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Does Insulet (PODD) Face Challenges from the New Weight Loss Drug?

ClearBridge Investments, an investment management company, released its “ClearBridge Select Strategy” third quarter 2023 investor letter. A copy of the same can be downloaded here. Rising bond rates and the Federal Reserve's shift to a more hawkish stance put pressure on stocks in the third quarter. The strategy underperformed its Russell 3000 Index in the third quarter. Overall stock selection and sector allocation detracted from performance on a relative basis. In addition, please check the fund’s top five holdings to know its best picks in 2023.

ClearBridge Select Strategy highlighted stocks like Insulet Corporation (NASDAQ:PODD) in the third quarter 2023 investor letter. Headquartered in Acton, Massachusetts, Insulet Corporation (NASDAQ:PODD) develops and manufactures insulin delivery systems. On December 7, 2023, Insulet Corporation (NASDAQ:PODD) stock closed at $194.54 per share. One-month return of Insulet Corporation (NASDAQ:PODD) was 25.43%, and its shares lost 35.65% of their value over the last 52 weeks. Insulet Corporation (NASDAQ:PODD) has a market capitalization of $13.584 billion.

ClearBridge Select Strategy made the following comment about Insulet Corporation (NASDAQ:PODD) in its Q3 2023 investor letter:

"Results were primarily impacted by weakness among two health care holdings, Insulet Corporation (NASDAQ:PODD) and Surgery Partners. Positive clinical studies for GLP-1 therapeutics showed substantial health benefits to diabetic and obese patients, boosting stock prices of pharmaceutical companies tied to the manufacturing of these drugs. The potential for improved patient outcomes raised the risk of lower utilization for Insulet, a maker of insulin patch pumps, and Surgery Partners, whose outpatient surgery centers conduct weight loss and many other types of outpatient procedures. Though the GLP-1 threat is weighing on the valuation multiple of Insulet, any negative effects would likely not meaningfully affect the business for many years, especially given how large and underpenetrated the Type 2 diabetes market is for the company currently. Additionally, this could require significant improvements in cost, availability, and adherence for GLP-1s. Furthermore, we are encouraged that the majority of Insulet’s business today is still from Type 1 diabetes, where fundamentals remain strong and the company is gaining share."

A pharmacy worker placing wireless handheld personal diabetes managers against the light.

Insulet Corporation (NASDAQ:PODD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 44 hedge fund portfolios held Insulet Corporation (NASDAQ:PODD)at the end of third quarter which was 39 in the previous quarter.

We discussed Insulet Corporation (NASDAQ:PODD) in another article and shared the best diabetes stocks to buy. In addition, please check out our hedge fund investor letters Q3 2023 page for more investor letters from hedge funds and other leading investors.

 

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Disclosure: None. This article is originally published at Insider Monkey.

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