Lost in the excitement

First it was Teladoc merging with Livongo, next Ascensia offering a lifeline for Senseonics and finally Medtronic acquires Companion Medical. Of these three deals only the Medtronic/Companion deal seems to make sense. Teladoc merging with Livongo has a strategic rationale behind it but Teladoc is vastly overpaying for Livongo. Yet the Ascensia lifeline to Senseonics remains a mystery.

Let’s be very clear here there is nothing wrong with Eversense sensor. The system works just fine and yes there is a niche market for an implantable sensor. However Eversense even if it becomes a 180-day sensor will never . . .

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What this could be

First before we get into the gist of today’s post we need to issue somewhat of a correction. Yesterday in our post “Tyler is growing up” we stated that Bigfoot had yet to submit their connected cap covers to the FDA. According to the Bigfoot CEO Jeff Brewer this is inaccurate as the 510k was submitted last month. So we stand corrected and wish Bigfoot good luck at the FDA. As we have said before we’re not sure how a patient knowing that they just injected their insulin will help all that much but hey the company had . . .

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Are we having fun yet?

Before we get started let’s review some facts regarding the proposed Livongo Teladoc merger and notice we said proposed merger as this is far from a done deal.

1. The Street hates this deal. The trading isn’t over yet but again today shares in both companies continue to sell off.

2. No one inside the diabetes community can believe Livongo pulled this off as they like us knew this house of cards would eventually collapse.

3. It’s beginning to dawn on people that Teladoc is vastly overpaying for Livongo.

Now here’s . . .

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Tyler Is growing up

Here it is;

“Medtronic plc (NYSE:MDT), the global leader in medical technology, today announced the planned acquisition of privately-held Companion Medical, manufacturer of InPen — the only U.S. FDA-cleared smart insulin pen system paired with an integrated diabetes management app on the market. The addition of Companion Medical’s InPen to the Medtronic portfolio expands the company’s ability to serve people where they are in their diabetes journey and offer them a unique and expansive ecosystem of support — regardless of how insulin is delivered.”

First before we get into what this really means congrats to the . . .

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A game of musical chairs

We are still trying to figure out the logic behind yesterday’s news that Ascensia has partnered with Senseonics. As we noted yesterday this deal doesn’t seem to have a solid business rational behind it. The best we can figure after giving it more thought is that this deal was driven more by fear than any solid business rational. That the CGM market has become so hot, that the market is growing so fast that those companies not yet in the market are playing the childhood game of musical chairs, afraid that when the music stops they will not . . .

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Not Dead Just Yet

This afternoon after the market closed Senseonics, not only released second quarter results but a new agreement with Ascensia, per the press release;

“Senseonics Holdings, Inc. (NYSE American: SENS), a medical technology company focused on the development and commercialization of long-term, implantable continuous glucose monitoring (CGM) systems for people with diabetes, today announced the formation of a strategic partnership with Ascensia Diabetes Care (Ascensia), through a commercialization and collaboration agreement, which will make Ascensia the exclusive worldwide distributor of Senseonics’ Eversense® CGM systems. The company also announced a concurrent financing agreement with PHC Holdings Corporation, the parent company of . . .

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Fools or Visionaries?

Laurence Peter once said; “You can fool some of the people all of the time and all of the people some of the time, but you can make a damn fool of yourself any old time.” Given the reaction to the Livongo Teladoc merger we’re beginning to think Mr. Peter might be right. Reading through the various analysis of the deal this is either the beginning of a revolution or this is yet another example of the greater fool theory.

Not surprisingly those in the digital health space are hailing this deal as proof that digital health is here . . .

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Good but not great

There is no question a trend has developed with each earnings release during COVID. At first companies were basically clueless about what the true impact of COVID would be. Some decided rather than guess the prudent move was to pull future guidance. As we moved into the second quarter the COVID picture became clearer and for many the impact wasn’t as bad as first thought. Those who pulled guidance reinstated others adjusted their revised guidance upward. As we now move into the third quarter companies seem to have a better feel of COVID, with the natural caveat that things . . .

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The transformation continues

Looking at the results released by Novo Nordisk this morning and listening to the earnings call the transformation initiated by the company continues to move ahead. Like their main competitor Lilly, Novo is also adjusting to the impact of COVID. The good news is that things aren’t as bad as initially anticipated. The fact is until COVID is gone everyone is adjusting to this new normal and the new normal basically seems to be slower growth.

The results also show how important obesity products, GLP-1’s repositioned from diabetes to obesity treatments, have become to the company.

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Will it actually happen?

As expected everyone in the mainstream media sees the Livongo/Teladoc merger as a watershed event for digital health. Ironically the Street wasn't that impressed as Livongo shares fell by over 11% while Teladoc shares fell over 19%.

The real question we have is will these two companies actually consummate this marriage or will one of the nuptials get cold feet at the alter? According to everything we have read the deal is supposed to close sometime in the fourth quarter which means there is plenty of time for a change of heart. Given the amount of money . . .

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