Nine lives

Nine lives

One of the wackier aspects of our world is handicapping the future. Determining winners and losers is as much an art as it is a science. Tandem (NASDAQ: TNDM) is the perfect example of this. By all outward appearances the company is on deaths door step, yet like the cat with nine lives they continue to live on. They continue to find more money, they continue to spend money and they continue to live on to fight another day. Just how no one is quite sure, but they do.

Now a few quick points here normally we would say this isn’t personal that this is just business. But when it comes to Tandem it is somewhat personal as management has taken a good system, gotten it into the hands of patients and because they cannot run an insulin pump company have put these patients at risk. They do this while collecting fat bonuses, fat salaries and stock options which give them the opportunity to get even fatter.

Think about this just for a moment let’s say we are right and the company finally runs out of lives. Will the management team be hurt in any way? Will they suffer? Sadly, the answer is no. Unlike patients who’s lives will be turned upside down, management will collect fat severance packages and go onto their next job. Management will not have to worry about finding a new system, they will not have to pay anything out of pocket. Management will just walk away.

Even worse using history as a guide they will get the chance to do this all over again. The business of diabetes is like the Hotel California where you can check out but never leave. Some other start up opportunity will come along, come up with an attractive story that entices investors and this cycle starts all over again. This is not a dream but a nightmare that we have seen many times over the past 20 years.

And just to be very clear we do not want Tandem to fail as we noted this isn’t a bad system. We are in favor of patient choice, but we also understand unlike others this is one of the most difficult businesses to run. Businesses which have a fiduciary responsibility to their stakeholders. Yes, we do believe these companies have a moral responsibility to their patients, that they should be ethical and tell these patients the truth. However, when it’s all said and done stakeholders come first.

Johnson and Johnson (NYSE: JNJ) has taken a lot of heat for their decision to shut down Animas. Heat which was intensified as they arranged for Medtronic (NYSE: MDT) to take over the Animas patients. Contrary to what the West Coast Mafia thinks this was the right thing to do. It was the ethical thing to do.

We only hope that Tandem management when the time comes follows JNJ’s example. But we must admit we are not optimistic again just based on their history. We understand that from a business perspective they cannot simply tell the truth and nothing but the truth. However, we do believe morally they need to find a way to make sure that patients have all the relevant information, so they can make an informed choice. This is not just moral and ethical it is the right thing to do considering what’s at stake for the patient.

As we note it’s not managements lives that will be turned upside down should this thing go under.

One last thing before we get onto the weekend one group that deserves condemnation is the company’s board of directors. It’s is their responsibility to see that stakeholders don’t get screwed, that the company is run well. The truth is they have let these stakeholders down by their failure to act. They may not have committed the crime, but they are certainly accomplices. Sadly, however like management they will not be hurt in anyway when this blows up.

Ok two more things, another group we hold in contempt is the West Coast Mafia as they too failed to act. They bought into the BS being told by Tandem management and failed to tell their minions the truth. Listen it does not take an advanced degree in finance to see that Tandem has serious issues. They could have told their minions that as much as they like the Tandem system the company has issues. This is not just factual but ethical.

We aren’t sure what’s happened but this unwillingness to tell the truth is hurting the very people everyone says they are concerned about; the patient. The fact is once again it’s the patient whose getting screwed. This must end it’s time we told these people the truth, allow them to make an informed choice. And we will not sit ideally by and let this hypocrisy go unanswered.

Listen folks if you want a friend get a dog. It’s time that the PATIENT COME FIRST.