Switzerland-based AMF Medical currently develops the Sigi patch pump and does not offer it commercially. The system received FDA breakthrough device designation just over one year ago.
AMF Medical designed Sigi as an ergonomic, rechargeable patch pump for reducing the burden of diabetes management. It uses pre-filled insulin cartridges and offers compatibility with automated insulin delivery technology.
The acquisition represents the second major buy in 2022 for Tandem. In July, the company bought extended wear infusion set developer Capillary Biomedical.
“This acquisition supports our commitment to drive growth through innovation, as AMF Medical has novel technology and a shared passion for creating easy-to-use solutions to improve the lives of people with diabetes,” said John Sheridan, Tandem Diabetes Care president and CEO. “Our portfolio approach to diabetes care is designed to bring the benefits of advanced insulin pump therapy to more people worldwide, utilize our expertise in automated insulin delivery technology and data management, and leverage our commercial infrastructure to create shareholder value.”
Terms of the deal
The acquisition features a number of payments that include investments and milestones.
It begins with a strategic investment paid by Tandem in the third quarter of 2022. That investment totaled more than $8.6 million, or Swiss Francs (“CHF”) 8 million.
Tandem owes a cash payment of approximately $67.4 million (CHF 62.4 million) at closing. Additional contingent earnout payments could reach $140 million (CHF 129.6 million). That includes up to $41.5 million (CHF 38.4 million) upon successful development milestone completion over two years.
Additionally, Tandem agreed to pay up to $98.5 million (CHF 91.2 million) upon obtaining FDA clearance for an automated controller-enabled (ACE) pump.
Tandem expects the transaction to close in January 2023.
Benefits of the deal for Tandem
The company said AMF Medical’s technology represents a “proprietary and disruptive” insulin delivery solution.
It could expand Tandem’s type 1 and type 2 addressable market opportunities, the company said. The acquisition adds a pump designed for a segment of people not served by Tandem today.
Additionally, the deal accelerates time-to-market for a patch pump in Tandem’s portfolio. The company noted that adding a pump that minimizes the generation of electronic and battery waste enhances its sustainability objectives, too.