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Insulet Corporation
CEO : Dr. James R. Hollingshead Ph.D.

Quarterly earnings growth(YoY,%)

Period	Revenue	Operating Income	EPS	Release Date
2023 Q2	32.4% YoY	-216.5%	-178.0%	2023-08-08

James Hollingshead says,

Financial Performance

• Q2 revenue exceeded expectations with total Omnipod growth of 33%, including U.S. growth of 41%.
• Total company growth of 32%.
• Raised outlook for the year.

Consumer-Focused Innovation and Clinical Achievements

• Omnipod 5 is disrupting the diabetes technology market as the only FDA-approved fully disposable, pod-based automated insulin delivery system.
• Omnipod 5 represented almost 95% of U.S. new customer starts.
• Completed the commercial launch of Omnipod 5 in the United Kingdom.
• Plans to launch Omnipod 5 in Germany this fall.
• Advanced clinical initiatives, including presenting compelling real-world data at ADA.
• Submitted 510(k) to the FDA for Omnipod 5 iOS app for the iPhone.

Penetration of Market Opportunity and Omnipod 5 International Launch

• Market opportunity for pump adoption in the type 1 market expected to reach over 70% from the current 40%.
• U.S. pharmacy channel expanding access to Omnipod.
• Omnipod 5 already contributing to overall pump adoption in the U.S.
• International commercial launches of Omnipod 5 underway.

Growth in Type 2 Market and Future Innovations

• Type 2 patients represent 20% of U.S. new customer starts.
• Omnipod DASH and Omnipod GO targeting type 2 market.
• Expectation of a future type 2 indication for Omnipod 5.
• 510(k) submission for the Omnipod 5 iOS app.
• Advancing integration efforts with CGM partners.

Customer Feedback and Data Insights

• Omnipod 5 receiving positive feedback and strong customer retention.
• Increasing number of healthcare professionals writing scripts for Omnipod 5.
• Building usage data from Omnipod 5 customer base to improve customer experience.
• Feasibility study of next-generation AID algorithm.

Wayde McMillan says,

Revenue Growth

• Generated 32% revenue growth in Q2, exceeding guidance range
• Global Omnipod growth of 33%
• U.S. Omnipod revenue growth of 41%, surpassing guidance range
• International Omnipod revenue increased 15%, in line with expectations

Gross Margin

• Gross margin was 66.8%, up approximately 320 basis points
• 320 basis point increase in gross margin primarily driven by volume growth in the pharmacy channel, improved manufacturing efficiencies, and decrease in warranty expense
• Expect adjusted gross margin to be in the range of 65% to 66% for 2023, with gradual improvement over the coming years

Operating Expenses

• Operating expenses were up year-over-year to support higher-than-expected revenue and investments in the business
• Expect adjusted operating margin of high single digits, closer to the high end of the range
• Anticipate leveraging investments in 2024 and beyond to drive margin expansion

Outlook

• Raising expectation for total Omnipod revenue growth to a range of 25% to 28% for the full year
• Raising revenue growth outlook for U.S. Omnipod to 33% to 36%
• Expect 7% to 10% constant currency growth for International Omnipod
• Expect decline of 50% to 45% for Drug Delivery

Cash and Liquidity

• Ended the quarter with $660 million in cash
• Extended credit facility 4 years, increasing borrowing capacity to $300 million
• Strong financial position to invest in pipeline and key areas of the organization

Q & A sessions,

Impact of GLP-1 Innovation

• The latest generation of GLP-1s is having a significant impact and offering additional efficacy for people with type 2 diabetes.
• The global problem of type 2 diabetes is enormous, with over 0.5 billion people living with diabetes worldwide.
• Omnipod has a huge market potential to help the 2.5 million people in the US living with type 2 diabetes who require intensive insulin therapy.
• Pump penetration in this market is low, providing an opportunity for Omnipod’s simplicity and channel access to succeed.

Launch of Omnipod 5 in the UK

• The launch of Omnipod 5 in the UK is off to a great start, with a doubled order rate and high demand.
• The growth in the US market is driven by the ability to cross over from tubed pumps to pharmacy benefits, allowing for competitive conversions.
• In European markets, customers who are locked into contracts need to wait for them to expire before switching to Omnipod 5.

Upcoming Features and Partnerships

• The iOS app has been filed with the FDA and, once cleared, will enhance customer satisfaction and boost retention rates.
• Omnipod is working closely with partners Abbott and Dexcom to launch G7 and FreeStyle Libre sensors, which provide sustained growth and choice for customers.

Increasing Prescribing Population and Customer Satisfaction

• Omnipod 5 is accessible and easy to use, leading to increasing confidence among prescribers in various healthcare professions.
• Record new customer starts are seen for both Omnipod 5 and MDI, with high customer satisfaction and better outcomes compared to competitors.

Pilot Plan for Omnipod GO and Financial Impact

• Omnipod GO, a new insulin therapy initiation product, will be piloted to educate clinics and understand the selling pitch, with plans to commercialize in 2024.
• The tough comp from last year’s Omnipod 5 ramp benefits will result in a 5-10% headwind to guidance range, but strong growth is expected due to the durable business model and record new customer starts.