Nine lives?

Nine lives?

Just when it seemed like Echo Therapeutics was gone for good along comes a press release which states; “Echo Therapeutics, Inc. (Nasdaq: ECTE) (“Echo”), a medical device company, will present its most recently completed clinical study of its non-invasive Symphony® Continuous Glucose Monitoring (CGM) System at the 14th Annual Diabetes Technology Meeting, November 6th to 8th in Bethesda, MD.”

More interesting reading comes later on as the release also states; “. Those risks and uncertainties include, but are not limited to, risks related to the actions of Platinum Management (NY) LLC, its affiliates and the other members of its group, including, but not limited to, the lawsuits filed or threatened by the Platinum Group and the actions taken by the Platinum Group to harm Echo’s prospects and interfere with Echo’s relationships with its vendors and employees, including the amount of related costs and the disruption caused to business and financing activities by these actions, the potential inability of Echo to secure additional funding for its operations, the possibility that Echo may be forced to seek protection under the U.S. Bankruptcy Code, the adverse impact of any such bankruptcy filing by Echo on its business, financial condition and results of operations, including its ability to maintain relationships with vendors and employees, the actions of Echo’s creditors and other third parties with interests in any bankruptcy case filed by Echo, and Echo’s ability to obtain bankruptcy court approval in connection with any bankruptcy case filed by Echo.”

Yes if there is one thing we can count on when it comes to the wacky world of diabetes devices and this quest to develop a non-invasive continuous glucose monitoring system there is no such thing as a dead idea. As we have written many times in the world of non-invasive glucose monitoring, conventional or continuous, just when it looks like an idea has breathed its last breath like a cat with nine lives this exact same idea, which didn’t work the first time around, comes back to life with a new name.

Diabetic Investor suspects when Echo runs out of lives and finally succumbs to its inevitable fate, the company or at least its idea will reemerge in the not so distant future. That the same people who created this monster will lie low for a while and comeback with another non-invasive idea. Like we have said before as long as investors continue to fund these companies, continue to buy the hype and fail to perform even the slightest due diligence this cycle will continue.

Anyone remember C8 Medisensors, another company with a non-invasive continuous glucose monitor; a company which bilked GE out of $8 million bucks. The same company that went belly up only to reemerge at of all places Apple. Yes that same company who brought us the way cool iPhone has fallen into the same trap as GE. They like so many others think that this technology, which didn’t work the first time around, has merit.

Now we don’t know for certain that after Echo officially goes out of business that someone like Apple will come along and resurrect the Symphony but we wouldn’t bet against it.  Heck Medtronic (NYSE:MDT) yes that Medtronic has also fallen into this trap. Diabetic Investor has learned that the company recently purchased the intellectual property form the now defunct GluMetrics. Keep in mind that this is a company that raised almost $60 million before calling it quits. Now we have no idea what Medtronic paid for the company’s 25 issued patents and 22 pending patents, but we find it interesting that the person who was spearheading Medtronic’s CGM unit is now gone.

Medtronic is in a fierce battle with Dexcom (NASDAQ:DXCM) for dominance in the growing CGM market; a battle which by all accounts Dexcom is wining and winning by a wide margin.  Don’t take our word for it just surf any of the more popular patient blogs and read through the comments on each system. The only reason this is a battle at all is Medtronic’s huge installed insulin pump user base, a user base which is becoming disenchanted with the CGM system offered by Medtronic.

The reality here is that glucose monitoring whether it be conventional or continuous, invasive or non-invasive the dynamics of the market are unfavorable. What makes Dexcom different is they understand this is about outcomes and not mere data collection. That in the future having better more accurate easier to use sensors is only half the battle. Collecting the data is just the starting point and the winner of this race will be a company who can transform data into actionable information which then translates into better outcomes.

Well before CGM systems appeared in the market Diabetic Investor warned that BGM would die a painful death if they did not transform from a data collection system into a tool which helped patients better manage their diabetes. Everyone falsely believes that it was the advent of competitive bidding that doomed the BGM market, but as we noted earlier today competitive bidding did not cause the decline rather it put the final nail in the BGM coffin. The decline in the market was well underway before competitive bidding.

Thankfully the talented management team at Dexcom has learned from the mistakes made by their BGM counterparts. That if they are to prosper over the long term they need to provide their patients with more than just data points. They must provide them the tools they need to analyze this data, tools which are easy to use and produce easy to understand actionable information.

It would be nice to think that the newcomers to this space whether it be Apple, Google, Facebook or any other tech company also understands this. Based on what we’ve seen so far it doesn’t look that way. It looks as if they like those before them, they have fallen in love with the technology and not how this technology is used or what it can produce when data is turned into actionable information. The newcomers also like those before them seem to believe that if they make it “less painful” to gather the data that more data will be gathered and somehow turn into better patient outcomes. This is the fundamental mistake with every non-invasive dreamer, that data collection is the answer when nothing could be further from the truth.

Data collection is a piece of a complex puzzle and by itself means little. Only when data is connected to other pieces of the puzzle does a picture begin to emerge. It is this picture the patient uses to see whether they are on the right path or whether changes need to be made.

Honestly the story about glucose monitoring, conventional or continuous hasn’t changed that much over the years. Diabetic Investor has long maintained that even if a truly non-invasive system existed it would not impact patient outcomes. It may make it “less painful” to gather data but that’s all it would do. The fact is a truly non-invasive system would suffer the same fate as a conventional system, in that after usage would decline over time as patients don’t understand what these data points mean or how they can be used to improve outcomes.

To those who point to increasing usage of CGM systems as an example of how technology improves outcomes we counter that the patients using these systems understand what the data means and how to use it. Yet for CGM to go mainstream, to expand beyond insulin pump and patients following multiple daily injection therapy, it must evolve. Thankfully Dexcom sees this and is taking the steps needed so they can increase sales.

Sorry to burst everyone’s bubble but this story isn’t about getting the data, this story is about what to do with the data.