Christmas Comes Early

Christmas Comes Early

There are times when something comes along that should shock you but because it’s happened so much in the past it no longer has impact. For Bears fans in Chicago this is their reaction to Jay Cutler throwing an interception at the worst possible time.  This was our reaction when we learned that Intuity Medical raised another $40 million last week. According to a company issued press release;

“Intuity Medical, Inc., a privately-held company developing innovative technologies for diabetes management, announced today that it has closed a $40M Series 3 round of financing. New investor PTV Healthcare Capital led the financing round, which also included affiliates of Luther King Capital Management as new investors along with existing investors: Accuitive Medical Ventures, Investor Growth Capital, U.S. Venture Partners, Venrock and Versant Ventures.

Intuity’s POGO® Automatic™ Blood Glucose Monitoring System, which received clearance from the U.S. Food and Drug Administration (FDA) in April 2016, is the first blood glucose meter and multi-test cartridge to provide automatic testing with lancing, blood collection and analysis in one easy step without the need for separate strips and lancets. By combining all of the necessary blood glucose testing supplies into a self-contained 10-test cartridge, POGO provides a convenient and discreet solution for millions of patients who need to regularly test their blood glucose in the management of their diabetes.”

When we first learned about this our initial reaction was are you kidding, this must be a joke. Keep in mind that Intuity has blown threw some $200 million and operates in a DECLING DYING market segment. Even nuttier the Pogo other than being an all-in-device is not by today’s standards that way cool or whiz bang.

Now the Pogo is a very nice device and we do see a place for it in the market had it come to market maybe 5 years ago. Yet, today the Pogo’s chances of being commercially successful are slim and none. Do we really need to state all the reasons why? Did we not accurately predict the demise of this market? Do we have to mention when it comes to glucose monitoring CGM is where it’s at? What was it we said this morning about people not paying attention?

Frankly we are not shocked that after blowing threw some $200 million and having little to show for it Intuity could find even more money. Just as we weren’t shocked that Sanofi (NYSE: SNY) basically paid MannKind (NASDAQ: MNKD) to go away. Perhaps events like these would have shocked us 10 years ago but we’ve been doing this for some 20 years now and it takes a lot to shock us.

At this point we could point out some obvious reasons why Intuity has an uphill battle but why bother. Let’s instead congratulate the people at Intuity as they get to fight on, they get a chance to see their dream become a reality. We honestly hope that we are wrong, that all this money will do is delay the inevitable, that their cost of goods is too high, that the sandbox they play in is already overcrowded that they have an ice cubes chance in hell of making it.

Listen we know what the investors think, they think some other company will come along and buy Intuity giving them a chance to cash out. Something that might have happened 10 years ago but not today. The smart money has left BGM and moved to CGM. The smart money knows that conventional glucose monitors are so yesterday. The smart money knows better.

At the end of the day we are not shocked here. Listen over the past few weeks we’ve seen the Chicago Cubs after 108 years win the World Series, a few days later Donald Trump was elected President of the United States and we can swear when we looked out our window this morning a folk of pigs flew by. So Intuity raising another $40 million, after blowing threw $200 million, is hardly a surprise. As Momma Kliff used to say; “Sometimes you just should accept stupidity, don’t even try to understand it as it will only drive you crazy.”