Insulet Reports

Insulet Reports

If there was ever a doubt that Insulet (NASDAQ:PODD) would survive as a viable company and become a serious insulin pump company this afternoon’s call should put any doubts to rest. With the release of first quarter results Insulet has graduated and is now a full blown serious insulin pump company. While the company did state that they added approximately 1,200 new patients during the quarter, they would not provide any clarity as to just how many total patients are using the OmniPod. All they would say there are over 5,000 patients using the OmniPod. Diabetic Investor had hoped that Insulet would be different than Medtronic (NYSE:MDT), Johnson and Johnson (NYSE:JNJ), Smiths Medical and Roche and actually tell us how many patients are using the system.

For reasons only insulin pump companies seem to understand, the actual number of patients using their system is a matter of national security and not to be discussed in public. While many, including Diabetic Investor, have estimated the number of patients using insulin pumps, no one knows with any certainty that these estimates are valid. The pump companies could end all this guessing by providing real numbers but that would just be too simple.

A second sign that Insulet is no longer a kid but a full grown adult came during the question and answer session. Words like achieving profitability, national coverage and dealing with competition came with regularity.

The bottom line here is Insulet must now prove they can do more than survive but actually execute. As innovative as the OmniPod is, Insulet is not a non-profit organization. The company has set some aggressive sales goals and is doing everything they can to take advantage of being the only wireless insulin pump on the market. Although they publicly try to dismiss the competition, competition is coming.

In the end Diabetic Investor sees no reason to change our long term outlook that the company will eventually be acquired. Nothing we heard today or have seen in the market changes this view. The only question is who will be the eventual owner of Insulet and what price will they pay. The answer to a great extent will be answered by how well they execute.

Given how well they’ve done up to this point Diabetic Investor has no doubts they will execute beyond expectations.

David Kliff
Diabetic Investor
847-634-4646 fax
224-715-3761 mobile