Over the past few months we have chronicled the many issues facing Tandem (NASDAQ: TNDM). What seemed somewhat odd was how the company has reacted to these issues. From all outward appearances, the situation was not just bleak but getting rather desperate. Year to date shares have fallen 68%, the company is running out of cash and has more than $80 million in debt. As of yesterday, they had a market cap of just under $35 million.
To make matters worse Tandem plays in a highly competitive sandbox. Even with Medtronic’s (NYSE: MDT) recent issues with the 670G this system is sucking the air out of the insulin pump balloon. Physicians and CDE’s are not oblivious to the issues facing Tandem and are loath to recommend that patients go on a Tandem system for fear the company will not be around to support these patients.
Yet in that beautiful city of San Diego there is nothing but sunshine. The way the company tells it yes, we have some issues but don’t worry be happy everything is just fine. Even though the company has been shopped to everyone and anyone with no takers. Even though they have been desperately trying to raise additional capital and again have come up empty. No according to the company everything is just fine.
To put this in terms everyone can grasp this would be like a resident of Miami or southern Florida saying that Hurricane Irma a category 4 hurricane is nothing more than a thunderstorm that will pass and life will go on as it was before the hurricane hits.
All along Tandem’s management team and their Board of Directors, the people who have put Tandem in this mess, have been acting as if nothing is wrong. Even with the company running out of money no steps are being taken to conserve cash. This would be like the Governor of Florida telling residents to enjoy the beaches and have a good time when Irma arrives.
Given this set of circumstances we weren’t that shocked when we read the following press release;
“Levi & Korsinsky announces it has commenced an investigation of Tandem Diabetes Care, Inc. (TNDM) concerning possible breaches of fiduciary duty. “
Now companies getting sued is hardly shocking as next to the NFL suing is America’s favorite sport. Nor are we surprised that this firm is trolling for victims to see if there are enough stakeholders for a class-action lawsuit. This too happens all the time.
The real shame here is this did not have to happen, that this whole mess could have been avoided. Listen we know people get tired of hiring it but talent is the most important element when it comes to running a commercially viable insulin pump company. And not just management talent but a Board of Directors who don’t stick their heads in the sand and are willing to take action when action is needed. Quite frankly the lack of action by Tandem’s Board is appalling.
One more thing while we’re on the subject of sticking their heads in the sand, the West Coast Mafia should take note of what’s happening here. These folks who were fawning over the way cool whiz bang iPhone like design of the Tandem pump. These people who ignored what was happening and continued to write about Tandem as if they were the thing going in the insulin pump world. Listen we understand that there is a fair amount of bias as most of the West Coast Mafia sees Medtronic as the evil empire and Tandem as the little guy who gets picked on.
Well we’ll say this Medtronic even with its issues is not living their patients in a lurch, they are not hanging them out to dry. Tandem not only has a responsibility to their stakeholders they have a responsibility to their PATIENTS. Think of the impact on these patients lives when Tandem goes under, this is not some toy they are using this is a device that keeps them alive. Talk about being hit with a Category 5 hurricane.