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This morning Insulet (NASDAQ:PODD) announced that Daniel J. Levangie will be joining its board of directors. According to a press release issued by the company;
“Mr. Levangie formerly served as President and Chief Executive officer of Keystone Dental Inc., a privately held oral healthcare company. Previously, he held various executive management and leadership roles at Cytyc Corp. for over 15 years, most recently as President of Cytyc Surgical, until the company was acquired by Hologic, Inc. Prior to Cytyc, Mr. Levangie spent 17 years at Abbott Laboratories, where he held various sales and marketing management positions. Mr. Levangie currently serves as Chairman of the Board of Directors at Keystone Dental and as Director at Dune Medical Devices, Inc., Liposcience, Inc. and Exact Sciences, Corp. Mr. Levangie received his bachelor’s degree in Pharmacy from Northeastern University.” (Bold and underlining added by Diabetic Investor)
Mr. Levangie joins Charles Liamos the current Chief Operating Officer, Peter Devlin the current Chief Commercial Officer and Patrick Treanor Vice President of Sales – all of whom like Mr. Levangie have a history with Abbott (NYSE:ABT). Mr. Liamos was Chief Operating Officer and Chief Financial Officer of Therasense, which Abbott acquired. Mr. Devlin according to the Insulet web site; “spent eleven years at Abbott Diabetes Care, most recently as Divisional Vice President of Global Strategic Marketing. Previously, Mr. Devlin served as Marketing Manager of i-STAT Corporation, a point-of-care blood analysis systems company, which was acquired by Abbott.”
Given the company’s already close connection to Abbott, the FreeStyle glucose monitor is embedded in the OmniPod Personal Diabetes Manager (PDM), and the many Abbott alumni now working at Insulet, the next step seems rather obvious. As Diabetic Investor pointed late last week when Abbott was explaining their new corporate structure, while the company may not be actively looking to acquire another diabetes device company, buying Insulet does make sense.
Considering the number of Abbott alumni now attached to Insulet such a move should be easier as the Abbott culture is already infecting Insulet. Actually the two companies have more in common than just people as they have both proven that they know how to turn gold into sand. Abbott has spent billions acquiring two glucose monitoring companies, both of which they have run into the ground. While Insulet has a taken a revolutionary and innovative technology and is showing signs that they too know how to screw up a very good thing.
It would only be fitting should the Abbott make such a bold move, if they brought back Ed Fiorentino, the former President of Abbott Diabetes Care and the man who was largely responsible for the Navigator disaster to run the company. To Diabetic Investor that would not just be priceless but a never ending source of excellent copy.
As we have pointed out many times this is the wacky world of diabetes devices where anything can and usually does happen. Somehow Diabetic Investor sees it as fitting that Abbott desperate to maintain a presence with insulin using patients acquires Insulet, realizing that cannot afford to lose the strip volume should Insulet switch from the FreeStyle to a competing glucose monitor. Insulet is equally desperate as pod quality issues are hurting sales and damaging their reputation. They have also bet the ranch on the new, yet still not approved Eros pod which if it isn’t approved soon will only take the situation from bad to worse.
Such a move should also make Insulet investors very happy as they would no longer be faced with the company’s continued dilution of their shares or seeing the company waste money on acquiring businesses that will do nothing more than drain even more resources from other more critical areas.
Frankly the more we examine such a deal the more it seems to make sense, it’s not as if Abbott cannot afford the deal or that they no diabetes device experience. Nor can see the Insulet board of directors, clueless as they may be, not recognizing this as the prefect exit strategy and certainly more preferable then seeing the company loss even more value. However, this is a board of directors who do seem a bit detached from what’s really going on at the company so we guess it possible they would pass on what would be perhaps the only way for the company to maximize its value. Still, given the opportunity we think even the Insulet board of directors can’t be that out of touch with reality; is that even possible?