Case Summary: LifeScan Chapter 11

Business Description

Headquartered in Malvern, PA, LifeScan Global Corporation, along with its Debtor⁽¹⁾ and non-Debtor affiliates (collectively, "LifeScan" or the "Company"), is a leading global provider of diabetes management products and digital health solutions, primarily focused on blood glucose monitoring ("BGM") technology.

• LifeScan designs, manufactures, and markets the OneTouch® brand of glucose monitoring devices, test strips, lancets, and integrated software/mobile applications.
• Its products are known for simplicity, accuracy, and trust, with over 20 million people worldwide relying on OneTouch® devices to manage their diabetes.
• The Company's comprehensive portfolio includes handheld glucose meters for home use, point-of-care devices for hospitals, and digital platforms like the OneTouch Reveal mobile app for tracking, analysis, and data sharing.

As of the Petition Date, LifeScan maintains a significant global presence, with direct commercial operations in over 50 countries across North America, Europe, and Asia, supported by approximately 1,300 employees. The Company holds a substantial share of the worldwide BGM market, with about 30% global volume share as of April 2025.

• LifeScan’s manufacturing model is highly efficient, producing high-volume test strips at its dedicated facility in Inverness, Scotland, while outsourcing meters and other components to contract manufacturers.
• Its products are distributed through various channels, including retail pharmacies, durable medical equipment suppliers, e-commerce, and direct-to-consumer sales.
• LifeScan’s OneTouch meters and strips are available over-the-counter in the U.S., a channel the Company is leveraging to expand patient access beyond traditional insurance reimbursement.

LifeScan’s BGM products have historically been successful, generating over $1 billion in annual revenue prior to 2021. However, revenues declined to $909 million in 2022 and approximately $750 million in 2023.

LifeScan Global Corporation and its affiliates filed for Chapter 11 protection on July 15, 2025 (the "Petition Date") in the U.S. Bankruptcy Court for the Southern District of Texas, reporting $1 billion to $10 billion in both assets and liabilities.

⁽¹⁾ For a complete list of debtor entities, see the organizational structure chart below.

Corporate History

LifeScan’s history spans over four decades, originating in 1981 with a focus on improving diabetes management for patients. The company quickly became a pioneer in blood glucose monitoring technology, developing one of the first user-friendly at-home glucose meter systems.

Acquisition by Johnson & Johnson and Product Innovation

• In 1986, LifeScan was acquired by Johnson & Johnson ("J&J"), becoming a central feature of J&J’s diabetes device business for over 30 years.
• Under J&J, LifeScan launched the OneTouch product line in 1987, introducing a revolutionary meter-and-strip system that simplified blood sugar testing with automated timing and measurement. This innovation delivered faster, more accurate results, transforming self-testing for diabetic patients.
• Throughout the 1990s and 2000s, LifeScan continued refining its technology with notable products like the FastTake meter (1998) for on-the-go testing, the OneTouch Ultra (2001) offering five-second readings and result storage, and the OneTouch Verio and OneTouch Reveal systems (2010s) with wireless data syncing to mobile apps.
• These continuous improvements in ease-of-use and connectivity helped LifeScan set industry standards while the global diabetes epidemic fueled growing demand for its products.

Divestiture to Platinum Equity

• In 2018, J&J divested LifeScan to private investment firm Platinum Equity for approximately $2.1 billion, as part of a portfolio restructuring. LifeScan became an independent entity, with Platinum Equity as its majority owner.
• Platinum Equity installed new leadership, including CEO Valerie Asbury, a healthcare industry veteran and former J&J executive, who assumed leadership in October 2018 to guide LifeScan as a standalone company.

Post-Divestiture Strategic Initiatives

• In 2019, LifeScan initiated a strategic partnership to develop a continuous glucose monitoring ("CGM") device, securing exclusive rights to a third-party CGM system with LifeScan responsible for its commercialization. This aimed to complement the legacy OneTouch fingerstick products and maintain competitiveness in the evolving technology landscape.
• LifeScan’s corporate structure includes various subsidiaries like LifeScan, Inc. (U.S. operating entity), manufacturing arms, IP holding entities, and international affiliates in Europe and Asia.
• The Company has been reassessing its geographic footprint, with plans to exit the China market in the near to medium term and ongoing monitoring of risks in markets like Russia and India, reflecting strategic adjustments to changing industry dynamics and financial constraints.

