Diabetes Stocks Remain Healthy

There are nearly 133 million Americans alone considered overweight- putting them at risk for the rapidly growing Type II Diabetes. I have done a bit of research on projections as to how many Americans would be living with the disease in the future. And I have seen some scary predictions:

U.S. Centers for Disease Control and Prevention 2001 study: est. 29 million Americans affected by 2050 (not accounting for undiagnosed diabetes).

From Diabetes Care magazine: 30.3 million Americans affected by 2030.

While I am no medical professional, I have to believe that population increases and longevity have more than a little to do with these figures. Some of the biggest increases are amongst seniors- no surprise there- elderly population is expected to double as a result of the mass amounts of retirees starting in 2011 (first “baby-boomers” turn 65).

So, Thursday’s market was a real foreshadowing to me. Down 350+ points on the DJIA. All 30 stocks trading lower. 95% of the S&P 500 lower. And these three companies are green:

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Lantus®, from France-based company Sanofi-Aventis (SNY) is the number one prescribed insulin in the United States . Their most recent quarter (Q1 2008) saw sales of €557 million for Lantus®, a 30.8% increase.

Second, there is Denmark based Novo-Nordisk (NVO), whose slogan is “changing diabetes.” Judging by the array of products and drugs they offer, I do not have any basis to disagree. Among the advertised insulin delivery products include pens like the #1 global sales leader “FlexPen®”, needles and also a specialized hypoglycemia kit for emergencies.

NVO has tremendous growth opportunities in many countries. Half of their employees are located in Denmark (12,689) but check out the host of countries they have penetrated:

• North America: 3,940
• Japan & Oceania: 1,025
• International operations: 4,943
• Europe: 3,411

Finally, DaVita (DVA) offers a different angle of treatment. The California based company operates kidney dialysis centers in the United States, serving over 100,000 people with both inpatient and outpatient options. The stock bottomed out in March and has not even come close enough to test the lows.

Here is an impressive string of analyst coverage/upgrades for DaVita:

• 6/3/2008 – Sun Trust Rbsn Humphrey (Initiated BUY)
• 4/29/2008 – Citigroup (Initiated BUY)
• 3/28/2008 – UBS (Upgrade to BUY)
• 3/12/2008 – Piper Jaffray (Upgrade to BUY)

…And the future is easily predictable... it will be up to companies like these to provide us with the innovation of new and effective treatments.

Disclosure: None

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The Pumpers: Better compliance for Insulin-dependent diabetic patients?

