This week, medical device giant Abbott announced its plans to acquire Bigfoot Biomedical. The deal is not that surprising given that the two companies have been collaborating for more than six years, but it reinforces the steady pace of digital innovation in the diabetes care space, analysts said.
The deal was announced on Tuesday and is expected to close in the third quarter of this year. Financial terms were not disclosed.
Founded in 2014, Milpitas, California-based Bigfoot sells a “smart” insulin pen cap, which collects data from a user’s continuous glucose monitor (CGM) to help them calculate the right dose.
“All too often, people with insulin-requiring diabetes are either forgetting to take their insulin or, when they do take it, are taking a suboptimal dose. Additionally, some people who are already on multiple daily injections of insulin and using a CGM have challenges of knowing what to do when they see their CGM reading,” Bigfoot CEO Jeffrey Brewer said in an interview.
Bigfoot’s insulin management system, called Bigfoot Unity, seeks to solve these problems by quickly turning diabetes data into a clear and reliable dosing recommendation right on the insulin pen cap. The company’s goal is to create a world “where technology frees people from the burdens of living with insulin-requiring diabetes,” Brewer added.
The system is designed to be paired with Abbott’s FreeStyle Libre 2 CGM, and Abbott’s device remains the only CGM to be integrated with Bigfoot Unity. Bigfoot’s system uses information from Abbott’s CGM to calculate the right dose for the patient and displays this information on the insulin pen cap, along with when the last dose was taken.
Bigfoot and Abbott began working on this integration in 2017, and the Bigfoot Unity system received FDA clearance in 2021.
Now that the two companies are planning to take their partnership a step further via an acquisition, Brewer said they can make diabetes management even more personalized and accurate.
“Back in 2017, we selected Abbott as our CGM partner because of the performance of their product and, just as importantly, because they shared our vision to provide simple, affordable and easy-to-use tools for people with diabetes. The proposed acquisition will give Bigfoot and Abbott the opportunity to continue to innovate together around that shared vision and to accelerate the rollout of Bigfoot Unity, which is now available in the U.S. through the pharmacy channel,” he declared.
Abbott can provide the scale necessary to bring Bigfoot Unity to as many diabetes patients as possible, Brewer added.
Jared Watkin, senior vice president of Abbott’s diabetes care unit, agreed with Brewer’s assertions. He pointed out that Abbott’s FreeStyle Libre portfolio is the most widely used and affordable CGM in the world.
“The planned acquisition of longtime partner Bigfoot Biomedical further expands our presence in diabetes care and supports our efforts to develop connected solutions that help make living with diabetes easier. We’re bringing together two leaders in different areas of diabetes care — CGM and insulin dosing support — to make diabetes management even more personal and precise,” Watkin explained.
Most industry observers were unsurprised to hear of the planned acquisition, given Abbott had been collaborating with and investing in Bigfoot for years.
For instance, Cheryl Cheng — CEO of Vive Collective, an investment platform for digital health companies — said the acquisition “is a natural evolution” of the two companies’ ongoing relationship.
She thinks the deal will benefit both entities. For Abbott, this acquisition helps extend the capabilities of the Freestyle Libre device and helps patients go from monitoring to taking action. The combination also furthers Abbott’s mission to create more personalized solutions for patients, Cheng pointed out. As for Bigfoot, the deal can help it achieve scale, she declared.
“Hopefully the combination of these two market leaders will create a strong platform for additional investment in AI-driven solutions, additional patient engagement tools and clinical tools,” Cheng said.
Echoing Cheng, Aaron DeGagne — a healthcare analyst at Pitchbook — called the deal “a logical next step.”
He pointed out that while terms of the deal weren’t disclosed, Bigfoot was last valued at $165 million in 2018. Even if its acquisition price is on the lower-end of the $100-$200 million range, the deal would represent “a notable exit in digital health” — especially in the context of lackluster M&A and IPO exit activity during the past year or two, he added.
“This deal reinforces that diabetes tech is a hot area of investment driven by better, easier-to-use technology, expansion to a wider population set —such as non-insulin taking diabetics — and a growing desire for personalized nutrition guidance. Additionally, recent data has shown greater CGM use for patients taking GLP-1 medications like Ozempic,” DeGagne explained.
In a research note, Marie Thibault, managing director at BTIG, agreed that the deal is good news for innovation in the diabetes space, given it could accelerate adoption of the Bigfoot Unity system among patients who need multiple daily injections to manage their condition.
While Bigfoot’s system is still in the relatively early stages of its commercial rollout, the startup has been winning contracts with pharmacy benefit managers, payers and group purchasing organizations, she noted. The company’s ability to attract customers is due in part to recent real-world studies, which have been presented at conferences such as those held by the American Diabetes Association, that show improved glycemic control in patients using Bigfoot Unity, Thibault pointed out.
“If reimbursement is more widely established in the U.S., the integrated ecosystem could drive some share shift from competitive systems toward Libre among those on multiple daily injections interested in smart pens. We acknowledge GLP-1s remain a long-term risk for the diabetes tech space, but continue to see a role for CGMs and insulin pens. We see this acquisition as a vote of confidence from ABT in the future need for insulin,” she stated.
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