Lost in the excitement
First it was Teladoc merging with Livongo, next Ascensia offering a lifeline for Senseonics and finally Medtronic acquires Companion Medical. Of these three deals only the Medtronic/Companion deal seems to make sense. Teladoc merging with Livongo has a strategic rationale behind it but Teladoc is vastly overpaying for Livongo. Yet the Ascensia lifeline to Senseonics remains a mystery.
Let’s be very clear here there is nothing wrong with Eversense sensor. The system works just fine and yes there is a niche market for an implantable sensor. However Eversense even if it becomes a 180-day sensor will never go beyond being a niche product. Here’s why and it comes from none other than Tim Goodnow Senseonics CEO who stated during the company’s last earnings call;
“Given the slowdown in insertion rates, most of our fulfillment partners are still working through their inventories and shipments into the channel are minimal in the quarter. Through all of this however, we are happy to continue to see reinsertion rate in the U.S. of over 85% in patients who are in the third and fourth sensor.”
Now at first glance that seems great that these patients are now on their third or fourth sensor. But what about reinsertion rates for patients on their very first sensor, are they going back for a second sensor? Sadly the answer is no, and this is where the problem comes in. Patients on their third or fourth sensor are early adapters who tend to be the most motivated and want the latest greatest toy on the market. These early adaptors will also put up with more than the average patient who is not as motivated as early adopters.
We hate to bring logic into this but look at the CGM choices available to a patient. There is the G6 from Dexcom which is inserted by the patient with a very patient friendly insertion device in a process that takes less than a minute. There is the Libre and now Libre2 from Abbott which like the G6 takes all of a 30 seconds to insert. Then there is the Eversense sensor which must be inserted in the physician’s office. When that sensor is coming to the end of its life the patient must go back to their physician have the expiring sensor removed and a new one reinserted.
Senseonics entire business model is built on the premise that patients will put up with these insertion, extraction and reinsertion procedures that are done in a physician’s office which requires a trip to the office rather than changing a sensor every 10 to 14 days. Sensors which are inserted at home in less than a minute. Let that sink in for just a minute.
Given that these sensors are medical devices there is another issue that hurts Senseonics, what happens when a sensor fails, and sensors do fail. Well with Dexcom or Libre the patient removes it and replaces it with a new one. If the Eversense fails it’s back to the doctor’s office.
According to the FDA’s MAUDE database so far this year there are 441 adverse events attributed to the Eversense sensor. By way of comparison there are 57 events for the G6 and 997 for the Libre. Granted not all of these reports are serious or life threatening however any Eversense failure requires another trip to the doctor’s office. This contributes to Senseonics issues. An issue that will not go away with a 180-day sensor.
But we aren’t done yet as yes the Eversense sensor is implanted however the patient must still wear a transmitter. So in addition to having the sensor implanted the patient must still wear something on their body. Now think about that for just a moment.
Listen we get it that CGM is hot and getting hotter. We understand why Ascensia wants to be in the space. What we don’t understand is why pay $80 million for Senseonics when there are plenty of better and cheaper options available. The problems with Senseonics aren’t going away even with a 180 sensor or better coverage. The problems will remain as long as there are more patient friendly options which do the job just as well as Eversense does.
Ascensia like so many others has fallen in love with toy and has forgotten that if the patient doesn’t play with the toy there isn’t a viable business.