Insulet Delivers Strong 3Q23 Based Upon Omnipod 5 Success; Product Cycle Momentum Shows No Signs of Slowing With Provider Adds, International Launch, and Type 2 Diabetes Expansion Primed for 2024
11-6-23 (by Scott Gleason) Insulet Corporation has reported its financial results for the third quarter of 2023 with total revenue of $432.7 million, marking a 27.0% increase compared to the prior year. Consensus forecasts had called for total revenue of $414.4 million. The key driver of growth was Omnipod revenue, which reached $422.0 million, signifying a substantial 29.4% increase, with both the U.S. and international markets growing. The quarter marked the anniversary of the launch of the new Omnipod 5 in the third quarter of last year. Management noted that the new Omnipod 5 comprised the vast majority of new patient starts in the quarter. The company has now began the international rollout of Omnipod 5. Omnipod 5 is the only tubeless insulin delivery system and has easy integration with a smart phone. Management noted the number of physicians writing scripts for the Omnipod also increased meaningfully in the quarter from 15,000 last quarter to 17,000 this quarter.
Omnipod 5 is not yet cleared for type 2 diabetes patients but the company noted that it has completed enrollment in its pivotal clinical study to support potential indication expansion in the U.S. The company is also ramping up plans for its full commercial launch in type 2 diabetes with Omnipod Go planned in 2024. In the U.S. there are 1.4 million adults with Type 1 diabetes compared to 37 million with Type 2 diabetes. However, the market is primarily a primary care call point (256,000 doctors) versus endocrinologists who treat Type 1 diabetes at 8,000 making it more diffuse and harder to address.
The company also received FDA 510(k) clearance for the Omnipod 5 iOS App, with plans to commence a limited market release in early 2024. Furthermore, they are preparing for a U.S. limited market release of Omnipod 5 integrated with Dexcom’s G7 sensor in early 2024.
Adjusted operating income was $52.9 million and adjusted operating margins rose by 60 basis points year-over-year. Adjusted earnings per share were $0.71 per diluted share compared to street forecasts of $0.40.
The company increased its full year guidance and is raising its expected revenue growth to a range of 26% to 27% (previously 22% to 25%). Additionally, the Company now expects operating margin in the range of 9% to 10%, closer to the high-end of the range (previous guidance called for high-single digit operating margins).