Diabetic Investor Investor has learned that Bayer Bayer will be closing the production facility for its A1CNow product and cease all production by the end of the year.
For those new to the wacky world of diabetes, back in 2006 Bayer acquired privately held Metrika, the makers of the A1CNow. Back in the day the A1CNow was the only at home A1C test on the market and the acquisition was generally viewed as a positive step for Bayer. Yet as so often happens in the wacky world of diabetes devices great products get ruined by inept management.
Before Bayer ran Metrika into the ground, something that’s normally the domain of Abbott (NYSE:ABT) who has run not one but two glucose monitoring companies into the ground, the possibility existed that sales of the A1cNow could also drive sales of test strips for Bayer’s line of conventional glucose monitors.
Before this disaster unfolded Diabetic Investor was very public with our belief that an A1C result was the simplest test result for a patient to understand, a result of 7 or below was good, above 7 not as good. Heck, even the geniuses who ran Bayer should have been able to see that.
The thought was Bayer with their scale, yes at one time the company did have scale in the BGM market, could use the A1CNow as an engagement tool for patients who weren’t testing their glucose or weren’t testing as often as they should. Basically the A1CNow would be the patient’s baby step into testing their glucose on a regular basis. As Diabetic Investor noted on more than one occasion with the proper marketing effort Bayer could have educated patients as to the correlation between regular glucose monitoring and A1C.
Yet once again the company never had a clear strategy for what do with the A1CNow and without a strategy wound up running in circles going nowhere in a hurry. This problem of not have a clear strategy in diabetes is spreading as fast as the disease itself is growing. As we recently reported Abbott recently eliminated over 100 positions in their troubled BGM unit as like so many others in the space they are clueless of what to do other than cut costs.
The way things are going it won’t be long before the only choices patients will have in BGM will be one major branded offering, more than likely LifeScan, and a bunch of no-name or store branded offerings.
Don’t for a moment think this ineptitude is unique to diabetes devices, not for a moment as diabetes drug companies are also suffering from this affliction. Diabetic Investor has also learned that Bristol Myers Squibb (NYSE:BMY) is again reorganizing their diabetes sales force. The only problem seems to be they still haven’t a clue what to do with this reorganized unit. Think shuffling the deck chairs on the Titanic as the shuffling really won’t help with the obvious problem that the ship is taking on water and about to sink.
Diabetic Investor has been covering this industry for over 20 years and we’ve seen some pretty stupid moves but honestly BMS is setting new standards for stupidity and that’s really saying something when it comes to the diabetes market.
Given the problems facing Novo Nordisk Novo Nordisk (NYSE:NVO) their main competitor in the GLP-1 market and the problems facing Sanofi Sanofi (NYSE:SNY) who may or may not enter the GLP-1 market, BMS continues to fumble about clueless that they have the best portfolio of GLP-1 offerings. Now Diabetic Investor isn’t sure why BMS is treating this portfolio like a second class citizen yet based on their actions this is how the portfolio is being treated.
Yes it was a positive move they stole the Express Scripts Express Scripts business from Novo but this is just a short term fix when a longer term more cohesive strategy is needed. Where is the Bydureon pen? Why hasn’t the company pressed its advantage with Bydureon which for the moment is the only once-weekly option available? Why do they insist on constantly reorganizing the diabetes sales teams into different units while at the same time using contract sales teams?
Seriously folks this is going to be an extraordinarily difficult year for Diabetic Investor when it comes time to give out our annual Corporate Frog awards. Until now Sanofi looked like a lock to earn a corporate frog for their plan to sell special lunch bags for patients with diabetes. How this translates into selling more insulin only the folks at Sanofi seem to know. Next it looked like Abbott and Roche would make the list just because they are Abbott and Roche and no corporate frog award list would be complete without them on it.
The fact that Bayer is actually in business would have exempted them form the list as we honestly believed there was a better then 50/50 chance the unit would have been sold or closed before the year was over. But this decision to abandon the A1CNow is making us reconsider our decision.
That leaves the folks at BMS as the front runner to earn the top spot for this year’s corporate frog awards. Now keep in mind we have yet to hit October which means there is still plenty of time for other nominees to come forward. After all this is the wacky world of diabetes where anything can and usually does happen.
David Kliff is editor of Diabetic Investor newsletter, which features investment analysis of companies competing in the diabetes arena.