Brutal – no other way to describe it

Brutal – no other way to describe it

Looking over the second quarter results for Johnson and Johnson whose diabetes care franchise experienced a 23.1% DROP in domestic sales compared to last year’s results and results for the six months of 2013 are also DOWN a whopping 21.3% the only word that comes to mind is brutal. Now it’s easy to understand why the unit has gone through yet another round of cost cutting and these cuts were just like today’s results – brutal.

Now Diabetic Investor should clarify that we did not listen to this morning’s call as we really didn’t want to hear another BGM company blame their poor performance on competitive bidding or hear once again how prices continue to contract. Been there, done that. However we did look at the slides used in today’s presentation and was somewhat surprised there was no mention of LifeScan or Animas, nothing, nada.

First off we should state for the record we’re really not surprised by this as frankly everyone who’s not on major drugs knew that this was coming. Secondarily expect more of the same when the other BGM companies report their earnings later this month or early next month. The simple fact is the BGM market is in a downward spiral and cost cutting is just a temporary fix, kind of like putting a Band-Aid on a knife wound.

Crazy it may seem, and this being the wacky world of diabetes where crazy is pretty much standard operating procedure, Diabetic Investor believes that any company willing to depart from the past and become innovative stands a chance to gain market share.  Frankly this is what the BGM market has come down to, who can steal share from whom. The days of double, heck single digit growth are long gone and never will return.  The question is which company has the fortitude to swim against the tide.