Mergers and Acquisitions (M&A) in the Diabetes Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Mergers and Acquisitions (M&A) in the Diabetes Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Key Highlights

• In 2020 and 2021, with the outbreak of the pandemic, there has been a rise in demand for diabetes devices. This has pushed the companies to partner or collaborate to advance in the diabetes devices market.
• Mergers and acquisitions (M&A) is the path that manufacturers take to accomplish exponential, rather than just linear growth, and thereby continue to intrigue the interest of investors.​
• In the Diabetes market, Mergers and acquisitions (M&A) is a critical tool for strategy implementation. Deal-making is critical for implementing game-changing strategic actions and building organizations that are ready to face future difficulties. However, diabetic businesses use M&A as a routine part of their business model to gain access to innovation, as well as to optimize manufacturing operations and prune business portfolios.​
• The key factors driving diabetes market mergers and acquisitions (M&A) are strategic changes to achieve the critical size requirement in the segment, as well as large mergers that allow bundling of subcritical businesses to build new platforms. The other driving force behind mergers and acquisitions is efficient capital allocation across the industry, which applies to two areas: R&D and manufacturing. The originators' large, complex organizations are unsuitable for fostering innovation. An ecosystem of venture capital and entrepreneurs has proven to be far more effective in identifying and allocating funds to early-stage biomedical research opportunities. Essentially, venture capitalists now pre-fund diabetes drug companies' early-stage development.​

Mergers and acquisitions (M&A) in the diabetes market have increased significantly, with buyers and sellers looking to create more strategic, operational, and financial values. The key factors driving the diabetes market’s mergers and acquisitions (M&A) are strategic changes to achieve the critical size required in the segment and large mergers that allow bundling of subcritical businesses to build new platforms. The other driving force behind mergers and acquisitions is efficient capital allocation across the industry. Through M&A activity, players in the diabetes market are expanding their product offerings. For instance, in August 2020, Medtronic, a global leader in medical technology, announced the acquisition of privately-held Companion Medical, manufacturer of InPen, the only U.S. FDA-cleared smart insulin pen system paired with an integrated diabetes management app on the market. According to Medtronic, the addition of Companion Medical’s InPen to the Medtronic portfolio offers the customers a unique and expansive ecosystem of support, regardless of the insulin delivery system. Also, players are focusing on expanding their geographical reach through M&A and partnerships with other established players. In August 2021, UK digital health startup, Gendius, signed a contract with AstraZeneca to confirm its strategic partnership to develop remote diabetes management and support the patients in Gulf Cooperation Council (GCC) countries. Such partnerships will help the growth of players in the market during the forecast period.

Countries with significant diabetes populations in Asia-Pacific are China, India, Indonesia, Japan, South Korea, Vietnam, Philippines, Malaysia, Australia, and Thailand. Together, these countries accounted for a diabetic population of 229.84 million in 2018 and 247.73 million in 2021. The population is further expected to grow, reaching 272.84 million in 2027. Asia-Pacific, with the largest diabetic population worldwide, offers significant growth opportunities for players in the market. Hence, players focus on growing in the key markets of the region through collaborations and strategic partnerships. Players are entering strategic collaborations to jointly explore integrated solutions aimed at advancing intelligent healthcare in the region. In November 2020, the Singapore-based data science and healthcare technology company, Holmusk, announced a collaboration with the Healthcare business sector of German pharma and life sciences giant, Merck, to support patients and physicians in Asia-Pacific with a holistic treatment approach for prediabetes and diabetes. Companies also focus on expanding their product offerings in key growth markets in the region through partnerships. In May 2021, Merck signed a collaboration agreement with Janssen Pharmaceuticals NV around the commercialization of INVOKANA (canagliflozin), a drug for adults with type-2 diabetes in six growth markets, including five ASEAN countries (Malaysia, Brunei, Philippines, Singapore, Thailand). By this agreement, Merck will hold exclusive rights for the distribution, promotion, access, marketing, and sales of INVOKANA (canagliflozin) in these countries. Similarly, in October 2021, Eli Lilly and Company (India) announced its strategic partnership in India with Cipla. As part of the agreement, Lilly will transfer its rights in India to sell, promote, and distribute Humalog and Trulicity to Cipla, subject to all regulatory approvals. This partnership is aimed at enhancing access to Lilly's key diabetes products in the country. Such strategies are expected to drive the growth of the players in the region during the forecast period.

Some of the prominent players in the market are Medtronic, Eli Lily and Company, Sanofi Aventis, Dexcom, and Novo Nordisk, among others. Mergers and acquisitions that happened between players in the recent past helped companies strengthen their market presence and to develop capabilities that are novel to the companies. For instance, in July 2021, Eli Lily and Company announced the acquisition of Protomer Technologies Inc. The acquisition will help Lily to focus on advancing glucose-responsive insulins and accelerate the development of next-generation protein therapeutics. Companies are also partnering to develop new products or to enhance the features of the existing products. For instance, in September 2021, Biocorp announced a partnership agreement with Novo Nordisk to develop and distribute a Mallya smart add-on device for the latter’s FlexTouch pen used by diabetes patients. Under the latest partnership, a specific Mallya version will be created for the insulin delivery pen. Such partnerships and M&A activities will drive the growth of the players during the forecast period.

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