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Edited Transcript of PODD earnings conference call or presentation 2-May-19 8:30pm GMT

Q1 2019 Insulet Corp Earnings Call

BEDFORD Aug 15, 2019 (Thomson StreetEvents) -- Edited Transcript of Insulet Corp earnings conference call or presentation Thursday, May 2, 2019 at 8:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Deborah R. Gordon

Insulet Corporation - VP of IR & Corporate Communications

* Shacey Petrovic

Insulet Corporation - President, CEO & Director

* Wayde D. McMillan

Insulet Corporation - Executive VP & CFO

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Conference Call Participants

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* Brandon Vazquez

William Blair & Company L.L.C., Research Division - Associate

* Danielle Joy Antalffy

SVB Leerink LLC, Research Division - MD of Medical Supplies & Devices and Senior Analyst

* David Ryan Lewis

Morgan Stanley, Research Division - MD

* Jayson Tyler Bedford

Raymond James & Associates, Inc., Research Division - Senior Medical Supplies and Devices Analyst

* Jeffrey D. Johnson

Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst

* Jonathan Preston McKim

Piper Jaffray Companies, Research Division - VP & Senior Research Analyst

* Matthew Charles Taylor

UBS Investment Bank, Research Division - Equity Research Analyst of Medical Supplies & Devices

* Rajbir Singh Denhoy

Jefferies LLC, Research Division - MD, Equity Research & Senior Equity Research Analyst

* Ravi Misra

Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst

* Robert Justin Marcus

JP Morgan Chase & Co, Research Division - Analyst

* Ryan Blicker

Cowen and Company, LLC, Research Division - Associate

* Suraj Kalia

Northland Capital Markets, Research Division - MD & Senior Research Analyst

* Steven Plachtyna

BMO Capital Markets - Analyst

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Presentation

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Operator [1]

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Good day, ladies and gentlemen, and welcome to the First Quarter 2019 Insulet Corporation Earnings Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference, Deborah Gordon, Vice President, Investor Relations and Corporate Communications. Ma'am, you may begin.

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Deborah R. Gordon, Insulet Corporation - VP of IR & Corporate Communications [2]

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Thank you, Lauren. Good afternoon, and thank you for joining us for our first quarter 2019 earnings call. With me today are Shacey Petrovic, President and Chief Executive Officer; and Wayde McMillan, Executive Vice President and Chief Financial Officer.

The replay of this call will be archived on our website, and our press release discussing our first quarter 2019 results and second quarter and full year 2019 guidance is also available in the IR section of our website.

Before we begin, I would like to inform you that certain statements made by Insulet during the course of this call may be forward-looking and involve known and unknown risks and uncertainties that may cause actual results to be materially different from any future results implied by such statements.

Such risks and uncertainties in addition to the inherent limitations of such forward-looking statements include those referenced in our safe harbor statement in the first quarter earnings release and in the company's filings with the SEC. Please note that we assume no obligation to update these forward-looking statements even if actual results or future expectations change materially.

Also, unless otherwise stated, all financial commentary regarding dollar and percentage changes will be on a year-over-year basis.

And with that, I'll turn the call over to Shacey.

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [3]

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Thanks, Deb, and good afternoon, everyone. Improving the lives of people with diabetes through our innovative technology is at the core of everything we do, and we made great progress with our innovation and other strategic imperatives during the quarter.

In the first quarter of 2019, we continued our strong growth trajectory coming out of 2018, which was a year of tremendous execution and foundation building for long-term sustainable and profitable growth. Our transition to profitability and our significant progress on the strategic imperatives position us for continued operational and financial success over the near and long term.

We are accelerating on many fronts, including the startup of our highly automated U.S. manufacturing, our Omnipod DASH U.S. full market release and the corresponding shift to a pay-as-you-go model. These major accomplishments were years in the making and they are coming to fruition while driving total revenue growth of 29% in the first quarter. And the total diabetes product line with the benefit of our direct operations in Europe grew over 30%.

Our growth rate confirms we are successfully converting multiple daily injection users to Omnipod. And given our low penetration into the global Type 1 diabetes market and even lower penetration into the insulin-dependent Type 2 market, Insulet has a uniquely long runway for growth. Today, we believe Omnipod users account for low single-digit percent of the total global insulin-dependent user population.

