JPM Day One

JPM Day One

As per usual the Westin St. Francis home to the J P Morgan Healthcare conference is packed to the gills and once again security is tight as a drum. Diabetic Investor seriously believes that an enterprising attendee could make a small fortune by renting out conference name tags.

Looking back on day one a few quick comments;

  1. As we anticipated when it comes to Abbott (NYSE:ABT) and diabetes it’s all Libre all the time and not much else.  However it remains unclear when or even if the Libre will be submitted to the FDA. There is also a rumor spreading that the company which already has an insulin pump which has been approved by the FDA but never marketed may be interested in acquiring an insulin pump company. Like we said it’s just a rumor but when it comes to the wacky world anything is possible, even for something that is this crazy.
  1. Medtronic (NYSE:MDT) has seen the light and is slowly making the transition from a seller of products to a seller of systems. The transition will not occur quickly, still based on what they are saying and the changes they have made the company understands in the future it will be outcomes that matter. That for their insulin pump franchise to remain viable it must evolve. Yes they will continue to launch new products and yes they will continue to pursue a closed loop insulin delivery system. But the insulin pump like the rest of the diabetes market is changing and it’s nice to see that Medtronic is preparing for change and not waiting for change to happen.
  1. The soap opera known as Sanofi (NYSE:SNY) provided the most entertainment as the company is struggling mightily in diabetes. Listening to both the presentation and following Q&A session it’s as if the company is trying to convince themselves that Toujeo really is a great, that Lixilan won’t run into regulatory issues and yes Afrezza really is the greatest thing since sliced bread and soft soap.

Staying with Afrezza for a moment the company has fallen into the worse possible trap, touting not that Afrezza is a better insulin, rather it has a superior delivery system.  They are also compounding this mistake by constantly comparing Afrezza to Exubera. Yes we all know that Afrezza is an upgrade when compared to Exubera, but why they would constantly remind everyone of this $4 billion failure remains a mystery. IF and again this a huge IF Afrezza has any chance at all the product must stand on its own and not just be positioned as being a better inhaled insulin than Exubera.

Another area where they continue to delude themselves is the impact of a generic/Biosimilar Lantus. Now we’re not sure if the company is just putting a positive spin on what’s going to be a very bad situation or if they actually believe what they are saying. We hope it’s the former and not the later because if they really seriously believe that a generic Lantus won’t adversely impact their diabetes franchise or hurt sales of Toujeo, if it gets past the FDA, then the company has bigger problems than we think.

The last comment on Sanofi is likely the most telling of all considering that for a man who likes to speak his mind Serge Weinberg, the acting CEO was nowhere to be found. Rather than face the music Serge apparently decided that JP Morgan one of the most prestigious conferences wasn’t worthy of his attention. Had we not wanted to be politically correct we’d would have said he was a coward.

  1. Johnson and Johnson (NYSE:JNJ) continues to waver when it comes to the future of Animas and quite frankly their diabetes device franchise altogether. While the company insists they are in diabetes 100% this commitment wasn’t exactly inspiring. Our sense is they are not sticking their heads in the sand nor are they ignoring what’s going on in the market. Rather Diabetic Investor came away with the impression that the company just isn’t sure what to do, nor are they in a hurry to make such an important decision. While Animas has yet to turn a profit, LifeScan continues to roll along and while not making huge margins is still doing quite nicely. Based on what we’re hearing give the company another year to 18 months while they sort this all out.
  1. Rarely does Diabetic Investor feel sorry for anyone in the BGM market but today we couldn’t help but feel a little sorry when we asked Bayer how of the sale of their diabetes device unit was going and what would they do with the unit if they couldn’t sell it. While the answer was classic corporate speak it was obvious management knows the party is over and quite frankly doesn’t have a plan B if this second attempt at a sale fails as the first did.

This leads Diabetic Investor to believe the company is willing to consider almost any offer which could be why they have reengaged with Sanofi. The bottom line here is they suffered enough and have cried uncle.

Well that’s all for today.