The Blame Game Begins

As we head into a well deserved Holiday weekend Diabetic Investor finds it amusing that Exubera has gone from a sure-fire blockbuster product to one of the worst product launches in history. Recently there have several articles written about Exubera and just how badly the product has performed. The most recent came today in the San Jose Mercury News- http://www.mercurynews.com/business/ci_6767521?nclick_check=1.

Diabetic Investor can’t resist a little gloating here as we predicted long ago that Exubera was nothing more than a niche product and would fail to reach the sales figures many . . .

This content is restricted to subscribers. Please subscribe.

Already have an account? Please login.

The Golden Gate Beckons

The San Francisco 49ers aren’t the only thing happening when the New Year begins in that beautiful city by the bay. The day after the top seeded Niners play the lowest remaining seed in the NFL playoffs the J P Morgan Healthcare Conference opens at the Westin St. Francis. So after attending CES in Sin City which begins the week before we head to JPM with high expectations.
The early schedule is out and while there are plenty of the usual suspects a few new names have appeared.

Monday at 3:30pm Verily presents, followed the next morning at 8:30am Livongo presents. Also new to the list is Novo Nordisk who presents on Tuesday at 3:30pm after Sanofi who presents at 10:30am and Lilly who presents at 2:30pm, so guess we should classify Tuesday as insulin day at JPM.

Dexcom opens the conference Monday morning at 8am with Abbott the next morning at 9am.

Other notable presentations Medtronic Monday morning at 9am, Insulet Tuesday at 11am and for the first time Companion at 2pm Wednesday.

As per usual we’ll be reporting from both CES and JPM and given both conferences are in the Pacific time zone expect posts to come out late east coast time.

Our best guess for both shows with digital health being hotter than Georgia asphalt is digital will dominate much of the discussion. But as per usual we always expect the unexpected particularly at JPM which always seems to yield a surprise or two.

So stay tuned.

Until then enjoy your New Year celebrations – Happy New Year Everyone may it be a healthy and prosperous New Year for all.

Out with the old, in with the new

As we close the book on 2019 and begin a new decade it’s worth looking back at the past decade and the many advancements in diabetes. There is no doubt in our mind that CGM was the most transformative technological innovation over the past decade. As we enter the new decade CGM systems are not just more accurate and patient friendly they are becoming more affordable an aspect that cannot be underestimated.

Before we go on let’s spend a moment on the affordability aspect of all diabetes products drugs and devices. Over the years we have seen many improvements in both the drugs used to treat diabetes and the technology used to monitor diabetes or deliver drugs. As we have stated many times while improvements in drugs and technology are welcome, we have the tools available today so that every patient if they choose to do so can easily manage their diabetes.

However it is also true that thanks to our convoluted healthcare system it is NOT a level playing field when it comes to patient access. The out of pocket cost of insulin is a prime example of this. Again as we have stated many times no patient should ever have to choose between buying groceries or refilling their insulin prescription. Insulin is a life sustaining drug for millions of patients. While we believe this issue has been somewhat over blown it is true that there are patients who through no fault of their own cannot afford the drug that keeps them alive.

The same can be said for much of the new technology available. Those patients with “good” insurance coverage have more choices. Unfortunately there are far too many patients who because of their insurance plan cannot afford or do not have access to these technologies.

It would be refreshing if instead of pointing fingers industry worked together to bring transparency to the system. In our opinion patients could care less about who does what and care more about being able to afford the drugs and technology they use. This is not a simple task as for competitive reasons many companies do not want to share in the public domain the discounts they offer or the rebates they pay. However until transparency is brought to the system patients will always feel that the system is rigged against them.

Let’s, excuse the expression, stick with the high out of pocket cost of insulin. From the start we have noted this issue impacts less than 5% of the overall patient population. Yet the issue has become a tinder box with patient advocates who only see that the WHOLESALE cost of insulin has increased dramatically over the last decade. What they do not see are the discounts and rebates given to payors, discounts and rebates used to gain favorable formulary placement. Nor do patient advocates have access to data which shows which patients have CHOOSEN high deductible plans or which patients do not have any coverage at all.

