- Interoperable insulin pump specialists Insulet and Tandem Diabetes raised their respective 2020 revenue and sales guidances this week after reporting better-than-forecast third-quarter results. Despite the impacts of COVID-19 cutting into some new patient starts, the third quarter was less affected than the second.
- For Insulet, which reported after market close Wednesday, a rising proportion of new Type 2 diabetes users was among the growth catalysts that helped fuel the earnings and revenue beat. The company is looking ahead to launching its new interoperable pump system in the first half of 2021.
- Tandem, sharing results late Thursday, said it achieved record sales during the most recent quarter amid uptake of its Control-IQ technology, the first FDA-cleared algorithm for use with a fully interoperable, automated insulin dosing system.
The management of chronic diseases like diabetes can't be deferred in the way treatment of some other conditions can. But diabetes tech companies worried at the outset of the pandemic that given fewer visits to the doctor, there wouldn't be as many people making the switch to insulin pump therapy.
More than six months into the pandemic, that impact appears to be less severe than feared.
Insulet CEO Shacey Petrovic described new customer starts as "stronger than expected" during the third quarter. All in all, COVID-19 had an estimated impact to number of new patient starts of less than 30%, the company said, an improvement over the second quarter.
Petrovic reported that 80% came from patients receiving insulin via multiple daily injections, rather than a competitor's insulin pump system. Additionally, in the U.S., one-third of new customers during the quarter have Type 2 diabetes, a sequential increase from last quarter.
Likewise, Tandem's worldwide pump shipments were up 23% over the prior year. Looking at just the U.S. market, users grew closer to 30%.
Both companies talked up improvement and expansion of their virtual training programs to allow those new customers to transition during the pandemic.
Q3 updates from insulin delivery pure plays
|Revenue||vs. consensus||Gross margin||New YOY rev. growth guidance for 2020|
|Insulet||$234M (+22% YOY)||+$12M||64.9%||20-21%|
|Tandem||$124M (+31% YOY)||+8M||53%||28-31%|
In the near term, analysts at SVB Leerink say they see upside to Tandem's fourth-quarter guidance. But they noted a more challenging landscape in the long term: "We do also continue to believe that with a potentially much more competitive insulin pump market in ~9-12 months, this level of upside might be more difficult to deliver."
Analysts at Cowen also acknowledged a more intense insulin pump market come 2021, which also includes Medtronic and potentially smaller player Beta Bionics, but took a slightly more confident view on Tandem, seeing room for revenue upside driven by international markets.
New products for Tandem in 2021 will be a mobile bolusing feature for users of its existing pumps, an entirely new pump hardware, called t:sport.
Insulet, meanwhile, announced it completed the pivotal trial for its newest interoperable insulin delivery system, now called Omnipod 5, and is on track to launch it in the first half of 2021. Looking to continue its momentum in the Type 2 population, Insulet is also working on a small early feasibility study for the technology among such patients.