Viva La France

Viva La France

Well it seems that France is not only home to that soap opera three ring circus known as Sanofi (NYSE:SNY) but will soon be home to the latest insulin pump company pursuing an initial public offering. Yes besides wine, champagne, cheese and beheadings we’ll soon find out if the French have an appetite for shares of CellNovo. Now if that name sounds familiar it should as Diabetic Investor has been following the company for several years.

After an overhaul, more like complete change in management, the company now thinks it’s a good time to go public. Given that Asante has had to delay their IPO due to lack of investor interest and that Tandem (NASDAQ:TNDM) is going back to the capital markets to raise more money, CellNovo likely felt that it wasn’t a real good idea to go public here and better to punish the French.

Now just in case you are unfamiliar with CellNovo and you just might be, the company makes …wait for it … a patch pump. Yes CellNovo wants to compete with our good friends in the great state of Massachusetts, Insulet (NASDAQ:PODD) who’s having issues of their own, but we digress.

Like so many insulin pump wannabes CellNovo hook is lower cost of goods and way cool design. Also in an ironic twist the management team at CellNovo actually has more diabetes experience than the new team at Insulet. (Like we noted earlier Insulet has issues.)

Now Diabetic Investor is not familiar with the French way of doing things and from what we’ve seen at Sanofi we really don’t want to become familiar with them but CellNovo’s choice to go public there is notable. Perhaps management has a fondness for chardonnay or likes the fact the French government, unions and media all want a say on how CellNovo should run their company although none of these parties will have a financial stake in the company. Yep you just gotta love it when these loudmouths who are unwilling to risk their own capital feel they have the right to tell a publicly traded company how to run their company. Kind of reminds Diabetic Investor of a mother-in-law, but again we digress.

We also have some advice for Eric Beard Executive Chairman and Chairman of the board of directors, please do not follow the Serge Weinberg school of management when dealing with the French. Please put the interest of your stakeholders ahead of pleasing the French, who no matter what cannot be pleased. Run CellNovo to create value for your stakeholders not to destroy it. And above all else if you have something bad to say about your sales team keep your mouth shut, or at least don’t say it in public forum, as one day those words just might come back to haunt you.

Listen Diabetic Investor has no idea if CellNovo will be successful, we hope so for the sake of stakeholders, but as we have noted many time the insulin pump business is tough and getting tougher. The market is highly competitive, pricing pressure is intensifying and did we mention that Medtronic (NYSE:MDT) owns the market. Yes the product is way cool and whiz bang but as we have noted anyone can build an insulin pump it takes real talent to run an insulin pump company. However in today’s market even real talent may not be enough.

Yet the more we think of it we have figured out why the company is going public in France. Now we have no idea if Mr. Beard is friends with our good buddy Serge but he must be aware of his fondness for pleasing the French and what better way to do that than to acquire a company that’s traded on the French stock exchange. Surly Mr. Beard is aware of how Sanofi just loves to blow billions on crazy deals, the MannKind (NASADAQ: MNKD) partnership is the most recent example. He also knows the company has experience in the device space with the way cool now way dead iBGStar. Plus he knows that the company does have a liquid short acting insulin Apidra which isn’t doing all that well and what better way to sell more Apidra than to acquire an insulin pump company. Most of all he is aware that Sanofi is desperate to look good after a series of disasters in diabetes.

As they say in France this CellNovo IPO is another example of “C’est des conneries”.  (Look it up its worth the effort.) Viva La France.