A milestone with a message

A milestone with a message

It might seem difficult to comprehend but today is the tenth anniversary of Google becoming a publicly traded company. Yes back on August 19th, 2004 Google shares began trading as the company was valued at $3.2 Billion. Today Google is valued at more than $400 billion generating over $66 billion in revenue. It would not be an overstatement to say that Google has not only changed the way we operate but has actually become an integral part of our daily lives. One then has to wonder where Google will be 10 years from today.

Recently the company garnered a ton of free media exposure with their contact lenses which are supposed to measure glucose levels. Even though most experts in glucose monitoring technology don’t believe this technology will ever work, that didn’t stop Novartis (NYSE:NVO) from jumping on the Google bandwagon agreeing to distribute these amazing contact lenses. The fact is everyone believes Google will succeed where so many others have failed just because they are Google.

The same can be said for some other noteworthy high tech companies.  Sanofi (NYSE:SNY) was the first company to hook up with way cool Apple with their iBGStar, a glucose monitor that worked with the way cool iPhone. Since then glucose monitoring newcomers have learned their lesson and have begun making monitors that are Android compatible, a good move since nearly 65% of smartphones run on this operating system. It’s well known that besides Apple and Google, Samsung and Phillips Electronics are among a growing group of high tech companies who have efforts underway in diabetes management.

This was the reason Diabetic Investor has noted that the Consumer Electronic Show has become more important than the American Diabetes Association (ADA) annual Scientific Sessions conference. The simple fact is with drugs and devices becoming commodities innovation in diabetes management will be delivered by consumer electronics companies.  Thankfully some existing diabetes companies have seen this change coming. Dexcom (NASDAQ:DXCM) future products will work with smartphones and take full advantage of cloud based computing. As noted earlier there are now several companies with glucose monitors that work with a smartphone.  Heck even Johnson and Johnson (NYSE:JNJ) has jumped onto to this bandwagon with their new VerioIQ Sync which works with the way cool iPhone.

Sanofi along with a host of others was developing an insulin pen which communicated with a smartphone. Not to mention the thousands of apps which are currently downloadable and the thousands more coming. All of which are designed to help patients better manage their diabetes. Even with its many very real obstacles interconnected diabetes management (IDM) is no longer a pipe dream but a very real possibility. Diabetic Investor actually believes when Google celebrates 20 years as a publicly traded company IDM will be the norm not the exception.

Ten years from today when Diabetic Investor writes about the leaders in the industry companies like Google, Apple and Samsung will be among them. Technology will be as important to diabetes management as long-acting insulin, once-weekly GLP-1’s and whatever oral happens to be in vogue at the time. Physicians and managed care providers will be pushing this technology onto patients as there compensation will be partially based on providing better patient outcomes. They will see this technology as essential not just for monitoring the patient but communicating with them. Yes in 10 years the patients smartphone, tablet or whatever mobile device is in style at the time, will become the centerpiece of their diabetes management.

Yes there are some very real obstacles to IDM but the obstacles having nothing to do with technology. In fact the technology for IDM exists today. The problem with IDM is more structural. Take a look at glucose monitoring by way of example. As we have noted already there are already several systems that work with a patient’s smartphone.  Systems which not only capture data but also can transmit and soon interpret data.  The theory is that patients will respond to messages and/or suggestions which could be texted or emailed to the patient. There is actually study data to back this up and several companies have built their entire future on this premise.

The main problem however is money or should we say lack thereof.  IDM is not just way cool but also way expensive. As we have noted on numerous occasions given current levels of reimbursement scale is critical in the glucose monitoring market. Unfortunately scale is the one thing the newcomers to BGM don’t have. To Diabetic Investor this problem offers an opportunity for well-heeled and very rich companies like Google and Apple.

Long ago Diabetic Investor predicted that at some point in the future instead of a patient being prescribed drugs from one company and devices from another, the physician would prescribe a diabetes management system. This system would not just include drugs and devices but also provide patient coaching, the goal of course being better patient outcomes.  Way back in the day when JNJ hooked up with Novo Nordisk (NYSE:NVO) it looked like we getting closer to this becoming a reality.  Next came Sanofi and we all know how that didn’t work. But even with these notable failures we are actually closer than ever to physicians prescribing a diabetes management system, a system where technology will play a major role.

While we know it’s difficult for people in the wacky world of diabetes to think out of the box, to get away from their comfort zones – let’s do something crazy – throw away everything you think you know. It won’t be long before Lilly (NYSE:LLY) achieves their goal and has a full complement of diabetes treatment options.  It’s not outside the realm of possibility they could partner with their Indy neighbors at Roche who just happen to have a full line of diabetes devices. Throw in an app or two which ties all these elements together and what you get is a complete diabetes management system. Did we mention this system could be tied into a pharmacy who would refill all the scripts? Think Walgreens or CVS just might be interested?

Ten years from today we could see some partnerships, which at first glance seem strange but actually make sense given where diabetes management and reimbursement is going. Items like a glucose monitor would no longer be expected to stand alone as the sole source of profits, as they would be just one piece of a puzzle; A puzzle that will be put together with technology. Now we know this way out of the box and might be too much for those in diabetes to understand, so allow Diabetic Investor to dumb it down a little. Technology will become the tool that connects all the dots, the glue that holds everything together.

Most importantly companies that embrace and don’t run away from technology will see greater revenues. Listen as diabetes treatments and devices continue their path towards commodization, where scale becomes not just important but critical the defining factor over who gets a contract will be technology. There are those who would actually argue the technology will be more important since all the drugs and devices basically do the same thing the same way. While Diabetic Investor is not yet in this camp we do understand why people feel this way.

Now we know this a lot to take in and that for most of the folks in the wacky world of diabetes, this is just too wacky to imagine. It’s almost as wacky as believing 10 years ago that Google would grow from a $3.2 billion market cap to a company with a market cap greater than $400 billion. While it’s difficult to comprehend today back then Yahoo and Microsoft were considered serious threats to Google. Many at the time believed Google would never amount to anything more than a search engine.

Here we are ten years later and take a look at what Google is doing, contact lenses that measure glucose, self-driving cars, Google Glass and who knows what else. Now it would be foolish to believe that everything the company is working on will become a reality. Yet it would be equally foolish to believe that just because something seems impossible that it cannot be done.

Happy Anniversary Google, thanks for showing everyone that innovation is possible. Let’s hope over the next ten years you and your high tech brethren bring much needed change to the wacky world of diabetes.