News Article

Abbott Labs buying TheraSense for $1.2B
Date: Jan 13, 2004
Author: Susan L. Thomas
Source: bizjournals ( click here to go to the source)

Featured firm in this article: TheraSense Inc of Alameda, CA

Abbott Laboratories said Tuesday it has agreed to buy Alameda-based TheraSense Inc. for $1.2 billion or $27 a share, giving the maker of blood sugar testing kits for diabetics a premium of more than 33 percent over its most recent market value.

The acquisition -- expected to close in the second quarter -- expands Abbott's reach into the growing market for diabetes products andtreatments, while TheraSense gains deeper pockets to help it develop and sell new test systems and to expand internationally.

W.R. Lortz, chairman and CEO of TheraSense, said in a statement that the combination of the two firms will "create significant opportunities in research and development" as the companies continue to make advancements in blood glucose monitoring and integrate their systems in the future.

Abbott delved into the blood glucose monitoring business in 1996 with the purchase of MediSense, the first company to commercialize biosensor technology, and it already sells a product similar to a TheraSense's monitoring test. Ed Fiorentino, president of MediSense products for Abbott, said in a statement the firm would continue to promote MediSense and TheraSense products and brands and would give TheraSense products a greater international presence.

TheraSense sells blood sugar monitoring systems to retail customers through stores such as Wal-Mart, Walgreens and Rite Aid. Its FreeStyle blood glucose self-monitoring is designed to be less painful than traditional tests because it requires a much smaller blood sample. In October the firm began selling what it boasts as the world's smallest glucose meter, a more sophisticated product that requires a very small sample size and gives results in about seven seconds.

The company also has applied with federal regulators to market a FreeStyle Navigator Continuous Blood Glucose Monitor, a product designed to provide real-time glucose data, hypo- and hyperglycemic alarms and trend analysis.

In the second quarter, TheraSense and partner Deltec plan to launch a new product called the CozMore Insulin Technology System, which combines TheraSense's blood glucose testing technology and insulin delivery options in a small system.

The deal reflects the growing interest in diabetes products and treatments. On Monday, Hayward-based Metabolex, which is developing treatments for diabetes, raised $4 million in a second close of its sixth round of funding, bringing the total raised in this latest round to $31 million.

The World Health Organization estimates that there are 185 million people with diabetes worldwide with only 40 percent diagnosed and treated. The number is expected to grow to 500 million by 2025 because of the aging population, sedentary lifestyles and increasing obesity. The blood glucose monitoring market is expected to have reached more than $5 billion in sales in 2003, and is projected to grow approximately 10 percent compounded annually, according to the firms.