This morning Tandem announced they would conduct their fourth quarter and full year conference call on Monday February 24th. As we have noted we don’t expect the launch of the Control IQ to materially impact results. However now that the Control IQ has passed through the FDA and is now in the hands of patients, we have some thoughts on the impact the system will make going forward.
First and foremost the biggest impact will hit Medtronic and hit them hard. Frankly we aren’t the least bit surprised that patients who used the 670G are converting to the Control IQ. These patients already understand the benefits of a hybrid closed system. These patients also understand the importance of having an accurate reliable sensor which as we have noted before is the biggest issue with the 670G. Patients on the 670G may not be thrilled with the pump design but they are less than thrilled with performance of the sensor. As we keep saying when it comes to hybrid closed loop the sensor is the straw that stirs the drink.
Medtronic should thank their lucky stars the Control IQ was not approved early in the fourth quarter, traditionally the strongest quarter for pump sales, as had that happened this exodus would have been much worse. Even so, the exodus is occurring and will likely adversely impact future Medtronic results.
Second and again these are early reports Tandem appears to be executing well. So far anyway we haven’t heard too much in terms of any major customer complaints. In fact, the opposite seems to be occurring with several customers commenting on the solid service they have been given. Tandem said they were getting ready and so far, anyway they seem to be.
Third, even with the strong demand and high level of interest there are some hurdles to overcome. An interesting dynamic is occurring with endocrinologists. Some of the younger endo’s or those who have Type 1 themselves are embracing Control IQ. Yet there is a group of older endo’s who seem content with the 670G. We attribute this gap to one simple fact; these older endos don’t want to learn yet another system. They have been dealing with Medtronic for years and have a comfort level with the company.
Unfortunately these endos tend to dismiss the many complaints they get from patients using the 670G. Since they themselves aren’t using the system they chalk up these numerous complaints to patients being snarky when in fact it’s the endos who are being snarky.
Fourth, it’s way too early to know if the demand for Control IQ is adversely impacting Insulet. We don’t think so, but time will tell.
Fifth patients on the Control IQ for the most part like the system. As we noted there are some limitations with the system yet so far anyway these limitations don’t seem to be a problem. Not surprisingly the patients who have converted from the 670G are impressed with the performance of the Dexcom sensor.
Yes, these reports are early but so far so good.
Now for some great news. As we all know Momma Kliff is wise and not surprisingly has developed a fan club. Therefore we have decided to give Mom her very own platform to share her wisdom. Beginning today Mom will be posting on social media what we are calling Momma Kliff Monday’s. Yes, we know it’s technically Taco Tuesday but Mom being ever respectful didn’t want to launch her new forum right after the Kobe Bryant tragedy.
You can find Mom on Facebook, LinkedIn and Twitter just look for #diabeticinvestor #MommaKliffMondays or #mommakliff – enjoy everyone and thanks for loving Mom as much as I do.