All everyone sees are the heartbreaking stories of a patient who has died because they could not afford the drug that keeps them alive. It’s no surprise this issue has become a hot button issue with our elected officials and the many who are running for President. Yet lost in this debate is one simple question, other than providing access to those who through no fault of their own cannot afford insulin, will lowering the out of pocket in any way result in better patient outcomes? Our connection has always been and continues to be that insulin could be given away for FREE but that would not result in better patient outcomes. The facts, yes, those pesky facts, tell us a far larger cost to the system are the many costly complications that come from poorly controlled diabetes.

So let’s get off the soap box and look to the future as it is very bright, particularly for insulin using patients. By the end of the next decade, thanks to CGM and insulin dosing algorithms, life for an insulin using patient will be blissful. The current crop of hybrid closed loop insulin delivery systems will get even better eliminating much of the heavy lifting done by patients and taking away the fear of serve hypoglycemic event. Tyler will be in full force during the decade doing the same for patients following multiple daily injection (MDI) therapy. Even patients using insulin plus orals will benefit as the insulin part of the equation will be augmented.

GLP-1 therapy will continue to grow and get a nice boost when the Intracia exenatide micropump arrives. Th reality is that the biggest issue that stands in the way of better patient outcomes continues to therapy adherence and this system eliminates that concern.

While we see a role for digital diabetes that role will not be as major as many see it to be for one simple reason, all the coaching in the world cannot force a patient to take their meds as prescribed. Our belief has not and will not change on this issue as until the patient has a real vested interest in their outcomes nothing much will change. And we are not talking about the patient “feeling” better no we mean real tangible rewards that the patient can see or touch.

Now I know we’ll get in trouble for this but heck after 20 plus years of covering our wacky world and telling the truth we’re used to getting in trouble so what the heck. It would equally refreshing if everyone acknowledged that the PATIENT bears some responsibility and should not be absolved of this responsibility. Diabetes is a MANAGABLE chronic disease IF the patient chooses to do so. Patients with diabetes are NOT handicapped, diabetes is NOT a disability. It may make patient advocates more popular by blaming everyone but the patient for the fact that nearly two thirds of all patients are not under good control, but it does not change that pesky fact.

As Momma Kliff used to say having a Diet Coke with a Lou Malnati’s deep dish pizza, or a Portillo’s Italian beef sandwich and large order of fries does not constitute being on a diet. Nor is it exercise walking from the bedroom to the couch to watch TV. There are many simple, painless and FREE things patients can do IF they choose to do them.

We would like nothing better than for patients to be treated as adults and with respect. Take away the guilt, the condescending attitude and the victimization. Give them the facts and allow them to manage their diabetes as they see fit. Make them aware of the choices they have and let them make that choice. In many respects this decade and the one to come are no different in that until everyone realizes that PATINETS ARE PEOPLE AND NOT ROBOTS nothing much is going to change.
Patient empowerment isn’t about a lower out of pocket cost of insulin or whiz bang way cool toys. Patient empowerment is all about providing clear, understandable information. Providing access to the drugs they need and the toys they play with. Then get out of the way and let them manage their diabetes.

As Momma Kliff used to say decisions have consequences but you cannot make an informed decision unless you have all the facts. It’s about time patients were given the facts so they can get on with their lives.

Is this the beginning?

Yesterday an unexpected gift was found under the tree as according to a study published in Diabetes Research and Clinical Practice CGM could be used as a cancer prevention tool. This retrospective analysis done at a large teaching hospital in Tokyo, Japan concluded;

“We found an association between large glycemic variability and a high risk of future malignancies in a dose-dependent manner among people without diabetes. This finding suggests that maintaining a constant level of glucose may have favorable effects on cancer prevention in people without diabetes.”

We have long maintained that CGM has greater applications beyond diabetes. That as well as CGM is doing in the diabetes world what we are seeing today is the tip of the iceberg, what’s above the water line.  For reasons that are obvious everyone looks at CGM as strictly a diabetes tool. Yes there is lots of empirical evidence that CGM has applications beyond diabetes but before this study there was little in the way of hard clinical evidence.

