LifeScan Global: OneTouch Maker's 104-Day Chapter 11 Pivot to CGM Future

LifeScan Global Corporation, the medical device company behind the OneTouch blood glucose monitoring brand, filed for chapter 11 bankruptcy on July 15, 2025, following technology shifts in the diabetes device market and pharmacy benefit manager rebate obligations. The company—acquired by Platinum Equity from Johnson & Johnson for $2.1 billion in October 2018—entered bankruptcy with approximately 97% secured creditor support and a prearranged plan to eliminate more than $1.4 billion in liabilities, including approximately $572 million owed to pharmacy benefit managers. The Confirmation Order was entered on October 27, 2025, and LifeScan emerged in December 2025 under new ownership by Canyon Partners and Brigade Capital Management, with a 75%+ debt reduction achieved.

The case reflects pressure on traditional blood glucose monitoring companies as continuous glucose monitoring technology—led by Abbott's FreeStyle Libre and Dexcom's G7—gains market share. With the BGM market projected to decline approximately 9% year-over-year through 2030 and the CGM market expected to reach $8.4 billion in the U.S. by 2033, the restructuring includes plans to invest in CGM technology. The timeline from petition to confirmation was 104 days.

From Johnson & Johnson Subsidiary to Platinum Portfolio Company

LifeScan traces its origins to 1981. In 1986, Johnson & Johnson acquired LifeScan, integrating it into J&J's medical device portfolio where it would serve in the company's diabetes device business for over 30 years. The OneTouch brand became a major home blood glucose monitoring brand, serving approximately 20 million patients globally across more than 90 countries.

The OneTouch brand. In 1987, LifeScan released its OneTouch meters and strip systems, introducing changes to blood glucose monitoring compared to existing products. The systems offered automatic algorithmic testing when blood was applied to a test strip, removing manual blood blotting and user-initiated timing while delivering results in less than a minute. Later products reduced test time and sample size, including the 2001 OneTouch Ultra and the 2014 OneTouch Verio Sync, which added wireless glucose result sharing to smartphones via mobile applications. Per the First Day Declaration, LifeScan consistently generated more than $1 billion in annual revenue prior to 2021 and ended 2022 with more than $909 million in revenue.

Strategic divestiture. In 2017, Johnson & Johnson announced plans to exit the diabetes device market as continuous glucose monitoring technology gained momentum. In March 2018, J&J entered a binding agreement with Platinum Equity valued at approximately $2.1 billion, with the transaction closing on October 2, 2018. At the time of the acquisition, LifeScan reported 2017 net revenue of approximately $1.5 billion and employed 2,400 people. The divestiture reflected J&J's approach to portfolio management and positioned LifeScan for independent operation under private equity ownership.

Platinum Equity ownership. Under Platinum Equity's ownership, LifeScan maintained headquarters in Malvern, Pennsylvania with operations across the United States, Canada, Mexico, the United Kingdom, Europe, and Asia. The company's business model included low maintenance capital expenditures, a blood glucose test strip manufacturing facility in Inverness, Scotland, and the use of contract manufacturers for other products. The company faced challenges as the diabetes technology market shifted away from finger-stick monitoring toward continuous glucose monitoring solutions.

The CGM Revolution and BGM Market Decline

The diabetes management industry shifted beginning in 2017 with Abbott's launch of the FreeStyle Libre continuous glucose monitoring system. Unlike traditional blood glucose monitors, which provide a single snapshot of blood glucose at a given time and require a finger prick, CGM devices offer a continuous stream of glucose data—typically measured every five to fifteen minutes—without the need for finger pricks. CGM devices provide real-time trend and pattern data and alerts for dietary, exercise, or medication adjustments.

The shift accelerated following Medicare's 2023 expansion of CGM coverage to a broader group of individuals, including all patients with diabetes who use insulin or who have hypoglycemia meeting specified criteria. Previously, Medicare required beneficiaries to be insulin-treated with three or more daily insulin administrations or use a continuous subcutaneous insulin infusion pump. The expanded reimbursement led many LifeScan patients to switch from BGM products to CGM products.

The First Day Declaration attributes LifeScan's financial distress to this market shift. Based on market studies conducted by LifeScan and FTI Consulting in 2024, the BGM market is expected to decline approximately 9% year-over-year through 2030 and beyond as CGM adoption accelerates. LifeScan's core product category faced sustained volume and pricing declines, and filings describe the need to enter CGM technology. The company ended 2023 with approximately $750 million in revenue—a decline from the $1 billion+ annual revenue generated prior to 2021.

