It is what it is

We haven’t quite decided yet if the redundancy of these earnings calls is a good thing or not, but as has been said before it is what it is. Novo Nordisk this morning followed this pattern with one exception, and note we did hoop on the call a little late but based on the earnings press release and the presentation they did NOT pull full year financial guidance. This either makes them brave or stupid we won’t know which until the year is over.

Other than that results were positively impacted due to COVID and stocking up. The company did thank their employees, suppliers and assured everyone that there will no interruption in the insulin supply. Just for good measure and little PR they highlighted their financial assistance for patients adversely impacted by COVID.

Also in the redundancy department the company continues their transition with GLP-1 sales being the driver while insulin sales becoming secondary.

Speaking of GLP-1 sales and continuing the redundancy as we anticipated sales of Rybelsus® their oral GLP-1 came in at $33 million for the quarter meeting expectations. As we noted before COVID early uptake of Rybelsus while important doesn’t tell the real story. The real story will come later as we’ll see if patients remain on the drug or fall off due to its complex dosing regimen. Now that COVID is here it will become more difficult to gauge whether Rybelsus is successful or not for as we noted physicians and patients have become reluctant to begin new therapies during this crisis.

Not that we needed any more redundancy, but the real story won’t emerge until later in the year when we see second and third quarter results.

Perhaps we should be grateful for all this redundancy as there were no negative surprises. Not to discount todays results but in the grand scope of things they aren’t as important as they normally are given COVID. Like everyone else Novo is managing this crisis the best they can navigating the difficult waters and hoping that smooth sailing lies ahead. We’d like to add greater analysis, but the fact is it is what it is.

Later this afternoon we likely will get away from the redundancy when Livongo reports. The stock has been on a roll recently approaching highs not seen since their IPO. After adding over 12% yesterday the stock is up over 50% in the last 30 days. Investors seem to believe that Livongo is one of the few beneficiaries of COVID given the greater use of telemedicine and remote patient monitoring.

Knowing Livongo as we do, they will likely take full advantage of this misconception touting their way cool whiz bang platform as the solution. We further suspect they will place a heavy emphasis on how this crisis has created more interest in their platform. Hey, these people are many things but stupid is not among them. They have been given a gift and have no plans on returning it.

The question we have that likely won’t be asked or answered is how COVID will impact new patient adds going forward. Now that employees are working from home and employers have greater concerns will these employers continue to add the Livongo platform. As we have said before from the perspective of the employer there is no risk to sign on with Livongo as the costs aren’t incurred until employees begin to sign up. However with so much economic uncertainty the question becomes will employers allocate resources to a program that increases their costs and doesn’t immediately produce cost savings.

Right now employers, many fighting to stay in business, are in the capital conservation mode not in the let’s spend even more money mode. Many have already announced sweeping layoffs, and more are on the way. While we know Livongo has a fondness for convoluted math Captain Obvious knows that with less people employed Livongo has an even greater hurdle to overcome with fewer possible new patient adds.

Still this should be one of the more entertaining calls which will only follow a portion of the redundancy we have seen already. And let’s be honest we could all use some entertainment even if it is fiction.