It just keeps getting wackier

It just keeps getting wackier

Yes Diabetic Investor is rolling today and the hits just keep on coming. Multiple sources have informed Diabetic Investor that Bayer Diabetes, yes the unit that supposedly is being sold to Panasonic/KKR for a billion or more, is getting set to undergo yet another reorganization. At first we thought there was no way this could be true as it just didn’t make any sense. Why would Bayer reorganize a unit that’s about to be sold? Call us crazy and many have but would it not make better sense to let Panasonic/KKR reorganize the unit once they own it?

Given that Bayer has tried to sell this unit before, a sale which feel through not once but twice, an occupational hazard when the buyer is that three ring circus known as Sanofi (NYSE:SNY), we thought perhaps this sale to Panasonic/KKR may also be in trouble. That Panasonic/KKR came to their senses and decided that maybe just maybe it’s not such a good idea to spend a billion bucks on a unit that is slowly sinking into the abyss. That perhaps it’s better to buy Abbott’s (NYSE:ABT) or Roche’s struggling units which as bad as they are; are in much better shape than Bayer’s unit. Or maybe they had a moment of true lucidity and decided not to enter the BGM market. Honestly Diabetic Investor can think of much better ways to blow a billion bucks, they could be like Al Mann and blow that money on developing yet another inhaled insulin.

As it turns out the reorg is for real and the sale seems to moving forward as well. Once we learned this our thoughts turned to exactly what left’s to reorganize. Now Diabetic Investor does not know the exact head count at Bayer but given previous reorganizations, which in BGM really is code for cutting costs, it’s safe to say there are more empty cubicles at Bayer Diabetes than there are actual humans.  Since Panasonic already makes the strips for Bayer they cannot cut manufacturing costs. Since they have virtually no R&D going on no cost cutting there either. Marketing is practically nonexistent so no savings there either. About the only place left to cut is sales which begs the question; after all this cutting how the heck will they sell any product.

Given that its management that came up with this reorg it’s a safe bet to say their jobs are safe. So again we have to ask just what’s left to reorganize, there are no deck chairs left on the Titanic.

Had we not been around this wacky world for nearly 20 years we’d be saying this reorganization is crazy, that it serves no useful purpose other than giving management something to occupy their time. Listen not much else is going on and heaven knows management cannot spend all their time deciding what color toilet paper goes in the executive bathroom so what the heck.

Keep in mind that today is not April Fool’s Day nor can we say that it’s Christmas in July although in many parts of the country it sure looks and feels like Christmas. Nope today is just another day in the wacky world of diabetes and we’d like to say it doesn’t get much wackier than this but the day is far from over. Stay tuned!!!