Subject: Hello Aviator, Goodbye Navigator
April 21, 2009
Hello Aviator, Goodbye Navigator
Diabetic Investor has learned that Abbott (NYSE:ABT) has decided to enter the insulin pump market and officially launch their Aviator insulin pump. Additionally, it appears the company is abandoning the Navigator as they have dramatically cut the Navigator sales force and reassigned its clinical team to other projects.
While details are sketchy as to exactly when the Aviator will be officially launched, Diabetic Investor expects to see something at the upcoming ADA conference this June. The more important question is; Why Abbott is even entering the insulin pump market. As Diabetic Investor has been reporting for sometime the competition has intensified to such a point that even companies with a good product can?t survive. Did Abbott management learn nothing from Smiths Medical recent decision to exit the insulin pump market entirely?
The decision to dramatically scale back Navigator sales is hardly shocking given the units dismal performance. Once the most anticipated continuous glucose monitoring system, Navigator has been a colossal disaster every since the day when Abbott foolishly sought a replacement indication from the FDA rather than an approval as an adjunct device, like everyone else in CGM did. Last to the market, the Navigator faced stiff competition from Dexcom (NASDAQXCM) and Medtronic (NYSE:MDT). The low hanging fruit already picked from the tree Abbott had the almost impossible task of coming to market with a product that was already technologically inferior and in a move only Abbot would do, priced higher than the competition. Even worse once on the market the product performed poorly as patients complained about numerous sensor failures and the devices 10 hour calibration period.
The fact is Navigator is a classic example of a product that was designed by engineers who lacked real world market experience. As one Diabetic Investor source stated; ?The Navigator is an excellent device the only problem is they (Abbott) designed the product without thinking that one day they would have to scale up and actually make thousands of sensors.? Put another way, when you?re conducting clinical trials you can get away with making sensors by hand. Once approved you have to be able to manufacturer efficiently. Abbott management let the engineers run the show and paid little attention to what would happen if the device actually made into the market.
Apparently the factor driving both moves is that Abbott believes that by entering the insulin pump business and scaling back Navigator will drive sales glucose test strips. Just how this will happen is anyone?s guess but as crazy as that sounds that?s the reason for these moves.
Diabetic Investor didn?t think it was possible that Abbott could provide us with even more reasons to show just how clueless they are when it comes to the diabetes device market. It wasn?t enough that after acquiring Therasense they demoralized their employees to the point where they had no choice but to seek employment elsewhere as they just couldn?t stand it as Abbott effectively ran their once thriving company into the ground. Things became so bad at the company that they couldn?t even get a simple glucose monitor through the FDA without somehow screwing things up.
For the moment Roche should feel comfortable that at least in one area they have not gained ground and remain firmly in second place when it comes to clueless management of diabetes devices. Roche has plenty of blunders of their own but Abbott continues to excel at making out and out dumb decisions when it comes to diabetes devices.
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