The Easter Egg Hunt
First from all of us here at Diabetic Investor including Momma Kliff a Happy Passover and Happy Easter. In the spirit of Easter we were shocked learn that our wine drinking friends are about to embark on an Easter egg hunt. For our Passover celebrating friends this is the equivalent of finding the Afikomen. Anyway no matter which holiday the folks at Sanofi (NYSE: SNY) have decided that its time to go all in when it comes to diabetes.
According to well placed sources the company after a series of meetings has decided now is not the time to say goodbye to diabetes rather its time for one last go around. It seems as though two camps were developing inside the company. One which believed best to cut their loses and get out of diabetes entirely, the other the exact opposite that now was the time to go big. In an astonishing moment of clarity management realized these two camps could not co-exist peacefully and in an unSanofi Ike moment decided that a decision had to be made.
While details are still somewhat sketchy and this being Sanofi nothing is written in stone anyway, more like pencil, the first move is to buy Google out of their much ballyhooed partnership. Now it’s well known that the folks at Sanofi haven’t been thrilled with this deal. That after spending $250 million they should have something to show for this investment other than well written press release. We reached out to our friends in the Valley for comment and all we got back was an cryptic email saying they were too busy laughing and could not comment at this time.
Step two in this go big plan is to buy not one, not two but three yes three diabetes device companies. CellNovo, Tandem (NASDAQ: TNDM) and wait for it …. Dexcom (NASDAQ: DXCM) are on the Sanofi shopping list. Now before we go any further this is likely why the folks in Mountain View are laughing as they too have a partnership with Dexcom and why not let Sanofi spend all the money so they can reap huge profits when the slap it on turn it on sensor is ready.
See it seems Sanofi has decided to go back in time and do what they wanted to do before Lantus the goose that laid the golden eggs was cooked. The goal … wait for it … start selling diabetes management systems not individual pieces of the system but everything a patient needs to manage their diabetes all in one nice neat package. And what better place to start than insulin using patients an area Sanofi knows something about already and has established capacity too. So besides pumps Sanofi also will launch their version of Tyler.
Step three, which we understand may or may not happen, is buying the diabetes portfolio from AstraZeneca (NYSE: AZN). This gets them a once-weekly GLP-1 pus a host of orals allowing them to compete head on with Lilly (NYSE: LLY) and Novo Nordisk (NYSE: NVO).
While we were not privy to the discussion between our good buddy Serge and his partner in crime Olivier they hatched this plan over a series of dinners which according to sources who were present involved some outstanding Chardonnay. Again these are not direct quotes but based on what we were told by sources who were present. It seems the two went back and forth lamenting how badly this got screwed up in the first place and doubting that it could be fixed. Then it was Serge who indicated how embarrassing it would be if they just surrendered and called it quits.
Olivier noted they didn’t want to be like Johnson and Johnson (NYSE: JNJ) and get nothing for Animas and a mere $2.1 Billion for LifeScan. An understandable sentiment. Therefore the two agreed lets not go home lets go past big and go huge. `
Now before everyone drops the eggs in their basket or breaks the afikomen lets keep in mind a few things. First this is Sanofi we’re talking about and even when and offers they seem to have made a decision they haven’t exactly demonstrated the ability to follow through with these decisions. Second while CellNovo and Tandem would happily sell we’re not so sure about Dexcom. In fact were not sure that Google might just say screw you Sanofi your not buying us out were buying you out and on top of that we’ll buy Dexcom and Tandem.
Anyone who remembers the movie the Godfather think of the scene when Micheal goes to Vegas and offers to buy out Moe Green. It’s a classic which I’m sure is on YouTube and aptly describes what could happen between Google (Micheal) and Sanofi (Moe Green). But we digress.
The last thing to remember is that besides it being Easter today it’s also April Fool’s Day.