SMITHS MEDICAL ANNOUNCES INTENT TO STOP SELLING DELTEC COZMO® INSULIN PUMPS

Wednesday, 25 Mar, 2009

Decision Represents First Step in Orderly Exit from the Diabetes Business Over Time

Smiths Medical announced today its intent to stop selling the Deltec Cozmo® insulin pump, and manage an orderly, carefully controlled exit from the diabetes business over time.

“The continued health of the thousands of people who use the Deltec Cozmo® insulin pump is our primary concern, and they should be reassured that their pump remains an excellent choice to help them manage their diabetes,” said Srini Seshadri, president of Smiths Medical. “Our customers also should be reassured that Smiths Medical will meet all of its warranty obligations; provide customer and clinical support for the lifetime of the warranty of all pumps; ensure that Deltec Cozmo® insulin pump cartridges and Cleo® and Comfort® infusion sets are available; and make any necessary transitions as simple as possible.”

For people with a Deltec Cozmo® insulin pump, today’s announcement means two important things:

  • When the pump approaches the end of its warranty period, customers should consult with their healthcare provider to choose a pump from another manufacturer.
  • Smiths Medical will work with pump users to transfer purchases of cartridges and infusion sets to one of the many national and/or regional distributors that stock these items. (Anyone who already is familiar with a distributor should feel free to contact that company immediately and start ordering supplies directly.)
  • NOTE: Pump users outside of the United States may continue to purchase disposable cartridges and infusion sets from their local Smiths Medical distributor, a list of which can be found at www.DeltecCozmoUpdate.com.

For more information, including distributor contact details, U.S. and International pump users and healthcare professionals should visit www.DeltecCozmoUpdate.com . In the United States, people may also contact the Smiths Medical customer support team at 1-800-826-9703.

Why Smiths Medical Made This Decision
Smiths Medical considered many possible options to create a long-term, sustainable diabetes business. However, after reviewing these options, it was decided that the best course of action is to exit the diabetes market.

In addition, as its only direct-to-consumer enterprise, the Diabetes business has little synergy with the rest of Smiths Medical’s businesses. For this reason, Diabetes requires its own extensive sales, marketing, reimbursement, insurance and clinical support infrastructure in the United States, which has resulted in it becoming uneconomical as sales and profits for the business have decreased. Without a strong, profitable Diabetes business in the United States, the world's largest medical market, it would also be impossible to sustain the business internationally.

Finally, dramatic changes have taken place in the diabetes market during the past three years, including:

  • The market has evolved from a familiar hardware-plus-disposables model to an integrated diabetes management model that would require significant ongoing investments in continuous glucose monitoring.
  • Smiths Medical’s shrinking market share has been exacerbated by the aggressive pursuit of market share growth by two large and well-resourced players – Medtronic, which has the largest share of the U.S. insulin-pump therapy market, and J&J.
  • A considerable amount of intellectual property has been established in the diabetes segment, which makes the development of next-generation products very costly, and risky in terms of the potential for future patent disputes.

“Throughout our involvement in the diabetes market, we have chosen always to put care for our customer first, providing excellent clinical support, maintaining the integrity of our warranty and being proactive about fixing issues as they arose,” said Seshadri. “For our efforts, we have been rewarded with a core group of very loyal customers. We thank them and reiterate our commitment to making this transition as easy as possible for them.”

What This Decision Means for Diabetes Employees
The decision to stop selling pumps means that 51 people working in the Diabetes business will be affected immediately, primarily in field sales, marketing and, to a lesser extent, clinical services, customer support and manufacturing. Smiths Medical will retain enough staff to ensure that it meets its commitment to customers for the remaining warranty period on pumps already sold. The company will continue to offer a pump recertification service for existing pumps that may need to be replaced during their warranty period.

About Smiths Medical
Smiths Medical is a leading supplier of high-quality medical devices and products for global markets. It designs and manufactures specialist medical devices in three key areas: Safety Devices, Vital Care and Medication Delivery.

Smiths Medical's customers include hospitals, alternate care such as home care, and other healthcare providers worldwide. Smiths Medical is part of the global technology business Smiths Group, a world leader in the practical application of advanced technologies.

Smiths is a global technology company listed on the London Stock Exchange.
For further information, visit www.smiths-medical.com

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