Bayer Reports – Turnarounds Can Happen
A few years ago almost everyone in the diabetes
sector, including Diabetic Investor, had written the obituary for Bayer’s
glucose monitoring business. The final nail in the coffin appeared to be the
ill-advised move to change the name of the company from Bayer to Ascensia. A
company who once dominated the sector appeared disengaged and headed for the
scrap heap.
Looking over the results the company announced today Bayer Diabetes is
not only off life support, the company is alive and doing very well. According
to the company “The top-selling
product of the Medical Care Division was again the Contour® line of blood
glucose meters, with a sales gain of 15.0 percent (Fx adj.).” While it’s
difficult to gauge the impact of currency on results, these results match Diabetic
Investor field reports and places Bayer squarely in Roche’s rear view mirror
here in the US.
This turnaround by Bayer shows
that it is possible to reinvigorate a once dead business unit. A move which began
when the company cleaned house and basically started over with a new, engaged
management team. Instead of relying on standard industry practices this new
team took a fresh approach to glucose monitoring taking full advantage of the
few advantages they had when they took over.
The question today is can this turnaround
continue and can they overtake Roche for the number two spot in the US. To
Diabetic Investor this really isn’t a question at all and it’s just a matter of
time before Roche falls to the number three spot. Unlike Roche, Bayer
understands the future for BGM will come down to a fight for insulin using
patients. Proof of this can be found with Bayer’s new monitor the Contour®USB,
a monitor that is directly targeted at insulin using patients.
Normally Diabetic Investor isn’t
overly impressed by any new monitor as we don’t view technology advancements as
the key to gaining market share. However, the ContourUSB is not your ordinary
new monitor. Basically what the company has done here is combine many of the
features found on other monitors and packed them into one nice neat little unit,
that’s very patient friendly.
One very nice feature of the
ContourUSB is the monitor contains a rechargeable battery. Unlike other monitors
which run on conventional batteries that need to be replaced, the USB is not
unlike a cellphone which can be recharged between uses. Another very nice
feature is the ability to download readings automatically to a patient’s computer
simply by attaching the monitor to the computer using a conventional USB port.
No wires, no special attachments, just place the monitor in the USB port and it’s
done. About the size of an OneTouch UltraMini, the ContourUSB is easy to carry
around and like all Bayer monitors does not require any coding.
As impressed as we are with the ContourUSB, Diabetic Investor isn’t
delusional either. Gaining market share in today’s ultra difficult environment takes
more than a fancy monitor. As everyone knows without solid formulary placement
and equally innovative marketing, the ContourUSB will join a long list of cool monitors
that did little to change market share.
Still this move by Bayer and lack of moves by Roche show the difference
between a management team that gets it and one that’s basically out to lunch.
Simply put Bayer understands where the market is headed while Roche continues
to live in fantasy land. Kudos to Bayer for showing what’s possible when you
take your head out of the sand, unlike Roche who continues to turn gold into
sand.
