After reviewing the earnings released by Medtronic and listening to the call the vision that came to us was a patient laying on the operating table suffering from multiple self-inflicted gunshot wounds who was bleeding from every orifice. Unfortunately for the patient a skilled surgeon was not standing at table but Bevis and Butthead.
How bad is it?
Domestic sales declined
The company is guiding toward the lower range of growth 6 to 8%
And as the company acknowledged the competitive environment is getting even tougher
Before we go on here and talk about how they plan to get out of this mess a few words on accountability or in Medtronic’s case the lack thereof. It wasn’t that long ago when the company was bragging that their diabetes franchise would be growing in the high double-digit range and their crappy sensor would be a billion-dollar product. Well as these and past results prove things haven’t exactly worked out as planned. Yet for reasons only Bevis understands Butthead is still running the franchise.
As far as the future here is what the company says;
The 780G their new advanced hybrid closed loop system is coming in the second half of their fiscal year with the big innovation being … wait for it …. Bluetooth connectivity. Yep nothing like launching a new product which has a feature that the competition has had for years.
Zeus their new sensor according to Bevis is going to eliminate 95% of fingerstick calibrations. Now we hate to break the news to Bevis but neither the Libre nor the G6 require ANY fingerstick calibrations. Thankfully Bevis didn’t double down on making stupid comments by saying Zeus would be a billion-dollar franchise.
But wait it gets even better as Diabetic Investor has learned that the company will soon have TV ads for their current crappy sensor. It seems that Bevis and Butthead believe the reason this crappy sensor isn’t selling is because Abbott and Dexcom are advertising on TV and they’re not. They seem to believe that these ads will generate patient interest which they might. Only problem is when the patient does some research, they’ll find out how crappy this sensor is and how much better the Libre and G6 are.
Internally these are very dark days in Northridge with employee morale at an all-time low and internal research indicating patient dissatisfaction at an all-time high, not exactly a positive combination. Frankly we feel for the good people at Northridge it’s not their fault the franchise is being run into the ground.
Those pesky facts paint a very bleak picture for the franchise. When it comes to insulin pumps Tandem and Insulet are winning Medtronic is losing. When the Control IQ from Tandem comes later this year a very bad situation will get even worse.
The CGM unit is a complete joke and the people laughing are Abbott and Dexcom. Abbott and Dexcom are growing like weeds while Medtronic is still talking about eliminating 95% of fingersticks. Seriously if this wasn’t so sad it would be damn funny, and let’s be honest it is damn funny.
The worst part and yes it does get worse is there is no easy way out of this mess. Given the respective market caps of Dexcom, Insulet and Tandem the company cannot dump this dog of a unit on private equity. Nor will any of the coming “innovative” products improve things as they are everything but innovative. We suppose they could combine diabetes with another unit and spin it off but given their inflated ego’s we doubt neither Bevis nor Butthead would permit this as this would be tantamount to admitting they have run this once great franchise into the ground. As Momma Kliff used to say this is what happens when you combine arrogance with ignorance.
To all the hard-working good people in Northridge we’re sorry you have to go through this, we’re sorry that your arrogant management team has done everything in their power to turn gold into sand. But the fact is this patient is bleeding from every orifice and even if the patient can be saved and live it will never, ever be what it once was.