To achieve our 2021 revenue target of $1 billion, it requires us to move to mid-single-digit penetration of this available market. We have multiple levers to drive this growth. Global expansion, innovation like Omnipod DASH, which helps us grow further into both the Type 1 and Type 2 insulin-dependent diabetes market and our Omnipod Horizon automated insulin delivery system, which will be a game-changer for people with Type 1 diabetes.

We're off to a terrific start in 2019 having entered the year in a position of strength.

On today's call, I'll review progress on our strategic imperatives and provide financial highlights from the first quarter. And then I'll turn the call over to Wayde who joins us for his first official call as CFO of Insulet. Wayde will provide further details on our financial results and share an update to our 2019 guidance and then we'll open the call for questions.

Before I cover our financial and strategic highlights, I'll start by saying what an exciting day this was for Insulet. This morning, we held our ribbon-cutting ceremony to officially commemorate the opening of our new worldwide headquarters and U.S. manufacturing facility. We were joined by our keynote speaker Massachusetts Governor, Charlie Baker; State Senator, Jamie Eldridge; town of Acton officials; Podders from around the country; and many of our dedicated employees. It was a wonderful morning celebrating this important accomplishment and Insulet's exciting future.

In a few minutes, I'll provide an update on the progress we're making getting our new highly automated manufacturing lines up and running.

Moving on to the Q1 financial summary. In the first quarter of 2019, we delivered approximately $160 million in revenue, exceeding our guidance and representing a 29% increase year-over-year. We drove gross margin to 67%, a 550 basis point improvement from 1 year ago. And our strong performance resulted in another profitable quarter and a great start to the year. We made important progress throughout the quarter, advancing our strategic imperatives to expand market access, to accelerate product and business model innovation, to grow our global footprint and to drive operational excellence.

Ensuring more people have access to our products continues to be a top priority. During the first quarter of 2019, we expanded coverage for an additional 5 million Medicare and Medicaid beneficiaries, bringing our total coverage to greater than 1/3 of all Medicare lives and over half of all Medicaid lives.

We also continue to secure coverage for our recently launched platform, Omnipod DASH. We ended 2018 with approximately 100 million covered lives for DASH with the majority through the pharmacy channel. And by the end of Q1, we expanded that coverage to an impressive 130 million covered lives. And just recently, we secured distribution through Cardinal Health, one of the largest wholesalers in the country to complement our established and expanding pharmacy distribution network.

Looking ahead, we continue to believe that market access expansion and business model innovation through the pharmacy channel provides a pathway for sustained growth. We are leveraging this broad coverage position with our launch of DASH mainly through the pharmacy channel. Our pay-as-you-go model is a clear differentiator and will continue to be a key driver of strong performance in the United States. It also provides several competitive and strategic advantages for us as well as for Omnipod patients, providers and payers.

Unlike traditional insulin pumps, DASH does not lock patients into a 4-year commitment, and it is the only insulin pump with no upfront cost to get started. This means we have removed major barriers to adoption for new users. Customers can now adopt a new technology like DASH without having to wait until their lock-in period has expired. And on the payer side, we have reduced the risk and cost of member attrition because there is 0 upfront cost for Omnipod DASH. We already have thousands of people who have placed preorders for DASH, and we are laser-focused on expanding coverage, so all of these individuals will have access to our exciting technology.

Customer feedback on the DASH product has been terrific. But we know in our business that just as important as terrific technology is seamless and capable customer support. During our limited market release, we built critical new competencies, such as automated integration with our specialty pharmacy partners, online ordering for DASH and the ability through the appeals process to assist patients who don't already have DASH coverage. These efforts required significant investments of time, resources and capability building. And while that process was complex, the customer experience should be simple. As a result of these investments, we are now in a much stronger position to ensure our customers have the best patient experience.

There is great enthusiasm and demand for DASH, and we will continue to build capabilities and access as we launch into the market. We could not be more excited to be delivering the DASH next-generation mobile platform to our customers, and we look forward to their benefiting from this remarkable product and business model innovation.

