When will people learn
Today we are watching shares of Tandem (NASDAQ: TNDM) sink into the abyss. With no news to be found anywhere shares have fallen almost 25% on 4 times the normal volume and the trading day isn’t over yet. Right at this moment the company has a market cap of just over $29 million. Now before reading further let that sink in for moment, and believe us sinking is the right term to use with Tandem.
Tandem did not just hit the iceberg, no that happened long ago. Yet this move downward should surprise no one and as we have noted in the past this creates several intriguing possibilities. Some good, some not so good and some very bad. Just so we can get it out of the way now Tandem patients are the ones who are getting royally screwed here because THIS DID NOT HAVE TO HAPPEN.
Yet the sinking of Tandem should serve as a lesson to every insulin pump wannabe and you know who you are. This should send a message that this is not about whiz bang way cool. This is about the ability to run a commercially viable publicly traded insulin pump company. This is not just in the best interest of shareholders but patients who depended on this device, a device that literally is keeping them alive.
Listen if we could we would see to it that Tandem management and their board of directors suffered as much as their patients are about to. This team does not just deserve a good lashing they should also suffer the indignity of public humiliation. Keep in mind this team was running around the ADA annual wacky dance telling everyone that everything was just fine, THIS WAS AN OUT AND OUT LIE.
Even worse some respected bloggers feel for the lie and perpetuated the myth that the company could survive their numerous financial issues. Shame on you, and yes you also know who you are.
Tandem has $80 million in debt and a market cap of under $30 million. The banks are breathing down their necks and no one is coming to the rescue. We used to believe that the company could make it to September, now we aren’t sure they will make it that far.
Should Tandem fold as we anticipate Medtronic (NYSE: MDT) just isn’t ready for this. The company is in the midst of the 670G launch and cannot supply these patients with the sensors that work with the system. It’s difficult to gauge whether Animas is ready as Johnson and Johnson (NYSE: JNJ) wants to sell the unit which seems to have no current leadership or direction. Insulet (NASDAQ: PODD) could by default become the anti-Medtronic choice, for as we have said before there are patients who just want move to the evil empire.
Listen if Tandem finds a lifeline, which we doubt, this likely would be a temporary solution, think using a band-aid when what’s really needed is a tourniquet. Besides bleeding cash, there is the debt issue, plus fixing the design flaw with the drive system, plus …. This is not a pretty picture it’s a very ugly picture.
The sad part is that Tandem management will walk away fat and happy. They will not suffer and they should. Thanks to their hubris thousands of patients are going to suffer needlessly. Instead of crying about the tactics used by their main competitor this team should have been getting their own house in order. Instead of bitching and moaning man up and deal with it. Hey if you want a friend get a frickin dog, these people had a responsibility not just to their stakeholders but their patients.
It sickens us to see this happening and quite frankly it should sicken everyone who associated themselves with the company.
Sadly, it’s unlikely that anyone will learn anything from this. They didn’t learn when Roche screwed up Disetronic or when Deltec went under. Nothing was learned when JNJ threw in the towel with Animas a unit which NEVER made money for the company. Did anyone learn from the many shenanigans pulled by the old management team at Insulet?
The definition of insanity is repeating the same behavior over and over while expecting a different outcome. The definition of idiocy is building an insulin pump company on the premise that someone will come along and acquire the company because it has a way cool toy. The definition of stupidity is continuing to fund and invest in these companies without performing even the slightest due diligence.
When will people learn?