Corporate Organizational Structure

Operations Overview

LifeScan’s operations span North America, Europe, Asia, and other regions, leveraging a combination of direct distribution and partner networks. The United States serves as LifeScan’s largest market and headquarters.

Market Reach and Distribution Channels

• In the U.S., OneTouch products are sold through retail pharmacies, durable medical equipment (DME) suppliers, e-commerce, direct-to-consumer channels, mail-order suppliers, and healthcare systems.
• Internationally, LifeScan maintains direct subsidiaries or branches in key countries such as France, Germany, Spain, Russia, Japan, China, and India, managing local sales and marketing.
• In other territories, LifeScan relies on third-party distributors to supply OneTouch products to hospitals, pharmacies, and clinics, contributing to OneTouch’s global presence.
• While products are used in both consumer home settings and professional healthcare settings (hospital glucose monitoring), the majority of revenue is derived from high-frequency sales of disposable test strips to individual diabetes patients.

Product Portfolio

• The core of LifeScan’s business is the OneTouch® Blood Glucose Monitoring system, which comprises handheld glucose meter devices and compatible disposable test strips.
• The Company sells various models of OneTouch meters, from basic models to Bluetooth-enabled devices, along with ancillary products like lancing devices, lancets, and control solutions.
• LifeScan also provides digital health tools, including the OneTouch Reveal mobile app and web portal, which sync with meters to record readings, display trends, and enable data sharing, empowering patients with actionable insights.
• The Company offers point-of-care systems for healthcare providers (e.g., hospital glucose analyzers) and operates the LifeScan Diabetes Institute, providing training and education in diabetes management.
• Though current revenue is primarily BGM-centric, LifeScan aims to expand into the CGM segment through its strategic partnership, capturing a growing market of patients using sensor-based technology.

Manufacturing and Supply Chain

• LifeScan’s manufacturing operations are optimized for high-volume, cost-efficient production, with its dedicated facility in Inverness, Scotland, producing the critical OneTouch test strips.
• Meters and electronic devices are largely produced by contract manufacturers, allowing LifeScan to focus internal resources on proprietary strip production and avoid heavy capital expenditure on device assembly.
• LifeScan’s distribution centers manage global shipments of products, ensuring supply across all markets.
• From 2019 to 2024, LifeScan implemented cost reduction initiatives, resulting in over $400 million in savings by optimizing its supply chain, simplifying IT systems, and right-sizing its workforce and salesforce. Despite these efforts, efficiency gains could not fully offset revenue declines in its core business.

Sales and Reimbursement Model

• In the U.S., a significant portion of LifeScan’s sales relies on insurance reimbursement, facilitated by rebate agreements with major pharmacy benefit managers ("PBMs") and insurers.
• Under these agreements, LifeScan pays substantial rebates to PBMs and insurers in exchange for formulary inclusion, ensuring patient access but severely compressing net margins; by 2025, LifeScan retained less than 9% of the list price per test strip sold under insurance contracts.
• These cumulative rebate obligations became substantial, with over $1.03 billion owed in accrued rebate payments to PBM and insurance counterparties as of the Petition Date, creating an unsustainable financial model.
• LifeScan’s post-restructuring strategy aims to reduce reliance on high-rebate insurance channels by expanding cash-pay, retail, and direct-to-consumer distribution channels.
• Internationally, reimbursement varies by country, with products sold through pharmacies and covered by national health systems or out-of-pocket payments depending on local healthcare systems.
• Managing a global diabetic customer base of over 20 million requires LifeScan to balance supply chain efficiency, stringent quality and regulatory compliance, and the economics of distribution agreements in each market.

Prepetition Obligations

Top Unsecured Claims

Events Leading to Bankruptcy