This is about to get very interesting

Sometime later today the FDA is expected to render their decision for the oral version of semaglutide, the first orally delivered GLP-1. We anticipate a positive decision from the FDA which should come as welcome news to Novo Nordisk as they have pretty much bet the farm on this drug. Analysts continue to believe this drug has blockbuster potential and have already begun speculating how it’s approval will impact other oral diabetes therapies.

Just as refresher our position on the drug is also simple as we believe the drug will get off to a strong start once approved. The real test will come once the drug has been on the market as patients and their physicians become familiar with the drugs rather complex dosing regimen. There is no doubt the drug works when dosed properly and all things being equal, we understand the high level of anticipation. However all things are not equal here which makes us cautious in our outlook.

The oral diabetes therapy market isn’t the only market that’s about to get more interesting. As we learned this week with the many deals made, Tyler will soon be here. All the major insulin companies have a Tyler underdevelopment and it’s no longer a question of whether Tyler gets here but when he gets here. While we continue to believe the insulin companies will control the Tyler market there is room for debate.

As we noted the other day it is quite possible with the coming of a biosimilar short-acting insulin that a company like Dexcom could develop a Tyler of their own, say using the Companion Medical InPen and their TypeZero insulin dosing algorithm. Dexcom could then partner with a biosimilar company to provide the insulin who could package it for the InPen. Dexcom and Companion already work together, both companies have apps that can be easily reconfigured to make dosing recommendations and off they go.

While Abbott could do the same thing their deal with Sanofi tells us they won’t go down this path. Abbott seems very content to pursue their value strategy with Libre and really doesn’t seem interested at all in being in the insulin delivery business. Which is likely why their other partner Bigfoot has been unusually silent this week. As we stated earlier in the week the way the Tyler market is developing could well spell the end of not just Bigfoot but the many other companies with connected pens who are not partnered with the big three insulin companies.

The insulin pump market is changing as well as this week also brought us news that most of us already knew, when it comes to insulin delivery it’s the CGM system that matters, and the pump is secondary. This was confirmed by a study published in Diabetes Technology & Therapeutics which noted the effectiveness of Tandem’s Basal IQ system. Medtronic also released data for the 670G showing 73% time in range for patients on the system. The big difference between these two systems of course is the sensor that works with them, Tandem uses the Dexcom G6 while the 670G of course uses Medtronic’s own sensor.

The fact is the Dexcom G6 is far more accurate and reliable then the Medtronic sensor. As we have said all along when the 670G system works as designed it’s wonderful, the problem is that it hasn’t been working as designed on a consistent basis a problem directly linked to the unreliability of their sensor. With the Control IQ coming from Tandem Medtronic will be in for serious fight. The last hurdle Tandem must overcome is Medtronic’s formulary dominance. Should that domino fall, watch out!

Insulet for their part seems content to move methodically with the Horizon system which also works with the G6. The company is doing just fine now that the OmniPod has moved to a pharmacy benefit and sees no reason to rush Horizon to market and we agree. Of the three insulin pump companies we believe Insulet is best positioned when Tyler does get here.

Finally this week could well mark the beginning of the end for several CGM wannabes. The fact is Abbott and Dexcom are just killing it and making it tougher and tougher for anyone else, including Medtronic to gain any meaningful share. The coming demise of several of the connected pen companies also doesn’t help either. What good is it to partner with a company that may not be here in six months?

One last thought as to the future of the Medtronic diabetes franchise. Our gut tells us that the company has reached a critical juncture. The unit continues to struggle, their competitors are getting stronger and the coming of Tyler will hurt them more than Tandem and Insulet. Should payors begin to level the playing field this could spark a mass exodus and mortally wound the unit. They are doing their best to protect that goose that lays all those golden eggs, their installed base, but without formulary protection that goose will be dead duck.