As the market research predicted, DASH has shown high satisfaction rates among people living with Type 1 and insulin-dependent Type 2 diabetes. In fact, the Type 2 customer segment expressed enthusiasm for DASH's ease of use, in particular, the CalorieKing food library and easy-to-set temp basal profile. We believe DASH and its pay-as-you-go and pharmacy advantages will be very appealing to people living with insulin-dependent Type 2 diabetes. Thanks to the system's 0 upfront cost model and its unparalleled simplicity and discretion.

As they come to market, our concentrated insulins program can help us further penetrate this segment. We successfully completed U-500 summative human factor studies and expect to submit U-500 to the FDA in the next few weeks. In the United States, where we have the best visibility, we believe the insulin-dependent Type 2 diabetes population is at least as big, if not bigger, than the Type 1 diabetes market. And innovations like DASH and concentrated insulins can help drive more Omnipod adoption among this population.

We continue to make important progress on our innovation road map with our Omnipod Horizon automated insulin delivery system. Our system provides even further ease of use and glycemic control with both on-body hybrid closed-loop and personal smartphone control. According to recent market research by Seagrove Partners, a large percentage of respondents said they would switch to Horizon, making it the single biggest winner as a stand-alone product. The data further supports that our patch pump design with phone control is the best embodiment of an automated insulin delivery system. Omnipod Horizon will be game-changing.

We are making great progress with our Horizon clinical development work and remain on track to start pivotals in the fourth quarter of this year and bring our technology to market in the second half of next year. We are so proud to be leading the way in leveraging consumer technology to provide meaningful innovation for our customers.

Also, from a clinical perspective, we once again will have a large presence at the American Diabetes Association show next month with 7 clinical abstracts accepted. These presentations will report positive outcomes for Horizon, including improved time and range and glycemic control and examine use in preschool children, ages 2 to 6. ADA presentations will also include real-world data on long-term clinical outcomes from over 20,000 Omnipod users, which further support the benefits of our Omnipod system.

Lastly, from an innovation perspective, we continue to support Tidepool's development efforts focused on getting an open-source iOS-based Loop app and algorithm approved by the FDA. We are collaborating to enable Omnipod to be an FDA-approved component of the Tidepool Loop automated insulin delivery system. This is additive to our internal Omnipod Horizon program and is a wonderful way to support the DIY community who have a strong desire for this advanced technology.

We understand members of the community are already using Loop technology off-label. And while we cannot condone off-label use, we certainly understand and empathize with the community's strong desire and sense of urgency for this technology. It is a compelling indication of significant market demand and it is precisely why we are supporting the Tidepool program and investing so significantly to get Horizon to market as quickly as possible.

In addition to our innovation efforts, we are also investing in our global footprint. Our direct model has been in place in Europe for 10 months now, and our team has done an incredible job building Insulet's reputation and capabilities in our European markets. We're already seeing this positively reflected in our best-in-class net promoter score. Since taking over direct operations, we have seen a sizable increase in our already market-leading net promoter score, a testament to the strength of our European team. And now that we are closer to the customers and to the markets we serve, we are gaining meaningful insights into user preferences that will help drive innovation, commercialization and strong operational performance.

We have made a significant investment to build our international capabilities, including, among others, our European-based regulatory, market access, advocacy, distribution and customer support functions. We are now very well positioned to drive deeper into our existing markets, and ultimately to expand into new geographies where we see tremendous opportunities for growth.

We are currently just in a handful of countries outside the United States, and we know there is a long-term strategic value in expanding our international presence. Building on the strategy we are successfully executing in Europe, we intend to continue to focus on the significant opportunities in our existing markets during 2019 and then to shift to expanding our global footprint in 2020. There is enthusiastic interest from numerous markets to have Omnipod available, and we are evaluating those opportunities as part of a thoughtful expansion strategy. We have multiple catalysts for accelerated growth and expansion throughout the globe.

Lastly, I want to touch on our operational excellence and manufacturing capabilities in the U.S, which, in addition to our operations in China, lay the foundation for our ability to meet our rapidly growing demand. Over the next 2 years -- over the last 2 years, we have invested in sophisticated, custom-designed automation for U.S. manufacturing. I am so thrilled to report that we have successfully begun producing Omnipod at our new U.S. facility, and our early experience validates our expectation that 1 highly automated U.S. line will produce up to 50% of the capacity of all of our lines in China with up to 90% less headcount. This provides redundancy in our supply chain and will drive further cost reduction.

