ADA Day Two Ends, Day Three Begins

ADA Day Two Ends, Day Three Begins

While there is a noticeable lack of buzz on the exhibit hall floor this year, the action behind the scenes continues to provide Diabetic Investor with the gift that keeps on giving, namely the wacky world of diabetes. Before we get into the meat of the meal, let’s start with some tasty appetizers.

As always at the ADA there are a plethora of companies with new product offerings, some good, some not so good. On the good side is a product called the GlucaPen® which is a very patient friendly pen device that delivers injectable glucagon for the treatment of severe hypoglycemia. Unlike the current delivery options for glucagon the GlucaPen is designed by putting the patient and/or caregiver first. Anyone who has experienced a severe hypoglycemic event knows the last thing you need is to be fumbling about getting the glucagon ready for injection. The GlucaPen dumbs down the process making it simple and easy. While the product is not yet FDA approved, Diabetic Investor believes when approved it would capture a significant share of the market.

On the not so good side of the ledger is a continuous glucose monitoring system form San Meditech, actually the company does not call their device a CGM rather a DGM which stands for dynamic glucose monitoring. Whatever you want to call it, this product which is approved and manufactured in China has a few minor problems. First, and this is no small problem, we’re not sure the device actually works. Second, even if it does work we doubt it will be approved in the US and third their business model is dangerous. Taking a page from the conventional BGM playbook the folks at San Meditech think they can give away all the hardware and make their money from the continual sale of sensors- and we all know how well that model has worked out for BGM.

Diabetic Investor also continues to be flabbergasted at the money Lilly is spending to promote Tradjenta™, you can’t swing a dead cat here in San Diego without seeing Tradjenta plastered on everything but the toilet paper in the bathrooms and given the money Lilly is spending to market this Januvia wannabe that stands little chance of gaining much market share, it wouldn’t surprise Diabetic Investor if we wake up tomorrow and find Tradjenta toilet paper in our hotel room. This would actually one of the more appropriate promotions for the drug as Lilly is basically throwing money down the toilet with Tradjenta.

Another interesting promotion was the highlights of prescribing information left in front of our door from Sanofi-Aventis (NYSE:SNY) which according to this lengthy and very data intensive document; “These highlights do not include all the information needed to use Lantus safely and effectively.”  Granted there are many physicians attending the conference yet one just might think that most of these physicians are well aware of Lantus, it is after all the world’s number one selling insulin and that there are more exciting ways to promote this very well-known and highly prescribed insulin. Maybe it’s time for Sanofi to rethink their marketing efforts.

Now onto the meat of today’s meal as Diabetic Investor had a nice sit down with Insulet (NASDAQ:PODD) yesterday and came away with all of our fingers and toes intake and unbroken. The company explained to DI that we had all wrong about their recent acquisition of Neighborhood and owning a DME is actually an effective spend of $63 million. Yet, Diabetic Investor can’t help but think the company is grasping at straws hoping that Neighborhood will produce enough revenue and back office efficiencies to keep the company financially sound until the new smaller less costly to make new pod gets here. At the end of the day Diabetic Investor still does not understand the deal and can’t help but feel Insulet paid $63 million for list of prospects.

As luck would have it after our meeting with Insulet, DI meet up with some of foreign sources who shed some light as to why Insulet needs to generate more revenue. As everyone knows Insulet sign a deal with Ypsomed to distribute the OmniPod system overseas. Given Ypsomed’s strong presence overseas and deep knowledge of the insulin pump market, most including Diabetic Investor thought this was a great move. Well things aren’t exactly going as planned as Ypsomed has priced the OmniPod on the high side and governments overseas have told them to take a long walk off a short pier. Unlike the US reimbursement overseas is different and Ypsomed seemed to believe they could get away with pricing the OmniPod at a premium, unfortunately the folks who make these decisions disagreed and now it’s back to square one.

Diabetic Investor has also learned that there is a strong, even likely, possibility that Insulet will replace the FreeStyle meter which is currently embedded in the OmniPod Personal Diabetes Manager. According to well-placed sources LifeScan is the leading candidate to replace the FreeStyle, although no final decision has been made.

Should this deal come to fruition it would be a serious blow to Abbott (NYSE:ABT) and could well derail any chance the company has at staying relevant in BGM. Abbott continues to dumbfound everyone in the industry as no one can figure what the company is up to. Rumors are rampant that they are desperately trying to reinvent the failed Navigator CGM yet the company can’t seem to make up their minds if they really want to do this. The bottom line here seems to be Abbott just can’t decide what they want to with this unit. Diabetic Investor may not be the sharpest knife in the kitchen but it does not seem like a sound business strategy to be moving in two completely different directions at the same time.

Well do our best to have more later today and can’t wait to see the Tradjenta toilet paper.