CGM development delays. In 2019, LifeScan negotiated a global, exclusive partnership for CGM device development. Under this agreement, LifeScan's partner bore responsibility for development, testing, and manufacturing while LifeScan would handle commercialization and sales. Original timelines projected a U.S. launch in late 2023 or early 2024. The CGM partner encountered obstacles including regulatory delays, with FDA approval now projected for the first half of 2027 at the earliest. LifeScan has considered additional potential CGM partners but reports that potential partners have been reluctant to engage due to market perceptions that LifeScan's capital structure would limit the capital expenditure needed to bring a new CGM product to market.

PBM Rebate Agreements

Beyond market disruption, LifeScan faced a financial crisis stemming from contracts with U.S. pharmacy benefit managers, state Medicaid entities, and other managed care organizations. The rebate agreement structure—common in the U.S. healthcare industry—was difficult for a company facing declining volumes.

How PBM rebates work. At a simplified level, LifeScan sells its products to a wholesaler at a Wholesale Acquisition Cost (essentially a list or gross price), which the wholesaler then sells to a pharmacy. A patient pays a copayment, and the PBM reimburses the pharmacy for the remainder of an agreed-upon amount on behalf of the patient's insurer or group health plan. The PBM then invoices LifeScan for a contracted rebate amount—compensation for maintaining LifeScan on the formulary for that insurer or plan. For example, if a box of blood glucose test strips has a WAC of $160 and LifeScan has agreed to a 90% rebate (inclusive of rebate and administrative fees), LifeScan would owe the PBM $144 for each box sold.

Rebate economics. Under these agreements, LifeScan retained less than 9% of its established Wholesale Acquisition Cost on products sold—resulting in approximately 3% EBITDA margin on U.S. gross sales after production and overhead costs. At the end of 2024, LifeScan owed approximately $572 million to rebate counterparties. As of the petition date, this figure had grown to approximately $1.03 billion. The practice of major PBMs requiring improved rebate terms annually as a prerequisite for formulary inclusion increased rebate obligations over time.

Failed renegotiation efforts. Beginning in January 2025, LifeScan initiated outreach to key rebate counterparties to renegotiate rebate agreements. The company halted rebate payments under forbearance arrangements to preserve liquidity while conducting negotiations. The majority of rebate counterparties refused to make material concessions on outstanding rebate liabilities or provide long-term pricing commitments. LifeScan filed for chapter 11 after those negotiations did not reach agreement.

Prepetition Capital Structure and Debt Maturities

Revenue declines and mounting rebate obligations combined with a debt maturity profile that contributed to LifeScan's financial crisis. The company's original capital structure dated to October 2018, when LifeScan entered into first and second lien credit agreements with Bank of America and various lenders providing $1.9 billion of financing: $125 million in revolving loans, $1.475 billion in first lien term loans, and $275 million in second lien term loans.

The 2023 transaction. In early 2023, LifeScan's leadership recognized the company would not be able to address upcoming debt maturities. The board initiated negotiations with lenders, ultimately executing a credit facility amendment in May 2023. The transaction exchanged first and second lien term loans into new facilities with extended maturities, extending the revolving credit facility as well. Consenting lenders received a 50 basis point consent fee, while revolver and first lien term loan holders received increased interest rates and partial repayment through a $50 million contribution from existing equity. The company believed this transaction would provide time to launch CGM products and support operations.

Credit downgrades and forbearance. LifeScan's debt burden and the 2023 transaction resulted in ratings downgrades from Moody's and S&P. In April 2024, the company experienced further downgrades. By September 2024, constrained cash flow proved insufficient to make mandatory debt service payments, including approximately $82.4 million of annual debt amortization. The company did not make its $27.4 million principal and interest payment on the third lien term loan, constituting a default. The company entered into a forbearance agreement with first and second lien lenders, who agreed to temporarily forbear from exercising remedies for defaults. The forbearance agreement was extended multiple times and remained in effect through the petition date.

Pre-filing deleveraging. Beginning in March 2025, LifeScan launched three offers to repurchase first lien term loans at discounts to face value. The initial auction, offering 60% of face value, was fully subscribed and closed on March 5, 2025, repurchasing approximately $167 million in face value. A subsequent auction at 55% of face value closed on March 11, 2025, with approximately $114 million subscribed. These transactions eliminated $576 million of first lien debt and captured approximately $139 million of discount. Per November 2025 Monthly Operating Reports, prepetition secured debt at filing stood at $706.5 million with prepetition unsecured debt at $1.21 billion.

