CellNovo Secures Additional Capital
This morning CellNovo announced they had secured nearly $50 million in additional capital. According to a press release issued by the company; “Cellnovo, developer of the first mobile diabetes management system, announced today that it raised ₤30 million ($48.4 million) in a Series B financing round led by Edmond de Rothschild Investment Partners (EdRIP), with Forbion Capital Partners; Auriga Partners; NBGI Ventures and Credit Agricole Private Equity joining Series A investors Advent Venture Partners, HealthCare Ventures and NESTA in the round.
Based in London, Cellnovo will use the funds to commercialize its system and expand to markets around the world. The Cellnovo system, developed in-house, is unique in several ways including: the accuracy and size of the pump’s technology, as well as the touch-screen, mobile-connected device that provides healthcare professionals and families immediate access to a myriad of information.”
Some may recall that Diabetic Investor had previously reported that Bayer was interested in acquiring CellNovo as their entry into the insulin pump market. Given the rather lackluster performance of their BGM unit, Bayer has basically put on hold any new investments in the diabetes device market.
CellNovo is just one of many companies seeking to attract the attention of the bigger players in diabetes interested in entering the highly competitive insulin pump market. The difference between CellNovo and the rest of the bunch is their approach to the market. Unlike the others who think they can build a better mouse trap, CellNovo is developing a diabetes management system where the insulin pump is the insulin delivery component of the system.
This is a somewhat radical departure from the traditional approach to the market which is more concerned with building a cheaper version of what’s already on the market while ignoring how patients actually use these systems in a real world setting. Diabetic Investor believes CellNovo stands a somewhat better chance of attracting the attention of the bigger players as they taking a more realistic approach to the future of diabetes management; a future where device connectivity will become the centerpiece of more effective diabetes management.
Their strategy also fits nicely into where the major players are headed. As Diabetic Investor has been predicting the day is quickly approaching where physicians will no longer prescribe individual components for managing diabetes rather they will prescribe a diabetes management system which will contain all the tools the patient needs, including disease management tools, in one nice neat box where all the components, drugs and devices, are provided by one company.
The reality for companies like CellNovo it is no longer good enough to say you have a better more cost effective insulin pump. As we have said many times, while there are differences between insulin pumps, a pump is merely a device and once you learn how to effectively use this device it really doesn’t matter which system you use. Given that there are numerous companies developing insulin pumps, all competing for attention from the same group of investors and potential partners, CellNovo has correctly read where the market was going and understood how important it was to differentiate their company from the rest of pack.
Although it’s still early in the process Diabetic Investor believes that CellNovo is headed down the right path. Given the copycat nature of the diabetes device market, don’t be surprised if others begin to embrace the diabetes management system approach. There is no question this where we are headed; the only question is who will lead the way here. At the moment when it comes to the many insulin pump wannabes CellNovo appears to be out in front.