Medtronic Reports / Lilly provides data

Medtronic Reports / Lilly provides data

It’s becoming increasingly difficult listening to Medtronic (NYSE:MDT) report results, not only are the calls incredibly boring but the company spends all of six seconds covering their diabetes unit. Then again with a 70%+ market share does it really matter all that much. The simple fact is Medtronic continues to print money with their diabetes unit and until one of their many competitors actually makes inroads into their installed user base nothing much will change.

The call could have really been interesting had anyone bothered to ask whether the rumors regarding the company buying Bayer’s diabetes device unit were true. Although Diabetic Investor sees little chance of this actually happening it sure would have been interesting to see how the company would have answered the question. Then again this is the wacky world of diabetes devices where anything can and usually does happen, even when something makes absolutely no sense whatsoever.

Speaking of making no sense whatsoever, Lilly (NYSE:LLY) provided some data on their long-acting GLP-1 dulaglutide. The results come from a Phase II study and were released this morning at the 27th American Society of Hypertension Scientific Meeting in New York. According to a press release issued by the company;  “Eli Lilly and Company (NYSE: LLY) today announced that dulaglutide, its investigational, long-acting glucagon-like peptide 1 (GLP-1) analog being studied as a once-weekly treatment for type 2 diabetes, met its primary endpoint of non-inferiority for mean 24-hour systolic blood pressure (SBP, or pressure while the heart contracts) after 16 weeks.”

Although not mentioned in the press release the company did disclose at the meeting the following additional information;  A1c Reduction 1.2% after 16 weeks for the higher dose – no weight loss data was reported – most common side effects were nausea and vomiting which is consistent with the GLP-1 class of drugs.

The real question is just where Lilly sees this drug fitting in when it finally gets to the market; a market which will most likely have not just Bydureon but another long-acting GLP-1’s already established. Is this really the reason the company dumped Amylin (NASDAQ:AMLN)? Now Diabetic Investor may not be the sharpest knife in the kitchen drawer but we’re not sure it’s a great idea to have a business strategy of coming late to market with me-too copycat products that offer no compelling benefit over the already well-established competition. This is exactly what they did with Tradjenta and it appears to be what they are doing with Dulaglutide.

Is this part of the great diabetes pipeline Cramer talked about last week? Because if it is then someone better find out what Cramer is smoking.  The fact is a large group of people just can’t accept the fact that Lilly is no longer a serious player in diabetes. These people just can’t bring themselves to believe that this once dominate franchise is now an also ran. They cannot understand why management has let this legacy franchise fall so far. They continue to buy the baloney sold by management, hoping beyond hope that sand can really turn into gold.

The fact is Lilly screwed up big time and there are no excuses for what is going to go down as one of the biggest disasters in diabetes.  While the company will continue to blame everyone but themselves for this debacle the fact remains the situation is so bad that the unthinkable is now plausible, Lilly could actually exit the space and no one would really miss them.  Lilly management is just lucky that the company is based in America and not Japan where management is known to commit suicide as atonement for their poor decisions.  The fact Lilly stakeholders are not crucifying management over this proves beyond a shadow of doubt that there is no cure for stupid.