LifeScan Global Corporation, a leading provider of blood glucose monitoring products for diabetes patients, filed for Chapter 11 bankruptcy protection in the Southern District of Texas with a pre-negotiated plan to eliminate approximately $1.4 billion in liabilities. The diabetes care company, which has approximately 1,300 employees and operations in 50 countries, cited the shift from traditional blood glucose monitoring devices to continuous glucose monitoring technology as a primary factor in its financial decline.
The Malvern, Pennsylvania-based company, formerly owned by Johnson & Johnson before being acquired by Platinum Equity in 2018 for $2.1 billion, disclosed approximately $667 million in funded debt in its bankruptcy filing, along with an additional $1.03 billion in outstanding rebate obligations to pharmacy benefit managers and other counterparties.
"LifeScan has commenced these Chapter 11 Cases with a clear path to consummate a value-maximizing transaction that eliminates approximately $1.4 billion in liabilities pursuant to a chapter 11 plan," the company stated in its disclosure statement filed on August 1. The restructuring plan is supported by approximately 97% of the company's secured creditors and its equity sponsor, Platinum Equity.
The company's restructuring aims to address its overleveraged capital structure while positioning it to compete in the rapidly evolving diabetes management market, particularly by enabling its entry into the continuous glucose monitoring (CGM) segment. Despite having worked with a strategic partner on CGM development, LifeScan has not yet launched a product in this growing segment.
"LifeScan's financial position has deteriorated in the past few years due to significant changes in the diabetes management market, predominantly driven by the growing adoption of CGM products, stemming from the 2017 launch of Abbott's FreeStyle system," the disclosure statement explains. The company reported approximately $750 million in revenue for 2023, a significant decline from previous years.
Under the proposed reorganization plan, holders of First Lien Term Loan Claims ($376 million) would receive cash and new first lien term loans with an estimated recovery of 97-100%. Second Lien Secured Claims ($176 million) would receive 100% of the reorganized equity, subject to dilution, with an estimated recovery of 37-63%. Third Lien Term Loan Claims ($31 million) would receive $9.25 million in cash, representing an estimated 30% recovery. General Unsecured Claims, including $134 million in Second Lien Deficiency Claims, would share in a pool estimated to provide a 1% recovery.
The company disclosed that over the past decade, the diabetes management market has undergone significant changes. While blood glucose monitoring devices provide a single snapshot of blood glucose at a specific time and require a finger prick, CGM devices offer continuous data streams measured every five to fifteen minutes without finger pricks.
"Expanded reimbursement for CGM products globally since 2019, including Medicare's expansion of coverage in 2023, led to an increase in patients switching from BGM products to CGM products, and resulting volume and pricing declines across the BGM category and in LifeScan's core BGM business," the filing stated.
LifeScan has a storied history in diabetes care, having been established in 1981 and acquired by Johnson & Johnson in 1986. The company revolutionized blood glucose monitoring with its OneTouch meters and strip systems, which were introduced in 1987. According to the filing, the company's products have been recognized as a top choice of pharmacists for 21 consecutive years, and in the past three years, patients have used approximately 18 billion units of LifeScan products.
The bankruptcy filing follows earlier restructuring efforts, including a May 2023 transaction that extended debt maturities and a series of three repurchase offers that eliminated $576 million of first lien debt and captured approximately $139 million in discount. The company also negotiated with lenders under a forbearance agreement after missing a $27.4 million principal and interest payment on its third lien term loan in September 2024.
LifeScan's path through Chapter 11 appears expedited, with a confirmation hearing scheduled for September 30, 2025, just 77 days after the petition date. The company anticipates emerging from bankruptcy by the close of Q4 2025.
Porter Hedges LLP and Milbank LLP are serving as proposed co-counsel to the debtors. The case is being heard before Judge ARP in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (Case No. 25-90259).
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