Let’s Make A Deal

Let’s Make A Deal

Back in the day one of our favorite TV shows, yes, we watched live TV back then, was Let’s Make A Deal hosted by Monty Hall. Anyone who remembers this classic show will recall how participants could choose from door number 1 through 3 receiving anything from a new car to a can of spam. We thought of this show when Livongo announced they had signed a deal with Abbott, so their system could analyze data from the FreeStyle Libre.

Per the press release;

“Through this collaboration, Livongo will offer, where appropriate and prescribed, the FreeStyle Libre Pro System to its members with diabetes. This will provide members with a visual snapshot of their glucose data, known as the Ambulatory Glucose Profile (AGP), offering a clearer overview of not only glucose levels, but also patterns and trends within those levels. Members also may request the AGP be shared with their personal physicians. This information allows doctors and people with diabetes to make better, personal treatment decisions.”

Now a quick note this is NOT the regular FreeStyle Libre which is used by the patient, this is the PRO version which means, again according to the press release;

“In order to start using the system, a healthcare professional will apply the FreeStyle Libre Pro sensor on the back of the Livongo members’ upper arm. The sensor will remain in place for up to 14 days, continuously measuring glucose in interstitial fluid and recording glucose levels every 15 minutes – capturing a complete glycemic profile that informs the AGP.”

Now we don’t want to say this deal is typical of Livongo, but it is. Livongo is notorious for signing deals which at the end of the day really don’t mean all that much.

As we have noted companies like Livongo, OneDrop and every other way cool whiz bang interconnected conventional glucose meter have a huge problem. They are quickly becoming irrelevant as CGM becomes the standard for glucose measurement. Now that Dexcom owns TypeZero it’s just a matter of time before the Dexcom app starts offering dosing suggestions. Even for non-insulin patients CGM data is more relevant than point to point data that must come from the patient doing something.

We suspect now that Dexcom has bought TypeZero Abbott will come out with their own way cool whiz bang app which does something similar. That is of course if the company turns the Libre into a real CGM and adds connectivity.

The fact of the matter is for all these companies like Livongo and OneDrop it’s becoming harder and harder to find a buyer. Livongo and OneDrop and the like are desperately trying to create value, value which is slipping away with each CGM system sold. Give Livongo credit as they are trying to expand beyond just diabetes, but the fact is diabetes is, excuse the expression, their sweat spot.

Look ahead a little and this road to value gets even more difficult. Again, excuse the expression but the sweat spot for these companies has been insulin using patients. Patients who will not need their help once insulin dosing algorithms become commonplace. While it would have unthinkable a few years ago we believe that it won’t be long before insulin patients will have it pretty easy. Whether its using a hybrid closed loop system like the 670G or a Tyler, many of the decisions now made by the patient will be done for them thanks to CGM and dosing algorithms.

This is one reason both Livongo and OneDrop have been desperately trying to prove their system produce better patient outcomes. Even if true, and quite frankly the data is dubious at best, it really doesn’t matter as systems like the 670G or a Tyler will produce better outcomes with less heavy lifting by the patient. This is the beauty when CGM is combined with insulin dosing algorithms. How the insulin gets delivered is almost immaterial.

This forces companies like Livongo and OneDrop to move into the most difficult area, non-insulin patients. Patients who could use their help but don’t want their help. Here too the new slap it on turn it on CGM sensors of the future will be another nail in their coffin. What’s always been misunderstood about CGM is they aren’t just for insulin using patients, ALL patients with diabetes will benefit from this technology it will just be used differently by non-insulin using patients.

By our way of thinking the clock is ticking and approaching midnight. Diabetes tech is hot right now with money being thrown with reckless abandon. Or in other words it’s the perfect time for a Livongo or OneDrop to strike a deal otherwise they and their stakeholders will risk getting a can of spam.