Overstating the obvious
According to a study published in the most recent issue of Diabetes Care; “Appropriate use of structured SMBG (self-monitoring of blood glucose) significantly improves glycemic control and facilitates more timely/aggressive treatment changes in noninsulin-treated type 2 diabetes without decreasing GWB. (general well-being)” Ya think?
And who do we have to thank for funding this study that tells us what we already know, the good folks at Roche Diagnostics. Roche just can’t seem to come to grips with the fact that the majority of patients with type 2 diabetes don’t have a clue when it comes to understanding what their glucose readings mean or how they can use this information to more effectively manage their diabetes.
For some time know Diabetic Investor has been wondering if Roche even had a strategy for BGM. This is, after all, a company who has seen their market share plummet and is now in danger of falling to third place. This is also a company who could not recognize that it’s not a good idea to support the use of the PQQ enzyme, when everyone else and the FDA view this enzyme as a problem.
This is also the company that spent almost $200 million to acquire an insulin pump company and has yet to launch the product. Hardly a surprise when you consider they spent over a billion dollars to acquire Disetronic, which at the time was the number two player in insulin pumps, only to have the FDA suspend sales shortly after the acquisition. Maybe Diabetic Investor is looking at this the wrong way, but our guess is Roche management is looking at the bright side and sees it as a positive step as they are only throwing away $200 million rather than a billion.
Getting back to BGM, a market clearly in turmoil, by supporting this study it appears the company is taking a different tack than their competitors. Instead of targeting insulin using patients, Roche seems to believe that with studies such as these they will convince non-insulin using patients to monitor their glucose levels more frequently. Management has likely reasoned that no one else is targeting this patient population and therefore these patients should be easy pickings. Never mind there are numerous reasons why LifeScan, Bayer and Abbott (NYSE:ABT) target insulin using patients, Roche seeking to differentiate themselves from the competition prefers instead to lose even more market share by throwing good money into a bad strategy.
As much as Diabetic Investor would like to believe otherwise, we do live in the real world and understand that while it would be great if non-insulin patients all of sudden found religion and began regularly monitoring their glucose levels, this dog just won’t hunt. The simple fact is it was the BGM industry itself that is responsible for this situation and there is no reversing a trend that started many years ago. Add in the fact that physicians are embracing GLP-1 therapy for their type 2 patients, a therapy which does not require glucose monitoring, and this market will get even worse.
Although Diabetic Investor is not an expert in business, we do know that the surest way to turn gold into sand is to get an increasing share of a declining market. The reality for BGM is simple; insulin using patients are where it’s at.
Diabetic Investor isn’t shocked or surprised that Roche has chosen to move in this direction as they have consistently proven the one thing they excel at is losing market share. This apparent change in strategy also has proven beyond a shadow of doubt that hands down Roche is the worst managed diabetes company on this planet. There was a time when Diabetic Investor thought this honor was a toss-up between Roche and Abbott but Abbott does not hold a candle to Roche when it comes to doing the dumbest thing possible.
As Diabetic Investor has been reporting as bad as the BGM market has become there are still companies not currently in the market who want to enter the market; companies who will willingly pay good money to become a player in BGM. Diabetic Investor thinks it’s about time Roche does the decent thing and sell this unit to someone else. Frankly it’s painful to watch a company who once was the dominate player in BGM become a bit play
Put another way, if you look at the BGM market like a prize fight, Roche is getting pounded and offers little in the way of defending themselves. It’s time to end the beating and throw in the towel. While they may not wish to admit defeat Roche would be wise to remember the words of Winston Churchill after the British forces surrendered at Tobruk; “Defeat is one thing; disgrace is another.”