Bayer buys Metrika
“Metrika, the maker of the at home A1c test A1cNow+ is in the midst of serious late stage negotiations to be acquired. Although all the I’s aren’t dotted nor are the T’s crossed, the deal should be closed in the very near future. While there is more than on suitor Diabetic Investor sees Bayer coming out on top.”
These comments came from an email alert Diabetic Investor sent out back on June 10th, 2006 after the first day of the American Diabetes Associations (ADA) Conference in Washington D.C. Once again Diabetic Investor was right on the money as yesterday afternoon Bayer announced they would be acquiring Metrika, the makers of the A1CNow+®. Terms of the transaction were not disclosed.
This move comes on top of news that Bayer is selling their diagnostic unit to Siemens, interestingly when this deal was announced Bayer specifically mentioned that the diabetes unit was not part of the deal.
Many have speculated how Bayer would proceed in the diabetes area as they have now fallen to the number four spot in terms of market share in the blood glucose monitoring market. The general consensus prior to these announcements was that Bayer would find a way to exit the business rather than try and compete. Although the company has some solid products they face stiff competition from well-healed competitors. The acquisition of Metrika appears to signal they are here to stay.
The question now becomes where they go from here. Will they use the A1CNow+ as method for expanding test strip usage? It is a well known fact that the majority of patients with diabetes fail to test their glucose levels as frequently as they should. Diabetic Investor has long maintained that the reason for this isn’t so much the so-called pain involved with testing; rather patients see little correlation between test results and their daily treatment regimen. Simply put they do not understand what the numbers mean and what actions, if any, need to be taken as a result. A1c results as a way of contrast are very easy to understand, 7 or below is good, higher than 7 isn’t.
It is possible that Bayer sees a market opportunity with primary care physicians. Nearly 80% of the patients diagnosed with diabetes are treated by their primary care physician and not a diabetes specialist. With the epidemic growth rate of diabetes primary care providers are becoming more familiar with the value of A1c and the A1CNow+ provides a simple, inexpensive means of providing this information when they need it most, during a patient visit.
Another possibility is selling the A1CNow+ packaged with a Bayer blood glucose meter. The system could be marketed to patients as a sort of baby steps approach to increase daily glucose testing. With a baseline A1c established the company could use simple educational material to explain how daily glucose readings correlate to A1c.
With all the attention on continuous glucose monitoring and concern over glycemic variability, many have forgotten that for the majority of patients all this data is unnecessary and confusing. A1c is simple to understand from both the patient and physician perspective. The one drawback here is testing frequency, while the ADA recommends patients test their glucose levels four times each day, A1c testing is recommended on a quarterly basis. Even if Bayer captures the entire market, a highly unlikely scenario, will there be enough volume to make this acquisition pay off. Stay tuned.