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You would be nuts to invest in $SENS, here's why.

This article is just for fun. It's my opinion. Make up your own mind.

$SENS bear - here's why:

Great tech but did anybody ever ask the customer?

The customer has the choice of using Abbot Freestyle Libre self applied continuous glucose sensors 26 times a year often painlessly
or
attending a surgery four times a year (in the USA prior to FDA approval of the 180 day version) for a qualified medic to perform surgical procedures to extract and insert a Senseonics Eversense sensor.

Demand for Senseonic's Eversense must be small mostly because there are easier options available. Only those unable to use Libre or Dexcom, such as swimmers, would find Eversense a good solution.

My choice.

From my perspective I'm sticking to Freestyle Libre which I have used for three years and I think nobody in their right mind would opt for surgery. The scar is small but I worry that over a lifetime it could produce enough scar tissue to make a complete mess of my upper arms.

Although the procedure is painless after the local anesthetic I say I don't care. No thanks. Given the choice of simply applying a CGM device like a Libre I wouldn't choose surgery no matter how minimal.

Due diligence

Due diligence for buying a stock should include trying to find out about what potential customers actually think about the product. You might search for "eversense customer opinion" and find people who do reviews (or influencers) and give you useful info but it's not so easy to find yes/no decisions.

With a web search there could be a positive bias because if you are a blogger/reviewer and you have the device then that's more likely to be a good thing to talk about than something to slag off. There are more likely to positive articles appearing in search than negative because there are more of them. It's not a good straw poll of the population with Type 1 diabetes.

Due diligence is difficult especially against the positive hype of tweets saying this will become a $400 stock despite the market consensus of last December that it was a $0.40 stock.

There was some genuine very good news on Jan 19, 2021 when they struck a deal with one of the largest nonprofit health plans in the USA. That's fantastic and it is a major new channel to new patients but does it mean they will prefer it to alternatives?

Is it just me?

Excuse me being selective but this review is worth a read. https://beyondtype1.org/trying-the-eversense-cgm/. There is plenty praise for a remarkable product but don't miss the conclusion where the James opts to go back to his Dexcom.

That is what Eversense is up against. I assume that sentiment is far more common than can be found through web search.

It looks horrendous

I haven't watched the whole of this Eversense sensor insertion video because I would rather stick pins my eyes. But if you think $SENS is going to be a hit with the customer then first watch this:

Next watch this Freestyle Libre user explain how easy it is for a user to apply the sensor:

The costs

I don't know about the costs! Before investing in Senseonics find out about the cost of managing appointments with a profession medic qualified to apply a local anesthetic, incision and extraction of the old sensor and insertion of a new one (in the other arm I presume) and compare that with the cost of stick on devices to insurers and national health services.

Consider this, given the method of delivery it is going to hard for Eversense to reduce their costs whereas Dexcom and Abbott (Libre) could drop their prices in an instant if they needed to squeeze out Eversense.

Prices are set as high as the market can stand. For an earlier version of Dexcom some users came up with a trick to get around 10 day limit and reported it was accurate compared to blood finger sticks months later. Newer versions enforced the 10 limit. That was a commercial descision. I expect they have considerable scope for a price reduction if Everesense tried to be more economic, so its best not to focus on costs in your due diligence.

The resource problem

Senseonics are likely to get FDA approval for sensors to last 180 days and be changed twice per year instead of every 90 days.

Eversense would be mostly confined to Type 1 diabetics of which there are about 1.25 million in the the USA and nearly all of them would want a CGM. If Senseonics managed to get a third of that market (Dexcom and Abbott's Libre having the rest) that would be 830k bi-annual surgical procedures per year compared to zero for Freestyle Libre/Decom. Are there enough medics available to cease what they are currently doing to dedicate themselves to this task which can be avoided by using Freestyle Libre/Dexcom?

If you consider the UK with a badly overstretched National Health Service and 400k Type 1 diabetics you would be talking about 266k procedures (400k x 2 x 1/3) per year. Given the option of paying for self administered patches I doubt the NHS could go for Eversense even if it were free.

If ever there was a good point to use the phrase "no brainer" then this is it.

Bad idea

When I first investigated CGM companies in 2018 I wondered why anybody thought a surgically implanted sensor was a good idea. What were they thinking of? Maybe if a sensor could be permanent or maybe changed every 5 years. That could change the situation completely for the customer but what charging structure would make it a commercial success?

Daft market

In December 2020 the price of $SENS was about $0.40 and on 16th Feb 2021 it was $5.27. That rise looks like the hype from pump and dump mania. On the other hand one tweet pointed that George Soros has a sizeable stake in the company. So who are you going to believe George or me?

My motivation

I have no beef about retail investors engaging in a pump and dump since it is a free world in that respect. I'm half tempted to take a punt myself sometimes but I'd probably end up being the victim.

When I see tweets extolling the virtue of a stock that I'm convinced is a dud it makes me want say something about it. Also I like the idea of being able to say "I told you so", assuming I turn out to be right!

George can't be right all the time can he?

Senseonics Bear

Disclosure

I have no $SENS stock, no shorts and no traded options. I wish I could buy puts but I'm not set up for that. I don't even have a share trading account.

Chris Jones 23/02/21. (SENS price $3.70) Last update: 25/02/21