News from the Insulet Q3 2018 conference call

Insulet (the Omnipod company) had their quarterly conference call on November 1. The transcript is available at https://seekingalpha.com/article/4217388-insulet-podd-q3-2018-results-earnings-call-transcript

I’m not a podder, but given some of what I read in the conference call transcript, there could possibly be pods in my future if the integration with LOOP goes well, In any case, here’s the news as I see it.

They are hard at work on the HORIZON automated insulin delivery system. This system will be controlled by an app on the user’s mobile phone, not by a dedicated medical controller device. (I.e., not like the locked-down separate android phone used in Omnipod DASH.) They are in their 4th investigatory device trial (20 or 30 people) to check the performance on people of all ages in real-world conditions such as large meals and skipped meals. They anticipate the HORIZON system will be on the market in the second half of 2020.

They are cooperating with Tidepool to get FDA approval for an Omnipod DASH to be controlled by the Tidepool-LOOP algorithm running on an iPhone. This may well become available before the HORIZON system is, because there are thousands of people running LOOP so we have lots of data already available and relevant to questions of safety and effectiveness.

On the business side, they are now operating with a profit, and expect 2019 will show a full-year profit.

They are working to get insurance approvals for Omnipod DASH coverage through the pharmacy benefit rather than as durable medical equipment, because this makes it much easier for doctors and patients: just write a prescription and get it filled rather than the heavyweight medical necessity documentation for a patient to get insurance approval for a pump or CGM as DME. And with a simple prescription the up-front costs for the patient and insurer are lower. The PDM is given free of charge to patients getting their pods through the pharmacy channel.

With respect to Medicare, currently they have about 1/3 of Medicare patients eligible for part D coverage (Optum, Express Scripts, and Magellan.) And for the medicare patients who still need to use part B, over 80% who apply for Omnipods through the exception process get approved.

Insulet says they don’t perceive that they are competing with Tandem or Medtronic for hybrid closed-loop systems. “I guess I’ll make the point that I always make, which is we’re not really competing directly with Tandem or Medtronic and their innovation that has occurred to date has certainly not slowed us down… we just know Omnipod is incredibly attractive and it’s a preferred product.” [Business people are so funny sometimes. They’ll say there’s no competition happening and then fight tooth and nail for every shred of business.]

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