A Swap and more

This summer there was a series of trades in the NFL at the most important position, quarterback. What made these trades unusual was it wasn’t a bunch of second stringers changing uniforms but starters. Well it looks like the wacky world is following the NFL as per a story in Reuters;

“Bayer, which is revamping its drug development activities, is losing the head of its pharmaceuticals division Dieter Weinand, who will join Sanofi to stem a decline in prices in the French drugmaker’s anti-diabetics and established drugs.

In a statement on Thursday, Germany’s Bayer said Weinand would be succeeded by Stefan Oelrich, currently a member of Sanofi’s executive committee in charge of diabetes and cardiovascular businesses.”

It should be noted that Mr. Weinand and current Sanofi CEO Olivier Brandicourt have worked together before so while a swap like this is somewhat unusual it’s not uncommon for a CEO to bring in teammates he has played with before.

This swap continues the revolving door at the Sanofi diabetes division and kind of reminds us of our beloved Bears who have had a similar experience at the quarterback position. Like Sanofi the Bears have been searching for their Tom Brady trading up in last years draft to get their current starter Mitch Turbisky. The question is can either Mr. Weinand or Mr. Turbisky lead their respective teams to the promised land. Frankly we think Mitch has a better chance given the talent that surrounds him.

Another question is how this change in leadership will impact Sanofi’s relationship with Google. As we have been reporting the Google/Sanofi partnership OnDuo is on shaky ground. Rumors have been swirling that both partners are unhappy just for different reasons. Will this change at the top push Sanofi closer to pulling the trigger and buying out Google or will Google will become so fed up with Sanofi and do what every other Sanofi diabetes partner has done and say goodbye?

At some point one would think that Olivier and our good buddy Serge might just realize that the problem with their diabetes franchise isn’t the person leading the division, that the problem just might lie elsewhere. That it takes more than a talented quarterback to win the game. A talented quarterback certainly helps but as we witnessed Sunday when the Bears blew a 20 point lead it doesn’t help matters when the head coach makes some very stupid decisions.

Turning our attention to another event that took place yesterday Apple announced that their new Series 4 Apple Watch will NOT measure glucose. According to a story on the MacRumors web site;

“Meanwhile, new heart detection features, made possible via a new electrical heart sensor, include the ability to perform electrocardiogram (ECG) readings right out of the box, as well as detect low heart rhythm with background detection for atrial fibrillation, and low heart rate monitoring to detect very low blood flow from the heart.”

A couple of quick points here;

1. There is no question with each version of the Apple Watch this is becoming a health tool. That when combined with the iPhone these tools will become the hub of the patient’s healthcare strategy. This as Momma Kliff used to say isn’t news.

2. Just because Apple can measure heart related issues does not mean they can measure glucose non-invasively. These are two totally different animals.

We find it funny that everyone seems to think Apple will succeed where everyone else has failed. That this super-secret effort to develop a sensor that will measure glucose non-invasively will pay off. An effort so secret it conjures up images of a group of mad scientists working day and night at a secret location. When the truth is with all their money Apple still has nothing, nada, zilch to show.

We’ll say it again because it’s true, when it comes to measuring glucose Apple will get closer and closer to Dexcom.

Lastly today we’ve been getting a ton of questions about Tandem, Insulet and Dexcom in terms of valuations. Going into the trading today Tandem’s market cap was just below $3 billion, Dexcom almost $13 billion with Insulet at just over $6 billion. On a year to date basis shares in Insulet are up almost 60%, Dexcom up over 150% and Tandem up an eye popping 1900% (well almost but at that leave does it matter the exact number).

To put some perspective to these numbers shares in Abbott are up almost 15% while Medtronic is up almost 18%. Granted these are not fair comparisons but anyone who’s been around the block more than once knows when a stock is up almost 2000% it might just be time to take some profits. We are many things here, but we did not fall of the turnip truck either.

As we have noted before of the three Dexcom has the most reasonable reasons for their move upward. However, for Insulet and Tandem this move upward has all the earmarks of momentum over actual substance. Both companies have promise yet both have obstacles too. As Momma Kliff used to say; “Tread carefully my son as the bottom always drops out beneath you when you least expect it.”