Just when you thought it couldn’t get wackier

Just when you thought it couldn’t get wackier

One of the most amazing aspects of the diabetes market is that once it seems things can’t get any wackier than they already are, they do. A perfect example of this starts tomorrow when an FDA committee meets to once again discuss Avandia. According to various media reports the distinct possibility exists that when this meeting is over the FDA will lift restrictions on Avandia and that GlaxoSmithKline (NYSE:GSK) will be vindicated. Even if that does happen, and we wouldn’t bet that it will, it would be a hollow vindication for GSK who has lost billions in sales, has seen their reputation damaged and paid billions more in settlements.

Yet the wackiness doesn’t stop with the FDA circus, rumors are flying that Novo Nordisk (NYSE:NVO) will make perhaps one the dumbest moves in diabetes drug history, which is saying something considering what’s gone on in this space, and actually acquire MannKind (NASDAQ:MNKD). Anyone who’s been watching MannKind’s stock price knows it’s been on fire rising nearly 350% this year alone. Now never mind that Afrezza their lead product remains in limbo and that even if approved, still a longshot, the drug is nothing more than a niche product or that MannKind has been down this road before only to falter. Nope the rumor believers say that Novo desperately needs Afrezza and that it really doesn’t matter that Pfizer (NYSE:PFE) lost nearly $4 billion with Exubera.

The rumor mill is also churning in the insulin pump market where many believe Medtronic (NYSE:MDT) in a desperate attempt to stop the bleeding will acquire Insulet (NASDAQ:PODD) or Tandem Diabetes, or both. Insulet’s stock has also done well the past six months up over 30%, while Tandem is making some solid gains with the iPhone like t:slim insulin pump. The general theory is that Medtronic has awakened to the fact that their pump technology is outdated and their much hyped closed loop system is still years away from commercialization.

Even funnier are the goings on in the conventional blood glucose monitoring market where the impact of competitive bidding is being felt like a hammer coming down an egg. What’s truly astonishing here is how unprepared the major branded companies are for this, a situation they knew as coming. Most of the players are running around in circles completely clueless about what to do other than cut costs. It’s almost as if they have resigned themselves to the fact they will lose share and there is nothing they can do it about. Which isn’t exactly an unrealistic assessment considering that these are the same people who thought that selling meters in pretty colors would somehow correlate to patients testing their glucose more frequently.

Now one just might think that the major branded companies would realize that cutting costs isn’t the only strategy available that given the nature of the market that now is the time to consider something different. That there might a company that realizes with the entire industry in full blown panic mode perhaps it’s a good idea to get aggressive. Instead of complaining about the impact of competitive, something they can do nothing about, that they instead turn a negative into a positive. As Henry Kissinger wrote; “Timid men are more likely to be moved to trepidation than daring in the face of great opportunities.”

Sadly this is not how the BGM industry thinks as it is much easier to complain about something then it is to actually do something. Yes we know that market conditions are far from ideal and that yes it could get worse. However, for all practical purposes it appears that the major BGM companies have taken the path of least resistance and have decided to surrender before the fight has even begun. In the eyes of Diabetic Investor any company willing to take calculated risks would see an increase in market share.

Frankly Diabetic Investor isn’t surprised by this turn of events and to some extent we can understand why the major BGM companies feel the way they do.  It’s also true that when the end does come they really have no one but themselves for the situation that now exists. As the bedtime story, all the kings’ horses and men won’t be able to put Humpty Dumpty back together again.