J&J’s LifeScan to Enter Insulin Delivery Pump Market

Johnson & Johnson (J&J; New Brunswick, NJ) plans to acquire insulin delivery company Animas Corp. (West Chester, PA) in a cash-for-stock transaction valued at about $518 million. J&J reports that Animas will operate as a stand-alone entity within its subsidiary LifeScan Inc. (Milpitas, CA), which manufactures blood-glucose monitoring systems.

“The combination of Animas' insulin delivery systems and LifeScan's glucose monitoring systems will allow us to offer more comprehensive disease management solutions for our patients,” says Eric Milledge, a J&J group chairman with responsibility for the LifeScan business. “We have worked in partnership with Animas Corp. since 2003 and know they share our commitment and passion for advancing the standards of care for people with diabetes.”

“Insulin pumps allow significant improvements in blood glucose control over conventional therapy for people with insulin-requiring diabetes, reducing the long-term morbidity of diabetes and improving quality of life,” says Katherine D. Crothall, PhD, chief executive officer and president of Animas. “We expect that in combination with LifeScan, our capacity to further contribute to the management of this disease will be meaningfully increased.”

The J&J-Animas deal, approved by the boards of both companies and expected to close in the first quarter of 2006, is still subject to various regulatory approvals, as well as Animas stockholder approval.

In addition to providing Lifescan with an immediate entry into the insulin delivery pump market, the acquisition would give the company access to the continuous glucose monitoring system market. Animas acquired its continuous glucose monitoring technology through the $10 million purchase of Cygnus (Redwood City, CA), completed in March 2005. Cygnus' GlucoWatch G2 Biographer, a glucose monitor worn like a wristwatch, is a completely noninvasive glucose monitor that is approved by FDA as an adjunctive device.