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Insulet Pumps Out 69% Revenue Growth in Q1, Reaffirms 2016 Guidance

Insulet (NASDAQ: PODD) reported its first-quarter 2016 earnings after the market closed on Thursday. The drug delivery company, which is a leader in tubeless insulin pump technology with its OmniPod System, posted revenue growth that exceeded its expectations and completed the divestiture of its diabetes supplies business. As expected, it posted an earnings loss.

Shares of Insulet have fallen 1.6% in the two-day period through Monday since the company reported. The stock's price has swung considerably over the year, though its 10.2% rise over the one-year period through May 2 solidly beats the S&P 500's total return of 2.2%. 

Insulet's key Q1 numbers

Metric

Q1 2016

Q1 2015

Growth (YOY)

Revenue

$81.2 million

$48.1 million

69%

Operating income

($7.7 million)

($7.3 million)

(5.5%)

Income from continuing operations

($10.7 million)

($10.4) million

(2.9%)

Net income

($12.5 million)

($11.8) million

(5.9%)

Earnings per share adjusted for discontinued operations

($0.19)

($0.18)

(5.6%)

Earnings per share

($0.22)

($0.21)

(4.8%)

Data source: Insulet.

Revenue of $81.2 million exceeded the company's guidance of $77 million to $80 million. Insulet does not provide earnings guidance. 

What happened with Insulet this quarter?

  • U.S. OmniPod revenue increased 28% to $50.7 million.
  • International OmniPod revenue soared 307% to $15.4 million.
  • Drug delivery revenue jumped 224% to $15.1 million. This rise was largely due to the success of Amgen's (NASDAQ: AMGN) Neulasta Onpro kit, which includes Insulet's OmniPod technology, according to comments made by management on the analyst conference call. This product was approved by the FDA just before the start of last year.
  • Completed divestiture of Neighborhood Diabetes supplies business.

Image source: Insulet.

What management had to say 
Insulet CEO Patrick Sullivan shared on the conference call some additional good news regarding Amgen's Neulasta Onpro kit:

We just learned from Amgen's online presentation that the Neulasta Onpro kit now represents approximately one-third of their U.S. Neulasta business. It improves patient compliance to achieve maximum benefit of Neulasta. Amgen also expects Neulasta growth throughout the United States in 2016.

Sullivan also commented on the call about the company's progress on key initiatives:  

We continue to drive improved results, with first quarter revenue ahead of expectations. We advanced our key commercial initiatives and made progress with our Digital Insulet strategy and artificial pancreas program. These initiatives will dramatically improve the quality of life for those living with diabetes. We are also keenly focused, along with Eli Lilly, on our concentrated insulins product development and clinical work, and we experienced dramatic growth in our drug delivery business.

Insulet signed an agreement last quarter with Mode AGC (Automated Glucose Control LLC) to develop and incorporate the advanced artificial pancreas algorithm into its OmniPod System. It also signed a development agreement last quarter with Eli Lilly for OmniPod delivery of U200 concentrated insulin, which the company has stated significantly expands OmniPod's addressable market for type 1 and type 2 diabetes.   

Looking ahead 
Insulet reaffirmed its full-year 2016 guidance and established Q2 guidance as follows:

Period

Revenue Guidance

Pro Forma* Growth YOY

Q2 2016

$81 million to $84 million

35% at midpoint of range

FY 2016

$330 million to $350 million

30% at midpoint of range

Data source: Insulet. *Pro forma growth-excludes revenue growth contributed by Neighborhood Diabetes in 2015.