Welcome to the hippie hippie

Welcome to the hippie hippie

For years Diabetic Investor has been searching for something that captures the feeling a company gets when they bilk investors out of their money. Something that describes that euphoric feeling when they know they have stolen money just because they have a great PowerPoint presentation. It’s almost as if management wants to break out the music and dance.  Yea that’s it a dance and we’ll call it the hippie hippie and doing the hippie hippie today is none other than Dance Biopharm who according to just issued press release raised $9.5 million in private financing.

Now just in case anyone hasn’t heard of Dance and we’d wouldn’t be surprised if you hadn’t according to the press release; “Dance Biopharm Inc. (Dance), a privately-held biotechnology company focused on the development of inhaled insulin products to treat diabetes”. Yep yet another inhaled insulin company raising money just as that soap opera known as Sanofi (NYSE:SNY) is launching Afrezza. And you can bet the ranch this fact did not go unmentioned when the folks at Dance were meeting with perspective investors. Investors who surly believed that there are other companies as dumb as Sanofi who will eventually come along and partner with or buy Dance. And you know what they are probably right no matter how badly Afrezza fails in the marketplace.

At this point it shouldn’t be necessary to note that Dance management believes they have built a better mouse trap. That their version of inhaled insulin is better than Exubera and Afrezza. That they have the special secret sauce. Honestly there are times when Diabetic Investor just wants to puke when listening to management spew this crap.

Yet management isn’t stupid either they see all the buzz surrounding Afrezza so why not strike the iron while it’s hot. Like their non-invasive brothers they know there are plenty of suckers who will buy into the hype, who won’t bother to do even the slightest due diligence and will happily, willingly write checks for millions of dollars. Management also knows that when the well is running dry and they need more money to survive they can go back to these investors saying “Oh we’re so close and with a few million more….” Then when all the private money runs dry and they can’t milk that cow anymore off to the investment bankers who will be happy, for a nice chunk of change, take the company public.

Listen if there is one thing everyone should know by now is that there are lots of suckers out there. Heck Diabetic Investor has seen this inside and out of diabetes, companies who raise $80 million in private money, then goes public, has a product which even if sold cannot be delivered and expects investors to pony up even more money in secondary offering just because the company might get sold in the future.  This is why investment bankers make the big bucks my friend as no one and we mean no one is better at selling horse manure.

So congrats to the good people at Dance who are surly doing the hippie hippie.