Random Friday Thoughts
Have you ever noticed that when things don’t go as exactly as planned that people just love to change the narrative. We thought of this today after reflecting on the Abbott earnings call. As we noted yesterday the company went to great lengths extolling just how great the Libre2 is and how it is the most accurate CGM on the planet. Which when you think about this it really makes no sense given that the Libre2 cannot be used with automated insulin dosing. Call us crazy but if Libre2 was all that great and as accurate as Abbott claims it is why then did the FDA find it necessary to add the warning for AID to the Libre2 label.
Even better since they didn’t get what they wanted Abbott then changes the narrative further by stating that the AID market really isn’t that important anyway. One day someone will have to explain to us why companies cannot just come out and say they were disappointed in the approval but are working to fix the issue. Keep in mind Abbott has deals with Tandem and Insulet, has invested in Bigfoot so they can integrate Libre into their AID systems so to say this market isn’t important is just disingenuous.
You also have to love that when the competition starts using your buzzwords you come up with new buzzwords. This happened this week when our friends at Livongo, a company which has become an expert at using buzzwords is now telling everyone they have shifted to delivering …. wait for it …. Consumer Driven Virtual Care. Now we aren’t what the hell that is but it sure does sound way cool whiz bang which is great because that’s about all Livongo has. This company has a market cap of over $10 billion why?
When news came out that Alphabet spinoff CityBlock Health raised $54 million we wondered is this a sign of things to come. Will Alphabet also spinoff their Verily Life Sciences unit which contains Livongo lookalike Onduo and then will Verily go public. Listen if Livongo can go public and achieve a market cap of $10 billion this just might be the smart move. It also makes us wonder why OneDrop another Livongo lookalike hasn’t hit the capital markets or why Omada Health yet another Livongo lookalike hasn’t either.
Going back to Verily and Onduo for a moment you gotta wonder how the folks at Sanofi feel right now. Remember Onduo was created as a Verily/Sanofi partnership valued at $2 billion. As with all Sanofi diabetes partnerships this one didn’t work out very well and being Sanofi they decide to exit the partnership. Now with digital health hotter than Georgia asphalt Verily now in complete control can take Onduo public and reap all the rewards not having to share with our wine drinking friends. We do love consistency and if nothing else when it comes to diabetes Sanofi is very consistent.
Listen we are many things but stupid isn’t one of them. We may not believe in what Livongo is doing, we may see it as old fashioned disease management in a shiny new box, we might think their revenue accounting methods are “interesting”, but we also see a market cap of $10 billion plus. We see investors ignoring some very real issues with the company, some very real competition coming yet ignoring all this while driving shares to this unreasonable, unexplainable incredible valuation. Momma Kliff always said don’t fight a hot trend even when there is NO there, there.
Sticking with Livongo for a moment and we should as their platform is based on old fashioned fingerstick monitors rather than CGM, you have to give them kudos for no one is better at shameless self-promotion. Heck they now have Cramer pumping the stock. As Mom said it may be chutzpah but even chutzpah has its rewards. We just can’t wait for the next buzzword or learn how the Livongo platform will cure the common cold. Right this very moment PT Barnum is green with envy.
Do we even need to mention that we came across yet another Dexcom wannabe? Another way cool whiz bang non-invasive CGM that looks like an Apple Watch. That this company which has zero experience in CGM, or diabetes found a VC group to invest in this concept. That this technology, which is old and didn’t work the first time around, will not work now even though it’s in a shiny new box. Let’s face it Mom was spot on when she said there is no cure for stupid.
Well it’s Friday and a beautiful day here in the city of big shoulders so let’s not waste it. Enjoy the weekend everyone.