We are on track to install our second line in our Massachusetts facility later this year, which will further support our rapid growth. All of this plays a key role in driving continued margin expansion and value creation while cementing Insulet's position as a global leader in the industry.

With that, I will turn the call over to Wayde to discuss our financials in greater detail.

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Wayde D. McMillan, Insulet Corporation - Executive VP & CFO [4]

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Thank you, Shacey. Before I turn to the financials, I'd like to take a moment to say how delighted I am to speak with you as CFO of Insulet at this exciting moment in the company's evolution and to share a couple initial observations. First, it's clear that the passion our employees have for improving the lives of people with diabetes is at the heart of all we do and exists at every level in the organization. We are making a real difference in the lives of those who use our products.

Second, we have significant advantages with our technology and differentiation with the pay-as-you-go model in the pharmacy, which is disrupting old market paradigms. The progress to date is impressive, and I look forward to working with the team here at Insulet and continuing to capitalize on the significant market opportunities we have in front of us.

Now on to our first quarter financial results. As Shacey mentioned, we delivered another quarter of strong performance with total revenue of $159.6 million, representing growth of $36 million or 29%, which was $3.6 million above the high end of our guidance range of $152 million to $156 million.

By product line, U.S. Omnipod revenue grew 23% to $86.1 million, which was $2.1 million above the high end of our guidance range and represented the majority of our total guidance overachievement. International Omnipod revenue of $56.9 million grew 48%, achieving the high end of our guidance range. And Drug Delivery revenue was $16.6 million delivering 11% growth, which was $1.6 million above the high end of our expectations resulting from an increased order from our largest customer in the last month of the quarter.

Turning to gross margin. We once again drove significant expansion reaching 66.9%, up 550 basis points and in line with our expectations. This expansion resulted from the incremental benefit of our successful transition to direct operations in Europe last year as well as considerable productivity and cost improvements we continue to realize in our purchasing, manufacturing and supply chain operations.

Our operating expenses were in line with our expectations, and we ended the first quarter with operating income of $7.3 million, representing 4.6% of revenue, and net income of $4.4 million, representing 2.7% of revenue. We ended the quarter with $393 million in cash and investments compared to $430 million at the end of last year. This use of cash was driven primarily by planned capital expenditures as we continue to invest in our U.S. manufacturing and supply chain operations.

In summary, we were on a strong growth trajectory coming out of 2018, and we are seeing that momentum continue in our Q1 financial performance. We feel well positioned for another year of growth and profitability.

Next, I'll provide an update on our 2019 guidance. As a result of our first quarter performance, for the full year, we are raising our total revenue guidance. We now expect 2019 total revenue in the range of $667 million to $690 million, representing growth of 18% to 22%. This compares to our previous expectation of $662 million to $687 million or growth of 17% to 22%.

By product line, we are raising our U.S. Omnipod revenue range to $376 million to $385 million, representing growth of 16% to 19%, up from our previous expectation of $373 million to $383 million or 15% to 18%. For international Omnipod, we now expect revenue in the range of $236 million to $244 million, representing growth of 37% to 42%, which is unchanged.

We continue to strengthen our capabilities and capitalize on our opportunity for growth in our existing markets.

As a reminder, we launched our go-direct strategy in Europe in the second half of last year. And as a result, we have -- we will have higher revenue growth in the first half of this year as compared to last year. We continue to expect a more normalized second half growth rate of mid-teens to low 20% in our existing markets. Lastly, for Drug Delivery, based on our first quarter overachievement, we are raising our revenue range to $55 million to $61 million, representing an 11% to 19% decline.

For the second quarter, we are introducing total revenue guidance of $160 million to $165 million, representing growth of 29% to 33%. This includes U.S. Omnipod revenue of $89 million to $91 million, representing growth of 14% to 17%. As a reminder, in Q2, we are working through both our first new product launch in some time with the full market release of Omnipod DASH in the U.S. as well as the shift in our business model to pay-as-you-go in the pharmacy, all of which requires significant new capabilities, systems and processes. A key component for our differentiated pay-as-you-go model is the no-charge PDM, which presents a temporary headwind and is included in our Q2 revenue guidance.

