November is National Diabetes Awareness month, but there's never a bad time to look after your health.
November 13, 2021
– Advisor: Dana Abramovitz
As we head into the holiday season, with the upcoming feast of Thanksgiving followed by dreams of sugarplum fairies, let us take a minute to acknowledge National Diabetes Awareness month. Diabetes is a disease that affects how our bodies process the foods we eat, particularly the uptake of sugar (in the form of glucose) from the blood into the cells where it can be used. There are many forms of diabetes, with type I and type II being the most common. This year’s focus of National Diabetes Awareness month is on prediabetes and type II diabetes prevention.
To clarify between the two most common forms of diabetes:
With both forms of diabetes, glucose from food is not brought into cells and thus cannot be utilized by cells for energy. An abundance of glucose remains in the bloodstream. This causes thickening of the consistency of blood, leads to long term damage to nerves and organs, and results in decreased circulation.
Type II diabetes is currently the most common form of diabetes in the US, including 88 million people who have prediabetes, according to the Centers for Disease Control (CDC). The National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK) offers ways to prevent or reverse diabetes, including moving more, choosing healthier foods and drinks, and losing weight.
There have certainly been a rise in companies that have responded to the need for assistance in these activities, from digital health and wellness apps like Sharecare (NASDAQ: SHCR) and MyFitnessPal from Under Armour (NYSE: UAA), to exercise tools and gyms like Nautilis (NYSE: NLS) and Planet Fitness (NYSE: PLNT), to athletic wear brands like Lululemon (NASDAQ: LULU) and Nike (NYSE: NKE). Fortunately or unfortunately, there is a large and growing market for these products. Getting people to get started on the journey to a healthier lifestyle and stick with it, especially as we head into the holidays, is the challenge. The success of these companies, and the market’s response to it, will fluctuate as people choose whether or not to stay on their healthy journey.
With type I diabetes and in some forms of type II diabetes insulin is required to assist with the body’s response to glucose. Insulin from animals was first made available in 1922, with Eli Lilly (NYSE: LLY) focusing on the production. Eli Lilly then used recombinant engineering to develop Humulin, the human form of insulin. Novo Nordisk (NYSE: NVO) worked to develop slower, longer acting forms of insulin to better match a patient’s biological needs. The work of both companies started in the first half of the 20th century and the drugs are only getting incrementally better. New variations of insulin, with only slight changes, are being created, so patent protection is keeping prices high, especially as we see an increased demand for these products. As the 7investing team discussed in a previous 7investing Now episode, Walmart (NYSE: WMT) created a private label for Novo Nordisk’s Novolog to sell it at a cheaper price. For people whose life depends on insulin, slightly cheaper may not be cheap enough, especially when the patent has long expired and improvements on decades old manufacturing procedures produce high margins.
For people with a normal functioning pancreas, the body is able to sense when there is food coming in. That allows the pancreas to make insulin available to respond to the increase in glucose in the blood. For people who don’t produce insulin or whose bodies don’t respond to the insulin they do produce, they need to actively monitor their blood sugar levels and give themselves doses of insulin. Blood glucose monitoring is done with a fingerstick and a glucose reader to measure glucose levels. The person then injects themselves with the amount of insulin needed to get glucose from the blood and into cells.
Companies like DexCom (NASDAQ: DXCM) and Abbott (NYSE: ABT) introduced continuous glucose monitors (CGM) that continuously monitor blood glucose levels to reduce the number of finger pricks. The 7investing team also discussed on a 7investing Now episode Apple’s (NASDAQ: AAPL) interest in adding glucose monitoring functionality to the Apple Watch. For people who are dependent on insulin, CGMs can pair with insulin pumps such as those from Medtronic (NYSE: MDT) to deliver the appropriate amount of insulin when sugar levels rise. Patients can also tell their pumps to deliver a dose of insulin when they eat. Unfortunately, if a person gets too much insulin for the amount of sugar in their blood, their sugar levels can drop dangerously low leading to seizures, diabetic comas, and even death.
Even though the number of people with diabetes continues to rise, it should not incite your fear of missing out (FOMO). Diabetes is no joke. If you can prevent it by changing your habits and creating a healthy lifestyle, please do. As an investor, there will continue to be plenty of companies that serve this market. As an investor who prioritizes companies that work to make the world a better place, I will continue to look at companies that promote the health of their customers in addition to the health of their business. With the large diabetes market, there are opportunities to do good and do well.