(Bloomberg) -- Dexcom Inc. is in talks to acquire medical-device company Insulet Corp. in a deal that would create a giant in diabetes devices, according to people with knowledge of the matter. Insulet rose as much as 16% in after-market trading on the news.
Talks between the companies are ongoing and an agreement could be reached in the coming weeks, said the people, who asked not to be identified because the information is private. Discussions could still be delayed or fall apart, the people said.
Insulet had market capitalization of about $14.1 billion at Monday’s close in New York trading, while Dexcom was valued at $31.8 billion.
Representatives for Dexcom and Insulet declined to comment.
The talks come amid a recent slump in health-care dealmaking, which had been booming in recent years as insurance providers, drugmakers and device companies paired up to diversify and add scale. U.S. health-care companies have announced $103 billion worth of deals this year, down 45% from last year, as stock market volatility and uncertainty about the macro economy have caused activity to slow.
Dexcom sells glucose-monitoring systems used by people with diabetes. Insulet makes pumps that deliver insulin. The companies have a partnership in which Insulet’s delivery system can connect to Dexcom’s continuous glucose monitor so that more insulin is automatically dispensed into someone’s body if the technology detects that it’s needed.
Dexcom made waves last year when it debuted a commercial starring singer Nick Jonas who has type 1 diabetes using its glucose monitor.
Combining the two companies would give San Diego, California-based Dexcom the tools to create a closed-loop system in which diagnosis and treatment are provided in one.
Founded in 2000, Insulet is based in Billerica, Massachusetts. Its shares were down 24% this year through Monday’s close. Dexcom, whose shares had slumped 40% through the close, fell as much as 9% in late trading.
(Updates with details starting in sixth paragraph)
©2022 Bloomberg L.P.