Waiting for Sanofi’s next move

Waiting for Sanofi’s next move

Yesterday was a great example of how Sanofi-Aventis (NYSE:SNY) is getting set to turn the diabetes world upside down. Rumors were rampant yesterday that the company had gone out and bought a blood glucose monitoring company. A move that really would come as no surprise, as the company has been very public about their desire to move beyond insulin and into medical devices.  The company already has a relationship with privately held AgaMatrix and adding an established BGM player would give the company an instant presence in the BGM market.

While Diabetic Investor cannot confirm a deal has been done, all the usual suspects when asked claimed to know nothing about a deal, don’t be surprised if a deal is done sometime in the near future. The fact is diabetes is now a core focus for Sanofi and the company has allocated the resources needed to make the company a major force in both drugs and devices.

As Diabetic Investor reported after the AACE conference it would not come as a shock if Medtronic (NYSE:MDT) sold their insulin pump unit to Sanofi. The reality is that Sanofi is about to turn the diabetes world upside down not just because they have the resources to do so, more so because the company sees where the market is headed. Additionally the company is not handcuffed by any established rules and brings an out of the box way of thinking to the diabetes market.

Frankly nothing is off limits to Sanofi and their acquisition binge could move beyond diabetes drug and device companies and include software companies as well. This is what makes Sanofi’s approach intriguing as they understand that patients, physicians and educators need tools that all talk with each other. This move towards greater connectivity will allow patients to better their diabetes and ultimately achieve better outcomes.

Diabetic Investor believes that Sanofi will ultimately become the first to company to offer a fully integrated diabetes management system that will include everything the patient needs. The Sanofi system will seamlessly communicate with the physician’s office, allowing the physician to remotely monitor and advise their patient. Like Diabetic Investor, Sanofi sees the reimbursement environment changing where physicians will have a financial incentive for achieving better patient outcomes and not just treating their diabetes. Sanofi looks to be known as the company who has all the tools the physician needs to achieve this objective.

The bottom line here is that Sanofi is bringing some much needed fresh thinking to the diabetes arena. Their competitors would be well advised to pay attention to what the company is doing and planning a counter offensive of their own. Should they choose to take a wait and see approach, as they have done in the past, it will prove to be very costly. There are several companies to watch in diabetes but none will have a bigger impact than Sanofi-Aventis.