Matria ( MATR) has finally transformed itself into a pure-play disease-management company.

After months of trying, Matria this week found a buyer for its remaining noncore diabetes business. All told, the company expects to pocket $155 million for its domestic and foreign diabetes units combined.

That sum falls well short of outside projections that, at one point, ranged from an estimated $250 million to $350 million for those two divisions. Moreover, the proceeds cover just one-third of the $445 million Matria spent on CorSolutions -- a competing DM company -- in its quest to become a pure player in the field.

Even worse, some experts feel, the pure-play DM business seems less rosy than it once did. Notably, they point out, giant health insurers like Aetna ( AET) and Cigna ( CI) have stopped outsourcing some of their DM programs and started handling more and more of those services themselves. Meanwhile, they add, other competitors have already snagged big contracts with Medicare and Medicaid -- a new high-growth opportunity -- whereas Matria has yet to establish itself in this important space.

For its part, Matria says that the asset sales went as planned and that the company remains on track to hit its debt-reduction target for this year. The company has also expressed little concern about mounting competition from health plans and insists that it, too, will join the Medicare and Medicaid games going forward.

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