What Next?

What Next?

Well it’s Friday and before we hit the weekend and do another triathlon it’s time to speculate a little. Will Abbott do something to keep the Libre in the CGM game? Will Apple do more than just partner with diabetes device companies? Will Google be content to be Dexcom’s partner or will they pull the trigger and buy the company?

While they would never admit it publicly we have a feeling our friends in Northridge are looking at alternate options in CGM. This doesn’t mean they won’t make enhancements to the Guardian Connect rather increase the options they could offer in CGM. There is no question in our mind that as CGM usage continues to expand this is not a one size fits all category. One possible target for Medtronic could be Senseonics as an implantable sensor would fit well with future version of the 670G.

We doubt Abbott will pull the trigger and acquire Bigfoot now however Insulet is a possibility. The two companies already have a relationship and the Libre can be easily incorporated into future versions of the OmniPod. If you go back and listen to past Insulet earnings calls the company has been rather coy about this possibility.

And as crazy as this may seem someone could come along and buy Tandem. Yes, this company which could have been bought for a few hundred million could be acquired for a few billion today. Only in our wacky world could this happen. Still Tandem will soon have a hybrid closed loop system using the Dexcom sensor and TypeZero insulin dosing algorithm, a system which has produced some outstanding results and would give Medtronic a very serious run for their money.

While any of the cash rich tech companies could jump into M&A arena we don’t see this happening just yet. A more likely scenario is closer integration via partnerships. Our belief here is that none of these companies want to own any device that requires FDA approval. However, they do want their way cool whiz bang toys working seamlessly with diabetes whiz bang way cool toys. Keep in mind there is nothing in Dexcom’s agreement with Google that prevents the company from also partnering with Apple.

A wild card here could be our friends in Indy who are aligned with Dexcom and developing their own way cool whiz bang toy. As we stated on several occasions they could go out and buy a pump company to achieve instant scale while still developing their own way cool whiz bang toy. What Lilly seems to have forgotten is that building the toy is the easy part yet running an insulin pump company is the hard part. With no experience in running an insulin pump company it would be wise for Lilly to acquire this expertise.

Sanofi is already moving down this path. Through their partnership with Google they have relationship with Dexcom, OnDuo has a patch pump coming and a Tyler isn’t far away either. And if there is one thing Sanofi does very well is throw money around. Desperate to become relevant in diabetes again our good buddy Serge and his wine drinking buddy Olivier could reason that the best way to make a splash is go out and buy someone.

Sitting and watching all this is Novo Nordisk who hasn’t had much luck in the insulin pump arena. Novo has the money to do a deal, but the question is do they want to do a deal. They are working with Dexcom on a Tyler however we don’t believe they want to be in the pump business. Heck we aren’t even sure if they want to be in the insulin business. Should they ever stop studying the oral version of semaglutide and submit the damn thing to the FDA they could have a mega-blockbuster on their hands. Novo could do a flip flop and go from being an insulin-GLP-1 company to a GLP-1/insulin company.

By far Abbott is in the most precarious position and one must wonder if instead of going big they decide to go home. Understanding that CGM is the hottest thing going combined with the large installed user base of Libre patients they become sellers instead of buyers. This isn’t their norm, but Miles could reason with Dexcom’s market cap at over $12 billion he could fetch a pretty penny for the Libre franchise. Miles is many things but stupid is not among them. He’s taken Libre farther than anyone anticipated and might decide now is the time to cash in.

Whatever happens one thing is certain things in our wacky world are about to get even wackier. Enjoy the weekend everyone.