Dive Brief:
- Tandem Diabetes Care agreed to acquire Switzerland-based AMF Medical to gain its insulin pump patch technology. Tandem will pay 62.4 million Swiss francs ($67 million) upfront and as much as 129.6 million francs if certain milestones are met.
- The deal will give Tandem control of Sigi, a reusable, rechargeable patch pump that is smaller and lighter than existing devices and integrate with continuous glucose monitors to create closed-loop systems.
- Tandem, targeting a 2027 U.S. launch, will enter a market that is already served by Insulet and has attracted the attention of its tubed pump rival Medtronic, whose Omnipod device is disposable.
Tandem in the past has shown interest in adding a patch pump to its technology portfolio. The company, which already makes the t:slim X2 insulin pump, put the technology on its five-year product roadmap at an event last year and initiated an in-house patch pump R&D program. Tandem participated in CeQur’s $115 million equity financing last year to support development of another patch.
Tandem, having identified multiple paths to the launch of an insulin patch, will wind down its internal development program with the purchase of AMF. Tandem made a 8-million-franc investment in AMF in the third quarter before following up with a bid to buy the company outright.
In addition to the upfront fee, Tandem agreed to pay as much as 38.4 million francs tied to the successful completion of key development milestones over the next two years, plus another 91.2 million francs once the pump is cleared by the Food and Drug Administration. Tandem CEO John Sheridan outlined why he’s confident AMF’s pump is worth the outlay on a call with investors to discuss the deal.
“It offers significant feature differentiation versus in-market patch pumps with the use of prefilled insulin cartridges. It’s also rechargeable, which further differentiates it from the patch pump landscape as a more environmentally friendly offering,” Sheridan said. “We see significant potential for increased penetration with people who live with Type 1 diabetes, and with people who live with Type 2 diabetes on insulin intensive therapy.”
Once the deal closes, Tandem said it will support AMF as it works on final design validation and moves the device into and through clinical development. Integration of Control-IQ, Tandem’s hybrid closed-loop insulin dosing technology, is also on the roadmap. While the time needed to complete the work could allow rivals to beat Tandem to market, analysts at Craig-Hallum are optimistic it can succeed.
“There are existing patch pumps from smaller companies in [non-U.S.] markets that could beat Tandem to the U.S. market, but the differentiated features of Sigi should mitigate the effects of being third to market for a patch pump; we do think scale matters too and Tandem has a strong infrastructure to leverage upon eventual commercialization,” the analysts wrote in a note to investors.