We expect international Omnipod revenue of $57 million to $59 million, representing growth of 100% to 107%. This growth reflects the last quarter of incremental benefit from converting our channel to direct from distribution in Europe. This benefit is comprised of an approximate 50% uplift in revenue in our European business now that we have direct operations as well as a favorable comparison due to the negative impact in Q2 of last year as we transitioned from our former European distributor. And last, we expect Drug Delivery revenue of $14 million to $15 million representing a decline of 15% to 21%.

For the rest of the P&L, our guidance remains unchanged. We expect our 2019 full year gross margin to be relatively consistent with last year, reflecting the benefit of changing our business model in Europe and continued operating and supply chain improvements offset by temporary headwinds from the ramp of our U.S. manufacturing. Therefore, we expect that Q2 gross margin with a partial quarter impact of our U.S. manufacturing ramp will be sequentially lower. We also expect second half of the year gross margin to be lower than Q2 due to the continued ramp of U.S. manufacturing.

For operating expenses, we expect to increase approximately 20% due to continued investments in our innovation pipeline and to remain relatively consistent as a percentage of revenue.

We expect to deliver full year operating margin in the mid-single-digit percentage range. And we expect capital expenditures to be relatively consistent with 2018 as we continue to invest in U.S. manufacturing to drive redundancy, cost reductions and contributions to our margin expansion over the long term.

In summary, we started the year delivering a strong first quarter of revenue growth and profitability, an indicator of the sound execution of our strategy. Given our solid foundation and positive momentum, we believe that we are well positioned for continued growth and profitability throughout 2019 and remain on track to deliver our 2021 financial goals of $1 billion in revenue, gross margin of 70% and operating margin in the mid-teens.

Now I'll turn the call back to Shacey.

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [5]

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Thanks, Wayde. It's great to have you on the team. I would like to reiterate Wayde's excitement about the opportunities ahead for Insulet. As we continue to build on our momentum and execute our strategic imperatives, we are focused on expanding our addressable market, investing in innovation and growing our international footprint, all while demonstrating operational excellence and driving significant top and bottom line growth. We have the right road map in place for long-term growth and superior financial performance, which we are confident will drive significant shareholder value creation.

Now I'd like to turn the call back to the operator to open for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from JP McKim with Piper Jaffray.

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Jonathan Preston McKim, Piper Jaffray Companies, Research Division - VP & Senior Research Analyst [2]

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I wanted to start first with the pharmacy. Is the right way to think about it like that adding 30 million lives a quarter or it could be lumpy here and there? And then maybe, Shacey, just early innings of your limited market release in Q1. Did you see that -- I don't want to say, the acceleration in new adds. But did you see that demand from patients given the low upfront costs? Is there any way you can qualify or qualitatively talk to that?

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [3]

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Sure. Yes. So in terms of DASH access, I think you could assume it's going to be somewhat lumpy. There are still a few large plans out there that we're working on. So those could be significant adds, and we will continue to build that access throughout the year. So -- but we feel great about having 130 million covered lives. It's a really strong position to move into coverage for DASH. So that's great.

In terms of the early experience about customer adoption and kind of where we're at with the no-charge PDM, just a couple pieces of color on that. The first is that Q1 was another record quarter for us in terms of new patient starts. And so the great thing about this is that we haven't seen any type of slowdown in demand as we near the full market release for DASH. And I think that's a testament to the strength of the business model, that people know that they can get onto Omnipod and as soon as they have access to DASH, they'll be able to access that technology without any delay.

And then we're kind of in the early innings of our full market release for DASH, but as I said in my prepared remarks, we've got a great pipeline, thousands of patients that have already preordered the product really with no promotion, right? Because we moved into full market release at the end of Q1 to supply the channel, and we're just starting to ramp promotion now. So we feel like we're in a good spot.

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Jonathan Preston McKim, Piper Jaffray Companies, Research Division - VP & Senior Research Analyst [4]

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That's helpful. And then could I ask one on just Horizon and Loop. Like, for example, Loop's already started their trial. And so if Loop gets approved for Horizon, could you launch a closed-loop system with Loop first and then Horizon second? Or is there something you have to do on your end first?

