You silly rabbit
It continues to amaze Diabetic Investor
that there are still investors willing to fund companies seeking to develop a non-invasive
glucose monitor. Once considered the “Holy Grail” of glucose monitoring
developing a non-invasive system that actually works has turned out to be as
elusive as the mythical “Holy Grail.” Even though not one company has been
successful that hasn’t stop companies in their continuing pursuit to separate investors
from their money.
This story has played out so often it has
become rather predictable. First, you have a group of inventors who believe they
have the magic touch. They develop a concept and business plan that contains
the usual information about how glucose monitoring is a multi-billion business
and that diabetes is growing at epidemic rates. They through in the normal
banter that patients have to experience excruciatingly painful finger sticks to
measure their glucose levels. They raise money from some Angel investors and work
begins.
Next the early results, usually done with
animals, shows promise; this is a given. Not one to miss an opportunity to
raise more money they use these very early results to hit up investors for more
money. The basic pitch here is simple; “We proved our concept works in animals
and with the additional funds we can begin human trails.” Investors begin to
salivate over the possibility that this company could truly be worth millions
and anxiously pony up more money believing that someday their small investment
will generate a huge return.
Again the early human results look
promising and again the company hits up investors for even more money. This
time the company begins to throw out the possibility that the technology looks
so promising that it has garnered the attention of “major players” in the
industry. Never interested in understanding the realities of the glucose
monitoring market investor once again open their checkbooks as they now believe
that one of these “major players” will swoop in and buy the company.
At this point we normally begin to see some
“issues” with the product. Typically the company uses what normal people call a
setback as another opportunity to bilk investors. They say something like; “While
it’s true we have some issues, we very close to solving the problem. All we
need is some additional funds.” Like a drug addict hooked on crack, the
investors can’t help themselves and pony up more money to feed their addiction.
Now anxious that their investment just might
go down the toilet, investors begin to ask questions as the company appears to
going nowhere. The “issues” which were supposed to be solved with more money
just aren’t going away. The company continues to insist that with just a few
million more they will solve the problem and the riches they promised will soon
be realized. Here investors find religion and check themselves into rehab
program or they continue to feed their habit fearing that all will be lost if
they don’t invest more. Like an addict who is powerless over their addiction
they rationalize their investment.
All of a sudden, with their investment now
virtually worthless, it begins to dawn on the remaining investors that these “issues”
will never be solved. The begin to turn their attention to other investments
and chalk this one up as a lesson learned, albeit a very costly lesson.
And what does the company do, now faced
with dwindling funds and no promise of more money coming in to bail them out?
They reinvent themselves, change the name of the company and start the process
all over again.
The reason Diabetic Investor shares this
piece of information comes as a result of press release issued today from a
company called Freedom Meditech. Here is what the press release stated;
Initial Research Shows Glucose Levels May
Be Measured Painlessly with Light in the Eye
Freedom Meditech technology successfully tested in pre-clinical
trial
PITTSBURGH, PA
(October 13, 2009) – New non-invasive technology designed to painlessly measure
glucose levels in the human eye shows promise of one day replacing the finger-stick blood test,
according to results of a pre-clinical study funded by Freedom Meditech, Inc.
The study, involving rabbits, showed
that the eye-scanning technology produced non-invasive, in-vivo glucose
measurements that tracked blood glucose readings with only a five minute
delay. In addition, through a
calibration and validation analysis, the mean absolute percent error for
glucose prediction was below 13%, as compared to an estimated 32% error
commonly derived from the finger stick blood test. The results of the study were presented at
the Biomedical Engineering Society’s 2009 Annual Fall Scientific Meeting. The study was conducted by Anthony J. Webb,
Rui Zheng, and Brent D. Cameron of the Department of Bioengineering at the
University of Toledo.
“We are very
encouraged by the results of this early-stage study and plan to move forward
with additional animal studies and present the results to the U.S. Food and
Drug Administration, in anticipation of human clinical studies,” said Craig
Misrach, President and CEO of Freedom Meditech. “We believe that
the human eye represents an ideal point of access for the monitoring of bodily
glucose without the interferences commonly present in other non-invasive
glucose measurement approaches. Our
technology is a powerful, and potentially highly useful, means to detect and
manage diabetes and presents a large and growing market opportunity.”
Note Diabetic Investor added
the highlighting.
It should come as no surprise that some of the people connected
with Freedom Meditech have been recycled from previous companies who were also
seeking to develop a non-invasive glucose monitoring system. It should also
surprise no one that according to the company’s web site that back in September
of 2008 they raised $380,000 of a planned $2.5 million Series A Preferred
Equity Financing. (We should have mentioned this is another part of the
process. Constantly issuing press
releases to let other investors know there are other fools out there.)
Seeing as no one and we mean no one has even come close to
developing a commercially viable non-invasive glucose monitoring system that
these companies would have a difficult time finding investors. One just might think
that these investors who are supposedly not only very rich but very smart would
hesitate just a little after doing just a small amount of due diligence. Believe
Diabetic Investor when we say there is an abundance of publicly available information
on the numerous attempts and failures when it comes to non-invasive technology.
In fact, we would argue it is difficult, if not impossible to find information
on any successes.
Still this hasn’t stopped these companies from finding investors
eager to part with their hard earned money. The fact is as long as there are
investors willing to buy into the non-invasive illusion companies will continue
to over promise and under deliver. While it’s pretty clear companies involved in
the non-invasive quest are clueless when it comes to developing a product that actually
works. They are in tune with one indisputable fact -There is no cure for stupid.
