It’s just a matter of time

It’s just a matter of time

It’s getting ever more difficult to find a ray of sunshine among the dark clouds surrounding Tandem (NASDAQ: TNDM) as they reported earnings this afternoon. Sales DECREASED 30% compared to the first quarter of 2016, with pump shipments also falling from 4,042 in the first quarter of 2016 to 2,816 in the first quarter of this year. Most importantly as of March 31, 2017 the company had $54 million in cash and a quarterly burn rate of $28 million. Doing some quickie math that means they have enough cash on hand to stay alive maybe two more quarters.

While the company reaffirmed their financial guidance for the full year that’s almost a moot point as the chances of them being a going concern for the full year are dwindling by the day. Simply put either the company raises more money, a lot more or gets acquired otherwise its hasta la vista baby. There is no way in hell they can withstand the mounting financial pressures they face and remain viable without one of those two options happening.

So, what did the company have to say about all this? Well for the first half of the call CEO Kim Blickenstaff went into a lengthy rant against the evil empire Medtronic (NYSE: MDT). There was a time given the length of this rant that we weren’t sure if this was a Tandem call or a Medtronic call. Simply put Kim was trying to position Tandem as the rebels up against the evil empire and their new death star, or as it’s known in the pump community the 670G.

Now we hate to break the news to Kim and everyone else at Tandem but the problems they face are not because of Medtronic, they are because it’s not a good idea to lose money on every system sold. Medtronic did not create the financial issues facing Tandem, Kim and his team did that. Even worse if you’re going to blame the competition for the problems you yourself created it would help if you told the truth and didn’t lie every time your lips moved.

The most glaring misstatement was Kim’s statement that the launch of the 670G is delayed. While the 670G is not available to everyone just yet, it is in the initial launch and quite frankly Medtronic should be commended for not rushing the 670G into the market. As we have noted while the 670G is not an artificial pancreas it is an advancement in insulin pump technology. Also, as we have noted the performance of the 670G is what we expected when the sensor works patients love it, when it doesn’t it’s just another pump.

We also found it laughable that Kim asserted that the Tandem pump was superior to the Medtronic pump because of the patients who converted from an existing system to a Tandem system most came from Medtronic. Really Kim. Would that not make sense since Medtronic has more patients than anyone else. Seriously we don’t what they are smoking or drinking in San Diego but we want some as whatever it is it does an outstanding job of making a person lose complete touch with reality.

Here are the facts, Tandem is not that tiny band of rebels up against the evil empire and their death star. Kim is no Luke Skywalker who will get in his x-wing fighter and using the force destroy the death star. Simply put Tandem and its Board of Directors are completely inept and have no clue how to run a commercially viable insulin pump company. The problems with the company have been obvious from the beginning and had this team had any clue whatsoever they would have worked at fixing these problems rather than worrying how big their bonuses were.

We’re not sure if this is hubris, chutzpah, stupidity or a combination of all three. Blaming Medtronic for the problems this team of fools created is like the Indians blaming a rain delay for losing to the Cubs in the World Series. Unlike the Indians who put up a valent effort against a better team, Tandem is crying because they aren’t even in the same league as Medtronic.

Listen anyone who’s been reading Diabetic Investors knows we have not always been kind to Medtronic. Yet unlike Tandem Medtronic understood they had a problem and brought in a very capable team to fix the problems. Are they perfect, not by a long shot. Are they the evil empire that everyone else in the insulin pump space makes them out to be? Nope. The fact is Tandem came to the game with a bunch of minor leaguers and went against a team of major leaguers.

Folks they can blame Medtronic all they want but that won’t change the fact they have just $54 million in cash and even with cost cutting they aren’t going to survive without a major cash infusion or being bought. Should by some miracle the company get this money or be acquired it would also be a great idea to get rid of the team that created this problem.

These people don’t deserve any bonuses or rewards.  What they deserve is all the punishment that Momma Kliff can muster and as we noted earlier today she is one tough cookie. The truth is these people had their chance and they blew it. BIG TIME!!!!