Welcome to the new world

Welcome to the new world

In honor of Columbus Day we thought it might be a good idea to review what this wacky world of diabetes has discovered over this past year. First and foremost this wacky world has discovered that the more things seem to change the more they stay the same. Yes there was a time in a galaxy far far away when it appeared that things might change that a new world order was in the offing. Yet the empire has not been defeated and one could argue is stronger than before.

This is particularly true in the drug space where Lilly (NYSE:LLY) and Novo Nordisk (NYSE:NVO) not only continue to dominate but have actually gotten stronger. While Sanofi (NYSE:SNY) and AstraZeneca (NYSE:AZN) continue to fumble about, Lilly and Novo are taking full advantage of their competitors ineptitude. We wouldn’t call the diabetes dug space a two-horse race but it is a race where there are two dominate thoroughbreds that stand above the rest of the field.

In the device field this sameness continues as well and it really doesn’t matter which device segment you look at. In the conventional glucose monitoring market Johnson and Johnson (NYSE:JNJ) continues to dominate with Roche, Abbott (NYSE:ABT) and Bayer fighting for the scraps that JNJ leaves behind. In the insulin pump market Medtronic (NYSE:MDT) maintains their dominance. Insulet (NASDAQ:PODD), Tandem (NASDAQ:TNDM) and JNJ continue to lag behind although thanks to the Dexcom (NASDAQ:DXCM) sensor Animas has seen somewhat of a resurgence. Speaking of Dexcom they continue to be the posterchild for how to run a diabetes device company.

When it comes to interconnected diabetes management (IDM) this once innovative category has fallen into the sameness trap. Yes just as the conventional BGM market has become a commodity market, IDM is headed down this same path.

The simple fact is far too many device companies and it really doesn’t matter which type of device are trying to build a better mousetrap when the last thing we need is more mousetraps. A perfect example of this is the continued fascination with dumb patch pumps. Yes in their never ending attempt to parse this market into ever smaller segments some very smart companies are about to do some very dumb things. One just might think that at some point someone just might stand up and say the surest way to make a small fortune is to start with a big one. That someone would look at the numbers and realize that the chances of a dumb patch pump being commercially successful are less than slim and none.

The one bright discovery this year has been the commercial failure of Afrezza. Now before everyone starts jumping all over Diabetic Investor let us be clear we are not against Afrezza as a therapy option. As we have stated consistently there is a place for Afrezza in the treatment paradigm. The issue with Afrezza is not whether the drug works, the issue with Afrezza has always been whether it could be anything more than a niche product. Well as those pesky facts point out the answer is getting clearer each day and the answer is Afrezza is nothing more than a niche product.

The real question is will be writing about Afrezza a year from now, will Sanofi come to their senses terminate the MannKind (NASDAQ:MNKD) partnership or will they continue to throw money into this sinkhole. Given this is the wacky world of diabetes where anything can and usually does happen all bets are off.

We would say that Afrezza has about as much chance at becoming a blockbuster as the Chicago Cubs do at winning the World Series this year. Yet the fact is those boys from the north side of town have a real chance at winning it all this year. That unlike Afrezza the Cubs are the real deal and win it all or not this year their future looks very bright. Too bad the same cannot be said for Afrezza or MannKind.