While biotech and big-pharma companies have dominated headlines over the years, medical-device businesses have struggled for attention during had following the pandemic. Many have seen their market valuations plummet, something that’s more or less what happened with Insulet (NASDAQ: PODD), a manufacturer of insulin delivery systems. However, the company’s stock skyrocketed on Friday after receiving government approval for a promising new product.
Insulet’s flagship product line is the OmniPod series of insulin pumps. According to the Food and Drug Administration (FDA), the organization has approved the newest OmniPod lineup for commercial use. This is a long-anticipated product for Insulet, one that’s seen multiple delays during its development circle.
“Omnipod 5 is a life-changing technology that we believe will revolutionize the market and the lives of people with diabetes,” said Shacey Petrovic, President and CEO of Insulet. “We are incredibly proud of this simple-to-use, elegant system, designed to deliver unmatched freedom and to greatly simplify insulin management and improve glucose control for our users.”
The OmniPod also integrates a popular glucose monitor developed by DexCom (NASDAQ: DXCM). Patients would be able to monitor and adjust their insulin pump settings via a smartphone, which is able to get blood sugar readings every five minutes. Unlike older pumps, newer models are water-resistant and fully automatic, not to mention being smaller and easier to conceal under everyday clothing.
Shares of Insulet were up over 18.4% on Friday following the news, making it one of the best-performing stocks prior to the weekend. Despite this price jump, Insulet has struggled throughout most of 2021. Even with Friday’s bump in price, Insulet is still down over 16% since 2021 began, and is down 13.5% over the past 12-months.
A lot of this has to do with the recent sell-off in tech stocks. With possibly several interest rate hikes coming over the horizon, growth stocks like Insulet are expected to far much worse amidst this broader rotation into value-based opportunities.
Back in 2019 and 2020, insulin device makers were considered one of the most promising biotech sectors to buy. Now, however, it seems they’ve fallen largely out of favor right now. It also doesn’t help that Insulet has been one of the more overpriced medical device makers out there. Although the expected demand for insulin pumps should skyrocket as diabetes grows in prevalence, we haven’t seen this translate so well into stock prices just yet.
This mediocre performance has led to a lot of mixed reviews from analysts. On Wall Street, there are ten analysts who are neutral or bearish about Insulet’s future prospects, while just eight are bullish. In contrast, the number of bearish predictions from analysts has substantially increased from last quarter, even if these are still in the minority right now.
Insulet Company Profile
Insulet was founded in 2000 with the goal of making continuous subcutaneous insulin infusion therapy for diabetes easier to use. The result was the Omnipod system, which consists of a small disposable insulin infusion device and that can be operated through a smartphone to control dosage. Since the Omnipod was approved by the U.S. Food and Drug Administration in 2005, approximately 150,000 insulin-dependent diabetics are using it worldwide. – Warrior Trading News
