The Fat Lady Is Warming Up
It looks like this is the week Roche
decides whether or not to remain in the US insulin pump market. As Diabetic
Investor has been reporting the company is seriously considering withdrawing
from the US market and focusing on their international markets. According to
sources inside the company the decision has already been made to drop the
Disetronic brand name and a meeting has been set for later this month to re-orientate
the sales team.
Given the amount of chatter Diabetic
Investor believes this reorientation meeting will convert insulin pump reps to
meter reps.
Frankly leaving the US market would be
smartest move this company has made in some time. The company isn’t even a
relevant player here in the US and their international unit is struggling to
fend off strong efforts by Medtronic (NYSE:MDT) and Animas. The only realistic
way to save the domestic business is to blow up the existing unit and start
fresh. Given the company has nothing new in their pipeline it would also mean
spending some serious money to acquire better technology.
Rumors had been swirling that Roche was the
company interested in acquiring up-start Medingo, however Diabetic Investor
suspects these rumors were circulated to raise Medingo’s profile. While Roche
could easily afford to make the deal, getting Medingo up and running would not
be an easy task.
The reality is the Roche name, once held in
high regard has been seriously damaged here in the US. Besides having inferior insulin
pump technology, their glucose monitoring unit seriously mishandled the PQQ
enzyme issue. While we can understand why the company felt this was not a
serious issue, we cannot understand why they didn’t change their tune once it became
obvious this issue wasn’t going to go away.
Although the company has fallen from grace
here in the US, internationally the Roche names still means something. The
company also sees that it will be next to impossible to dethrone LifeScan in
glucose monitoring here in the US, so why not cut where you can and make the
best of a very bad situation. While the glucose monitoring unit continues to
lose share here, the unit is still very profitable. If they can stop the
bleeding it’s even possible the glucose monitoring unit would become attractive
to a possible buyer.
As Diabetic Investor has reported rumors
are rampant that insulin companies such as Sanofi-Aventis (NYSE:SNY), Novo
Nordisk (NYSE:NVO) and Lilly (NYSE:LLY) have been contemplating entering this
market. All three have the resources to
enter the market and understand that insulin patients are where it’s at when it
comes glucose monitoring.
Should Roche “officially” pull the plug it
really won’t change the dynamics of the insulin pump market. Medtronic continues to lead the way, Animas
and Insulet continue to gain ground. In reality the biggest loser here is
Insulet, as Roche was one of the companies rumored to be interested in buying
the company. Diabetic Investor still believes that Insulet would be a better
fit for Animas and that the Roche rumors we’re never really that serious.
So the more things change, the more they
really stay the same.
