JP Morgan – Monday Morning

JP Morgan – Monday Morning

This morning the annual JP Morgan Healthcare Conference got off to a rousing start with a presentation by Vivus (NASADAQ: VVUS). Vivus is in a three way race with Arena (NASDAQ:ARNA) and Orexigen (NASDAQ:OREX) to be the first company to have an obesity medication on the market. The company got a major boost toward this goal when at the end of last year they submitted Qnexa to the FDA. During this morning’s presentation the company also noted they will be seeking a diabetes and sleep apnea application as well.

While Qnexa has shown solid results in clinical trials the major issue Diabetic Investor has with the drug is the relatively low completion rate of these studies. The company notes that the completion rates are in line with other drugs being studied for obesity but compared to other drugs, albeit with non-obesity applications, these rates are below normal. Still Diabetic Investor believes Vivus being first to get Qnexa to the FDA has a major advantage over Arena and Orexigen.

Turning to diabetes devices the Roche presentation was a half hour of pure boredom. The company pontificated about the dismal environment they are facing and really didn’t say anything of value. When asked in the breakout session after the session what plans they have for their Accu-Chek line of diabetes products, particularly here in the US, the company acknowledged they have lost share but seems absolutely clueless as to what they are going to do about it. When asked if they planned on pulling out of the US insulin pump market, the company again acknowledged they have a problem and again appear clueless as to what to do about it. Diabetic Investor remains convinced that a decision has already been made to exit the US insulin pump market, as pink slips have already been handed out at their US headquarters. Suffice it to say Roche continues to have no strategy and continues to drink the corporate kool aid believing that their number one position globally is not in danger. This is exactly the same attitude that cost them the number one position here in the US, or put another way history appears destine to repeat itself.

Medtronic (NYSE:MDT) followed Roche with news that their much anticipated patch pump is delayed yet again. The company is now saying the pump should be ready sometime in late fiscal year 2011 about the same time their new conventional pumps are supposed to be ready. (Just so where clear here the company’s fiscal year 2011 ends in April 2011.) Simply put that means we won’t either the patch pump or the new conventional pump which will replace the Paradigm line for another 16 months and that’s assuming they don’t push back the timeline one more time.

It goes without saying this is great news for Insulet (NASDAQ:PODD) as they remain the lone real player in the patch pump market. A market Medtronic sees being valued at $1.6 billion.

Another winner here is Animas, a unit of Johnson and Johnson (NYSE:JNJ), who continues to gain on Medtronic in the conventional pump market. The fact is more and more patients are choosing Animas or Insulet over Medtronic. As Diabetic Investor has said before Medtronic insulin pumps, once innovative, are now substandard when compared to the competition. It will be interesting to see what Medtronic’s market share will be in the insulin pump market, when or if, these new products actually make it to the market. They way things are going at the company Diabetic Investor isn’t optimistic these new products will meet their new deadlines and even if they do it may be too little, too late.