Animas Launches a New Pump – too bad it’s already outdated
This morning Diabetic Investor had the chance to look at the new insulin pump from Animas, the 2020. While the 2020 has several neat features and is definitely targeted at the IPOD generation, what stood out was what the pump didn’t have.
One would think that with Animas being part of Johnson and Johnson (NYSE:JNJ) who also owns LifeScan, that the 2020 would allow LifeScan’s line of blood glucose meters to communicate with the 2020. Nor does the 2020 work with the Dexcom (NASDAQ:DXCM) continuous glucose monitoring system. These two omissions by themselves hurt the pumps chances, no matter how many fancy cosmetic features the pump has.
Looking at the competition Medtronic (NYSE:MDT) the market leader has the Paradigm 722 which combines their Paradigm insulin pump with their Guardian RT continuous glucose monitoring system. Earlier this week Medtronic announced that the MiniLink™, the new transmitter for the 722 system is now available. Besides being smaller and more comfortable to wear than the old transmitter, the MiniLink is also waterproof and rechargeable. While Medtronic is aggressively pushing the 722 system, they still offer pumps that communicate with a blood glucose meter.
The Cozmo for Smiths Medical has the CozMonitor, which is basically a FreeStyle meter that attaches to the back of the pump and communicates with the pump. The OmniPod from Insulet has a FreeStyle meter built into the Personal Diabetes Manager and the company also has an agreement with Abbott (NYSE:ABT) to integrate the Navigator continuous glucose monitoring system into the OmniPod, once it receives approval from the FDA.
The fact of the matter is if Animas wants to gain share they must integrate their pumps at minimum with a blood glucose monitor, ultimately with a CGM. It won’t be long before the Navigator is approved by the FDA, Diabetic Investor is hearing that the system should be approved sometime in April and officially launched at the ADA show in June. Should Insulet and Abbott successful integrate the Navigator and the OmniPod, the OmniPod would not only have the advantage of being a wireless system but it would also have a CGM system as well. For all the problems Abbott has had getting Navigator approved by the FDA, most researchers regard it as the most accurate system.
With the Paradigm 722 and OmniPod available what compelling reason does the physician have to recommend the 2020? The fact that the 2020 does not even communicate with a blood glucose monitor puts it in the same category as the Accu-Chek Spirit insulin pump which isn’t saying much.
Although Dexcom has had it share of problems, they do have an FDA approved product, an installed user base and most important intellectual property. It is also well known that at its present market cap, JNJ or Roche could easily afford to buy the company. One of them better do so and soon or their insulin pump units are in serious danger of becoming obsolete. The fact of the matter the future of the insulin pump market will be all about semi and fully closed loop systems. Medtronic is well ahead in this area and with their huge installed base it’s doubtful anyone could overtake them as they number on player here. The OmniPod stands the best chance to establish itself as the number two player in the market and combining this system with the Navigator increases the chances of this happening. This will leave Roche, JNJ and Smiths to fight for third place.
Diabetic Investor does not consider Smiths a serious player in the market any longer, which means the fight for third, will be between heavyweights JNJ and Roche. (It should be noted there are host of companies getting set to come to market who will further muddy the waters in the insulin pump market.) Given that neither JNJ nor Roche is anywhere close to having their own CGM system ready buying Dexcom is not only logical it’s strategically imperative. Based on their respective histories Diabetic Investor believes Roche will end up with Dexcom as they have a history of overpaying, i.e. Amira and Disetronic.
Whether its JNJ or Roche who ends up with Dexcom, both companies have the human and economic resources to effectively compete when they have pump/CGM system. Until then it really does not matter what they do or what enhancements or features they add to their pumps. Diabetic Investor has said it before and we will say it again – THE INSULIN PUMP MARKET IS NOT LARGE ENOUGH OR GROWING FAST ENGOUGH TO SUPPORT ALL THE CURRENT AND MANY FUTURE PLAYERS SET TO ENTER THE MARKET.
Without a technological advantage like the OmniPod or a huge installed base like Medtronic has, the remaining players are just kidding themselves if they think they can effectively compete. This is not an opinion this is a fact!!!!!