Insulet (Nasdaq:PODD) stock is down on second-quarter results that came in mixed compared to the consensus forecast.
Shares of PODD were down more than 7% to $184.56 apiece by midday trading today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — was up slightly.
Yesterday evening, the Acton, Massachusetts–based automated insulin delivery technology maker reported profits of $188.6 million. That equals $2.59 per share on sales of $488.5 million for the three months ended June 30, 2024. The results fell in line with the company’s preliminary results released two weeks ago.
Insulet’s bottom line skyrocketed from profits of $27.3 million this time a year ago, with a sales increase of 23.2%.
Adjusted to exclude one-time items, earnings per share came in at 55¢. That landed a penny shy of expectations on Wall Street. Sales came in well ahead of the forecast, though, as experts projected $463.1 million in revenue.
The company’s Omnipod automated insulin delivery system accounted for $480.4 million in revenue. That marked 26.3% growth from the same period last year.
Recent highlights include the full market launch of Omnipod 5 with the Dexcom G7, along with an iOS app. The company also revealed at ADA 2024 that it plans to seek an FDA nod for Omnipod 5 in the type 2 diabetes community.
“2024 is shaping up to be another year of rapid growth, fueled by strong Omnipod 5 demand and our accelerating pace of product innovation,” said Jim Hollingshead, president and CEO. “Omnipod 5 continues to disrupt the diabetes landscape in every market in which it is offered, and we are thrilled to have expanded the Omnipod 5 platform globally with multiple integrations and product launches.
“We remain the clear leader in our industry, and in light of our first half results and our confidence in delivering an even stronger second half, we have increased our full year guidance for revenue, gross margin and operating margin. We are poised for continued profitable growth, while successfully advancing our mission to simplify and improve the lives of people with diabetes.”
Insulet now expects full-year revenue to range between 16% and 19% (previous projections earmarked 14%-18% growth). It forecasts total Omnipod sales growth between 18% and 21% (previously 15% to 19%).
The analysts’ take on Insulet’s quarterly performance
BTIG analysts Marie Thibault and Sam Eiber say investors were “distracted” by softer commentary on new U.S. patient starts for Insulet. The company still expects them to grow in the third and fourth quarters, but may not see year-over-year growth over the full 12 months.
The analysts say that management pointed to a “less steep ramp” in second-half new starts. Insulet leadership attributed this to less competitive switching in the insulin pump market and a longer G7 phase-in period for retail channels.
“With investors highly focused on Insulet’s pace of new U.S. starts this year, we think this commentary may overshadow the positives,” the analysts wrote.
Other notes included encouraging trends for Omnipod 5 outside the U.S. The analysts also say Insulet expects FDA approval for Omnipod 5 in type 2 diabetes by year-end. The company has work underway on a targeted salesforce investment to focus on that population.
“We are confident we have a clear right to win in the type 2 space,” Hollingshead said on the company’s earnings call. “We expect to be the first to market in type 2 with an AID offering, and not just any AID offering, but with Omnipod 5, which is the product platform that quickly leapfrogged into market leadership once we launched it in type 1.”
The analysts maintained their “Buy” rating for Insulet.
“We see plenty of catalysts ahead, including integration with new CGMs, ongoing and planned OUS launches, phone control, and expansion into a Type 2 indication, all of which we think can help accelerate new customer starts in 2025,” the analysts wrote. “With its recurring revenue model, large installed patient base, and fast progress on profitability, we think Insulet remains a top-quality MedTech name.”
This story originally ran on the evening of Aug. 8, 2024. Updated Aug. 9 with next-day stock price.
