The week in review

The week in review

There are few weeks in this wacky world that can match what we have witnessed this week. Let’s just for a moment reflect on what we have learned and how these events will impact the future.

Glucose Monitoring

Although we have known for some time that the conventional glucose monitoring market was headed for obsolescence this week provided even more evidence. The growing prevalence of continuous glucose monitoring and continued price contraction have killed what was once a great business. The question going forward isn’t what will happen rather when it will happen.

As it stands today Johnson and Johnson (NYSE: JNJ) looks to be the only major player who can survive longer term. The question for JNJ is can they successfully make the transition from a seller of products to a seller of diabetes management systems.

The outlook for Roche and Abbott (NYSE: ABT) is not so good. Abbott continues to bet their future on the Libre but is well behind the curve here. Even if the Libre is approved for consumers here in the US we doubt it would be able to make deep inroads into the expanding continuous market. Roche has an even bigger problem as they just don’t have a coherent strategy, there is nothing to indicate they have a plan to deal with the changes taking place. Libre may not be the optimal plan for Abbott but at least it’s a plan.

Continuous Glucose Monitoring

Although we and quite frankly most everyone else expected Dexcom (NASDAQ: DXCM) to receive a non-adjunctive claim yesterday’s FDA favorable panel vote is a significant milestone. This victory could well open the door to CMS coverage for CGM while giving Dexcom a major leg up over Medtronic (NYSE: MDT). CGM is the lone bright spot in the diabetes device world and Dexcom is just killing it.

Closed Loop Insulin Delivery

Although we aren’t quite sure how big this market is or may be, there is no question in our mind that closed loop insulin delivery will happen. Besides Tandem’s (NASDAQ: TNDM) announcement yesterday, BigFoot BioMedical also announced yesterday that they will begin clinical studies for their closed loop system. The question here is not one of therapeutic benefits, the question as we see it is whether there is enough patient demand. Still after many false starts a closed loop insulin delivery system is no longer a pipedream it will soon be a reality.

Looking at the calendar for next week our attention turns to the drug world. The two most important calls happening Tuesday when Lilly (NYSE: LLY) reports and Friday when Sanofi (NYSE: SNY) reports. This is almost a tale of two cities, with Lilly seemingly having the best of times while Sanofi having the worst of times.

Thursday will be spiced up when Tandem reports. As we have been reporting the company is facing several critical issues and their very survival is at stake. At this point our belief is not when Tandem gets acquired but by whom and for how much.

Happy Friday everyone enjoy the weekend.