We hope everyone is sitting down for this one, per a just issued press release;
“Medtronic plc (NYSE:MDT) and Tandem Diabetes Care, Inc. (NASDAQ:TNDM) today announced that they have entered into a non-exclusive patent cross-license agreement for certain technologies in the field of diabetes. Cross-licensing each other’s patent portfolios enables both companies to focus on helping people with diabetes through innovation of future products and services, while avoiding the distraction of potential legal disagreements.
With certain exclusions, this agreement applies to the companies’ existing products, as well as new products for at least the next five years, and also includes a provision not to clone one another’s products. No payments will be exchanged as part of this agreement and further terms were not disclosed.”
Honestly when we read this we had to look at the calendar to make sure it was not April Fool’s Day. First comes the news that Medtronic and UnitedHealthcare ended their exclusive agreement and that United will now cover Tandem systems and now this. Listen we have long known that when it comes to their diabetes franchise the ship was sinking for Medtronic but seriously this latest news shows just how over it is. We are stunned.
Keep in mind that back in the day Medtronic who owns a boatload of insulin pump IP used to use this portfolio to bludgeon their competition. Going back in the wave back machine this is how they were able to get Smiths Medical to pull the Cozmo, a great insulin pump, from the market. Back then we used to say to all the Medtronic wannabees you’re not a real insulin pump company until Medtronic sues you, that’s when we’ll know you have something worth looking at.
Boy have times changed.
This news also shows how dramatically the landscape has change for the insulin pump market and how really bad things are getting for Medtronic. Besides losing exclusivity with United, a move made because Medtronic could no longer afford the terms of the old deal. The company showed no faith in the unit’s future when they partnered with Blackstone. Listen when a company as large and well capitalized as Medtronic is unwilling to invest a measly $300 million in diabetes R&D, a unit which generates billions in revenue you know the ship hasn’t just hit the iceberg but is seriously taking on water.
Add in the fact that they no longer have the coolest toy in the toy chest and well the Fat Lady whose been warming up is about to belt out the Medtronic swan song.
It’s becoming difficult to even imagine what could come next. Pigs began flying when they lost the United deal. These flying pigs are now doing summersaults. Will the final phase come when elephants begin standing on tables as Medtronic exits the diabetes market entirely?
Yep there is a reason we call this the wacky world of diabetes. Where anything can happen no matter how strange it seems. WOW this is just a stunner.