With $32M loan, connected glucometer pioneer AgaMatrix will split company into CGM, BGM businesses

By Jonah Comstock
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AgaMatrix, the medical device that launched the first ever iPhone-connected glucometer, has secured a $32 million loan in order to reorganize the company into two distinct entities: AgaMatrix, which will continue to focus on Bluetooth-enabled glucometer's such as the company's newest Jazz Wireless 2 device, and WaveForm Technologies, which will be focused on the development of a proprietary continuous glucose monitoring product based on technology acquired from iSense CGM and Bayer Healthcare in 2016. A new holding company called AgaMatrix Holdings will own 100 percent of the stock in both businesses.

The loan funding, from Prospect Capital Corporation, will be used to support sales and marketing, product development, and clinical trial initiatives for both companies.

“With the completion of the Prospect transaction, we’ve initiated the remaining steps to complete the reorganization of our company,” John Alberico, president and CEO of AgaMatrix Holdings, said in a statement. “These next steps will enable each organization to focus on its strongest competencies and set an appropriate strategic direction. We are excited about the technology, products, and services our two companies offer to the diabetes community and their caregivers.”

It's hard not to see the move as a reaction to the seismic changes happening in the world of glucose monitoring and diabetes management. Companies like Abbott, Dexcom (via its partnership with Verily), and Senseonics are all working on reinventing the CGM to be cheaper, longer lasting, and less intrusive, with the goal of eventually taking it beyond its traditional Type 1 use case into the much larger population of people with Type 2 diabetes. Although it won't happen overnight, that sea change will eventually spell trouble for companies that rely on fingerstick glucometers — even connected glucometers — for their livelihood.

"There is great opportunity for our accurate, low-cost AgaMatrix BGM technology to capture significant market share with the additional investment afforded by the Prospect transaction," Thomas Bailey, CFO of AgaMatrix Holdings, said in a statement. "We are also excited by the results of recent clinical trials supporting the development of WaveForm's novel continuous glucose monitoring technology, and are eager to pursue the tremendous market opportunity for WaveForm's product candidates as a fully independent company."

WaveForm's recently acquired technology boasts lower cost, longer potential sensor life, and easy and painless needle insertion, so it could certainly allow the company to compete against the likes of Senseonics and Abbott. But its also late to the party, with CE Mark clearance not expected until 2018 and FDA approval not until 2019 at the earliest.