Two Rising Stars in Glucose Testing
Executive Summary
Despite its attraction, diabetes glucose monitoring remains a tough field for newcomers, who face competition from four major-league, entrenched players. But two of the newer entrants appear to be succeeding--not because of revolutionary technology, but because of partnering savvy, efficient execution, and technological competence. Analysts expect Inverness Medical's symbiotic relationship with LifeScan to help Inverness's diabetes sales grow 30% a year as LifeScan pushes Inverness-made products as a major part of its fight to regain its market leadership. Home Diagnostics Inc.'s success with co-branding raises the prospect that discounting, until now not a significant factor, will become much more common in the field.
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Can Ron Zwanziger Do It Again?
In the past two years, Inverness Medical Innovations has paid a total of roughly $500 million to buy five rapid point-of-care (POCT) diagnostic testing businesses, which now lie at the heart of its effort to expand in the POCT realm. These have laid the ground work for four subsequent transactions and related financings, all aimed at making Inverness a world leader in women's health and pregnancy testing. But what's of interest isn't so much the women's health play per se as the company's management tream, which has twice before built up POCT companies, then sold them for significant premiums.
Half-Year Tally in Clinical Diagnostics
The top seven IVD manufacturers had lackluster 4% growth (in local currency) during the first half of 2003, compared to the same period in 2002, but the weaknesses were not evenly distributed. Perhaps the largest story in diagnostics these days is the surprising deterioration of the self-glucose testing market, one of the largest and most profitable sectors of the industry, and until recently, its biggest driver of growth.
How's Diagnostics Doing? Quite Well, Thank You
The diagnostics industry grew an estimated 7% from 2000 to 2001, to more than $20 million, with 8% projected for this year, according to Boston Biomedical Consultants. While in some industries, that figure might be considered lackluster, in diagnostics it is far better than the norm, especially considering that the growth was solid and broad, benefiting most top companies in many product categories.