I’m more concerned with where the money is supposed to come from, first and foremost.
It is good to be concerned. Buy some shares and voice those concerns to the company. Or don't buy shares and call the company anyway.
But for your concern, here is a little history. Glucometers and test strips are now into their third generation -- well into the 3rd generation. Diabetics treat their meters as if they are personal appliances. nonetheless the Big 4 in the industry spend billions trying to steal users from each other. That task is made harder because of Obamacare's 3% tax on medical devices (not implemented but not killed either), the FDA's Least Burdensome Guidance which is anything but Least Burdensome, and finally the 2013 Medicare changes affecting 55% of the diabetic users in the marketplace.
Innovation in the industry has died. Each of the Big 4 would rather spend $100 million per year stealing customers from each other, then $25 million developing new technology. In fact, the basic chemistry used in today's 3rd generation test strips (like the company's GenChoice) is over 40 years old. Sadly I remember when it was new.
So here's the deal flash, every company looking to make an industry splash with new technology gives their meters away. That was J&J's argument in the first DECN lawsuit. They said that because they give away their meters, the las of commerce do not apply to them. And... Bayer, Roche, and Abbott each filed Amicus Briefs in support of J&J's position. Why? Why would competitors who at all other times fight to the death try to support each other in the face of little old DECN? Why, because it was good business. I know that doesn't mean anything to the "stock price is everything crowd" and the bash crowd who lost money in DECN stock, some almost two decades ago, and who still harbor grudges. Problem is in the industry the only tried and true way to get a new customer is by giving away your meter. At least you'll get that customer temporarily and if your product is great, you'll keep them.
But, here is the beauty of DECN's plan. They made their new strip 100% compatible wit the older J&J meters where the J&J user will still get a majority of the benefits presented by the new strip. Or if the user thinks its time to try something new where the new strip is at least a first cousin to what you have been using Mr. or Ms. Diabetic, you can try that too. And, if you are a little daring, go for all 100% of the benefits presented by the new strip and take their new meter. Or do a combination, switch strips now, then switch meters later.
Meters made in China cost between $8 and $15. It is a cheap marketing/merchandising plan that replaces meters where the company (DECN) invests $15 in a diabetic customer and then receives $75 per month new cash flow, for each and every diabetic they pick off. But who is counting. Well of course non-shareholders are.
Oh and one more thing. What makes you believe flash that DECN is going to deep discount the new strips? Who in the world discounts a new product before it is introduced? Perhaps penny stock traders do. But then again traders do not usually try to dig deep into marketing strategies and markets.
It is good to be concerned. Buy some shares and voice those concerns to the company. Or don't buy shares and call the company anyway.
But for your concern, here is a little history. Glucometers and test strips are now into their third generation -- well into the 3rd generation. Diabetics treat their meters as if they are personal appliances. nonetheless the Big 4 in the industry spend billions trying to steal users from each other. That task is made harder because of Obamacare's 3% tax on medical devices (not implemented but not killed either), the FDA's Least Burdensome Guidance which is anything but Least Burdensome, and finally the 2013 Medicare changes affecting 55% of the diabetic users in the marketplace.
Innovation in the industry has died. Each of the Big 4 would rather spend $100 million per year stealing customers from each other, then $25 million developing new technology. In fact, the basic chemistry used in today's 3rd generation test strips (like the company's GenChoice) is over 40 years old. Sadly I remember when it was new.
So here's the deal flash, every company looking to make an industry splash with new technology gives their meters away. That was J&J's argument in the first DECN lawsuit. They said that because they give away their meters, the las of commerce do not apply to them. And... Bayer, Roche, and Abbott each filed Amicus Briefs in support of J&J's position. Why? Why would competitors who at all other times fight to the death try to support each other in the face of little old DECN? Why, because it was good business. I know that doesn't mean anything to the "stock price is everything crowd" and the bash crowd who lost money in DECN stock, some almost two decades ago, and who still harbor grudges. Problem is in the industry the only tried and true way to get a new customer is by giving away your meter. At least you'll get that customer temporarily and if your product is great, you'll keep them.
But, here is the beauty of DECN's plan. They made their new strip 100% compatible wit the older J&J meters where the J&J user will still get a majority of the benefits presented by the new strip. Or if the user thinks its time to try something new where the new strip is at least a first cousin to what you have been using Mr. or Ms. Diabetic, you can try that too. And, if you are a little daring, go for all 100% of the benefits presented by the new strip and take their new meter. Or do a combination, switch strips now, then switch meters later.
Meters made in China cost between $8 and $15. It is a cheap marketing/merchandising plan that replaces meters where the company (DECN) invests $15 in a diabetic customer and then receives $75 per month new cash flow, for each and every diabetic they pick off. But who is counting. Well of course non-shareholders are.
Oh and one more thing. What makes you believe flash that DECN is going to deep discount the new strips? Who in the world discounts a new product before it is introduced? Perhaps penny stock traders do. But then again traders do not usually try to dig deep into marketing strategies and markets.
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