Last minute gift shopping

Honestly, we were hoping with Christmas coming we’d be able to sit back and enjoy the beautiful weather here in San Diego. However, the wheels of commerce never stop moving which unfortunately is making us work harder than we’d like. So, let’s get right to it as there’s lot’s going on in our wacky world.

1. A Big Win for OnDuo

Per a press release issued late yesterday;

“Walgreens Boots Alliance, Inc. (Nasdaq: WBA) and Verily, an Alphabet company, today announced they will collaborate on multiple projects under a broad agreement aimed at improving health outcomes for patients with chronic conditions, while also lowering the cost of care. Walgreens will be a first-choice retail pharmacy development and commercialization partner to Verily, and the organizations have agreed to work on and explore ways to improve access to advanced healthcare technologies and solutions – which may include sensors and software to help prevent, manage, screen and diagnose disease – with a shared goal of scaling deployment at Walgreens retail locations.

Initially, the companies are developing a medication adherence pilot project that will deploy devices and other approaches designed to improve adherence. Walgreens together with Onduo, Verily’s joint venture with Sanofi, will also launch a virtual diabetes solution to Walgreens employees and family members with Type 2 diabetes through the Walgreens employee health plan. Onduo provides tools, coaching and remote access to specialty doctors to help people with diabetes to manage their condition anytime, anywhere. These initiatives are part of a broader strategic alliance designed to combine Verily’s healthcare technology innovation with Walgreens corner store presence and trusted pharmacy services.”

Although not specifically mentioned in the release this is also very good news for another Verily partner Dexcom. We have noted many times that CGM will soon migrate to the Type 2 community and this program is a step in that direction.

We also view this move as Walgreens attempt at combating Amazon’s move into diabetes. Walgreens knows that Amazon has made the deep dive and is major threat to their future. Given their scale, footprint and trusted brand name it will be interesting to see how this all plays out. One thing is certain patients with diabetes are going to have lots of options when it comes to getting help with their diabetes management combined with how their medications, devices and supplies are delivered.

2. Pulling a Tandem

This morning MannKind priced their latest offering and we have seen this movie before as the company has taken a page out of the Tandem playbook. Back when Tandem was on the ropes financially unable to find a buyer for the company and desperate for cash, they diluted the crap out of the stock in a last desperate attempt to remain viable, a Hail Mary if you well which as we all know worked like a charm.

Now we have no idea if MannKind will experience the dramatic, more like unprecedented explosion that Tandem shares did but the company is in the midst of a transformation. The company understands that their lead product Afrezza has a long way to go and likely will never be the major revenue generator once imagined. The key to their future therefore becomes transforming from a diabetes company to a drug delivery company as insulin is not the only drug that can be inhaled. This transformation will take time and money and with this offering they have bought more of both.

3. P T Barnum is alive and well

Speaking of public offerings MannKind isn’t the only company raising more money. Also hitting the capital markets is Nemaura Medical who according to a press release;

“Nemaura Medical Inc. (NASDAQ: NMRD), a medical technology company developing sugarBEAT® as a non-invasive affordable and flexible Continuous Glucose Monitor (CGM) for use by people with diabetes and pre-diabetics, today announced the pricing of a “best efforts” public offering of Company’s shares of common stock and warrants with expected total gross proceeds of up to $2.5 million. The offering is expected to close on or about December 20, 2018, subject to satisfaction of customary closing conditions.”

To be honest we have never been big fans of this technology but given the history in this space we aren’t surprised they have been able to raise money and are now raising even more money. However, after reading the documents the company filed with SEC regarding this latest money grab, we are even less impressed. One of the funnier things we found in the supplement to the prospectus (https://www.sec.gov/Archives/edgar/data/1602078/000107997318000687/nemaura_424b5.htm) can be found on page S-8 a chart which compares the currently available CGM systems.

On the Reliability (Overall MARD) line Libre 11.4% Eversense 11.4% G5 9% G6 9.8% and the SugarBEAT® greater than 14% but wait there’s more. The company basically has no patent protection here in the US which would be meaningful if the damn thing worked but since it doesn’t who cares.

Seriously folks if you’re looking for a great tax loss this is a great investment, or you can play a cruel joke on a friend or get back at an enemy by saying “I’ve got a hot stock tip for you buy shares in Nemaura.”

4. Such a bargain

Back in the day Momma Kliff was notorious for finding bargains. Hey when your raising four boys every dollar saved was a dollar earned. Mom would read the papers looking for deals and we knew she found a good one when she stated; “Oye such a bargain.”

