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Tandem Diabetes Care Idea Proposal (TNDM)

Tandem Diabetes Care Idea Proposal (TNDM)
 

Can Tandem continue its growth trend as competition intensifies and new technology looms?

Report Available: June 19, 2019

 

Blueshift’s initial research found insulin pump manufacturer TNDM posting its sixth consecutive impressive quarter of growth when just two years ago some questioned if the company could survive. TNDM now has nearly 100,000 patients using its insulin pumps. A third-party study found that TNDM pumps have achieved the highest level of customer satisfaction compared to its peers and the company is investing heavily to meet demand. Can the success continue? Competitors are constantly improving their technology, start-ups are on the verge of new product releases, and attractive new payment models could challenge TNDM’s growth.

 

Observations

  1. TNDM posted strong Q1 numbers following stellar Q4 2018 results. Q1 revenue beat expectations by 31% and was up 141% year to year. EPS recorded a loss, but was still above expectations. Pump shipments were up 232% year to year to 14,722 pumps and TNDM raised its full year guidance.
  2. TNDM’s Q4 2018 and Q1 2019 accomplishments include:
  • Securing the designation as the first Alternate Controller Enabled Infusion Pump (ACE pump) from the FDA. TNDM’s t:slim X2 insulin pump is the first and so far the only ACE pump. It allows for separate companies to integrate their products into the t:slim X2 without having to submit to the FDA each time.
  • TNDM launched the t:slim X2 with Basal-IQ Technology. The new feature offers predictive low glucose suspend (PLGS) designed to help reduce the frequency and duration of low glucose events (hypoglycemia). It is integrated with the Dexcom G6 CGM System, which requires no fingersticks for calibration or diabetes treatment decisions.
  • TNDM has added expertise and strong leadership to its board and C-suite. Rick Valencia, the President of Qualcomm Life, joined Tandem’s board last year. In Q1, Becky Robertson also joined its board, bringing her proven track record of helping medical device companies succeed. Manuel Jaime became Senior VP of Technology and Digital Health. He brings expertise in mobile connectivity and cloud technology.
  • TNDM purchased three additional production lines and rented additional warehouse space in San Diego. When operating, these three production lines will produce three million units per year and will allow for service to an additional 125,000 patients.
  1. Competitors that could create headwinds for TNDM in the near term include:
  • PODD which also reported an impressive Q1 with revenue growth of 29% year to year and an increase in its full year guidance. PODD’s transition to a pay-as-you-go model for its insulin pumps could be highly disruptive. Its distribution through the pharmacy channel is also unique. PODD launched its newest pump, the Omnipod DASH, and its pipeline includes new patch pump technology with phone controls that it claims will be a game changer.
  • MDT’s fiscal Q4 results also beat expectations, however the Diabetes segment only met expectations. Sales of diabetes devices grew 0.6% in constant currency with strong international sales (mid-teen growth) that were offset by an 11% decline in U.S. revenue. MDT expects full year growth in the Diabetes group of 6% to 8%. The company also expects to launch its next-gen MiniMed 780G hybrid closed loop insulin pump system with Bluetooth later this year.
  1. There is a plethora of innovation and technology advancements in the diabetes field that are not yet available, but could eventually disrupt TNDM growth. A few examples:
  • Smart Insulin Pens: LLY submitted its first connected pen product – referred to as a Connected Care prefilled insulin pen – to the FDA earlier in 2019. SNY, NVO, and ABT are also working on connected insulin pens.
  • The Bionic Pancreas, Beta Bionics’ iLet Bionic Pancreas System, is in clinical trials and has demonstrated dramatic improvement in glycemic control relative to the standard of care.
  • Bigfoot BioMedical is a medical device company that has an investigational automated insulin delivery system, otherwise known as an artificial pancreas, that was inspired by a proof-of-concept system that has been used for over 50,000 hours. Bigfoot is harnessing the power of machine learning to automatically and continuously optimize insulin delivery for people with insulin-requiring diabetes.
  1. Blueshift’s April 25 DXCM report highlighted MDT, PODD, and TNDM as the top insulin pump providers. DXCM’s interoperability with PODD and TNDM products provides a CGM advantage, and the products are well liked. The report also said Bigfoot Biomedical is working with ABT to integrate its pump with the Libre and, if successful, will provide additional competition.

 

Can TNDM continue its growth trend over the next six to 12 months? What growth rate is realistic to expect? Why is TNDM’s pump renewal rate so low (50% vs. goal of 70%)? Is there any chance that TNDM and the other pump providers have saturated the market? How will PODD’s new pay-as-you-go and pharmacy distribution model impact the market? How will the competitive landscape impact TNDM? Is there a new technology or feature that could disrupt the insulin pump market? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: Diabetes centers, Nurse Educators, Endocrinologists, Competitors, and Distributors.

 

Companies: Tandem Diabetes Care Inc. (TNDM), Abbott Laboratories (ABT), Eli Lilly and Company (LLY), Insulet Corporation (PODD), Medtronic plc (MDT), MicroPort Scientific Corporation (MCRPF), Novo Nordisk A/S (NVO), Sanofi (SNY), Valeritas Holdings Inc. (VLRX)

 

Research Begins: June 3, 2019

 

To see other ideas Blueshift Research is currently working on, please click here.

 

Blueshift Research’s sister company, Intro-act, is launching its Intro-act Scorecard, the C-suite’s standard, ongoing measure of corporate investor engagement.

 

The Scorecard optimizes the ROI on corporate access by measuring: Concentration, Directionality, Breadth, Impact, Depth, and Duration