Henry David Thoreau once wrote; “Shams and delusions are esteemed for soundest truths …. By closing the eyes and slumbering, and consenting to be deceived by shows, men establish and confirm their daily life of routine and habit everywhere, which is built on purely illusory foundations.” This statement best sums up where Roche stands with their struggle diabetes care unit.
Listening to the replay of the company’s full year results which were released today it’s quite clear the company is content to live in their own little fantasy land rather than take the difficult step of living in the real world. When you look at the full year results for the diabetes care unit which had 0% growth, it’s difficult not to break out laughing when Dan O’Day, the head of this unit, stated that the unit was “growing significantly faster than the market.”
He was much more believable when he went to state that since things are going so well nothing much is going to change the way the company is doing business. These two statements demonstrate the depths to which the company has sunk into drinking their own kool aid. Never mind that here in US their BGM unit has lost nearly 12% share points or that their insulin pump unit is becoming the laughingstock of the industry. Nor does it seem to bother the company that their sales force is sitting around doing nothing, collecting their paychecks as they wait for the ax to fall.
Diabetic Investor could go on but why bother. The facts speak for themselves even if the company chooses to ignore them. As Ralph Waldo Emerson once noted; “A man [cannot] dupe others long, who has not duped himself first.”