Insulet (Nasdaq:PODD) shares got a boost from third-quarter results that came in ahead of the consensus forecast.
Shares of PODD were up more than 16% at $162.94 near the end of trading today — a day after the company released results after market close. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — was up more than 2%.
Highlights for the quarter included FDA clearance for the Omnipod 5 app on Apple iOS and the limited launch of the Omnipod Go basal-only pump. Insulet also launched Omnipod 5 in Germany as it expects full European availability in 2024.
Perhaps the biggest news from Insulet’s third-quarter results was an update on a major integration development. The company said it’s on track to integrate Omnipod 5 with the Dexcom G7 by early 2024. Omnipod 5 already works with the Dexcom G6, while the company continues work on integration with Abbott’s FreeStyle Libre 2.
Integration with G7 would mark a major step forward as it would enable the users of Dexcom’s next-generation continuous glucose monitor (CGM) to use the latest Insulet pump technology. Dexcom COO Jake Leach recently told Drug Delivery Business News how vital automated insulin delivery integration is for the company.
How Insulet performed in the quarter
The Acton, Massachusetts-based company posted profits of $51.9 million for the quarter. That equals 74¢ per share on sales of $432.7 million for the three months ended Sept. 30, 2023.
Insulet recorded a massive bottom-line gain from losses of $5.2 million this time a year ago. It posted a revenue increase of 26.96%.
Adjusted to exclude one-time items, earnings per share totaled 45¢, 5¢ ahead of Wall Street expectations. Sales beat projections, too, as analysts looked for $414.4 million in revenue.
Total Omnipod revenue of $422 million marked a year-over-year increase of 29.4%.
Insulet increased its guidance for the full year to sales growth between 26% and 27% (previously 22% to 25%). It projects total Omnipod growth between 29% and 30% (previously 25% to 28%).
“Our third quarter financial and operational results marked another strong quarter for Insulet, and as a result of continued high demand for Omnipod 5 – both in the U.S. and globally – we are pleased to again raise guidance for the full year,” said Jim Hollingshead, president and CEO. “We are the leader in growing the large U.S. type 1 and type 2 diabetes markets, and we are only in the early innings of capitalizing on strong and increasing global demand. We are confident we are taking the right steps to unlock Insulet’s full potential while successfully advancing our mission to improve the lives of people with diabetes.”
The analysts’ view
Analysts at BTIG were buoyed by Insulet’s third-quarter results and continue to give the company a “Buy” rating.
Marie Thibault and Sam Eiber wrote that they consider the next-generation CGM integration, international launches and a potential expansion into type 2 diabetes as potential catalysts in the near future.
“We think PODD shares can move meaningfully higher in Friday trading and given the benefit of having a recurring revenue model layered on a rapidly expanding installed patient base, we think the company remains a top-quality name in medtech,” they wrote.
The analysts also shed some light on the ongoing GLP-1 drug craze and its effect on diabetes technology. The GLP-1 drug class, which includes Ozempic and Wegovy, has cast a shadow of doubt over diabetes technology of late. This therapeutic class, a glucagon-like peptide 1, has proven to lead to improved blood sugar control and weight loss.
Thibault and Eiber already quelled some concerns on this topic in September after a chat with a diabetes expert. They saw the impact on insulin delivery, in particular, as “relatively minor.”
The analysts went a step further after looking at Insulet’s third-quarter results, and broader results in the diabetes space.
“We are tired of the focus on GLP-1s and know that investors are too,” the analysts wrote. “If this season’s stellar Q3 results from diabetes tech leaders Abbott, Dexcom and now Insulet are any proof, the worry about an impact on diabetes device therapies from these drugs is misplaced. We remain Buyers of these names and think most of MedTech is on deep discount.”
This story originally ran on Nov. 2, 2023. Updated Nov. 3 with next-day stock price.
