Amid increasing competition, Johnson & Johnson is dropping out of the insulin pump business, with plans to shut down its Animas unit immediately.
The closure puts 410 employees out of work and leaves about 90,000 patients in need of a new insulin pump. Those patients will have the option to transfer to Medtronic pumps, the company said.
“With changing needs of customers, rapidly evolving market dynamics, and increased competitive pressures, it proved too difficult to sustain the insulin pump business and we decided to pursue an exit of the business," said Valerie Asbury, general manager of Animas Corp. "This decision was extremely difficult and comes following the extensive exploration of all other viable options for the Animas business.”
The company had previously been looking at strategic options for the business, including a potential sale of its entire diabetes care, which also includes LifeScan Inc. and Calibra Medical Inc. The division reported sales of $421 million in the second quarter, down 10.6% from a year earlier.
The company said it will continue to provide customer service, training, and warranty support through a transition period. That includes providing pump supplies that are used in conjunction with the Animas Vibe and OneTouch Ping insulin pumps. "Our number one priority is ensuring patients have a seamless experience as they transition to Medtronic.
Clearly, Medtronic has a lot to gain from this development, having been selected by J&J as the partner of choice for patients currently using the Animas insulin pumps. But it could also benefit other competitors in the space, including Abbott who recently celebrated a big win in the diabetes realm with FDA approval of its FreeStyle Libre system as a replacement for blood glucose monitoring. Abbott also was selected over DexCom this year by Bigfoot Biomedical as its technology partner for a diabetes management system designed to analyze patients' glucose readings to help them manage their disease in an easier and safer way.
That said, Medtronic has been holding its own in the diabetes care business, with its MiniMed 670G insulin pump system, which offers a hybrid closed-loop system for insulin delivery, as well as its glucose monitoring systems. The popularity of these devices has soared to the point where the company actually saw a slowdown in first-quarter sales as demand for its diabetes devices, particularly the sensors used in the devices, outpaced supply. The company has been racing to add production capacity for the sensors as a result of the supply constraints.