Now we will not suggest this one retrospective analysis will push CGM usage beyond diabetes, however we do believe it will begin a new series of studies that examine CGM usage beyond diabetes. Needless to say this is very good news not just for Dexcom and Abbott the two leading players in CGM but the many Dexcom wannabes who are smart enough to understand that CGM is not just for patients with diabetes.

Already we are aware of elite athletes using CGM to enhance performance, while others see CGM as a weight loss tool. Frankly the conclusion of this analysis was very surprising and obviously should be investigated further as if proven to be a cancer prevention tool it would blow the doors off the market. It could also prompt some companies semi-attached to CGM to make the deep dive by acquiring CGM assets.

As we begin trading today Dexcom carries a market cap of $20 BILLION, an astonishing valuation when looked at from just a diabetes perspective. Yes CGM is becoming the standard for glucose measurement with adoption expanding beyond insulin using patients. And yes, the Type 2 market is huge and largely untapped. But still $20 BILLION is a big number until one looks beyond diabetes.

The simple fact is CGM could move beyond being the most transformative tool in diabetes to one the most transformative tool in healthcare. Let that sink in for just a moment and think of what that would mean for Dexcom and Abbott. Yes, the future for CGM is very bright indeed.

Tis was the night before ….

This being the Friday before Christmas and also Hanukah which begins Monday it’s time once again for our annual list of gifts. So let’s have at it –

To Sean Salmon who is now running Medtronic Diabetes a year’s supply of Tums. Given you have inherited a mess of a unit you are going to need them.

To Paul Hudson Sanofi’s new CEO who deserves credit for doing what needed to be done with the company’s beleaguered diabetes unit, the sense to finish what he started by selling the unit. Paul have the common sense to sell this unit which still has value and put this capital to use somewhere else.

To Glen Tullman CEO of Livongo a real revenue recognition method. We know this won’t happen but it sure would be nice to know how much money is really coming in rather guessing.

To the West Coast Mafia who deserves credit for making the out of pocket of insulin a real issue the sense to stay away from anything business related. Excuse the expression but stick with being patient advocates as this is what you do best.

To every company that has a Tyler under development stop screwing around and get Tyler to the market as soon as possible.

To all the folks at Tandem you now own the coolest toy in the toy chest heed the words of Momma Kliff and don’t screw this up.

To every Dexcom wannabe understand this is no longer about making an accurate and reliable sensor and this is all about the ability to run a CGM business.

To Dexcom and Abbott the sense to keep pushing. CGM is becoming the standard for glucose measurement but don’t stop there as this is just the tip of a very large iceberg what’s below the water line is an even larger market opportunity.

To our friends in the Valley, yes, the folks at Verily and Apple, use your vast amounts of capital wisely and not on stupid projects which may be cool but won’t help patients much. You have been splashing around in the diabetes pool for a while now it’s about time you start swimming. The same goes for our friends at Amazon.

To every digital diabetes company remember who your target market really is, Type 2 patients who are on orals alone or orals plus insulin these are the people who really need your help.

To the Chicago Bears a real quarterback, a GM that can analyze talent and a coach who believes in winning. Yes, we know this has nothing to do with our wacky world but damn we had Superbowl aspirations going into the year and instead we got a toilet bowl.

To our loyal and growing list of subscribers a heartfelt thank you. Have a great holiday season and a happy healthy and prosperous New Year.

What happens when the wheels fall off?

Digital health and by extension digital diabetes remains a hot topic. This is one reason we’re headed back to CES at the start of the new year and why this year’s edition of the J P Morgan Healthcare conference the following week should be more interesting than usual. Deals are being made, companies are accessing the capital markets and by the look of things this trend is far from over. Everyone and we do mean everyone is jumping on the digital health/digital diabetes bandwagon.

Livongo may have been the first company to go public but they certainly won’t be the last. Now that Sanofi has stepped away from Onduo it’s possible Verily will take Onduo public. Waiting in the wings are companies like Omada Health and OneDrop. The fact is just about every diabetes company has some sort of digital solution. While each solution goes about solving the problem in a slightly different way, they all do basically the same thing in very similar fashion.

Driving the digital bus are the claims being made by these digital companies that they are saving employers money. We have read many studies, claims analysis, etc. all of which show that not only are patients achieving better outcomes, but employers are saving money. Livongo claims they are saving employers around $2,000 per patient while Omada Health recently published a claims analysis stating they save employers nearly $1,800.