Well Mom has nothing on what Medtronic is trying to pawn off as a bargain. Yes, our friends in Northridge are once again playing very fast and very lose with semantics with their latest “deal” their recently announced Lift Ticket Program. Per the company’s web site;

“The Lift Ticket program allows you to upgrade during your warranty period to a future Medtronic technology at a cost of $99. To use your Lift Ticket, you will be charged $499 upfront. You will then receive a $400 credit when you return your old pump.†”

First the good news at least the company has learned a valuable lesson and is at least telling patients they will be charged $499 UPFRONT and then credited back $400 IF they return their old. This is in sharp contrast to their last program which charged the patient $300 which was only credited back after the patient completed some surveys and was touted as a FREE upgrade.

Now the bad news take a gander at the terms and conditions of this “deal” –

 $499 charge will be required upfront to use Lift Ticket. Return of old insulin pump is required. Upon receipt of old pump, $400 will be credited to the original form of payment. If old pump not returned, patient will be charged $3,200.

 After you have requested to use your Lift Ticket, it could take up to 60 days to process your order. The Lift Ticket Program does not guarantee prioritization of your order.

 Lift Ticket can only be redeemed once during your warranty period. A Lift Ticket cannot be redeemed if less than six (6) months remains on your pump warranty period.

 The Lift Ticket Program price applies to (1) insulin pump. CGM products and consumables are not included.

 Insurance coverage and approvals may impact patient ability to upgrade. Coverage for your pump is contingent upon your payer medical policy guidelines. Restrictions and medical necessity requirements apply.

 Warranty dates do not reset. The warranty date of an upgraded insulin pump will remain the same as the warranty date of the initial pump purchased.

 Patients enrolled in a rental program must complete their final payment and own their pump before utilizing the Lift Ticket program.

 The MiniMed™ pumps have certain labeling restrictions that may exclude certain populations, including age, type of diabetes and pregnancy. We recommend you consult your Healthcare Provider.

 A valid prescription will be required to purchase a new pump. Other restrictions may apply.

First notice that CGM products are not covered which we understand. However, given that all of new pumps are sensor augmented this “deal” could actually end up costing the patient more given they will be required to purchase sensors too.

Next a patient cannot use the program is there is less than 6 months left on their warranty. Why? Well the company knows insurance will pay for a brand-new system when the pump is out of warranty so why get $99 in revenue when they can ten times that much for a new pump.

Notice also that warranty dates don’t reset for the exact same reason as above the faster the pump gets out of warranty the faster insurance pays for a new pump – CA CHING.

We could go on here but why bother as this is just another money grab disguised as a “deal”. The reality here is sales of pumps aren’t going all that well, the conversion of Animas patients isn’t meeting projections and word is spreading that the way cool whiz bang 670G isn’t all that way cool whiz bang.

Now we could say that the company is getting a little desperate as besides the issues we already noted they know that Tandem has the Control IQ coming, Insulet has the DASH coming along with their recently announced deal with Tidepool and Tyler is on his way. Simply put they no longer have the coolest toy in the toy chest and soon their toy will be inferior to the new toys. Throw in the FDA investigation and it’s easy to understand why they are more than a little nervous, heck their bonuses are stake here.

5. So, what that insulin prices are too high.

Yesterday Lilly provided a revenue and profit forecast for next year that beat analysts’ expectations. Per a post on the FirecePharma web site;

“Lilly told investors to expect 2019 revenues to come in between $25.3 billion and $25.8 billion and adjusted earnings per share to range from $5.90 to $6, not including the company’s stake in the recently spun off Elanco Animal Health unit. Analysts had projected revenues just below $25 billion and EPS of $5.82, according to FactSet.

Lilly also upped its revenue-growth forecast, from 5% on average between 2015 and 2020 to at least 6%. Its human pharmaceuticals business should grow at least 7% on average, it said.”

The company noted in their press release;

“The company anticipates 2019 revenue between $25.3 billion and $25.8 billion. Revenue growth is expected to be driven by volume from newer medicines including Trulicity®, Taltz®, Basaglar®, Jardiance®, Verzenio™, Cyramza®, Olumiant® and Lartruvo™. Revenue growth is also expected to benefit from the recent launch of Emgality™, and could benefit from the potential approval and launch of nasal glucagon and lasmiditan.”

Frankly we aren’t surprised by this news as when it comes to diabetes anyway the company is kicking ass. While the oral version of semaglutide looms on the horizon they know it will be awhile before Novo Nordisk gets the damn drug to the FDA so sales of Trulicity should continue to accelerate. They also are thankfully that Sanofi continues to be Sanofi so there is no threat to Basaglar or Humalog. Throw in greater formulary presence for Jardiance and the coming approval of nasal glucagon and life is pretty good in Indy these days.

Well that’s it for today and hopefully nothing will happen these next few days so we can enjoy the great weather here in San Diego and everyone can have a relaxing Christmas holiday. Merry Christmas everyone.