Unfortunately, No Surprises
Even before they reported their numbers we knew they would be more of the same; bad. Even before they stated that they remain committed to diabetes we knew this was their stance. Sadly, there wasn’t one surprise today with Roche and that my friends is why they like everyone else in conventional glucose monitoring are condemned prisoners walking the plank. And no, we do not care they bought mySugr because this is just window dressing.
Let’s count’em up besides Roche there is LifeScan, Bayer (yes, we still call them Bayer), Abbott (NYSE: ABT), OneDrop, Livongo, MyDario, Trividia, AgaMatrix (we think they are still alive), Arkray – we’re sure were missing a few but unless you’re in full rigor you get the point. Now every one of these players will tell you that they are transforming data from these old fashioned out of date systems into patient relevant patient actionable information. What they won’t tell you is that this is meaningless.
We will not get on our soapbox and say once again that CGM is replacing BGM. Nor do we feel it necessary to state again that few of these players have any real hard data that their system impacts outcomes in a positive way. Self-reported data and empirical evidence is nice but it’s also complete and utter bullshit.
Yes, we are getting a little cranky perhaps even a bit snarky in our old age but if it walks like a duck, talks like a duck it’s a frickin duck or in this case a bunch of dead ducks. Yet in a sign that the greater fool theory is alive and well the newcomers to duck soup continue to raise money. Now we will not debate the merits of these investments because we see no merit. To us all this money being thrown around is just one more piece of evidence that people have lost touch with reality.
Let’s say by some miracle the newcomers can achieve scale, which they won’t, but let’s say they do. What then? Will they still not be replaced by CGM? Do they own some sort of magic potion that will make prices rise? Can they afford to go 100% at risk and hopefully get paid something on the back end?
What the new guys seem to forget is that the old guys wanted to get out but they can’t get out because so far no one is dumb enough to buy them out. Roche had no choice but to stay in as like Johnson and Johnson (NYSE: JNJ) who is seeking a buyer for LifeScan, they couldn’t find one. Abbott is slowly moving away from BGM and is betting the ranch on Libre. And Bayer, yes, we still call them Bayer, seems content to sign deals with every pump and CGM player they can find.
Now just in case you have not yet caught up to our point here, perhaps you work at Sanofi (NYSE: SNY), please explain to us what the exit strategy is for a company like OneDrop or Livongo, just who is going to come along and buy them? Listen JNJ and Roche may be old school but if someone is going to buy anyone would it not make sense to buy an existing established well-known franchise rather than some newbie who really doesn’t have anything that exciting something that can be easily replicated and oh by the way will soon be outdated.
Yes, we know what they have is so way cool very whiz bang clouded enabled and by lord they even talk to Siri and Alexa. But what they don’t have is a prayer, a long term sustainable business model. What they need more than anything is for the wacky world to be just that, wacky. That some other company will come along fall for the bullshit and buy them.
As Momma Kliff used to say; “People just don’t like reality. They don’t like facts because facts get in the way of a great story.”