Now we won’t say that these studies use fuzzy math to reach their conclusions let’s just say the math is interesting. We are by no means claiming these companies are intentionally deceiving anyone however we are very familiar with how studies are constructed, and the design of a study can yield the desired outcome before the study is even concluded. Keep in mind that these studies are not like clinical trials rather statistical analysis that can be manipulated by which data sets are included or excluded.

Be that as it may there is another issue that goes largely unnoticed or should we say unspoken about, how or whether these digital companies are making money. Now that Livongo is publicly traded we know that for all their bluster the only thing the company has been really good at is losing money. We also know that their method for calculating revenue is interesting. Again we aren’t saying that Livongo is doing anything illegal, but they are very extraordinarily liberal with how they report revenue.

The other issue here is the very short history with digital health and digital diabetes. Almost every study or analysis we have seen has taken place over the last two years. Again these are not clinical trials which can run for several years and go through several stages before reaching their conclusions. The studies and analysis by the digital companies imply sustained long-term results based on short term data sets. Sure it’s great to see short term improvements in outcomes but for a chronic disease like diabetes it’s critical that these results are sustainable over the long term.

Folks thanks to our age and many gray hairs we have been down this road before with disease management companies. Like the digital companies these companies showed very promising results over the short-term results that unfortunately were not sustainable. Like the digital diabetes companies these disease management companies had some interesting accounting methods for reporting revenue. The fact is and no one wants to admit this likely because its true but digital diabetes is just disease management using new technology.

But let’s say we are all wrong here and that digital diabetes isn’t just disease management in a shiny new box. That these short-term results are sustainable and that these revenue “projections” turn into real money. With so many companies all battling for the same client what happens next? Competition is what happens and that will drive prices down which makes making money even more difficult. It won’t be long before one of these companies perhaps Onduo will be the first to go 100% at risk only getting paid for producing verifiable improvement in outcomes.

Competition isn’t the only problem coming, new technology will make these programs offered by digital diabetes companies obsolete and unneeded. Let’s start with the low hanging fruit and increasing usage of GLP-1’s. Besides the current crop of once weekly options we now have an oral version and soon the Intarcia exenatide micropump will be here. GLP-1 therapy is very compelling offering good control few adverse events and are very patient friendly in terms of compliance. The Intracia micropump all but eliminates any compliance concerns as once its implanted compliance is guaranteed.

Next we have all the new hybrid closed loop insulin delivery systems. The Control IQ is just the first of what will be a major advancement in insulin pump therapy. The insulin dosing algorithms used with these systems continue to improve and it won’t be long before an insulin pump patient can forget about counting carbs. Put simply these systems continue to get smarter doing more and more of the heavy lifting for the patient.

Then we have the coming of Tyler which like the hybrid closed insulin delivery systems will take away much of the heavy lifting performed by patients following multiple daily injection (MDI) therapy. We’ve said it before and will say it again because its true in five years perhaps sooner insulin therapy whether it’s delivered by an insulin pump or connected insulin pen will be easier than ever.

With each of these advancements in technology it eliminates patients who need coaching. The technology will do what the coach does. That leaves a large but tough of group of patients to connect with, patients either on orals alone or orals plus insulin. So far about the only company in the digital space that has targeted this tough group is Onduo. A job which really boils down to one simple but undeniable fact, getting these patients to take their meds as prescribed.

Making this job even harder is that these patients are the least engaged with their diabetes management. They as we have said for years want to live their lives with diabetes and not for their diabetes. Yes, they do respond to coaching over the short term however we have yet to find any program which converts these short-term results into long term improvements. As we noted previously this is why attrition rates are a critical metric to pay close attention to. Not to pick on Livongo but since they are now a publicly traded company, they are one of the few to report attrition rates which as we noted with their latest offering is nearly 25%.

Now we don’t know what all this adds up to for the many believers in digital diabetes but what it adds up to for us is that the wheels are going to come off the digital bus. This is exactly what happened when disease management was all the rage and what will happen to digital diabetes. No this won’t happen overnight, but it will happen. Hence the reason why a company like Livongo so desperately wants to bet on the greater fool theory and get acquired. An event they hope happens before the wheels start coming off.

