Here we go yet again
There are certain things we just love about our wacky world for as we continually state anything can happen and usually does. This is why we weren’t surprised when we learned that Sensile Medical who just signed a deal with OnDuo, the Sanofi Google joint venture, was acquired. Per a company issued press release;
“Gerresheimer will acquire the Swiss technology company Sensile Medical and thereby significantly expand its business offerings. For the Sensile Medical business, this will open up new opportunities and synergies with existing and potential new customers. The combination of the two companies will also enable Gerresheimer to enhance its Drug Delivery offering for its Pharmaceutical and Biotech partners, especially with new digital and electronic capabilities.”
Now we don’t know much about Gerresheimer but a quick glance at their webs site indicates the company is not a stranger to our wacky world. Which could explain why by extension they are entering the most competitive market in diabetes, insulin pumps. Perhaps they believe that OnDuo will do what no one else has done and make money in the insulin pump market.
So, let’s have a little fun today and speculate a little as to what OnDuo might have up their sleeve. Now it goes without saying that Sanofi and Google have gobs of money which is a good thing as their going to need a ton of it if they are to have any chance at all at making money. Given this fact it is quite possible that they could leave the reservation entirely and give away their system for free. They could go 100% at risk only being paid for better outcomes.
Medtronic has been pushing the envelope with their “value-based” contracts recently touting how payors are lowering costs because patients who use the 630 aren’t going into the emergency room. The company is so confident they have initiated a program that reimburses payors if their systems don’t deliver this benefit. And as we noted the other day we suspect that the 670G will deliver comparable if not better results then the 630.
Given that OnDuo is going the patch pump route two things are clear. First like everyone else who enters this market they believe their target will be insulin using Type 2 patients. Second, they also like everyone else believe they have a better mouse trap. Third, since they would be giving this toy away for free they believe payors will fall all over themselves to promote it. Ok that’s three things but who’s counting.
Listen if it’s a choice between the OmniPod the only other patch pump and a free Onduo patch pump the choice should be a no brainer. As we state all the time all these pumps, patch or tethered, do basically the same thing the same way. And given that Google has a relationship with Dexcom you can bet the farm the OnDuo system will work with the Dexcom CGM.
The one thing that should scare the bejesus out of everyone is neither Sanofi or Google is afraid to spend a large fortune so they can make a small one. And let’s be honest here the most important resource in this market isn’t building the damn toy that takes no talent whatsoever. No, the most important resource is big bucks and this is something Sanofi and Google have in abundance. Bucks they can spend not just finding a toy maker but the talent it takes to run a commercially viable toy company.
Big bucks also buys another important resource, time. Time to establish payor relationships and build an installed user base. The simple fact is OnDuo doesn’t have to make money from the get go. They are not under the same pressures as Insulet or Tandem.
Now both Insulet and Tandem should look on the bright side for as sure as the sun rises in the east and sets in the west everyone wants to be in the insulin pump market. Yep as we note often lots of people want to experience the enjoyment of having their heads bashed in by Medtronic. Even better for Insulet and Tandem they will pay handsomely for this privilege. Remember Roche paid over a billion bucks for Disetronic while JNJ paid over $500 million for Animas.
So here go yet again as Onduo joins Lilly, CellNovo and god knows how many others in the quest to do what no one has done before. They will attempt to avoid the fate suffered by JNJ, Roche, Smith’s Medical and Asante. The difference this time could be unlike the others they billions they can waste making this attempt. And in the case of Sanofi anyway they have proven they are exceptionally talented at wasting money.
So, have at it boys and girls.