Let the games begin

Let the games begin

This morning Tandem Diabetes (NASDAQ:TNDM) announced they have received FDA approval for the their t:slim G4™ – according to a company issued press release- “Tandem Diabetes Care®, Inc. (NASDAQ: TNDM) today announced U.S. Food and Drug Administration approval of the t:slim G4™ Insulin Pump, the first and only touch-screen pump with continuous glucose monitoring (CGM) integration, for use by people 12 years of age or older who use insulin. It combines features of the t:slim® Insulin Pump and Dexcom G4® PLATINUM CGM System”.

The t:slim G4 now becomes the third FDA approved insulin pump that integrates CGM technology, the second integrated with a Dexcom (NASDAQ:DXCM) system. Given the success of the Animas Vibe, the other insulin pump which works with a Dexcom system, we’re about to find out whether Tandem’s iPhone like interface really matters.

We have long believed the reason the Vibe has been successful is directly attributed to its integration with the Dexcom sensor, a sensor which nearly everyone believes is superior to the Medtronic (NYSE:MDT) sensor. We have maintained that there is really nothing all that special about the Animas insulin pump as it does basically the same thing as a Medtronic insulin pump. The difference and driving factor was the CGM sensor.

Now we’re about to find out whether Johnson and Johnson (NYSE:JNJ), who owns Animas, made a mistake by failing to update their pump. Just as the Paradigm line for Medtronic is aging and in need of a major overhaul, so too is the Animas pump. Prior to this announcement the compelling reason patients choose a Tandem pump was for its superior patient interface, it’s Apple like design. The t:slim like all the other pumps does basically the same thing the same way the compelling force was its design.

It’s ironic that rumors have been circulating that Medtronic is about to buy Tandem for that very reason. That they see the t:slim as a replacement for the Paradigm.

It’s equally ironic that JNJ is for the moment in the insulin pump business. That this unit once up for sale has been taken off the sales block. A move which looked pretty smart given the success of the Vibe but now will be tested with the presence of the t:slim G4.

Given that the insulin pump market is already ultra-competitive this news will just throw more fuel on a raging fire. Not that Medtronic doesn’t care about such things but the reality is they remain far ahead of both Animas and Tandem. This doesn’t mean that new pump starts don’t matter rather keeping its existing customers in the fold matters more. The harsh reality is this news impacts JNJ way more than it does Medtronic.

And what about our friends at Insulet (NASDAQ:PODD) as they too are also working with Dexcom. Well such a system could have been here already had not previous management been so pig headed. Already facing a host of issues the company must now compete against systems preferred by patients and physicians. The reality is being wireless/tubeless is nice but integrating CGM with pumping is better.

Let the games begin.