Here we go again

Here we go again

As everyone prepares to head off to see family and friends the wacky world has given us one more gift before the Thanksgiving holiday. According to a report published online at Bloomberg Bayer is once again exploring the sale of their beleaguered diabetes device unit. The report states; “Bayer, based in Leverkusen, Germany, is working with Credit Suisse Group AG (CSGN) on the potential sale, three of the people said, asking not to be identified because the process is private. Private-equity firms such as Cinven Ltd., EQT Partners AB, KKR & Co. (KKR) and Triton Advisers Ltd. may consider bidding for the unit, which could fetch between 1 billion euros and 2 billion euros ($2.5 billion), the people said.”

Keep in mind this is the same unit that was at one time going to be bought by Sanofi (NYSE:SNY). Yes there was a time when Sanofi was about to jump squarely into the blood glucose monitoring space. Yes this is the same company that launched the way cool but now way dead iBGStar. As we reported back at that time Sanofi made an offer, only to withdraw the offer and then come back again with another offer and then again withdrew that offer.

Now we’d like to say that Sanofi came to their senses and realized that there was a reason Bayer was selling and maybe it wasn’t such a good idea to spend billions for this struggling unit in an ultra-competitive commodity market that had little chance of ever becoming vibrant again. We’d like to say this but we can’t as quite frankly this is why Sanofi is in such a world of hurt as they just can’t execute.

Keep in mind that Bayer isn’t the only company looking to unload their diabetes device unit as Abbott (NYSE:ABT) and Roche have also shopped their units yet could not find a serious buyer. As Diabetic Investor has been reporting unable to sell their unit, Roche has now decided to spin this off into a separate privately held company. Abbott for their part continues to deny the unit is for sale but it is well known within the industry that the company would jump at the chance to sell if they could find a buyer.

Which brings us back to Bayer and this second go at selling their diabetes device unit. A unit which currently occupies the number four spot in terms of market share behind market leader Johnson and Johnson (NYSE:JNJ), Roche and Abbott. A unit which has seen its better days and has already arisen from the dead once already. But unlike a cat this unit does not have nine lives. Frankly if Credit Suisse can fetch $2.5 billion for this unit they deserve every dime they will earn in fees.

Yet as we have noted on many occasions when it comes to the wacky world of diabetes anything can and usually does happen even when it doesn’t make any sense whatsoever. Yes this is the same wacky world which brought us the wonderful Sanofi MannKind (NASDAQ:MNKD) partnership and the Sanofi Medtronic (NYSE:MDT) partnership. This is also the same world that witnessed a partnership between Lilly (NYSE:LLY) and Amylin, which was followed by a messy divorce only to see Amylin be bought by Bristol Myers Squibb (NYSE:BMY) and their partner AstraZeneca (NYSE:AZN) who then bought out Bristol and now owns Amylin outright, at least as of today anyway.

Given these facts maybe it possible to sell the number four player in the market. A market which has transformed itself into a full blown commodity style market where price trumps performance. A market which is barley growing and in some cases contracting. The fact is the glory days for BGM have come and gone never to return. And as the fairy tale goes all the kings’ horses and all the kings’ men cannot put Humpty Dumpty back together again.

The bottom line here is that the party is over for the once mighty BGM players, thanks for the wild ride and please turn off the lights when you leave.

Have a happy, healthy and safe Thanksgiving holiday everyone.