Crazy Idea

Over the years we have documented many of the Sanofi diabetes partnerships that have failed. MannKind and AgaMatrix are two that quickly come to mind but there have been many others including the latest with Lexicon. Now if there is one thing, we have learned other than Sanofi is the worst partner in diabetes and believe us that’s saying something. Sanofi in one respect is an great EX-partner as get a load of this from a Lexicon release;

“Under the terms of the settlement, Sanofi will pay Lexicon $260 million, of which $208 million is payable upfront and the remainder is payable within twelve months, and coordinate with Lexicon in the transition of responsibility for ongoing clinical studies and other activities.”

This falls in line with Sanofi paying MannKind millions after that partnership was terminated and proves that Sanofi when it comes to diabetes anyway is not a pharmaceutical company but a bank that has a knack for bad deals. Bad deals that cost Sanofi millions in termination payments. But the best is yet to come.

Listen just about everyone knows the Sanofi Verily partnership isn’t going all that well. We also know that Onduo is valued at $2 Billion. Throw in a few pesky facts like Onduo is going nowhere in a hurry or that Sanofi has a new CEO or that Livongo has gone public and this could well set the stage for either Sanofi’s biggest diabetes failure ever or the luckiest moment ever.

Since this partnership started, we have heard of both parties wanting to buy the other out. This is cump change for Verily, but a billion bucks is serious money for Sanofi. Yet now that Livongo has gone public these two unhappy campers can become two very happy campers by spinning off this unit on the public, who as we have seen with Livongo has a strong appetite for companies that do nothing but lose money.

Digital health even after the Livongo pump and dump is still hot, maybe not hot like Georgia asphalt anymore but certainly as hot as freshly made coffee in one of those swanky way cool whiz bang coffee makers. Yep Verily and Sanofi can dump this dog on the unsuspecting public saying that while Livongo may not living up to expectations Onduo has the magic potion.

Listen if Livongo could reach a market cap of over $4 billion, which is now about $2 billion, who’s to say Onduo can’t get a cool $2 billion. This is the perfect out for two partners in an unhappy marriage. Each gets paid, each gets to go their separate way plus the Onduo management team makes a tidy sum. How can anyone walk away unhappy?

This choice is a hell of a lot better than either partner buying out the other. Sanofi may be that stupid but Verily? Then come to think of it Verily was dumb enough to partner with Sanofi so who the hell knows.