Earnings Seasons- Lots of questions, not too many answers

Earnings Seasons- Lots of questions, not too many answers

Once again it’s earning season and once again we’ll be bombarded with a variety of explanations as to why diabetes companies or companies with diabetes units aren’t doing so well. Bank on the fact blood glucose monitoring companies will use competitive bidding as an excuse for poor performance and the reason there have been or about to be even deeper cost cutting measures. Diabetic Investor is also anxiously waiting to hear from Bristol Myers Squibb (NYSE:BMY) as we might just learn why after spending billions to acquire Amylin they aren’t actively promoting Bydureon a drug which would have  blockbuster potential if the company actually decided to promote it.

The questions surrounding the insulin companies, Lilly (NYSE:LLY), Sanofi (NYSE:SNY) and Novo Nordisk (NYSE:NVO) are just as intriguing. Will Lilly finally publicly admit that they have given up on developing innovative therapy options and that their diabetes strategy is now one of developing copycat, me-too drugs which are sold at deep discounts? Perhaps Sanofi can explain once and for all just what their diabetes strategy actually is and we certainly hope it’s something other than riding the Lantus gravy train, a train which is headed straight for derailment with the coming generic versions of the drug. Maybe Novo will shed some light as to what they plan to do now that Tresbia® is facing a major delay or how they plan to deal with their own patent expiration issues.

Although we doubt many will be listening when MannKind (NASDAQ:MNKD) reports this could be one of the more interesting calls of the summer as rumors have been swirling that Novo or Sanofi is about to buy the company. Now Diabetic Investor believes these rumors are just that, rumors and that there is no real substance to any of this chatter.  Still that won’t stop Al Mann from saying that company is oh so close to having a partner and that Afrezza is the greatest thing since sliced bread and soft soap.

Insulet (NASDAQ:PODD) just might be a call worth listening to as the company has begun shipping their new Eros pod to existing OmniPod patients. Now this may not seem like a big deal but actually it’s a huge deal as now that they begun converting their installed user base to the new pod there is no turning back. Based on early reports from the field, and keep in mind these are very early reports, the conversion process has gone well. Although patient reaction is somewhat mixed, while there are some who love the new smaller pod, others are less impressed as it’s basically the same thing they had before in a smaller package.

GlaxoSmithKline (NYSE:GSK) who is now back in the diabetes market could also be an interesting call. Will the company gloat a little with the recent decision by the FDA that Avandia isn’t really a bad drug after all; and what about Albiglutide which is now awaiting approval at the FDA. Wouldn’t be ironic after suffering through the Avandia controversy GSK sees Albiglutide approved, aggressively promotes the drug and steals the long-acting GLP-1 market from Bristol.

Frankly Diabetic Investor isn’t expecting answers or at least real answers to our questions. The fact is the diabetes market whether it’s drugs or devices is in the midst of change and turmoil. Device companies, BGM companies in particular are now in full blown panic mode now that competitive bidding is here. Drug companies with the possible exception of Merck (NYSE:MRK) are wondering what the FDA will do next and how to deal with coming wave of patent expirations.

Albert Einstein once said; “Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world.” This is exactly what the diabetes world needs today, imagination not more the same old, same old. We’ve said it before and we’ll say it again, while we understand the need for some amount of cost cutting we have never seen a company cut their way to growth.  Any company with an already approved, innovative drug should be taking full advantage of the craziness that is going on that the FDA and not fumbling about without a clear strategy.  Companies facing the coming wave of patent expirations should wake up and realize that unless they do something different payback will be a bitch as payors will press the generic button and demand price concessions.

We’re hoping for not just for answers but action, sadly we doubt we’ll see either.