This marks the latest integration of Dexcom’s next-generation CGM into automated insulin delivery technology. Omnipod 5, Insulet’s newest patch pump offering, previously worked with the G6 in the U.S. It also recently integrated the system with Abbott’s FreeStyle Libre 2 Plus in Europe.
Insulet previously suggested that G7 integration would come early in 2024. In the company’s fourth-quarter earnings report yesterday evening — which included Street-beating results — the company confirmed the initial limited rollout began recently.
By the middle of the next day, PODD shares were down more than 4% to $187.81 apiece. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — was up slightly.
BTIG analysts Marie Thibault and Sam Eiber suggested that the initial investor reaction may be related to changes in the company’s order timing reporting. However, the underlying numbers remain strong.
The quarterly results for Insulet
For the quarter, the Acton, Massachusetts-based company posted profits of $103.3 million. That equals $1.44 per share on sales of $509.8 million for the three months ended Dec. 31, 2023. Insulet increased its bottom line six-fold on sales growth of 37.9% year-over-year.
Adjusted to exclude one-time items, earnings per share came in at $1.40. That landed 74¢ ahead of expectations on Wall Street. Sales beat the forecast, too, coming in well ahead of the projection of $461.05 million.
Total Omnipod revenue of $501.0 million in the fourth quarter reflected a year-over-year uptick of 36.7%. Omnipod sales of $1.7 billion for the full year marked 33.1% growth.
“2023 was another transformational year for Insulet. The rapid adoption of Omnipod 5 helped fuel our eighth consecutive year of more than 20% constant currency revenue growth,” said Jim Hollingshead, president and CEO. “Our team’s outstanding execution and relentless pursuit of innovation further solidify our position as the category leader, strengthen our competitive moats and enable us to deliver our groundbreaking innovation to even more people. We entered 2024 with powerful momentum and are well-positioned for continued profitable growth and value creation as we simplify life for the millions of people with diabetes around the world.”
Insulet projects 12% to 17% revenue growth in 2024, including total Omnipod growth between 13% and 18%. Its guidance reflects an estimated $20 million to $25 million in revenue related to U.S. pharmacy wholesaler orders that were accelerated into the fourth quarter of 2023 from the first quarter of 2024 in advance of the Company’s implementation of a new ERP system on January 1, 2024.
The analysts’ view
Thibault and Eiber wrote that the order timing changes muddied the top-line outlook for Insulet. However, they said the underlying fundamentals remain healthy.
The analysts noted that type 2 diabetes patients represented 20%-25% of new additions as well. That highlighted the remaining interest in device therapy among patients where pump penetration falls below 5%.
“With a recurring revenue model layered on a rapidly expanding installed patient base and better margins, we think the company remains a top-quality name in MedTech,” Thibault and Eiber wrote.
The analysts said Insulet has future catalysts that include CGM integration, launches outside the U.S. and expansion to type 2 patients. All of those can help accelerate new customer starts in the back half of 2024 and into 2025, they said.
BTIG maintains a “Buy” rating for Insulet.
This article originally ran on Thursday, Feb. 22, 2024. It was updated on the morning of Friday, Feb. 23, with additional context from analysts and the next-day stock price.