Folks we are not trying to be Debbie downer here as there is some value in digital diabetes. However that value is not in the stratosphere where it is today. Digital diabetes to us is just another tool in the toolbox. Just one more toy in the toy chest. So when it comes to digital diabetes we would proceed with extreme caution as there are just too many warning signs.

Clueless

Yesterday Medtronic acquired Klue who according to a story posted on Drug Delivery Business News is a as “software company that tracks people’s eating in real-time and analyzes it with artificial intelligence (AI) to help control diabetes.” The story goes onto state;

“Medtronic plans to incorporate Klue’s technology into its Personalized Closed Loop (PCL) insulin pump system, which won FDA breakthrough device designation in February. PCL is designed to automate insulin delivery in real-time, adapting to the user to simplify diabetes management, according to the company. Medtronic also said it will use Klue’s technology to boost analytics and insights for its continuous glucose monitor (CGM) technology to help people using multiple daily injections stay ahead of high- and low-glucose events.”

Now we’ll admit before this news broke, we were clueless as to who Klue was and what they did, which really isn’t that surprising as they haven’t been around all that long. The company was founded in 2016. And to be quite honest while we’re happy for the folks at Klue this news in no way impacts our already low opinion of Medtronic diabetes. Instead of acquiring some way cool whiz bang technology that even if it works won’t help patients all that much why not instead make a CGM that actually works.

Yet hidden in this clueless event is a glimpse into where the company as look at this line from the Medtronic press release;

“In addition, the Klue technology can be leveraged to enhance the company’s market-leading analytics and insights in their smart1 CGM technology to help people using multiple daily injections (MDI) stay ahead of high and low glucose events.”

Now if that doesn’t sound like a Tyler, we don’t know what does. Remember Medtronic is the market leader for INSULIN PUMPS and that sentence specifically mentions MDI. Patients who will be using Tyler.

Even though the Medtronic CGM sensor isn’t that reliable it does work occasionally which means the only piece missing to have a Tyler would be a connected pen. Given there are thousands of connected pen companies who would like nothing better than to be acquired it would easy for Medtronic to buy one or two of them and they too can enter what is becoming a very crowded Tyler market.

The simple fact is Medtronic is grasping at straws here. Now that the Control IQ is here, they know they no longer have the coolest toy in the toy chest. They understand that unless they do something their days as the market leader in insulin pumps are numbered. They see Tyler coming and understand if they aren’t in this market they will fall even further behind. They like us see the handwriting on the wall and understand that Tyler is huge threat to insulin pump sales. Therefore rather than swim against the tide better to swim downstream.

Will this move work? We haven’t a clue and based on Medtronic’s checkered track record we doubt if they have a clue either.

The Cone of Silence

Today we’re going way back in the wave back machine referencing a very funny TV show Get Smart. Now for the millennials out there we highly recommend getting on YouTube or whatever streaming service you have and watching a few of what are truly hilarious episodes. One of the funniest scenes came when Max and the Chief went into the cone of silence and then in Get Smart fashion couldn’t hear what the other was saying.

We thought about the cone as the FDA has yet to approve the Libre2. After being very vocal about the Libre2 Abbott recently has been less enthusiastic about when approval will come. At one time the company was giving the impression that this approval was a slam dunk. Yet for reasons no one seem to know approval is taking much longer than anticipated. Our gut tells us that, excuse the expression the sticking point is getting the iCGM designation.

Now from the start we have noted that while it would nice to get this designation, with or without it, Abbott’s strategy with Libre would not change. Abbott has made it crystal clear they are committed to a value strategy with Libre and we don’t see that changing when the Libre2 gets approved. Still it is somewhat unsettling that this approval which was supposed to be a layup has turned into a half court three pointer.

Speaking of the cone one of Abbott’s partners has entered the cone as well as Bigfoot has gone from being very vocal to radio silence. All of a sudden BigMouth has become closed mouth. This is very strange for many reasons not the least of which being that next to digital diabetes the hottest thing going in diabetes tech land is Tyler. Yep you can’t swing that poor dead cat without hitting a Tyler and back in the day Bigfoot claimed their version of Tyler was the best thing since sliced bread or soft soap.

