Swiss drugmaker Roche has signed a deal with Isreali group Elron Electronics to acquire the latter’s majority-owned subsidiary Medingo and expand its presence in the insulin delivery market.

Under the terms of the deal, Roche will pay Medingo shareholders an upfront fee of $160 million, with an extra portion - up to 25% of the initial payment - up for grabs depending on the achievement of certain performance related milestones.

The move will enable Roche to get its hands on Medingo’s promising micro pump insulin delivery system, which is comprised of a semi-disposable dispensing patch and a remote control, giving diabetics a more discreet method of insulin delivery.

“The integration of Medingo is a perfect fit to our existing diabetes management product portfolio”, noted Burkhard Piper, head of Roche Diabetes Care, and he said offering an innovative micro patch pump “will bring our competence in the area of integrated insulin delivery systems to a broader range of people with diabetes on insulin therapy, providing a greater choice to meet the different individual needs”.

According to Basel-based group, the product, which is scheduled for launch in 2012, provides the functions of a conventional insulin pump alongside with all advantages of the innovative tubeless patch pump technology, and given that there are 285 million diabetics around the globe its potential market is huge.

Last year the insulin delivery system global market was estimated at 1.6 billion Swiss Francs, and growing at a fast pace, with the expectations for the growth of the patch pump segment even higher, Roche noted.

“With this acquisition we will broaden our portfolio of innovative insulin delivery technologies and strengthen our position as a leading player in the diabetes care business”, said Daniel O’Day, chief operating officer at Roche Diagnostics.