At its inception in 1985, Cygnus was engaged in development and manufacturing of transdermal drug delivery systems, including products for contraception, hormone therapy and smoking cessation.
[1] According to the Company, the reasons for failure included adoption barriers for new technology, need for a paradigm shift in the management of diabetes, lack of widespread medical reimbursement, and performance characteristics of the device.
Cygnus did not resolve these technical feasibility issues[2] and was unable to replace the standard glucose monitoring device that was on the market.
Without a substantial reimbursement level, it is very difficult for healthcare organizations to approve the GlucoWatch for its beneficiaries at the price that Cygnus was selling it.
The Company retained some cash and equivalents, and accounts receivables but no operating assets and no means to generate revenue, other than pending arbitration with Ortho-McNeil Pharmaceutical Inc.