Based on what we know Bigfoot is not just losing key people but is having a very hard time finding fresh capital. Frankly we aren’t that surprised on either front given how the Tyler market is developing. As we noted yesterday all the insulin companies have a Tyler under development plus it would not surprise us if Dexcom who has a relationship with Companion came out with a Tyler. Plus it doesn’t help any when your partner is making deals with other Tyler companies so that the Libre talks to other connected pens or cap covers.

At one time it looked as if Abbott along with Bigfoot would enter the Tyler market together. However with the Libre2 stalled at the FDA and Bigfoot floundering this once happy marriage seems headed for divorce court. Quite frankly Abbott does not need Bigfoot, but Bigfoot desperately needs Abbott. Yet as so often happens when a marriage is coming to an end, Abbott is moving on finding new partners while Bigfoot remains hopefully, they can somehow get back together.

The fact that both have entered the cone of silence tells speaks volumes. Now we suspect Abbott will be just fine and that eventually the Libre2 will gain FDA approval. Will it get the iCGM designation is another story.  But one way or another it will get here. We cannot say the same for Bigfoot as without a capital infusion the company appears destine to fad away.

The End is Near

With the approval of the Control IQ the last thing Sean Salmon the new guy running Medtronic diabetes needs is more bad news. But as Momma Kliff used to say this is why you earn the big bucks so put on your big boy pants and deal with it. Today Lilly and Dexcom reached a non-exclusive agreement to integrate Dexcom’s sensor into Lilly’s insulin delivery systems which include connected insulin pens and yes, an insulin pump.

Now we have never understood why Lilly wants to be in the insulin pump business but what the heck there are lots of things we don’t understand like why the Bears cannot beat the Packers, but let’s not digress. We do understand the entry into the connected pen arena as Lilly like everyone else wants a Tyler as they like Novo Nordisk see Tyler as tool to sell insulin. Sanofi which for the moment is still in diabetes also just did a deal for their version of Tyler.

Lilly also is the only company that has developed a disposable Tyler. Although we have yet to see this way cool whiz bang device, we’re told Lilly has a disposable insulin pen that communicates with a smartphone. This is in sharp contrast to the traditional Tyler which is either a durable connected pen something that Companion, and Novo have. Or a connected cap cover which is used in conjunction with a disposable pen which is where Sanofi and many others are headed.

We like Lilly’s approach, assuming of course it ever gets here, for the simple reason it fits within the patients existing paradigm. Patients are already using disposable insulin pens by the boatload and the Lilly approach does not ask them to do anything different then they are doing today. While it may not be a Herculean task to place a cap cover over a disposable pen the cap cover does have to be charged and while these extra steps aren’t onerous, they are extra steps. As much as we like the Companion approach the cost of durable pens make this approach difficult. Even with their massive scale Novo will run into the same problem.

This is another reason we like Lilly’s approach as it’s also very cheap to make and Lilly knows that payors will NOT pay a premium for a Tyler. Lilly understand that they will have to GIVE AWAY the connected disposable pen, unlike everyone else who will either seek reimbursement for their system or eat the cost which will be substantially higher than Lilly’s. Keep in mind Lilly is already making millions of disposable pens. All they are really doing is adding a chip to these pens, chips which when bought in massive scale are very cheap.

This is the reason we continue to believe the insulin companies will own the Tyler market, that is assuming they get moving before someone else beats them to it. Yes Tyler will make insulin therapy easier for the patient but that’s not why the insulin companies need him. They need Tyler to protect their insulin franchises since insulin is now a commodity. They see Tyler as protecting these franchises as they know it won’t be long now before we have a biosimilar short-acting insulin. Well Sanofi already has one but that doesn’t count as well it’s Sanofi.

See when it comes to insulin therapy it really doesn’t matter which insulin a patient uses. Yes there are some minor, very minor differences between the brands but none so glaring that a patient would notice the difference. Simply put for majority of patient’s insulin long or short acting are interchangeable. The insulin companies know this and know they need to somehow differentiate their brand from the other, Tyler is that differentiating factor. This is why all the insulin companies want to work with Dexcom as they know Dexcom is King of the CGM mountain. Abbott may have more patients worldwide but until they Libre2 gets here, and why it still isn’t here is a mystery, they are not on the same page as Dexcom.

