Not Shocking

Not Shocking

Everyone should have seen this coming, so it should surprise no one that Tandem shares fell nearly 16% yesterday or that Insulet and Dexcom feel. As we have noting these three stocks have been hotter than, and damn it’s getting difficult to find new adjectives to describe how hot they have been. The question becomes is the party over or are investors just taking a breather?

Of the three stocks we see Dexcom having the most reasonable chance for moving back upward. The company is just beginning to feel the impact of the G6, has an impressive pipeline and more deals coming too. It won’t be a straight shot to the moon but there is no reason to believe there are any major negatives either.

Insulet is doing ok and with the DASH coming seems reasonably positioned. They continue to lag in the sensor augmented area which we see as a major negative. The question is can they get their version onto the market quick enough.

Tandem’s fall is the most predictable and expected, heck the stock was up almost 2000%. Next week we’ll be attending the company’s investor day which should provide some clarity on the future. Third and fourth quarter results will tell much of the story. They have an impressive pipeline and lots of potential, but we need to see that potential realized before we’d feel comfortable investing. The financial crisis may be over, but the dynamics of the insulin pump market haven’t changed, well not yet anyway.

We also learned this morning that Novo Nordisk is cutting 400 jobs. Per a company announcement;

“Novo Nordisk today announced plans to restructure its Research & Development (R&D) organisation to accelerate the expansion and diversification of its pipeline across serious chronic diseases. To enable increased investment in transformational biological and technological innovation within both core and new therapy areas, approximately 400 employees will be laid off from R&D roles in Denmark and China.”

Novo has joined Sanofi who is also restructuring as their diabetes units continues to struggle. The big difference between these two companies is that one knows what they are doing and the other is well slightly more than clueless. The question many continue to ask about Novo is are the committed to the insulin market for the long term. While the question everyone asks about Sanofi is should they be committed as they continue to watch their franchise circle the bowl.

While we wouldn’t say that our friends in Indy are doing the happy dance watching all this, but they aren’t worried either. This is not to say they do not have issue of their own, we’re still trying to figure what they were smoking when they decided to enter the insulin pump market, they just seem to have fewer issues than Novo and Sanofi.

From the good news bad news department our friends in Northridge made a big deal out of a study published in the Journal of Medical Internet Research. Per a post on their web site;

“The results tell a powerful story about the impact that Canary Health’s digital chronic disease self-management programs can have on both health outcomes and costs. The study demonstrated significant healthcare savings of $815 per patient over the 12 months after the program.”

First, we want to commend Canary for doing a real clinical study something that seems like a foreign concept to others in the digital health space. However, look at what the researchers concluded;

“Patients in the BCBH-D program experienced reduced all-cause health care utilization and costs. Direct cost savings were US $815. Although encouraging, given the complexity of the patient population, further study is needed to cross-validate the results.”

In another study done and also published in the same publication the researchers concluded;

“Participants had small but significant benefits in multiple measures. Improvements previously noted at 6 months were maintained or amplified at 1 year.”

Again, kudos to Canary for doing studies but as the results from studies note drawing a straight line from using their program to better overall outcomes is precarious. The reality here is that we all know patient education works that has never been in dispute. The problem comes in two major areas, first getting this education to the patient and second keeping them motivated.

We really hate repeating ourselves but here we must as everyone continues to miss the point. Managing diabetes is not rocket science. For the vast majority of patient’s diabetes management is rather simple. The problem isn’t we don’t know how to manage diabetes or that there aren’t enough education/coaching programs that can assist a patient. The problem isn’t with the HOW TO MANAGE DIABETES. The problem is getting the patient TO WANT TO MANAGE THEIR DIABETES AND DO SO ON A REGULAR BASIS.

The more we research digital health and all these way cool whiz bang cloud enabled toys which transmit data, so it can be analyzed then regurgitated back to the patient is they ALL lack an understanding of how a real patient thinks. They are designed with the assumption that patients WANT to manage their diabetes and the missing link is education and data analysis.

When they should be designed with assumption that yes patients do want to manage their diabetes, but they don’t want this management to run their already busy lives. They want diabetes management to be stupid and simple something they don’t have to think about. As we have been stating with the advent of CGM and insulin dosing algorithms insulin using patients will soon live in this world. Yes, they will have thinking to do but not much. The system will do the all the heavy lifting for them.

Patients who use a GLP-1 will also fall into this category as GLP-1’s only work when they need to.

But what about the millions of patients who use orals alone to manage their diabetes. No amount of technology, no device, no algorithm no toy can make them take their meds as they are prescribed. All they can do is tell the patient how to manage their diabetes THEY CANNOT MAKE THE PATIENT WANT TO MANAGE THEIR DIABETES.