With some diabetic patients, the hormone insulin may be absent, yet necessary for their survival. As I recall, a man named Pauescu developed the concept of insulin replacement, and discovered a method of using insulin secreted from pigs as a replacement method for humans, which was effective at that time. Legend has it that this concept originated in a dream this man had on a night soon before his idea became reality several decades ago. Yet presently, this hormone which is naturally produced by the pancreas normally has advanced as far as treatment goes for the diabetic patient through synthetic engineering, as this is needed for survival for some diabetic patients.
Recently, the Denver Bronco’s quarterback, Jay Cutler, was recently diagnosed with diabetes, a disease that affects over 20 million people. As I recall, part of his treatment regimen involves what is called an insulin pump. They are approximately the size of a cell phone, and the users of such pumps are called, in the diabetic community, ‘pumpers’. Developed primarily for type 1, or insulin-dependent diabetic patients, the pumps can be used by some type 2 diabetic patients if they have some dependence on insulin replacement, which has steadily increased over the years. The importance of the device is improved management of the disease, which can cause life-threatening consequences if the disease of diabetes is not controlled properly. By the way, he takes it off for games, practice, etc.
The three elements The Pumps: A New Paradigm in diabetes management of an insulin pump include the pump itself and its components, such as the insulin tube for delivery of insulin, and a catheter that delivers basal and bolus doses, which are dependent on preset calculations. The amount of insulin is rapid acting to ensure maximal pharmacokinetics to create intensive insulinotherapy for required diabetes management. These insulin amounts are ultimately determined by the patient’s doctor, who is usually an Endocrinologist, including bolus doses determined by the patients glucose level calculated with their carbohydrate intake, also known as the meal- time dose. Furthermore, the amount of insulin delivered by these methods is quite small due to the nature of the medication being rapid acting.
The makers of such pumps tend to partner with associations relevant to the disease of diabetes, as well as local chapters of such organizations as the ADA and Endocrinology societies that may exist, along with contacting diabetes educators frequently at different locations throughout the country. Unfortunately, there are few Endocrinologists in the United States, as it is not one of the more lucrative specialties of a doctor, so treatment of diabetes is dependent on many others who are not doctors, but patient care specialists regarding this disease.
Competing companies are few, as there are approximately 5 insulin pumps in the market, with Medtronic having the largest share of 30 percent, as I understand. In addition, some pumps avoid the possibility of metabolic action therapy due to their dosing precision, in addition, there is at least one pump that has long acting lithium battery that averages about a 6 week lifespan, yet a pump user should have a battery replacement with them at all times. The personalized insulin and carbohydrate ratio provided by insulin pumps greatly reduces any incidence of such complications as hypoglycemia. Also, in addition to storing and recording glucose and carbohydrate values with a back up mechanisms, some insulin pumps have a low basal rate, which I understand is an advantage as well. Regardless, and in my opinion, the ultimate advantages of insulin pumps exist with all that are available to patients presently.
The cartridges of the insulin pumps hold a large number of units of insulin, which is an additional benefit. Further benefits include the fact that the pumps are convenient and reliable- especially if damage is avoided to the pump. Most importantly, the personal service provided to the patients by the caregivers of existing diabetic teams in health care facilities from hospitals to health care centers dedicated to the disease of diabetes ensures proper management of their disease, much to the benefit of those who have diabetes.
The market growth of insulin pumps is anticipated at over 10 percent a year, as only 20 percent of type 1 diabetic patients have utilized these pumps out of over a million type 1 diabetics in the United States. The market is speculated to be greater than one billion dollars and is expected to increase due to speculated growth of the Insulin pump market. Many believe this therapy is superior in comparison with previous treatment options available to diabetic patients, along with being less cumbersome for these patients. Because of this, there is decreased mortality along with increased quality of life for diabetics, as they are assured of better control of their disease in this rather convenient way. This has been proven by better A1C blood tests and glycemic control of diabetic patients.
The steady dosing maintains the patient’s metabolic requirements and decreases long term consequences associated with diabetics. It has also been proven that insulin pumps result in fewer hospitalizations, ER visits, and episodes of hypoglycemia due to the excellent control provided by the insulin pumps while providing the necessary intensive therapy for their disease state. The fast acting insulin used in these pumps is created through genetic engineering, I believe. In addition, patients are encouraged to check their blood sugar greater than three times a day while on the insulin pump. So this system is both friendly to the user and is clearly a very convenient form of treatment for them. The A1C test, by the way, is a blood test that reflects the diabetic patient’s average blood sugar over a period of a few months.
Those who may be interested in insulin pumps will include those described already, along with hospitals, long term care facilities, home health care agencies, pediatricians, and possibly dialysis clinics, to name a few. Most likely, those considered for insulin pumps will be diabetic patients that are unable to achieve compliance with their current treatment regimen, along with other benefits of insulin pumps stated so far.
The diabetes team for a diabetic patient may include an Endocrinologist, a diabetes educator, a dietician, along with the insulin pump representative. Follow ups with this team may include review the progress of the insulin pump for the patient and how the patient is tolerating the treatment. Often, classes can be scheduled through an institution or center regarding insulin pump training a few times a month. Education and training about the insulin pump may include the following:


1. Glycemic control importance and how to prevent and treat as needed
2. Basal and bolus concepts and how they contribute to the treatment
3. Pump basics and strategies. Negative effects stressed to pt. if their pump is not used properly.
4. Importance of knowing blood sugar and why. Definitions of terms like A1C
5. How to deliver a bolus dose after checking carbohydrate intake
6. How to check the pump’s memory
7. Troubleshooting, phone number access, and how to replace battery
8. Emphasize the safety of the insulin pump if operated correctly
9. Keeping a glucagon injection and spare battery with you



Ultimately after training others, it is important that the patient acknowledges understanding of how the device works, as well as the consequences that may occur if directions are not followed that are ultimately determined by the patients doctor. And fortunately, doctors and others who treat diabetes now have a new tool or device to assure compliance and longevity of these patients.

Innovation is a wonderful thing, such as what has been described. Control of such a large and devastating disease is of great importance, so there seems to be a much desired need for pumpers now and likely in the future. Especially for those patients who slack on following their prescribed treatment regimen. And this will have to do until relevant transplants to reverse diabetes become more frequent and less complicated.

“Death destroys a man. The idea of death saves him.” --- E.M. Forster


Dan Abshear

Author’ note: What has been annotated is based upon information and belief