ventures or strategic alliances, a sale of the businesses, or other alternatives either separately or together. All options will be evaluated to determine the best opportunity to drive future growth and maximize shareholder value. There can be no assurance that this process will result in any transaction or other strategic alternative of any kind.”

The company is however continuing to manufacture, deliver and support its products, saying: “Our blood glucose meters and test strips are household staples, growing in usage, and LifeScan, Inc. is a world leader in volume for blood glucose monitoring devices. Insulin will remain the standard of care for patients living with diabetes and Animas Corporation is the maker of innovative insulin delivery systems that offer the latest sensor technology, with availability to patients as young as age two. With Calibra Medical, Inc., we plan to lead in the emerging segment of disposable insulin delivery with the U.S. launch this year of the OneTouch Via, a disruptive innovation that offers patients a discreet, wearable, on-demand, mealtime insulin delivery system.”

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