The rise in childhood diabetes and what it means for industry
Today the American Academy of Pediatricians will issue their first-ever clinical guidelines for Type 2 diabetes. While this is sad news it should shock no one as the diabetes epidemic continues to rear its ugly head. These guidelines call for more aggressive treatment of the disease and less reliance on oral medications and greater usage of insulin therapy. As Janine Sanchez, director of pediatric diabetes at the University of Miami Miller School of Medicine noted in an article that appeared in today’s Wall Street Journal, “Diabetes is an expensive disease, and complications are even more expensive. We definitely want to make sure that these kids are taken care of, because in the end we are all going to pay for that.”
Yet this rise in childhood diabetes has broad implications for the diabetes drug and device world as they will have millions of new customers who need the same things adults with diabetes need. However, it would be foolish if industry believes they can just resell the same old products they have been selling to adults as children with diabetes and their parents have different needs. A perfect example of this comes from the beleaguered glucose monitoring world, as the childhood market actually offers a ray of sunshine among some very dark clouds, here’s why-
Along with greater insulin usage is the risk of hypoglycemia, which even for an adult patient can be a harrowing event. One of the best ways to prevent a hypoglycemic event is making sure the child is receiving the proper amount of insulin and then monitoring after insulin administration to catch a possible hypoglycemic event before it happens. This is obviously very good news for both conventional and continuous glucose monitoring companies. But the real big winners will be companies like TelCare, Sanofi (NYSE:SNY), Dexcom (NASDAQ:DXCM) and LifeScan, a unit of Johnson and Johnson (NYSE:JNJ). Why, because they all have systems which either communicates with a smartphone or cellular network, something that will be a major selling point for worried parents who will spend the extra bucks to make sure their child is being monitored regularly. There are also a host of smaller less well-known companies that will benefit from this demand for systems that allow parents to track their child’s diabetes management.
The fact is the increase in childhood diabetes could be the tipping point and finally bring interconnected diabetes management into the mainstream. While adults may not want to be interconnected, this relaxed attitude towards their own diabetes changes when it is their child who must endure the daily rigors of diabetes management. These are parents who are not only used to being in touch with their children; they expect to be in touch with their children. This is also another reason why Diabetic Investor believes interconnected systems must be platform agnostic, yes iPhones are way cool and very popular with kids, Android usage is growing and it too is becoming cool.
Needless to say Sanofi, Novo Nordisk (NYSE:NVO) and Lilly (NYSE:LLY) should benefit from increasing insulin usage but Diabetic Investor would give the edge to Novo given their best in class insulin delivery devices. JNJ should not be counted out either as they recently purchased Calibra Medical the makers of the Finesse insulin patch. While Diabetic Investor doesn’t see a great demand for the Finesse among adults who prefer pens however, parents and their diabetic child just might like the patch as it allows for less frequent needle sticks and simple insulin administration without the all the education needed for a full blown insulin pump.
When it comes to diabetes, drugs or devices, and children two points are paramount; simplicity and connectivity.
Diabetic Investor allows believes this increase in childhood diabetes could spur the FDA into faster action on items such as regulation of health related apps, device connectivity and a clearer path for the artificial pancreas. The fact is nearly every child today is walking around with a cellphone which they use like their parents use their computers. Their cellphone has become the centerpiece for everything they do and they will expect their diabetes management fit within their already interconnected, wireless world.
With all the possible winners here companies like Novo, Sanofi and Bristol Myers Squibb (NYSE:BMY), AstraZeneca (NYSE:AZN) and GlaxoSmithKline (NYSE:GSK) may have some lobbying to do as GLP-1 usage with children is not even mentioned. . According to a study published in Diabetes Care back in May 2011 entitled “Treatment of Type 2 Diabetes in Youth” the authors noted: “On the horizon, therapeutic options that may prove beneficial for pediatric patients with type 2 diabetes are the incretin-based therapies.” It would stand to reason that children and their parents just might embrace a drug like Bydureon which requires just one injection each week, offers the additional benefit of weight loss, little risk of hypoglycemia and little need to monitor glucose regularly. Given the large and growing size of the pediatric market and the quest to ring every dollar of profit they can out of their branded products which aren’t facing generic competition, Diabetic Investor can almost guarantee we’ll see more and more studies related to childhood diabetes and GLP-1 therapy.
Lastly Diabetic Investor sees adult patients benefiting from the growing childhood diabetes market, as adults with diabetes also want simpler systems and they too use smartphones. Diabetes would not be the first market where kids influenced the purchasing habits of their parents; something that happens with regularity in none other than the market for smartphones and tablets. It would almost be ironic if the childhood diabetes market actually pushes companies to do the things adults have demanded for years. Since this is the very wacky world of diabetes, where anything can and usually does happen, that would be one wackiness Diabetic Investor would be thrilled to write about.
