Insulet Reports – Something just not right
Given the how important the new Eros pod is to Insulet (NASDAQ:PODD), who reported earnings this evening; one has to wonder whether their regulatory team is up to the task. The last time the company reported earnings they intimated that the new pod would receive FDA approval BEFORE the upcoming ADA meeting in early June. Today according to a company issued press release the company stated; “We are eager to introduce the new OmniPod in the U.S. as well and are working diligently with the US Food and Drug Administration to obtain 510(k) clearance in the coming months.” (Bold and underlining added by Diabetic Investor.)
The company also noted that yet again the FDA has issued yet another set of questions. Now we know that dealing with FDA is never easy and we also know that the agency is paying closer attention to insulin pumps but even taking these factors into account Diabetic Investor suspects that Insulet has a problem on their hands, a feeling that was reinforced by their answers to the many questions on the subject that came up during the Q&A of the call. Given the way the company danced around these questions, never providing a direct answer we began to wonder whether this was an Insulet earnings call or Dancing With The Stars.
On the one hand the company states they want to convert their entire patient base to the new yet still not approved new pod by the end of this year. Yet on the other hand they won’t tell anyone how many new pods they are actually making, only stating that they are making between 100,000 to 150,000 per day but the production line is not running 100% of the time. Although there is no way to know this for certain Diabetic Investor has the impression that the manufacturing process for the new pod is much more complex than anticipated and the company underestimated the true nature of what they were up against. Or put another way, like so many companies in the diabetes device business they opened their mouth before realizing the true nature of things and ultimately ended up inserting their foot.
On a positive note the quality issues that were plaguing the current pod have become less of a problem, which is a good thing as it looks like the company will be selling this version for quite some time as they have no clue as to when, or if, the Eros pod will ever make it to the market. As much as we would like to believe the company when it states they remain confident that the new pod will be here soon, we’d feel much better if they actually backed up this statement with some real, hard facts. While we know this isn’t an exact process, especially when the FDA is involved. However, we also have been around long enough to know that when there are no straight answers to rather simple questions something just isn’t right.