In the future we believe all the connected pens no matter what configuration will talk to both Dexcom and Libre. But as it stands today Dexcom is the most experienced at connectivity and this experience cannot and should not be underestimated. This does not mean Abbott can’t do it rather they have yet to do it and commercialize it. By the way weren’t they supposed to do this with Bigfoot, gee guess that didn’t work out to well. But let’s not digress.

So if you have paying attention recently and we hope you have been real change is coming to the insulin delivery sector. In the very near future it won’t be about which insulin a patient uses rather which insulin delivery system they use. Do they go over the top using the Control IQ, or do they prefer Tyler? Both systems have compelling stories and much different price points which as we all know will impact decisions.

This is why we believe Mr. Hudson should finish what he started and sell Sanofi’s diabetes assets. This is why we believe every insulin pump company should have a Tyler of their own. This is why we believe if they wanted to Dexcom with Companion could beat everyone to the market with a Tyler. This is why we almost feel for Mr. Salmon who continues to swim upstream fighting multiple wars on multiple fronts.

The simple fact is market forces combined with mistakes made by previous management teams will destroy the Empire. As we noted this morning the rebels now own the Death Star and will use it to exact their revenge on the Empire. Next they will face a ground assault from all the various Tyler’s coming to market. Throw in their existing problems unwillingness to change their business model and a good deal of hubris and it all adds up to a slow and steady death march.

The Rebels now have the Death Star

Finally this past Friday the FDA did what everyone expected and approved the Control IQ, creating lots of happy dancing for the folks at Tandem, not to mention the large and growing group of patients who were also anxiously awaiting its approval. Before we get into what this means a few quick thoughts.

1. Ok I know there is nothing we can do about this, but these Friday afternoon approvals have got to go, has the FDA never heard of Happy Hour.

2. While shares of Tandem did increase with the announcement the reaction was rather muted. This is largely due to the fact that everyone anticipated it would be approved and the approval came very late in the quarter. Simply put the approval was pretty much priced into the stock.

3. Yes this is obvious but now it’s up to Tandem to execute, they have known this is coming, they have been getting ready but now it’s time to move from planning stage to execution. Best as we can tell the company has done everything they can and based on communications with the company they are ready.

The fact is Tandem now owns the Death Star, the coolest toy in the toy chest, the most whiz bang tool in diabetes. Given that Evil Empire is struggling, has come under new leadership it’s possible that the rebels who now have the Death Star could use this weapon against its former owner. With this approval all the focus all the bright lights will be shinned not just on the Control IQ but the Dexcom sensor.

As we have said a thousand times while the 670G may not be the greatest thing invented but when the damn thing works patients love it. The problem which is well documented and well known in the diabetes community is the damn thing doesn’t work as designed and the biggest issue is the crappy sensor. A sensor which is not reliable nor accurate on consistent basis.

The reality is that Medtronic is down to their last bullet in the chamber, formulary position. That without that one advantage the choice for patients wouldn’t even be a choice, Control IQ would beat the 670G like a rug. This could happen anyway given the anticipation from the diabetes community and the reaction to the approval on social media.

And just to be clear there is NOTHING in the Medtronic pipeline that will be here soon enough to counter the enthusiasm for the Control IQ and quite frankly given their track record we have no idea when or if these new systems will get here.

We don’t see this approval adversely impacting Insulet too much although it does put added pressure on the company. Control IQ is the new standard in hybrid closed loop insulin delivery and Horizon now must meet this new and thankfully higher standard. Thankfully like Control IQ the Horizon works with the Dexcom sensor and just in case you haven’t figured it out by now Dexcom is also a big winner with this approval.

Before we close today a huge shout out to Tandem, this company which admittedly was on the verge of bankruptcy for the moment is now King of the mountain when it comes to insulin pumps. This turnaround will go down in diabetes history as one of the greatest turnarounds ever. This tops Bayer’s comeback in BGM although that was pretty damn good as well but was unfortunately unsustainable.

In the words of Momma Kliff “Damn good job now don’t screw it up.”