The more things change …..
Now that earnings season is over, and we prepare for the upcoming ADA Scientific Sessions in that beautiful city by the bay some reflective thoughts on what we have learned and what lies ahead.
Looking at the pharma side of the ledger first it can be best summed up by stating the more things change the more they stay the same. While there was a time when it looked like this was a three-horse race between Lilly – Novo Nordisk and Sanofi – recent results confirmed what we have long known when it comes to diabetes therapies it’s battle between two heavyweights, Lilly and Novo.
While Novo lacks depth in their portfolio when it comes to the GLP-1 arena and insulin markets, the two areas where they compete head to head with Lilly, they are putting up a good fight. The key for Novo will be first getting the oral version of semaglutide through the FDA and then overcoming its somewhat complex dosing regimen. Everyone is just assuming that as the first oral GLP-1 on the market this drug is a for sure blockbuster.
We also felt this way until we dug a little deeper and learned that yes, the drug is very effective when dosed properly. However if not dosed properly it doesn’t work at all. Novo has some heavy lifting ahead of them to ensure that physicians and patients understand this fact.
Looking at the insulin market both Lilly and Novo are running into the same problem, continued pricing pressure. But here too they are about to compete head on as both companies have their own version of Tyler coming to the market. For the moment we will give the edge to Lilly as their connected pen is a prefilled disposable while Novo has gone the durable route. Both systems will ultimately do the same thing in almost the same way yet as we noted previously with the disposable Lilly will have the edge when it comes to cost and consumer preference.
Others will play in the Tyler sandbox, but we suspect it will be Novo and Lilly taking the lion’s share of the Tyler market. And it goes without saying that Dexcom will come out a big winner here as it’s their sensor that works with almost every Tyler under development.
Speaking of sensors the ADA in San Francisco should be wild as we suspect Dexcom will be showing off the G7, while Abbott will be talking up the Libre 2.0 which should be approved by the FDA before the show begins. Just as the therapy side is a two-horse race so too is the CGM market. Medtronic is a non-factor, more on them in a moment, and everyone else even those with working systems such as AgaMatrix aren’t available yet and won’t be for some time. For the foreseeable future its open field running for Dexcom and Abbott.
Now you can’t talk about sensors without talking about insulin pumps as they go together like peanut butter and jelly. Long ago we predicted that sensor augmented systems would rule the world and they now do. With the Control IQ coming from Tandem and the Horizon coming from Insulet, both systems working with the Dexcom sensor, these two systems will leapfrog the much hyped but much maligned 670G. Although the pump itself for the 670G wasn’t great it was the sensor that was the systems downfall.
The most intriguing factor at ADA will be who’s manning the booth for Medtronic. Put May 23 on your calendar as that’s the day Medtronic releases their fiscal fourth quarter results and if history repeats itself that should be the day, we learn who will be running Medtronic diabetes. Not like it really matters all that much as this unit now being stripped of all non-essential costs is being set up to be sold. The choice for who takes over will tell us a lot about the unit’s future as should they chose an insider that would strengthen our view that unit is being set up for a sale. Should they pick a qualified outsider this would indicate otherwise, based on what we know we think it will be the former not the later.
Adding levity to this year’s show will be all the way cool whiz bang toys and their way cool whiz bang app/coaching counterparts. And let’s be honest no ADA is complete without some levity for as Momma Kliff used to say levity and an ADA is a like a manicure and pedicure they naturally go together.