UPDATE: Jan. 28, 2022: Insulet on Friday announced its Omnipod 5 insulin pump has gained FDA clearance after being delayed for the majority of 2021, sending the company's stock up nearly double digits.
Wall Street touted Omnipod 5 as a top 2021 product for the diabetes technology space, and even the entire medical device market. However, the FDA's review timelines have been slowed due to COVID-19 work taking priority.
Omnipod 5 was originally expected to be cleared and launched in the first half of last year but was delayed multiple times, before CEO Shacey Petrovic told investors in December that the agency's decision would likely come in 2022.
Insulet's stock price was up over 9% following the announcement.
Omnipod 5 is a crucial product for Insulet as the adoption of wearable diabetes devices like insulin pumps and continuous glucose monitors is taking off. The product can create an automated insulin delivery (AID) system — where a pump and CGM coordinate together to deliver insulin doses — better positioning Insulet to compete with Tandem Diabetes Care, which has had an AID system on the market for years.
The pump also comes as rival Medtronic is dealing with product safety problems with its diabetes group. The medtech giant received an FDA warning letter last month about multiple safety issues, which could delay the review of its 780G MiniMed pump.
J.P. Morgan analysts wrote Friday that the Omnipod 5 clearance "puts Insulet ahead of Tandem due to pharmacy access, in our view, but both are still winners as long as Medtronic's warning letter prevents 780G approval. Medtronic's loss is everyone else's gain in insulin pumps."
Insulet's Petrovic has previously said that following Omnipod 5 clearance, the company will do a more limited launch before expanding the rollout.
The company will provide an update on the product during its Feb. 23 earnings call.
- Insulet said it now expects FDA clearance for its much-anticipated Omnipod 5 insulin patch pump in the first quarter of 2022 rather than later this year, a delay that sent its stock tumbling more than 8% on Friday.
- CEO Shacey Petrovic sought to reassure investors during a presentation at Nasdaq's virtual investor conference that the new device ultimately will build on the success of the company's current Omnipod Dash platform. "We are eminently confident in our submission," Petrovic said, who blamed the delay on the FDA's workload.
- Wall Street analysts said it's a matter of when, not if, Omnipod 5 gets the FDA's go-ahead and that the product will accelerate the company's growth when it does. The release has been delayed throughout 2021 after Insulet originally projected a first-half clearance and launch. Insulet's stock price rebounded by nearly 3% when the market opened Monday morning.
With Omnipod 5, Insulet promises to bring to market the first closed-loop insulin delivery system via a tubeless pump, in combination with Dexcom's G6 continuous glucose monitor. The system detects changes in blood glucose levels and automatically adjusts patients' insulin doses. The device provides three days of continuous insulin dosing in a disposable, wearable patch pump, Petrovic said.
Analysts have suggested the convenience offered by Omnipod 5 has the potential to shift more patients to pump therapy, replacing finger sticks to read glucose levels and injections for insulin delivery. The device will challenge Tandem's Control IQ technology and Medtronic's MiniMed automated pump systems.
Clinical trial results for the technology have been encouraging. The company this summer presented data from the device's pivotal study that showed the new pump improved A1C levels, and patients' glucose readings remained in target ranges longer than seen in those using multiple daily insulin injections with a needle.
Petrovic told investors Friday that Insulet has been in regular contact with FDA, and the device continues to progress toward clearance, but the agency has let the company know it cannot complete its review by the end of the year.
"It's a pretty challenging environment right now, and cycles are just taking longer, and of course the Omnipod 5 submission is a novel, large and complex regulatory submission," Petrovic said. "So based on our current conversations with the FDA, we are confident we will receive clearance during the first quarter of 2022."
J.P. Morgan analysts in a note to clients Friday said that while the clearance delay could rattle investor confidence and potentially pressure the company's 2022 forecasts, it "isn't terribly meaningful" in the long run. "We still are very confident in the long-term outlook for Insulet and think Omnipod 5 will be a significant value creator for the company," they said.
Analysts at SVB Leerink similarly said they did not anticipate a meaningful impact on 2022 estimates for Insulet, and noted that further stock weakness could present a buying opportunity for investors. The insulin pump market should maintain growth rates in at least the mid-teens, and Insulet has the potential to outpace the broader market, they said.
"The underlying story hasn't changed here," the analysts wrote.
Petrovic said Insulet is on track for another strong year in 2021, after posting five consecutive years of more than 20% revenue growth. Omnipod Dash continues to drive strong adoption of the company's technology, including record new customer starts in the third quarter, the CEO told the investor conference.
Omnipod 5, once available, will be a significant and long-term growth driver for Insulet, Petrovic predicted.
"This is game-changing technology that will bring improved outcomes, improved quality of life and pioneering innovation to people living with diabetes," the CEO said. "So we remain very excited about what is to come with Omnipod 5."