Insulet Gains On Omnipod Reimbursement Update, Rivalry Stiff

On Dec 7, we issued an updated research report on Insulet Corporation (NASDAQ:PODD) . We are upbeat about the company’s series of positive reimbursement updates for its Omnipod System while a tough competitive landscape raises concerns. The stock carries a Zacks Rank #3 (Hold).

Shares of this leading developer, manufacturer and marketer of the Omnipod Insulin Management System have outperformed its industry over the past year. The stock has gained 14.5% against the industry's 1% fall.

Insulet has achieved several milestones with respect to expanding Omnipod’s market access. In this regard, Insulet is gaining from the limited commercial launch of the Omnipod DASH system.

At the end of the third quarter, the company secured approximately a third of Medicare Part D covered lives for both Omnipod and Omnipod DASH systems. This also includes large Part D providers like Optum, Express Scripts (NASDAQ:ESRX) and Magellan.

Moreover, Insulet’s Omnipod System was selected as the preferred insulin pump for diabetic patients in the province of British Columbia, Canada, under the expanded British Columbia PharmaCare insulin pump program in July 2018.

We note that, CMS issued guidance in January which required Omnipod to be covered under the Medicare Part D prescription drug benefit program. This move expanded the company’s access to around 450,000 individuals with Type 1 diabetes who have Medicare/Medicaid coverage.

The company is also progressing well with respect to its Omnipod HORIZON development program. In this regard, the company announced that its HORIZON automated insulin delivery system will be controlled by an app on the user's smartphone.

Meanwhile, Insulet operates in a highly competitive environment, dominated by firms ranging from large multinational corporations with significant resources to start-ups.

The company’s Omnipod System primarily competes with Medtronic’s market-leading MiniMed, a division of Medtronic (NYSE:MDT) . Notably, MiniMed boasts a major part of the conventional insulin pump market share in the United States.

Key Picks

A few better-ranked stocks in the broader medical space are Integer Holdings Corporation (NYSE:ITGR) and Veeva Systems (NYSE:VEEV) .

Veeva Systems’ long-term earnings growth rate is estimated at 19.5%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Integer Holdings has an earnings growth rate of 31.2% for the next quarter and a Zacks Rank #2.

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