ATTD Day Two

Yes we realize that this is a diabetes technology conference, i.e. a toy show, but why is it as we walk around the exhibits and talk with everyone we feel sorry for that dead cat. You can’t swing that dead cat around here without hitting;

“Smart” insulin pens
Cloud enabled conventional blood glucose meters
Continuous glucose monitoring systems
Insulin pumps patch and conventional

Now that cat might feel a little better IF – all of these way cool whiz bang cloud enabled toys didn’t do the same damn thing the same damn way. Yes each has its own slight little variation but at the end of the day – all insulin pumps – all the “smart” insulin pens – all the CGM’s and all the “smart” conventional meters are almost mirror images of each other.

A technology that did catch our eye was from a Swiss start-up snaq (www.snaq.io) which has an app that takes a picture of a patient’s food and calculates carbs, calories, etc. Actually this is not the first time we have seen this technology as at CES a year or two back we found a French company that had the exact same thing. The crazy part here is that this type of technology is being incorporated into apps for Ascensia and Roche.

In “theory” these companies seem to believe that patients will whip out their cellphones take a picture of what they are eating and use the information to help them dose insulin. Which to us is well, crazy. But then we started maybe we’re just old and out of touch as last night at dinner we did witness people whipping out their phones and taking pictures of their authentic Austrian food. And being a fan of Facebook and Instagram that dead cat couldn’t be swung without hitting someone posting these pictures.

Being an insulin pump patient and understanding the importance of carb counting we thought ok maybe this isn’t a dumb idea. Maybe it is a good idea to use such an app to insure we got our carb intake correct. Then of course we came to our senses and realized that once the novelty wears off this is just another example of a solution looking for a problem to solve.

Think about this just for a moment about what happens in the real world, somewhere were these companies do not live. Think of Diabetic Investor taking his wine consultant out for a nice dinner at Mastros, a great steak joint that also has pork chops that are just killer, and during this intimate dinner whipping out our smartphone and taking a picture of those outstanding pork chops, great bread and that twice baked potato. Yep that certainly makes for an intimate moment doesn’t it. And what about the two Grey Goose and tonics we had before dinner, guess have to adjust that number provided by the way cool whiz bang app.

Seriously folks lets get real just for a moment, let’s think about how patients really live and not the folks walking around the convention center here in Vienna. Yes this technology is damn cool but just how many patients will actually use it and use it consistently. Sure there will be that let’s play with it time but once the coolness wears off and the drudgery sets in what will patients do? They go back to what they have been doing before and doing their best to estimate their carb intake, you know an educated wild ass guess.

Another start-up that caught our eye was Dianax (www.dianax.eu) from Italy. What do these great pasta makers have – a cloud enabled .. wait for it … A1C test. Frankly we almost shed a tear as this company reminded us of another at home A1C test made by Metrika. Now some may remember Metrika that company with the disposable A1C test, that was bought by Bayer and then disappeared from the planet only to be bought from Bayer by PTS Diagnositics. We were always a big fan of Metrika but like so many great ideas the business model didn’t work and this nice technology never caught on. Maybe the Italians can do more than make great pasta, but we doubt it.

Folks it’s about to come to grips with some FACTS, yes we know they are pesky but they are FACTS nonetheless;

1. We do not need three hundred different “smart” insulin pens, heck we don’t even need more than 5.

2. Try as they might to put lipstick on a pig, there is no future for conventional BGM no matter how you dress it up. Yes, there is a limited future in emerging markets, which actually should be redefined as countries that don’t have CGM, but the margins stink, the markets aren’t large enough to make up for these low margins and there is still competition which hurts margins even more.

When we think of BGM we think of the movie “Other Peoples Money” with Danny Devito who plays a corporate raider taking over a wire and cable company. During a speech his character states the surest way to oblivion is to get an increasing share of a declining market. He notes how in the old day there were probably hundreds of buggy whip makers and the last buggy whip maker made the best damn buggy whips around but still went out of business because of new technology.

This is exactly what’s happening with conventional BGM as it will be replaced with CGM. So all the way cool apps that do way cool things with these way cool whiz bang cloud enabled conventional fingerstick meters will become obsolete. Or as Momma Kliff used to say; “You can put a fancy dress on, put on lots of make up and fancy shoes but ugly is still ugly.”

3. Speaking of CGM isn’t it about time everyone realize that at a certain point accuracy won’t matter, that all the systems will be accurate enough. That being factory calibrated won’t matter or that a 14 day sensor life will become common place. In other words when will these companies realize that CGM like BGM will become a commodity. When will they realize that instead of improving accuracy – seriously is a 8% MARD really that much better 9- that it might be better to concentrate on running a commercially viable CGM company.

Listen we hate to be redundant here but the ability to make sensors on a massive scale, get them on formulary and supporting patients is more important than a 8% MARD. Frankly the CGM world is getting to be like the insulin pump where any idiot can make a CGM but it takes real talent to run a CGM company.

4. Turning our attention to pumps a quick chuckle as when we walked into the exhibit hall and passed by the Insulet (NASDAQ: PODD) booth we thought we were being transported back in time as there it was OmniPod’s in water. As we Tweeted this morning we’re not sure it’s a good idea for any insulin pump company to copy anything done by Animas. For those who can remember Animas did the exact same thing and now instead of being waterproof the company is under water sunk because Johnson and Johnson (NYSE: JNJ) with all their money and marketing might ran it into the ground. And did such a good job of running it into the ground they couldn’t sell it and had to shut it down.

This FACT makes us wonder what all the insulin pump companies here not named Medtronic (NYSE: MDT) or Insulet are thinking. These two companies now control almost 90% of the insulin pump market. Tandem (NASDAQ: TNDM) will be around for a little while longer which basically means that Lilly (NYSE: LLY), CellNovo, Ypsomed and SOOIL are what, fighting over scraps. (We would mention Bigfoot but they aren’t here in Vienna.)

Let’s be honest here these companies not named Medtronic or Insulet are spending large sums of money so they too can become members of the tried and failed club. That one day they will join the Deltec, Asante, Roche and now JNJ in the insulin pump graveyard.

Momma Kliff used to have word for this a word that apply describes all these insulin pump wannabes, she would shake her and and just say all these companies are just meshuggah. (Look it up its Yiddish but loosely translated means crazy.)

Well that’s all for now more later.