Medtronic, Inc. (MDT), in collaboration with French drug maker Sanofi (SNY), has signed a memorandum of understanding to form a global strategic alliance aimed at improving experience of patients suffering from diabetes. Following the news, Medtronic's share price gained 1.4% to eventually close at $61.58 yesterday.
At the initial level, the development of drug-device combinations and delivery of care management services will be the two crucial concerns of the alliance.
The collaboration intends to facilitate delivery of novel drug-device combinations, including new form factors that are affordable, convenient and easy to use, in a bid to increase therapy adherence. These efforts should assist Type 2 diabetes management, especially in people who are unable to control their glucose level even with multiple daily injections of insulin.
Care management services aim to improve adherence, simplify insulin treatment, and help diabetic patients better manage their health condition. It will be delivered through a program designed to guide people suffering from Type 2 diabetes who fail to gain disease control through oral therapies administered during the initiation phase of insulin treatment.
With the increasing emergence of diabetes around the world, healthcare costs are also exhibiting an upward trend. On collaboration, Medtronic and Sanofi will work together toward the development of integrated care solutions for diabetic patients, in order to improve clinical outcomes as well as reduce overall healthcare costs.
Designed as an open-innovation model, the alliance has the potential to leverage the capabilities of both the companies, combining Sanofi's extensive insulin portfolio and drug development expertise with Medtronic's proficiency in insulin pumps and continuous glucose monitoring. The alliance will result in advanced technology treatment solutions that can deal with the challenges associated with diabetes at an affordable price.
Both the organizations are already engaged in an existing agreement that serves specific Type 1 diabetes patients in Europe with an implantable insulin delivery system. This project and additional innovative ones will eventually be added to the strategic alliance. However, implementation of the alliance is subject to the negotiation and execution of a definitive agreement between the companies.
Medtronic currently has a Zacks Rank #3 (Hold). Some better-ranked medical product stocks that warrant a look include Cardica Inc. (CRDC) and NeuroMetrix Inc. (NURO). Both these stocks carry a Zacks Rank #2 (Buy).
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