DexCom, Tandem Diabetes pursue combined CGM/insulin pump

DexCom ($DXCM) and Tandem Diabetes Care have inked a deal to share technologies to develop a next-generation continuous glucose management product. And folks in the diabetes space may want to take notice.

Both are based in San Diego. And Tandem appears be taking the lead in generating the product, which will blend its T:Slim touch screen insulin pump with a next-generation iteration of DexCom's glucose monitoring technology. Tandem gained FDA clearance for T:Slim last year, which is the first-ever pump that uses a color touch screen to control insulin delivery. It's also the smallest insulin pump on the market, according to coverage of the deal in the San Diego Business Journal.

So why is this relatively small deal significant? As the SDBJ explains, there's only one other pump on the market that combines an insulin pump and glucose monitor into one device: Medtronic's ($MDT) Paradigm device. One other is in the early development stages, also involving DexCom, which signed a research and development deal with Roche Diagnostics to develop a similar blended system. Neither DexCom or Tandem is offering details about strategy, but they could easily carve a big market share for themselves considering the paltry competition so far for a combined product.

As part of the Tandem/DexCom deal, Tandem agreed to pay a $3 million technology licensing free upfront. The company will also cover any development, clinical and regulatory expenses DexCom faces. Once their product gains market approval, Tandem said it will pay DexCom a $100 royalty for each CGM/insulin pump it sells.

- here's the release
- read the SDBJ story

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