Boringly Consistent

Boringly Consistent

One of the greatest things about San Diego, our new home, is the weather is boringly consistent. Which is a great thing given the great weather here. San Diego is also home to Tandem which like Dexcom, another San Diego company, and Insulet has reported results which show two things. The Control IQ continues to kick ass and while COVID hasn’t gone away they have learned to succeed in the COVID world.

Also like Dexcom and Insulet the company is revising guidance upward, per the release;

“For the year ending December 31, 2020, the Company is updating its sales guidance estimated to be in the range of $465 million to $475 million, which includes international sales of approximately $70 million to $75 million. This represents an annual sales growth of 28 percent to 31 percent compared to 2019. The Company’s prior sales guidance for 2020 was estimated to be in the range of $450 million to $465 million.”

Another communality at least with Insulet is the growing number of patients switching from multiple daily injection (MDI) therapy to insulin pump therapy. While MDI patients have always been fertile ground for conversions this trend has been accelerating and we think we know why. First and foremost CGM systems have become the transformative tool we have always known they would be. Second once a CGM patients have become more in tune with their diabetes. Third these patients now in tune with their diabetes see insulin pump therapy easier, that’s right easier, than the daily regimen of multiple shots.

With Tandem and their Control IQ these trends make the future bright and the reason why Insulet wants to get the Omnipod 5 launched. The one possible dark cloud on the horizon could be the arrival of Tyler. We have long believed and still believe that Tyler is the single biggest threat to the insulin pump market. However with all his benefits Tyler has one large drawback the patient still must inject, Tyler will provide direction, but he will not perform the actual injection.

Since these patients are already on CGM the side benefit is they are also becoming more comfortable wearing a device on their body. Adding either an infusion set or pod, once seen as a drawback has become less onerous. Throw in the fact they don’t have to carry around a pen or worry if the pen is stored properly or having to inject in a public place all goes away with a pump. Tyler will always carry a lower cost but as the reimbursement environment becomes a more level playing field for Tandem and with Insulet’s move to the pharmacy channel, this advantage is somewhat mitigated.

Finally and this cannot be underestimated particularly for Tandem is the role social media has played. A day does not go by when you don’t see a Control IQ patient gushing about the outstanding control they are achieving on the system. This constant positive endorsement from real Control IQ patients is a huge benefit and often helps a patient overcome their fears moving from MDI to an insulin pump.

It’s becoming more obvious with each earnings call that the three amigos – Dexcom – Insulet and Tandem – have all adapted to the COVID world, have strong management teams and are prepared to deal with any possible setbacks as COVID continues to move in the wrong direction.