What have we learned?

What have we learned?

As we move deeper into earnings season it’s a good time to reflect on what we have learned so far. One thing we are definitely learning is that the FDA excuse the expression is taking their sweet time in approving the Libre2 and Control IQ. We have no doubt that both approvals are coming just when is another matter. Based on all the available information we have the Control IQ approval should come soon while the Libre2 seems destine to be pushed into the first quarter of next year.

We’re also learning that when it comes to diabetes therapies GLP-1’s are where it’s at. Yes, we know that some of the analysts were disappointed with Trulicity sales, but the fact is this this market is going to continue to grow. Besides Rybelsus hitting the market let us not forget that Intarcia has resubmitted their exenatide micropump to the FDA and we fully expect this resubmission to result in approval, again when we have no idea, but it will be approved.

So this sets up an interesting battle between Trulicity, Rybelsus and the yet unnamed Intarcia system. Now we know all things are not equal when it comes to formulary position but putting that factor aside, we see this as battle between Trulicity and Intarcia. The fact is the Rybelsus dosing regimen is complex and patients/physicians hate complexity. The choice as we see it is what easier for the patient once weekly injection or the insertion of a micropump. As much as we like the Intracia micropump we do know that some people will be uncomfortable having anything inserted into their bodies no matter how simple and relatively painless this procedure is.

Now let’s be clear here Novo is well aware of these facts and will not just sit around doing nothing as they bet the farm on Rybelsus. However the one thing they cannot change is the drugs dosing regimen and that we believe that will ultimately be the drugs Achilles heel.

Turing our attention to our friends at Livongo, a company that never meet a press release they didn’t like and has a panache for fireside chats, the stock at long last appears to have settled into a trading pattern. After losing close to half its value since the IPO it’s seems like $17 to $21 is the range. The company reports again on November 6th and hopefully will have a better performance than their first earnings call.

We frankly aren’t expecting much in terms of substance coming out of the call as it’s just too early in the process. We would however love it if the analysts would press the company a little about what their client acquisition costs are, what their attrition rate is and more clarity on the exact terms of all these deals they are signing. It would also nice if they pressed for more clarity on just how many people are eligible, just because a plan has a million members does not mean they have one million patients with diabetes. Livongo likes to exaggerate using the member number when this is vastly misleading.

All the toy makers are getting ready to report and the one we’ll be paying attention to will Medtronic who reports on November 19th. This doesn’t mean we won’t be listening in on Tandem, Dexcom or Insulet rather we won’t to see how Medtronic handles the introduction of the new guy. Based on everything we have read about Mr. Salmon, and just to get off track for a moment but with a name like Salmon you know the fish jokes are coming, we don’t anticipate much in the way of real change. He may not be the man in the grey flannel suit but he ain’t no revolutionary either. Is it’s possible we’re wrong sure heck my Fighting Illini football team a 31-point underdog beat the mighty Wisconsin Badgers last week so anything is possible. But then again, the Illini are 10-point underdogs this week to a 2-5 Purdue team, so just as we don’t anticipate much change at Medtronic the folks in Vegas aren’t big believers in my Illini.

Well that’s all for this week hope everyone has a great weekend and no matter what the folks in Vegas say GO FIGHTING ILLINI beat those Boilermakers and then go have a few.