Well that didn’t take long

Well that didn’t take long

It seems as if Abbott (NYSE:ABT) has already issued a Field Safety Notice for their new FreeStyle Libre. In the alert, the company has outlined that a software feature designed to disable the device’s sensor if it identifies a loss of power may not function correctly, which could lead to power loss not being properly highlighted.

The company has warned that in such circumstances, the sensor may provide previously collected glucose values as if they are the latest results, meaning erroneous information could be provided to the user. Abbott Diabetes Care has confirmed that erroneous results not recognized by the user may pose significant risk to their health.

This news comes on top of what Diabetic Investor would call mixed reviews from patients who have been using the Libre. The main issues, which should surprise no one are sensor reliability and accuracy. Now Diabetic Investor isn’t all that surprised by these issues and suspects this is one of the reasons the company only launched the Libre on a limited basis.

It should also surprise no one that the early adaptors of this new technology have been very understanding of these issues and quite frankly actually expected them. Again this is not all that unusual for early adaptors as these patients tend to be more sophisticated than the masses.

Still there are many in the continuous monitoring world who believe that the Libre may never see the light of day here in the United States and point to the accuracy issues as the reason why. While early adaptors may put up with these issues, the FDA won’t. The FDA will likely demand not only greater sensor reliability but also improved accuracy if this system is ever to receive approval.

Which begs the question whether the Libre, even if it makes it through the FDA, be commercially successful here in the US. As we noted previously the CGM market while growing nicely is dominated by Dexcom (NASDAQ:DXCM) and Medtronic (NYSE:MDT). The question is will the market support a third player or perhaps an even more appropriate question is will payors reimburse for the Libre. Should reimbursement come the next question would be at what level.

Let’s be honest here Abbott doesn’t exactly have a stellar track record when it comes to CGM, having blown a great opportunity with the way cool now way dead Navigator. It’s also well known that the diabetes care unit isn’t doing all that great and resources have been cut to the bone. This makes Diabetic Investor wonder if the company is willing to throw even more money into a product which while way cool has only limited potential in a crowded and competitive market.

The way we look at this Abbott sees the Libre as a tool that will help them unload the diabetes care unit. A move which seems more likely now that Bayer has put their diabetes device unit up for sale, a unit which they believe will fetch $2 billion. Although Diabetic Investor believes a company would have to be half out of their mind to pay $2 billion for the Bayer unit, we could see someone buying the Abbott unit. The fact is Abbott has greater share than Bayer, has a more complete product portfolio and the FreeStyle brand is well thought of by consumers. Given the choice the Abbott unit clearly has more value than Bayer unit.

Of course Abbott will insist the unit isn’t for sale but if the right offer came along we know they would jump at the chance to sell. Abbott may have made many mistakes in diabetes devices running not one but two major BGM acquisitions into the ground but the company isn’t so stupid that they would turn down a billion or so to rid themselves of this unit. Or at least we don’t think they are.