TGIF
Before we get started today we need to clarify something, yesterday we stated that OneDrop and Dexcom (NASDAQ: DXCM) were not partners rather they were collaborators. As we noted this characterization came from Dexcom. Well as it turns out legally the two companies are partners as are the other companies who are taking advantage of Dexcom’s open platform. However, this “partnership” does not involve any money and Dexcom is not favoring or endorsing any one of these partners over another.
What burns us here and this is rather obvious is how OneDrop is trying to imply that this “partnership” with Dexcom is somehow an endorsement of their unproven platform. Just so we are crystal clear we will continue our assault on OneDrop or any company who makes outrageous claims based on self-reported data that is not independently verified. This may ruffle feathers but as Momma Kliff used to say; “If you want a friend get a dog.”
Now onto the business at hand. Some may have noticed the incredible turn around in MannKind’s (NASDAQ: MNKD) stock price. Over the past month alone shares are up almost 40%. Many are speculating that the company now under new leadership has turned the corner and it will be smooth sailing ahead. While this is certainly possible we remain skeptical and not just because they are running out of money.
As we have stated from day one the issues with Afrezza are not therapeutic, the drug does work and there is a place for Afrezza in the treatment paradigm. No, the issues with Afrezza are structural, cost to manufacture, getting the drug on formulary and competing with lower cost entrenched competing products. Yes, we realize these mundane items might not matter to some but they are the difference between success or failure for the future of MannKind.
Next on today’s hit parade are the good folk at Tandem (NASDAQ: TNDM) who’ve got to be wondering if they have a future. From what we are hearing many have come in kicked the tires and looked under the hood. Yet, so far anyway, no one is willing to pull the trigger and buy the company. We remain convinced that the company creditors are controlling this process and could cut a deal where they get something which leaves existing shareholders out in the cold.
Making life more difficult is these same interested parties are also kicking the tires at Animas. The general belief being better to buy Animas first then roll what’s left of Tandem into this new company. Once combined they would convert patients to the more cost-effective system which comes with a leaner organizational structure.
The feeling among many is that Medtronic (NYSE: MDT) even with their huge installed base and dominance in the insulin pump market is more vulnerable than ever. The 670G launch is hampered by the sensor shortage, they had a major recall and now must deal the impact of the hurricane on their facility in Puerto Rico.
It’s also becoming clear now that patients are using the 670G that this is not the system many thought it was. Many patients who’ve used the system have noted that it’s more difficult to use than previous systems. Now let’s be clear there are many patients who love it and believe it is the best thing since sliced bread and soft soap.
The reality is exactly what we thought it would be. Yes, the 670G is an advancement in insulin pump technology. No, the 670G is not a true artificial pancreas however due to circumstances beyond Medtronic’s control it was billed as such. Add in some of the self-inflicted snafus with the launch and what you have is a kind of love hate situation.
Over time Medtronic will solve the issues they face and it would be foolish to believe they are in serious danger of losing patients to the competition. Are the vulnerable? Well yes and no. Yes, if someone could come along with a cost-effective elegant solution, something like what we saw at EASD with the new Ypsomed pump. No, simply because Medtronic owns the space and not just from a patient perspective.
So, we are where we have always been with Medtronic, having a competitor who not only has the technical expertise to compete but also the management talent to compete. Oh, and just to make it more interesting this competitor whoever it is must have some serious bucks otherwise they will run into the same fate as Tandem, Animas, Smiths Medical and Roche.
Now one last thing before we let everyone get ready for the weekend. The entire insulin pump market could be turned upside down IF and this a HUGE if a consortium of companies teamed up to take on Medtronic. A consortium that could include a sensor company, an insulin company and perhaps a one of our friends in the Valley. Backed with big bucks this consortium could buy Animas, Tandem and the rights to the Ypsomed system all under one roof, with one back office and one sales team.
As our good friend, the loopy Lou used to say; “This would stir the pot with one heck of a spoon.”
