Take a deep breath

Take a deep breath

This morning MannKind (NASDAQ: MNKD) and OneDrop issued the following press release;

“MannKind Corporation (Nasdaq:MNKD) TASE:MNKD) and One Drop today announced that they have signed a memorandum of understanding to enter into a collaborative agreement that would extend One Drop’s subscription service and digital health platform — which currently provides unlimited blood glucose testing supplies and 24/7 live in-app support from diabetes experts — by adding Afrezza as a rapid-acting insulin offering.

The planned collaboration will include three consumer-focused areas:

  1. Access, Cost Savings and Convenience initiatives, intended to simplify the complexity of starting and staying on mealtime insulin.
  2. Customized Coaching and Engagement designed to help people on Afrezza achieve the American Diabetes Association (ADA) recommendation of an A1C goal of less than 7%.
  3. Design innovation around packaging and exploration of a reusable Afrezza Inhaler with integrated Bluetooth technology.”

Neither company disclosed any financial terms of this collaboration.

At first glance we aren’t sure what to make of this deal as we don’t see it helping either company solve the problems they individually face. This will not improve formulary access and manufacturing costs two of MannKind’s biggest problems. Nor will it add a significant patient base to OneDrop as quite frankly there aren’t that many patients using Afrezza.

This deal strikes Diabetic Investor as lots of sizzle but very little steak. MannKind has a host of issues the biggest of which is growing scripts and based on all publicly available information that isn’t happening.

The OneDrop story is a little different as they are desperately trying to separate themselves from the crowd in the interconnected diabetes management (IDM) arena. A crowd which includes Livongo, iHealth and many others. As we have stated many times you can’t swing a dead cat these days and not hit a company that isn’t in some way working on IDM.

Reading through the remainder of the press release from this deal one would walk away with the impression that it’s OneDrop whose driving this deal and not MannKind. The release reads like a jumbo advertisement for OneDrop touting its many self-reported “accomplishments”.  Listen we have never disputed that IDM works what we have always questioned is whether this approach is scalable and what the impact of CGM will have.

Time will tell how deeply ingrained IDM becomes but the way things are going our sense is there lots of noise here but not a lot of music. That just as disease management was once hailed as the answer to better patient outcomes only to fizzle out, IDM is showing all these signs and more. Since IDM has come along we have always believed it was just disease management reincarnated with new technology. That instead of the telephone being the link between the patient and the coach, the telephone line was replaced by the smartphone and the cloud.

Just as disease management promised millions in savings IDM is touting these exact same benefits. What every IDM company is counting on is that the results seen with small sample sizes can be converted to broader patient population. That they can expand beyond insulin using patients into the huge non-insulin patient population. That they will succeed where disease management failed.

This is their path to riches as nearly every IDM company has the same goal, get bought by some cash rich high tech company. They know they don’t have to show results on a large scale they just have to show that results on a large scale are possible. This is the bait they will use to lure the big fish. A big fish who will likely fall for this trap just as disease management companies were bought up back when disease management was all the rage.

This is my friends is the benefit of being around this wacky world for 20+ years. As there isn’t a lot new here just an old idea reincarnated with new technology. An old idea which didn’t work all that well back in the day and likely will run into the same issues even with way cool whiz bang cloud enabled technology attached to it.