Bug bites Animas – Threats on the horizon

Bug bites Animas – Threats on the horizon

This morning insulin pump maker Animas (NASDAQ:PUMP) announced a voluntary recall of approximately 2000 of the newly released IR 1250 pump. According to the company they identified a software bug related to the use of the food database.

This is just the latest problem facing Animas as they FDA recently issued a sternly worded warning letter.

Timing couldn’t be worse for the company as Disetronic is set to re-enter the insulin pump market and newcomer Insulet is set to introduce their OmniPod system. Although Insulet lacks the resources of the existing players in the pump market, the OmniPod is so innovative and attractively priced that Diabetic Investor believes it will capture the attention of the entire pump community. As the technology platforms for the existing players continues to converge there is little product differentiation and patients have been left with the choice of products that all do basically the same thing, the same way. For existing pump especially, the OmniPod system will be a viable alternative. It would not be unreasonable to expect that the OmniPod could easily steal market share from all the current players.

The fact of the matter remains that the insulin pump market is not large enough, nor is it growing fast enough to support all the existing companies in or set to be in the market. Should Animas be unable to correct their problems in a timely fashion and regain momentum they would be in serious danger of losing valuable market share. Although Disetronic has been away from the market for almost two years the company’s reputation remains intake with the medical community. Now owned by Roche, the company has the resources it needs to effectively compete. Smiths Medical, the maker of the Cozmo insulin pump, is a likely beneficiary of Animas’ current problems and could gain share over the short term. MiniMed, the clear market leader, is also likely to benefit from Animas’ problems. Add in the introduction of the OmniPod system and what you have is major fight to see who will survive to be a firm runner-up to MiniMed. Some companies may dreams of supplanting MiniMed as number one but that’s all they are, a dreams. Barring a major blunder MiniMed should maintain their huge lead.

Diabetic Investor can see come scenarios where MiniMed’s lead would shrink and even with their huge lead they are not unbeatable. The real question is who has the chutzpah to think outside the box? In the next few months we’ll find out who are the contenders and pretenders.

A quick reminder, we have set a publication date for our special report on the insulin pump market and have extended our special pricing offer. The report will be published on May 31st, 2005 and orders received before May 1st will be priced at $11,500. After May 1st the price will increase to $14,000. In the report we’ll examine all aspects of the insulin pump market, provide a detailed analysis of all the companies in or set to enter the market, explore why the insulin pump market is critical to the blood glucose monitoring market and investigate the new technologies that could change the market forever. Included in the new technology section will be at close look at the companies racing to develop a continuous glucose management system, as well as, the renewed interest in non or minimally invasive glucose management systems. Finally the report will delve into how new diabetes therapies, such as Exenatide, will impact the market.

To order this special report contact Diabetic Investor at 800-783-3712 or dkliff@diabeticinvestor.com.

David Kliff
847-634-4646 Fax
224-715-3761 Mobile