October 30, 2017 shares of Tandem closed at $2.24 yesterday shares closed at $61.91 THAT’S AN INCREASE OF 2,663.84%. That’s not astonishing that’s firkin crazy. Just by way of comparison Dexcom over that same time frame increased a very respectable 209.30%. Now we’d say a Tandem like turnaround is a once in a lifetime event but in this wacky world of ours you never know. And many have asked of all the public companies in our wacky world who is the most likely to experience a Tandem like rise.
It’s really no surprise that many think the newest publicly traded company Livongo stands the best chance to replicate Tandem’s success. Digital diabetes is the hotter than Georgia asphalt and many suspect that it won’t be too long before Livongo gets acquired for a nice fat multiple.
We on the other hand have a different view of Livongo. To us Livongo is like a beautiful woman that all the guys want to date. Yet once they do, they find out there isn’t much substance to go with that beauty. Yes there are guys who only want nice arm candy but when it comes to long term relationships, we’ll take substance over flash any day.
This is how we see Livongo lots of beauty on the outside but not much substance.
Senseonics is another possibility. The company has a respected product, is in another hot space CGM and is currently struggling financially as Tandem was. Over the past year shares have fallen over 70% currently trading at just over $1.
Yet we aren’t convinced Senseonics can pull it off over the long term as the company is facing some very serious obstacles, obstacles that Tandem didn’t face. The biggest of which is reimbursement combined with their business model. Being an implantable sensor the key for Senseonics is bring their costs in line with Libre and Dexcom and to be honest we just don’t see this happening. CGM costs are going lower NOT higher.
We do see a place for the Senseonics sensor however this is a niche not mass market.
Believe it or not we see MannKind standing the best chance to have a Tandem like turnaround. Now let’s be very clear here we don’t expect any company to see 2000% type growth, Tandem is the ultimate outlier. However now that MannKind has cleaned up their finances they can start running the business without the fear of going out of business. This is exactly what happened to Tandem, who back in October of 2017 was on deaths doorstep.
Want more craziness the potential for the turnaround is not 100% linked to Afrezza. While improving Afrezza sales will help MannKind should not be viewed as a diabetes company rather a drug delivery company that happens to have a diabetes drug. If MannKind is to pull this off and there is no guarantee they will it will be because they found more partners who want their drug to use the MannKind delivery system.