Judging by how the Street is reacting one just get the impression that Tandem’s results were below expectations. That the Control IQ isn’t just killing it and driving Tandem to new heights. Now to be honest we could care less what the Street thinks or how they react as they have been wrong so many times it’s ridiculous to even pay attention to what they do. Listen the results were just fine and pretty much what we expected.
We also suspect the company is taking a page from the Dexcom playbook preferring to lowball guidance only then to raise it later in the year. Frankly we think is a very wise strategy given the many variables that impact results.
Listening to the call that accompanied results the company is not content to rest on having the coolest toy in the toy chest with the Control IQ. They continue to invest in future products and innovations such as the ability to bolus from a smartphone. So why then is the stock selling off in after hour trading? Who knows and frankly who cares as there is no question Tandem is doing exactly what we thought they’d be doing and it would be foolish to give up on them now.
Here are some facts everyone needs to come to grips with;
1. We are at the VERY EARLY stages of the Control IQ launch and it’s only getting better as word gets out on it’s performance. Social media is filled with reports of patients achieving Time in Range (TIR) exceeding 90% and these results are beginning to get the attention of physicians as well.
2. Their biggest competitor Medtronic continues to struggle, is dealing with yet another recall and has nothing in the pipeline coming anytime soon that will halt Control IQ momentum.
3. The fact that they are not slowing down, that they continue to innovate and invest in additional capacity shows that Control IQ is not a one hit wonder. Simply put Tandem knows they have the Big MO, they know Medtronic is floundering and now is the time to strike.
4. Everyone needs to slow their roll a little for as much as we see a very bright future for Tandem there will be bumps along the road. The company acknowledged they weren’t equipped to handle the demand for Control IQ which in our book is not a bad thing, never a problem to have more demand than anticipated.
5. Finally the insulin pump market is becoming the domain of Tandem and Insulet with Medtronic becoming somewhat of an after thought. Medtronic is doing their best to stay relevant but they are just aren’t equipped to handle what is going on.
The best way to look at whats happening here is to understand that Control IQ is a transformational product which will continue to drive growth. Tandem is making the right investments in additional capacity and new products. Their main competitor is floundering and frankly is not equipped to deal with the new realities of the market. Will Tandem overtake Medtronic we aren’t sure about that, will Tandem and Insulet do serious damage to Medtronic, no question.
When it comes to insulin pump the players haven’t change but the game has. Tandem and Insulet are killing it and Medtronic is getting killed and yes, it is that simple.