Prearranged Chapter 11 Restructuring

The case proceeded under a Revised Restructuring Support Agreement featuring approximately 97% support from secured creditors and equity sponsor Platinum Equity. The restructuring framework targeted elimination of approximately $1.4 billion in liabilities while providing for a dual-track process to market test the plan inside chapter 11 for potential superior transactions.

The original RSA. On February 17, 2025, LifeScan entered into an initial restructuring support agreement with Platinum Equity and members of an ad hoc lender group consisting of approximately 84% of first lien term loan lenders and 73% of second lien term loan lenders. The original RSA was subsequently opened to all secured lenders, with nearly 100% of first and second lien term loan holders eventually joining. The original RSA contained an implementation toggle allowing for an out-of-court restructuring contingent on achieving adequate terms in renegotiating rebate agreements.

Tax complications. As the company worked to effectuate the restructuring, tax advisors quantified income tax liability arising from halted rebate payments. Historically, LifeScan deducted rebate liabilities accruing in a taxable year against income if paid by September 15 of the subsequent year. When the company halted rebate payments under forbearance, the absence of these deductions resulted in income without offsetting deductions, creating tax liability not accounted for in company forecasts. This development, combined with failed PBM negotiations, required restructuring the RSA terms.

The Revised RSA. Intensive negotiations yielded the Revised RSA, effectuated on July 15, 2025, which allowed for prepetition payment of outstanding 2024 taxes (eliminating a potential significant priority claim) and provided for payment of 2025 taxes subject to bankruptcy court approval. The company anticipated mitigating all or nearly all 2025 federal income tax liability by concluding the restructuring by December 31, 2025.

First-day plan filing. LifeScan filed its Initial Plan and Disclosure Statement on July 16, 2025—the first day following the petition—demonstrating the advanced state of prepetition negotiations. The plan underwent seven amendments through October 2025 as negotiations with PBMs and other stakeholders continued:

PBM settlement and confirmation. The Texas bankruptcy judge granted confirmation of the Seventh Amended Plan on October 27, 2025, after LifeScan reached agreements with pharmacy benefit managers resolving their objections. The confirmed plan eliminated more than 75% of the company's debt—approximately $1.4 billion in liabilities—setting the post-emergence capital structure. The timeline from petition to confirmation was 104 days.

Emergence and New Ownership

LifeScan successfully emerged from chapter 11 in December 2025 with majority ownership transferred to Canyon Partners and Brigade Capital Management. The restructuring eliminated more than 75% of debt and included plans to pursue CGM market entry.

New investors. Canyon Partners, founded in 1990, employs a deep value credit-intensive investment approach. Brigade Capital Management, founded in 2006, manages over $30 billion in assets under management. Aaron Rizkalla, Managing Director at Canyon Partners, and Ray Garson, Partner at Brigade Capital Management, expressed support for LifeScan following emergence.

Leadership continuity. CEO Valerie Asbury, who has served as President and CEO since October 2018, led the company through the restructuring process. Asbury brought more than 40 years of healthcare industry experience, including over 20 years at Johnson & Johnson where she served as Global President of Diabetes Solutions from 2013 to 2018.

Go-forward strategy. The restructured company plans to pursue growth by entering the CGM market while implementing new commercial strategies in the United States. Court filings indicate that LifeScan's operations throughout Europe and Japan are expected to remain profitable and will serve as the focus of go-forward operations. U.S. operations—after rejection of certain rebate agreements—will be smaller but more profitable on an EBITDA margin basis, with the company focused on direct-to-consumer and cash-pay channels including retail and e-commerce. The company continues to work toward a potential CGM product launch, with FDA approval currently projected for the first half of 2027.

First Day Relief and Cash Collateral

The court entered an interim Cash Collateral Order approving consensual use of cash collateral without the need for debtor-in-possession financing, consistent with the prearranged nature of the restructuring and secured creditor support.

The court also approved retention of Epiq Corporate Restructuring, LLC as claims and noticing agent on the first day. International subsidiaries—including operations in France, Germany, Spain, Japan, and other markets—were not included in the chapter 11 filing, allowing those businesses to continue operating.

Professional Retentions

Debtor Professionals.

Committee and Lender Professionals.

Key Timeline

Frequently Asked Questions

What is LifeScan and why did it file for bankruptcy?

