The return of the “GlucoWatch”

The return of the “GlucoWatch”

Diabetic Investor once referred to the diabetes business as the “Hotel California”, a place where you can check out but never leave. At the time we were referring to the many executives who made their mark then left the industry only to return. As it turns people aren’t the only things that return from the past as so do very bad ideas.

Recently Diabetic Investor has come across several companies that are developing … wait for it .. an updated version of the ill-fated GlucoWatch. Now for those who are new to the diabetes industry allow us to suggest that you take a trip through the Diabetic Investor archives as we actually covered the first version of the GlucoWatch back when Diabetic Investor was a print publication.  (Yes way back Diabetic Investor was printed on something called paper, which was then sent to subscribers through the U S Postal service, imagine that.)

As the name implies the “GlucoWatch” is a watch like device which using sensors measures a patient’s glucose levels on a semi-continuous basis. Now never mind that the first version of the GlucoWatch didn’t really work all that well and the company eventually was sold at fire sale prices to Animas, who at the time was not yet owned by Johnson and Johnson (NYSE:JNJ).

Not surprisingly the first version of the GlucoWatch received lots of attention and lots of money from investors who fell for the most common trap in diabetes investing; the reason patients don’t test their glucose is because of the pain associated with testing; that if someone invented a non-invasive method for measuring glucose patients would test regularly which would in turn make these investors rich as the company would surely be acquired for billions.  The GlucoWatch also came with a unique twist as it measured glucose semi-continuously, something which is commonplace today but unheard of back in the day.  Cygnus, the company who developed the first version of the GlucoWatch was once considered a hot commodity.

But just as every other non-invasive product before it, the GlucoWatch failed to live up the hype and as noted earlier Cygnus was eventually sold to Animas for a fraction of what everyone said it was once worth.  A scenario that could well repeat itself today if these new GlucoWatch companies continue to find investors dumb enough to believe they have solved the problems that plagued the first GlucoWatch and they own the rights to the Holy Grail of diabetes, a truly non-invasive continuous glucose monitoring system.

Now some just might think that given the checkered history of this space that major, well-respected companies wouldn’t touch the non-invasive space with a 10 foot pole. That they would see that GE, yes the company that brings good things to light”, just lost $8 million by investing in the latest non-invasive continuous monitoring scam C8 MediSensors. But nope just to prove that the greater fool theory is alive and well, Apple yes the makers of the way cool iPhone, are entering this space. According to a post last Thursday on the AppleInsider blog  “Apple has allegedly hired a number of experts in the field non-intrusive medical sensors, ranging from vein mapping to glucose tracking, potentially revealing some of the company’s interests in developing a wrist-worn smart accessory.”

The post goes on to state;

“Apple is rumored to have hired employees from companies such as AccuVein, C8 MediSensors, and Senseonics, a report published Thursday by 9to5Mac claims. Specifically, it was said that after the company C8 MediSensors went out of business, Apple “moved aggressively” to hire former directors and engineers from the company.

Prior to its closure, C8 MediSensors specialized in non-invasive sensors that could track substances inside the body, such as glucose levels.”

Now we know what everyone is thinking here, heck if Apple sees something here there must be something too it. As much as we’d like to believe this is true, 20 years of covering the diabetes market tells Diabetic Investor this is just an updated version of snake oil. Frankly we’re not that surprised Apple has fallen for the same horse manure that GE fell for as they likely think as GE did, heck we’re Apple and we can do anything.  The fact is the non-invasive space is littered with examples of companies who have come along with what looked like a great idea only to see that great idea fail and fail miserably. But not before the company was able to bilk their investors out of more money as they were always oh so close and just a few millions more would put them over the hump.

The fact that a company as respected as Apple would even delve into this space will surely embolden the many other GlucoWatch companies as they can now go to investors and say; “Hey Apple is in the space too.” This in a nutshell is the problem with the non-invasive space, in spite of overwhelming evidence investors fail to do their due diligence or worse they believe that someone has actually built a better mouse trap and the heck with history. They ignore the advice of experts in the field who advise them that investing in the non-invasive space is like throwing money into a never ending sinkhole.

They delude themselves into believing the myth that has driven the non-invasive scam from day one that patients don’t test because testing is painful. That any company that develops and commercializes a non-invasive glucose monitor will reap billions as diabetes is growing at epidemic rates and patients need this information to manage their diabetes.

They ignore the fact that the majority of patients don’t test not because testing is painful rather they have no idea what all these numbers mean or how to use these numbers to better manage their diabetes. That for many patients testing is just one more reminder that they have a chronic disease. That for the millions of patients who do not use insulin testing is somewhat irrelevant as no matter what the results show there really is nothing the patient can do it anyway. As much as Diabetic Investor believes that patients should be testing we understand why they are not. Unlike the companies who invest in the non-invasive space we live in the real world.

So get ready folks now that Apple has arrived expect to see more of this crap and that’s exactly what it is.