Memorandum
Today (Wednesday), Roche surprisingly announced that it has signed an “exclusive” agreement with Medtronic to develop a dedicated Bluetooth-enabled blood glucose meter that will communicate with Medtronic's future Bluetooth-enabled insulin pumps. The meter will be based on Roche's new Accu-Chek Guide platform and sold under the name “Accu-Chek Guide Link.” Today’s press release emphasized that the deal is exclusive and covers all markets where future Bluetooth-enabled Medtronic pumps will be sold. This is a major win for Roche and a clear loss for Ascensia, Medtronic’s current BGM partner. We were quite surprised to see this deal, as Ascensia and Medtronic renewed their exclusive partnership in June for a period of five years (whereby Ascensia supplies Medtronic with the Contour Next Link and Next Link 2.4 BGMs to wirelessly pair with the MiniMed 530G, 630G, 640G, and 670G systems). Presumably Medtronic’s future Bluetooth-enabled pumps after the 670G were not part of the Ascensia renewal. We’ve never heard firm launch timing on those pumps, but we’ve known since ATTD last year that they are in Medtronic’s pipeline. Medtronic’s Analyst Day last year called for a smartphone-controlled pump to launch after May 2020; we’re not sure if that timing was ultra conservative and/or if pumps before it will also embed Bluetooth. Medtronic easily could have gone with Ascensia for this deal – the new Contour Next One and Plus One BGMs also have Bluetooth – so presumably Roche offered better deal terms. The accuracy associated with the Ascencia has been particularly positive for pump users and we expect as with any exclusive arrangement, that there will be lots of discussions about this change.
-- by Adam Brown and Kelly Close