LifeScan Global Corporation is a medical device company that manufactures and markets blood glucose monitoring systems under the OneTouch brand, serving more than 20 million patients globally across 90+ countries. The company filed chapter 11 on July 15, 2025, due to market disruption from continuous glucose monitoring technology, PBM rebate agreements where it retained less than 9% of list price (resulting in approximately 3% EBITDA margin on U.S. sales), and debt maturities. At filing, the company owed approximately $1.03 billion to rebate counterparties and had approximately $365 million in first lien term loans and $275 million in second lien term loans outstanding.

What is LifeScan's corporate history?

LifeScan was founded in 1981 and acquired by Johnson & Johnson in 1986, serving in J&J's diabetes device business for over 30 years. The company's OneTouch brand changed blood glucose monitoring beginning with the 1987 launch of its first meter and strip systems. In 2017, J&J announced its exit from the diabetes device market, and Platinum Equity completed a $2.1 billion acquisition in October 2018. At acquisition, LifeScan had 2017 net revenue of approximately $1.5 billion and employed 2,400 people.

How did CGM technology impact LifeScan's business?

Continuous glucose monitoring devices—led by Abbott's FreeStyle Libre (launched 2017) and Dexcom's G7—provide continuous, real-time glucose data without fingerstick testing, changing the traditional blood glucose monitoring market. CGM devices measure glucose every five to fifteen minutes and provide trend and pattern data. The BGM market is expected to decline approximately 9% annually through 2030, while the U.S. CGM market is projected to grow from $3.7 billion in 2024 to $8.4 billion by 2033. Medicare's 2023 expansion of CGM coverage accelerated patient switching from LifeScan's products.

What role did PBM rebates play in the bankruptcy?

LifeScan faced contracts with pharmacy benefit managers requiring substantial rebates—the company retained less than 9% of its Wholesale Acquisition Cost on products sold through these channels, resulting in approximately 3% EBITDA margin on U.S. gross sales. At year-end 2024, LifeScan owed approximately $572 million to rebate counterparties, growing to approximately $1.03 billion by the petition date. Negotiations with PBMs to restructure these obligations did not reach agreement, as the majority of counterparties refused material concessions on outstanding liabilities or long-term pricing commitments.

What was the outcome of the restructuring?

LifeScan eliminated more than 75% of its debt—approximately $1.4 billion in liabilities—through the confirmed Plan of Reorganization. The company emerged from chapter 11 in December 2025 under new majority ownership by Canyon Partners and Brigade Capital Management. CEO Valerie Asbury continued to lead the company, which emerged with reduced debt and plans to invest in CGM technology while refocusing U.S. operations on direct-to-consumer and cash-pay channels.

How quickly did the case proceed?

The case moved on an accelerated timeline: LifeScan filed its initial Plan and Disclosure Statement on the first day following the petition (July 16, 2025), achieved plan confirmation on October 27, 2025, and emerged by December 2025—a 104-day timeline from petition to confirmation. The timeline reflected 97% secured creditor support, a prearranged RSA, and consensual use of cash collateral without the need for DIP financing.

Who are LifeScan's new owners post-emergence?

Canyon Partners and Brigade Capital Management hold majority ownership of the reorganized company. Canyon Partners, founded in 1990, employs a deep value credit-intensive investment approach. Brigade Capital Management, founded in 2006, manages over $30 billion in assets under management. Both firms expressed support following the restructuring.

Did LifeScan use DIP financing?

No. The court approved consensual use of cash collateral without the need for debtor-in-possession financing. The company continued normal operations throughout the restructuring process, with international subsidiaries not included in the chapter 11 filing.

What is LifeScan's strategy going forward?

The restructured company plans to pursue growth by entering the CGM market, with FDA approval for its CGM product currently projected for the first half of 2027. International operations in Europe and Japan are expected to remain profitable as key focus areas. U.S. operations will be smaller following rejection of certain rebate agreements but more profitable on an EBITDA margin basis, with the company focused on direct-to-consumer and cash-pay channels including retail and e-commerce.

What professionals were involved in the restructuring?

Debtor professionals included Milbank LLP and Porter Hedges LLP (legal counsel), Alvarez & Marsal North America, LLC (financial advisor), and PJT Partners LP (investment banker). The Official Committee of Unsecured Creditors was advised by Paul Hastings LLP (counsel), Jefferies LLC (investment banker), and Province, LLC (financial advisor). The Ad Hoc Lender Group was represented by Davis Polk & Wardwell LLP (counsel) and Houlihan Lokey (investment banker). Bank of America was represented by Cahill Gordon & Reindel and Haynes Boone.

Who is the claims agent for LifeScan Global?

Epiq Corporate Restructuring, LLC serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

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