Mr. Kliff: First of all, Diabetic Investor has been publishing now for almost 15 years. Basically I cover the diabetic market from a business perspective and we write about literally any company that is connected to diabetes in any way. Obviously you have drug companies, device companies, but we also cover retailers, pharmacy benefit managers, literally there is no aspect of the economy that isn't somehow affected by diabetes. There are 24 million patients with diabetes, there's another 57 million with pre-diabetes who are likely to develop diabetes sometime in their lifetime. The World Health Organization estimates by the year 2030, the number of patients with diabetes will double worldwide. According to the CDC here in the States, estimates are one of three children will grow up to get diabetes. The word epidemic has been thrown around diabetes and there's kind of what I call a dangerous triangle here, you have obesity on one side of the triangle, you have diabetes on the other side of the triangle, and then you have cardiovascular events on the bottom of the triangle. Unfortunately all three of those disease states are connected and basically I think why there is an enhanced level of interest in diabetes, there are several reasons.
Just off the top of my head, I would say that, from a retailer's perspective, like a Walgreens, CVS Caremark or pharmacy chain, a diabetic patient is a golden child. Diabetic patients on average will spend about 4,500 a year inside a pharmacy. They visit the store more frequently, they buy higher-margin products, and as with any chronic disease state, unfortunately, we're not very close to a cure. Whether it's going into the store to buy test strips, insulin, drugs, whatever, they're always in there. Obviously over the 15 years that we've been publishing, there has been some tremendous advancements in not only the therapies people use to treat the diabetes, but also in the devices they use to monitor the diabetes.
Like any part of health care, a new twist and wrinkle to diabetes is all the talks about healthcare reform. This is going to have a definite impact on the marketplace. You have also the wildcard of the FDA and new drug approvals. There's been several recent controversial events in the drug world, pretty much starting when Avandia, which was a drug from GlaxoSmithKline, connected to cardiovascular events, which in turn led the FDA to establish new guidelines on how they are going to go about approving drugs targeted at people with type 2 diabetes. Suffice it to say that there are a lot of interesting things going on in the diabetic world that makes my job a lot easier.
Tickers included in this excerpt: AMLN, CVS, GSK, KFT, KO, LLY, MHS, MRK, NTRI, NVO, PEP, RAD, WAG
For more information call (212) 952 7433. The Wall Street Transcript does not endorse any of the comments made by interviewees, and does not make stock recommendations.