Abbott – Roche Find a Solution
In what can only be termed a stunning move for two of the Big Four glucose monitoring companies Abbott (NYSE:ABT) and Roche are about announce major changes. Diabetic Investor has learned the two companies are considering a management swap. Although the terms of the swap are not final here is what Diabetic Investor has learned:
1. 1. Realizing that their current management has run Therasense into the ground and completely alienated the entire sales force Abbott will send their management team to Roche.
2. 2. Roche realizing that their new management team has failed to develop a coherent strategy to turnaround their struggling unit will send their management team to Abbott.
3. 3. Apparently what clinched the deal was Abbott willingness to throw in a container of leftover M&M’s.
4. 4. It was rumored that both companies had considered torturing their management teams as punishment for their ineptitude but after consulting with the Bush administration decided that a swap was greater punishment.
5. 5. Sources inside both companies have confirmed that Lilly (NYSE:LLY) was consulted prior to the deal being consummated. Lilly’s main concern was that with Abbott’s former management team being so close to their home office, their management team would somehow be infected. Roche officials accurately pointed out that Lilly’s management was already infected as evidenced by how they have handled their relationship with Amylin (NASDAQ:AMLN).
Although the swap is not yet completed it will be interesting to see if the swap will yield the desired benefit. Diabetic Investor sees this as the ultimate test for the Abbott, now Roche team. This team has proven quite effective at turning a large fortune into a small fortune. Although the Roche, now Abbott team, seems to have lost a sense of direction they have not yet been able to run the Accu-Chek franchise completely into the ground.
Perhaps this was the reason for the swap in the first place. While it was relatively easy to run Medisense and now Therasense into the ground, Roche has thrown down the gauntlet and wants to see if their new team can ruin Accu-Chek too. Based on the history of this new team Diabetic Investor is confident they are up to the task.
Diabetic Investor will gives this development the attention it deserves considering what day it is.
David Kliff
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