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Nothing Basic About Abbott's Diabetes Deal with Tandem

Abbott and Tandem investors reacted favorably to the companies' partnership news, but DexCom investors appear to see the deal as a competitive threat to DexCom's G6 continuous glucose monitoring device.

Tandem's t:slim X2 insulin pump, shown above, was the first to receive FDA clearance in the category known as alternate controller enabled (ACE) infusion pumps. The special controls for ACE pumps allow for communication with compatible external devices like Abbott's sensor-based glucose monitoring system.

Tandem Diabetes Care Inc.

Abbott and Tandem Diabetes Care dropped a big partnership announcement Tuesday that sent shares of Tandem up nearly 9.5% while DexCom shares slipped 4.5% on above-average trading volume for both stocks.

Abbott and Tandem plan to develop integrated diabetes solutions that combine Abbott's glucose-sensing technology with Tandem's insulin delivery systems to provide more options for people to manage their diabetes.

"To help customers fully realize the potential of the latest advancements in diabetes technology, we're ensuring our products have interoperability, creating a cohesive ecosystem where people with diabetes can manage their condition across devices from us and other companies seamlessly," said Jared Watkin, senior vice president of diabetes care at Abbott. "By bringing together Abbott's and Tandem's leadership and expertise, we can provide new ways for people to manage their diabetes that are impactful and can integrate easily into their daily lives, especially people who rely on insulin pumps."

The need for interoperability between diabetes devices is widely recognized in the industry. Tandem's t:slim X2 insulin pump was the first to receive FDA clearance in a new device category called alternate controller enabled (ACE) infusion pumps earlier this year. The special controls for ACE pumps allow for reliable and secure communication with compatible external devices like Abbott's FreeStyle Libre system, which would give people with diabetes the ability to select tools and tailor their diabetes management to best meet their needs.

Abbott Park, IL-based Abbott and San Diego, CA-based Tandem said they are currently in discussions regarding a final agreement for the technical implementation of device integration and associated commercial support activities.

"The FDA's new interoperable designations for the various components of automated insulin delivery systems are making integrations of advanced technologies more straightforward, and we are looking forward to exploring these possibilities with Abbott," said John Sheridan, president and CEO of Tandem Diabetes Care. "Our companies share a fierce dedication to helping expand the available treatment options for the diabetes community so that more people can experience the benefits of automated insulin delivery systems, using a combination of devices they feel best meets their individual needs."

While DexCom investors seemed to take the news as a competitive threat, it's worth noting that DexCom has been doing a pretty good job of holding its own in the diabetes space. The company dominated 2018 with phenomenal earnings and earned a nomination for MD+DI Medtech Company of the Year. Most recently, DexCom won FDA clearance for its G6 Pro CGM System for healthcare professionals to use with their patients, ages two years and up.

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