JPM – Wrap Up
If there were two clear themes to emerge from JPM this year they were the importance of emerging markets and the influence Apple is having on the technology front. Frankly you could not sit through a presentation from a major drug or device company without hearing the company talk about their growing presence in emerging markets. Whether it was China, India or elsewhere in the world everyone and we mean everyone has a presence there or wants a greater presence there.
This globalization of the business is really nothing new but with market conditions problematic in established markets, it’s impossible to ignore the growing importance of emerging markets. The one problem here is just how long it will take these emerging markets to become established markets. For years now we have heard about the growing middle class in India and China. We’ve also heard that infrastructure is improving and that patients in these markets are becoming more comfortable with advanced drugs and devices.
Even with all these positive developments it should be noted from a revenue perspective, emerging markets are still the minor leagues and established markets are were the real action is. This does not mean emerging markets won’t reach established market size, rather it continues to be a long process and will takes years before their sales come even close to the current size of established markets. Simply put, if you can’t cut it in established markets you have zero chance of developing business in emerging markets.
Perhaps a more interesting trend is the impact Apple is having on medical technology. Given the popularity of the iPhone and now the iPad, it’s easy to understand why. It is not an overstatement to say that no other company or product has forever changed the future direction of medical technology. What the iPhone and iPad have proved is that consumers not only want cool technology but easy to use technology that fits into their life and helps make their lives easier.
The only issue Diabetic Investor has with this obsession with technology is that when it comes to diabetes and technology all too often the companies in the space somehow forget there is a real person who needs to use this technology if it’s ever to be successful in helping them better manage their diabetes and ultimately produce better outcomes. As we have seen in the past you can have the great technology in the world, but if the patient doesn’t use or doesn’t use it properly all this great technology is worthless.
Diabetic Investor is also concerned that companies see technology as the answer to all their problems. As great as this technology may be, technology cannot overcome many of the obstacles involved with good diabetes management. First and foremost, it cannot overcome the patient who’s supposed to be using this technology. A patient who does not want to be reminded any more than they already that they have diabetes. A patient who still must gather information and then understand how to use this information effectively.
The reality is what this obsession with technology really tells us is that when it comes to diabetes technology; insulin using patients rule and non-insulin patients, the majority of the diabetes population are left out in the cold. The central fact here is that when it comes to type 2 diabetes the winners won’t be device companies at all, the real winners will be drug companies who develop better, more patient friendly drugs that require fewer doses. This is why GLP-1 technology is the most promising therapy option for patients with type 2 diabetes. GLP-1’s offer the total package- effective control- simple dosing – no glucose monitoring and weight loss. GLP-1’s are not just insulin killers their test strips killers too. With GLP-1 therapy gaining traction the stark reality is if you want to be a player in the type 2 drug market you better have a GLP-1.
When it comes to the insulin side of the business, the trend is also clear – the fewer injections the better. Diabetic Investor does not anticipate insulin using type 2 patients abandoning their insulin and converting to GLP-1 therapy, while there will be some erosion, patients tend to stick with therapy regimens they are comfortable with. However, these same patients will embrace longer acting insulin’s which require less administration. The simple fact with insulin using type 2 patients is less is more.
Although a much smaller percentage of the market type 1 patients stand to gain the most from this obsession with technology. Insulin pumps will become smarter and easier to operate. These patients will have a greater number of tools available to them, tools that will be available 24×7 whether there on their mobile device or personal computer. Tools that will work together and communicate with the patient, the physician, the pharmacist and the insurance company.
The biggest loser of all will be glucose monitoring companies, or should we say conventional blood glucose monitoring companies who don’t make monitoring more patient friendly. The simple fact is the future is brighter for continuous monitoring companies and all-in-one monitors as they fit perfectly into the future of diabetes management and both have a place in the marketplace. The reality is there are not enough patients following intensive insulin therapy to support the huge and still bloated infrastructures of the major players here. When it comes to conventional glucose monitoring bigger is not necessarily better.
Diabetic Investor anticipates that 2011 will be a transitional year in the diabetes world; where the old guard will make way for some desperately needed new blood. Companies once thought to be invincible will face some very serious competition from these newcomers and just might not be able to adapt. Stuck in the past and unable to move to the future, the diabetes world could be turned upside down. Diabetic Investor can’t wait to see it all.