It’s basically over and out at Roche
The only word Diabetic Investor can use to describe the first quarter results for Roche’s diabetes care unit is awful. We could also use the word terrible, but we’re not sure that’s a strong enough statement to help everyone understand just how bad things have become at this once proud franchise. Not surprisingly the company is making matters worse by falsely believing that somehow a new meter or new platform will magically change the dismal market dynamics for glucose monitoring.
Frankly Diabetic Investor believes that Roche management does not have the capacity to understand or fix the problem. They have become so entrenched in their thinking (at least we think they are thinking, it’s hard to tell at times) and unable to take a realistic assessment of the situation. If management had any compassion at all they would sell the franchise and give someone else the chance to turn things around. This would be the decent thing to do because the way current management is running things it’s just a matter of time before they run the franchise completely into the ground and the Accu-Chek brand, already badly damaged, will become worthless.
The reality is the company seems content to follow old worn out strategies that didn’t work years ago and won’t work today. They seem perfectly happy to ignore what is really going on in the marketplace and live in a fantasy land where the world is flat and the tooth fairy is living with the Easter bunny. Looking at their history Roche is the classic definition of an addict, doing the exact same behavior but expecting a different result. Based on results the company unfortunately is addicted to failure.
Diabetic Investor would recommend management immediately check into a rehab facility but this likely won’t work as you must acknowledge you have a problem before you can fix that problem and this is something Roche has never done. When the last chapter is written the company will have no one but themselves to blame for taking this once dominate franchise and turning it into a mere shell of its former self.