Good Luck

Good Luck

Yesterday the City Of Hope announced that thanks to a gift of $50 million from the Wanek family they want to find a cure for diabetes in six years.  This obviously is a very generous gift and there is no question that the City of Hope has assembled an outstanding team. Now we don’t want to seem crass but we have been done this road before, actually multiple times. About 15 years ago, Diabetic Investor sat down with two of the most respected diabetes researchers in the world who looked directly at us and stated; “David, in five years there will be a cure for diabetes, besides what we’re doing with our research, there are just too many very talented people working on this an and let’s face it it’s a huge problem with lots of money being thrown at it.”

Needless to say, here we are 15 years later and well, no cure.

Yet these grandiose statements are not limited to organizations like the City of Hope, back in January 2010 when the JDRF partnered with insulin pump maker Animas, a unit of Johnson and Johnson (NYSE: JNJ) Alan Lewis, PhD, who at the time was the president and CEO of JDRF, stated; “JDRF will provide $8 million in funding over the next three years for this project, with a target of having a first-generation system ready for regulatory review within the next four or so years.”

Just in case anyone has forgotten this is now 2017 and while the JDRF may think the recently approved 670G from Medtronic (NYSE: MDT) is an artificial pancreas it’s not. Yes, it is an advancement in insulin pump technology but no it is not by any means an artificial pancreas, heck even the folks at Medtronic acknowledge this.

Yet the JDRF doesn’t want just to take credit for developing an artificial pancreas, something they did not do by the way. They also want to take credit for the recent decision by Medicare to cover CGM, again something they did not do. Now did the JDRF help in both instances for sure. But the truth is they had lots of help and while they may not want to acknowledge this the 670G would have come along without the JDRF and same can be said about the decision to cover CGM.

Basically, the JDRF is using these two events as … wait for it… fund raising purposes. Listen we get that but why not share the credit for these events with the people who really should get it, namely Medtronic and Dexcom (NASDAQ: DXCM). Why not call the 670G what it really is and not what it is not? Why not acknowledge the very heavy lifting done by Dexcom?  We’ll tell you why they want money.

In the old days, the JDRF was notorious for trotting out Pippy Longstocking, yep that cute little blonde girl who has Type 1 diabetes. Pippy, who was cute as a button, would tell her story, the burden of managing her diabetes. The constant finger sticks, fears of hypoglycemic events, etc. Pippy holding back tears tells how she dreams of the day when she won’t have to do all this. How one day in the future there will be a device called an artificial pancreas, a device which will allow beautiful and sweet Pippy to grow up, get married and of course have beautiful children.

This pitch and it was a cleverly designed one worked. The only problem was everyone, both the folks who donated along with industry, got a tired of waiting for the JDRF to actually produce anything other than grandiose statements. People started asking where is all this money going, just what to do we really have to show for it. Best of all these people stopped or limited their donations. Simply put they were tired of all the false promises. Like a CEO who gets canned for poor performance, the JDRF should have known better to under promise and over deliver than vice versa.

So along comes these two events, events which the JDRF did play a role in, but by no means are they solely responsible for either. Events which they are taking undo credit for because they want to show donors that their money has not been wasted that they are getting something done. That they should continue to donate.

This is not just reprehensible behavior, it’s irresponsible behavior that will come back and bite the JDRF. Here’s why. When the 670G was approved, the JDRF issued a statement with the following headline;

“JDRF Celebrates FDA Approval of Artificial Pancreas System”

Now we’re not sure how the JDRF defines an artificial pancreas but in the main stream media which picked up this story hears artificial pancreas and thinks – slap it on, turn it on and forgot about it. This is not what the 670G, not by a long shot and too their credit Medtronic has never called the 670G an artificial pancreas. Unfortunately, the JDRF kept shooting their mouths off and main stream media ate it up. The day that cute little Pippy was waiting for had arrived.

These irresponsible statements have created a huge problem for Medtronic and the entire insulin pump world. There is no way the 670G can live up to the hype, as we have stated many times it is an advancement but it is not an artificial pancreas. When consumers, the people who will actually use the damn thing see this, that it is not slap it on, turn it on and forget about it technology will say WTF.

But that’s only half the problem, what about Animas, Insulet (NASDAQ: PODD) and Tandem (NASDAQ: TNDM), all of whom are working on their versions of an artificial pancreas. Were not the irresponsible statements made by the JDRF an out and out endorsement of the 670G. Did not the JDRF basically say hey the 670G is the system. Yep nothing like throwing Animas, Tandem and Insulet under the bus and you can bet the JDRF will have brass ones as when they go back and ask these companies, which they just thrown under the bus, to donate. Momma Kliff has a word for that; CHUTZPAH.

Listen we hope the City of Hope is successful as we have also said from day one there is nothing we’d love more than to be put out of business. Let’s hope, and yes, the play on words is intentional, they learned a valuable lesson from the JDRF on what not to do. Let’s hope they take credit when they deserve it and share credit when that is appropriate. Let’s hope, they do not unjustly take credit. Most of all let’s hope they become another word Momma Kliff used, let’s hope most of all they are a MENSCH.