Enjoy the ride

Enjoy the ride

Welcome to hump day, the start of the NHL playoffs and another wacky day in this wacky world we affectionately call the business of diabetes. In no particular order of importance here are just recent news items that caught our eye.

Although we would never say that a recall is a good thing but how a recall is handled says something about the quality of an organization and Dexcom (NASDAQ: DXCM) continues to shine. On Monday the company announced they would be voluntarily recalling receivers due to a minor alarm issue. According to a company issued press release;

“The notification constituted a voluntary recall and applied to those Dexcom G4 Platinum Receivers, Dexcom G4 Platinum Pediatric Receivers, Dexcom G4 Platinum Professional Receivers, Dexcom G4 Platinum with Share Receivers, Dexcom G4 Platinum with Share Pediatric Receivers and the Dexcom G5 Mobile Receivers that are experiencing problems with audible alarms and alerts. There is no reason for patients to return receivers to Dexcom that are functioning properly.”

Yet the press release is just the latest in series of steps the company has taken to inform their customers who might be impacted by this issue. Or put more simply the company did not try and hide anything quite the contrary they were very proactive in reaching out to patients. A refreshing approach given how others in this space have approached recalls.

The bottom line here is that when it comes to medical devices, whether it’s a simple glucose meter or complex insulin pump, recalls happen it’s the nature of the beast so to speak. The difference between companies is how they deal with these recalls and once again Dexcom shows why they are the model for how a diabetes device company should be run.

Speaking of device companies our friends at Livongo are certainly smiling today as the company has raised more capital. According to a press release;

“Livongo Health, the leading consumer digital health company focused on chronic conditions, announced the completion of a $44.5 million Series C financing round.  The new funding round includes Merck Global Health Innovation Fund; Cowen Private Investments; Sapphire Ventures; Zaffre Investments, the investment arm of Blue Cross Blue Shield of Massachusetts; Wanxiang America Corporation; and others as well as existing investors General Catalyst, Kleiner Perkins Caufield & Byers (KPCB), DFJ, and 7wire Ventures.”

For those who may be unfamiliar with Livongo it is one of the many companies with a way cool whiz band cloud enabled glucose meter. Yet what this recent round of funding shows is that when it comes to the race for supremacy in the interconnected diabetes management (IDM) space technology is second to capital. Not to rain on Livongo’s parade but the IDM space is quickly following the conventional BGM path of becoming a commodity where all the whiz bang way cool cloud enabled systems do basically the same thing the same way.

As we noted many times in the past the winner in IDM won’t necessarily be the company with the “best” technology. No the winner here will be any company that can successfully navigate choppy seas as reimbursement transitions from fee for service to outcomes based. Frankly when it comes to IDM it’s a lot like the NCAA basketball tournament, survive and advance. And in this business in order to survive and advance capital is critical. So congrats to Livongo as they get to advance.

We’re not sure if they are advancing or retreating but it sure has been fun watching shares of MannKind (NASDAQ: MNKD) trade over the past month or so. Now uncoupled from our wine drinking friends in France the company is getting set to announce how they plan to commercialize Afrezza all by themselves. How this company with a host of financial issues and passionate fan base will do what Sanofi (NYSE: SNY) couldn’t or more like was incapable of doing, that is make Afrezza more than a niche product, will be a neat trick.

Listen we’re glad that MannKind is no longer under the evil spell of the nasty Sanofi witch. Still the company has a daunting task ahead and unfortunately even with a major infusion of capital we’re just not sure they can survive. The reality is Afrezza is what we said it was; nothing more than a niche product that might generate millions but not billions in sales. And the fact is a capital infusion won’t change that fact.

Speaking of things that won’t change very much this morning our friends at Medtronic (NYSE: MDT) released data from their OpT2mise study. According to a press release;

“Medtronic plc (NYSE:MDT), the global leader in medical technology, today announced the publication of new data in Diabetes, Obesity and Metabolism from the continuation phase of the OpT2mise study, providing further clinical evidence in support of insulin pumps for people with insulin-requiring type 2 diabetes.  The OpT2mise study is the largest randomized controlled trial to compare the efficacy and safety of insulin pump therapy versus multiple daily injections (MDI) for poorly controlled type 2 patients.

Study findings showed that MiniMed® insulin pumps safely provided significant, sustainable and reproducible improvements in glucose control in comparison to MDI. At 12 months, the group that crossed over to MiniMed insulin pumps after an initial six months of MDI doubled their A1C reduction (a blood measurement used to indicate glucose control) from 0.4% to 0.8% while using 19% less insulin.”

Now we hate to break the news to folks in Northridge but this is hardly news, most everyone knows that insulin pump therapy is very effective. That yes insulin using Type 2’s on a pump typically have better outcomes than non-pumpers. As we have said many times the reason more insulin using Type 2’s don’t use an insulin pump has nothing to do with outcomes. The reason there are not more insulin using Type 2’s using pumps is the complex infrastructure connected with insulin pump therapy.

Frankly we aren’t sure what’s more complex navigating the maze to get an insulin pump covered by a patient’s insurance plan or balancing the federal budget. But getting the pump covered is just the beginning, next the patient has to be trained on pump therapy. But we’re not done yet the patient must then be supported.  And this is no small task as ask any physician and they will tell you that insulin pump patients require a ton of support, time they are not reimbursed for.

The reality is it’s well proven that insulin pump therapy is very effective and it doesn’t matter who the patient is, a Type 1 or insulin using Type 2. The other reality is greater insulin pump adoption has nothing to do with outcomes, heck less than 30% of Type 1’s use an insulin pump. No the reality here is getting a patient on a pump and then supporting them is and will continue to be the obstacle to getting more patients to adopt insulin pump therapy. Ironically this is one example where better outcomes just don’t seem to matter and the business of diabetes takes over.