Sanofi-Aventis is allying with AgaMatrix around the latter's blood glucose monitoring technology. The deal gets Sanofi a BGM product line and access to a technology around which it can begin to build an integrated diabetes management system. Importantly, it signals to other companies that it is moving in that direction. That could help Sanofi in partnering or M&A discussions around other aspects of diabetes device development, including continuous glucose monitoring, and also stimulate competitors to pick up the deal-making pace.

Abbott and GE Healthcare broke off their $8.13 billion deal for Abbott's diagnostics and point-of-care businesses. The difficulty of delivering something so heavily integrated into Abbott appears to have surprised both sides. It's unlikely Abbott will seek another buyer and it is poised to make new investments in diagnostics. GE is also likely to continue pursuing more targeted acquisitions in diagnostics including, like Abbott, in molecular testing.

The entry by GE into the core lab business via its acquisition of Abbott's clinical diagnostics businesses follows a similar move by Siemens last year, and suggests IVD may be best suited for generalist industrial giants. While the pricing pressures that have dogged this segment of diagnostics are not likely to abate, existing players--including Abbott--are continuing to develop high-margin molecular diagnostic tests that they expect the new players will want to incorporate into their platforms.