Don’t worry be happy

Don’t worry be happy

To say that 2020 has been an interesting year is like saying the Sears, oops it’s now called the Willis Tower is a tall building. First came COVID which has been followed by protests, rioting and looting. Yet by the way things are going in the wacky world of diabetes one would think life goes blissfully along.

1. Yesterday Big Mouth, oops we meant to say Bigfoot announced they have closed their Series C $55 Million financing. Per a press release;

“Proceeds from the financing will support the completion of product development and FDA submission and clearance for the Bigfoot Unity™ System, part of the Bigfoot Unity™ Diabetes Management Program, a real-time, dose-decision support system for people with insulin-requiring diabetes relying on Multiple Daily Injection therapy, the most common form of insulin therapy for people with Type 1 and Type 2 diabetes. Bigfoot Unity utilizes proprietary, smart pen caps for basal and meal-time insulin dosing recommendations integrating Abbott’s FreeStyle Libre platform. FDA submission of Bigfoot Unity is anticipated in 2020 with a target launch soon after clearance.”

As we noted this FDA submission is expected later this month. Given that Libre2 from Abbott has not been approved and no one knows when or if it will be it will be interesting to watch how Bigfoot commercializes the Unity if it’s approved before Libre2. Frankly we aren’t expecting much, and neither should anyone else.

2. Last week Onduo announced that “Dr. Vindell Washington will step in as interim CEO to lead the company during its next stage of growth. Vindell joined Verily as chief clinical officer of Health Platforms in January. Dr. Josh Riff, who has served as CEO since the launch of Onduo in 2016 is leaving to pursue other early-stage entrepreneurial opportunities.”

We aren’t surprised by this news as based on what we know this is just the first of several announcements coming from Onduo. Stay Tuned.

3. Sticking with the digital health space and yes the play on words is intentional our friends at Livongo hit the capital markets with a $475 Million Convertible Senior Note offering. Per Livongo;

“Livongo estimates that the net proceeds from the offering will be $461.1 million (or $534.0 million if the initial purchasers exercise their option to purchase additional notes in full), after deducting the initial purchasers’ discount and estimated offering expenses payable by Livongo. Livongo intends to use approximately $60.3 million of the net proceeds from the offering to pay the cost of the capped call transactions described below. Livongo intends to use the remainder of the net proceeds for general corporate purposes, including working capital, business development, sales and marketing activities and capital expenditures.”

This extra cash might come in handy given what others in this space are planning. We have always said it’s just a matter of time before a Livongo competitor goes completely 100% at risk offering their program for FREE and only getting paid for producing real verifiable results. Based on what we know this day is sooner rather than later so again stay tuned.

4. In the what’s old is new again department AgaMatrix has changed their name to WaveForm Diabetes, named Rick Valencia Executive Chairman and CEO plus signed a deal with Bayer to develop a CGM for the Chinese market. Per the company;

“In addition to the new name and new leadership, Waveform Diabetes announced that it has entered into a commercial agreement with Bayer, the global life science enterprise, to provide innovative continuous glucose monitoring (CGM) solutions that help address unmet needs for patients in China. Under the new partnership with Bayer, WaveForm will develop a 15-day wear CGM while Bayer will be responsible for the commercialization, distribution, sales, and customer support in mainland China. WaveForm and Bayer will explore customized enhancements to the CGM to meet the needs of Chinese patients and physicians.”

WaveForm is perhaps one of the few Dexcom wannabes that stands a chance but so far anyway has yet to prove they can play in the same sandbox with either Dexcom or Abbott. Time will tell of course but for the near and mid-term future our money is on Dexcom and Abbott.

5. Finally a word on valuations after getting off to a very slow start the Three Amigo’s (Dexcom, Insulet and Tandem) and Livongo have seen an explosion in value that began back on March 13th. While this is great news for stakeholders we remain skeptical that valuations can continue at these levels. We hope we’re wrong but from what we hear the second quarter won’t be that great and third quarter is looking murky.

We are not backing away from our belief that Livongo is setting up as one the greatest shorts of all time. A belief reinforced by the recent rocket ship ride their stock has been on. The way we see it is absolutely everything has go right for Livongo to hit their stated projections and let’s be honest in this environment that’s hardly a given.