The musical chairs continue

The musical chairs continue

Well it seems Pat Sullivan the recently appointed CEO of Insulet (NASDAQ:PODD) isn’t quite finished making changes to the disorganized company he inherited. According to a company issued press release; “Insulet Corporation (NASDAQ: PODD), the leader in tubeless insulin pump technology with its OmniPod® Insulin Management System, today announced the appointment of Daniel Levangie to the newly-created role of President, Insulet Drug Delivery, and Ms. Shacey Petrovic to the position of Chief Commercial Officer, both reporting directly to Patrick Sullivan, President and Chief Executive Officer.”

The company also announced that Dr. John Fallon has been appointed Lead Director of Insulet’s Board of Directors, taking the position previously held by Mr. Levangie.

In keeping with his custom Mr. Sullivan seems to believe that experience in the wacky world of diabetes is not a prerequisite to being part of the Insulet management team, as neither Mr. Levangie nor Ms. Petrovic have any direct diabetes experience. Initially Diabetic Investor thought this lack of diabetes experience was a plus however this was before we learned how much trouble the company was in thanks to the former management team.

With the company’s earnings call coming up at the end of the month perhaps we’ll learn why Mr. Sullivan does not see diabetes experience as a plus for a company that makes insulin pumps which are only used by people with diabetes. Yes we understand that the OmniPod can deliver other drugs besides insulin but insulin pumps are their core business, the main reason the company generates revenue. It’s also true that any non-insulin deals or partnerships will take time to develop and even longer for the company to see any revenue. We’re not saying this area should be ignored however given the many issues with the insulin delivery business best to put out the fire before trying to rebuild the barn.

Frankly it really doesn’t matter how much the previous management team screwed things up or how many lies they told. Insulet has some serious problems and these problems won’t magically go away. What this company needs more than anything is an experienced team that not just understands diabetes but the wacky world of diabetes devices. At minimum a portion of the new management team should bring this experience. To Diabetic Investor this like asking a team of non-sailors to compete in the America’s Cup. Even with the best boat in the field this inexperienced team stands no chance of winning.

So far Diabetic Investor has given Mr. Sullivan somewhat of pass as he was thrown into the deep end of the pool. As much as we like the fact he’s not shying away from the problems and letting the truth be known we are concerned that he fails to grasp just how wacky this world is. Granted just because someone has worked in this wacky world doesn’t mean they are necessarily more talented than the team Mr. Sullivan has assembled. Still given the issues facing the company it would be nice if a few grown-ups were sitting at the dinner table.

What’s becoming clearer every day is the ultimate goal of selling the company is still a long way off. Let’s just hope this new team has the ability to learn and quickly as the insulin pump market isn’t going to get any easier. Not with a refocused Medtronic (NYSE:MDT), a brave newcomer in Tandem (NASDAQ:TNDM), a for the moment in the business Animas and now Asante becoming well capitalized.

Insulet stakeholders better hope that Mr. Sullivan is a good judge of talent as these newcomers are about to be put to the test. Like Mr. Sullivan they are being thrown in the deep end of the pool, sure hope they know how to swim for if they don’t this could get ugly in a hurry.