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [5]

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Yes. We -- I mean, one of the reasons -- there were many reasons to partner with Tidepool, but one of the reasons was that they had potentially a faster pathway to market. If they were able to get the FDA to agree to their clinical strategy. And so we are prepared to kind of capitalize on whichever product makes it to market first, and we do see value in both programs.

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Operator [6]

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Our next question comes from David Lewis with Morgan Stanley.

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David Ryan Lewis, Morgan Stanley, Research Division - MD [7]

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Great. Congrats on the quarter. And Wayde, welcome. I'm glad you got out of that other company. Got out a lot. But anyway. Just a couple quick questions here for me. On just the U.S. business. So initially, Shacey, you discussed, for the second quarter, you thought you'd see a headwind from pharmacy and DASH. I think you said $6 million to $8 million for the year. But I sort of look at the second quarter guidance, and it's actually pretty stable on a momentum basis.

So I'm just sort of wondering is $6 million to $8 million still the headwind you see for the year and what could that be in the second quarter? Or are you seeing less of a headwind or more specifically just better underlying demand helping you to sort of offset that pressure in the second quarter?

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Wayde D. McMillan, Insulet Corporation - Executive VP & CFO [8]

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David, thank you. And thanks for the comment. It's great to be here. Yes, so we are still holding the estimate from last quarter, which is expecting a unfavorable PDM revenue of about $6 million to $8 million in this year because of the pay-as-you-go model where we have the no-charge PDM. So in other words, we recognized revenue last year for the PDM. This year, we will not, for some of our PDM sales. Some will still be sold through the traditional channels. But for those that are under the pay-as-you-go model, it will be a no-charge PDM. And so we still think it will be $6 million to $8 million.

What we also said was that it will be neutral for the year. And so what that means is as we ramp our pay-as-you-go model, we will have no-charge PDMs. And those will start here in Q2 and will start to ramp. The benefit of moving customers into the pharmacy channel will start to accrue. And as that customer base builds, the benefit of that will start to offset the no-charge model and eventually become a tailwind for us.

And so the more customers that we get on the pay-as-you-go model we'll have more of a headwind upfront from the PDM. But it will be overall good for our business because over the long term that will be a favorable impact for us. So hopefully, that answers the question, David?

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David Ryan Lewis, Morgan Stanley, Research Division - MD [9]

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Okay. Just a real quick follow-up, Wayde. So it sounds like underlying demand must be a little better in the second quarter, for second quarter momentum stable. And then I'll ask my second just for Shacey.

The U-500 update. We're sort of assuming second half 2020 for U-500 clearance. Is that a decent estimate? And then you kind of reiterated your time lines around Horizon. Can we think about 2021 as a full commercial launch for Horizon? Or is that going to be kind of a scaled commercial launch in the first half of 2021?

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [10]

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Sure. Those are great questions. So first of all, on your first comment, I think you can look at the bump in guidance in the U.S. as a sign that we feel really good about the momentum and strength of the business in the U.S. So I would concur with you on that.

As it relates to U-500, we have probably a little bit more aggressive estimates in terms of potential FDA clearance there. So -- but I don't think it really matters, David, because it's not a material impact from a revenue perspective. It's a pretty niche population. We are excited about being able to offer the product to the market, but it won't really move the needle from a revenue standpoint.

And then the last question was about Horizon and full market release. We're actually evaluating that now. How do we actually get to use the clinical study potentially as a way to test some of the things that we would do in a normal limited market release to get to full market release more quickly? So we'll give you more color on that as we kind of get closer to the FDA approval date and through the pivotal studies.

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Operator [11]

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Our next question comes from Jeff Johnson with Baird.

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Jeffrey D. Johnson, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [12]

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Shacey, I guess, just to focus a little more on DASH. I apologize for that. But we've been hearing rumor that DASH had moved into DME as well. I'm not sure exactly the mechanics of how that would work, but it does seem like there's some verbiage on your website, on the DASH website, about DME as well. So is any of that increase from 100 million to 130 million lives driven by DME. And just if it is, do we have to conceptually, from our side of the table, think about that any differently than a pharmacy-based relationship?

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [13]

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Actually, I'm glad you asked the question because I think it gives us an opportunity to just sort of clarify. We look at 2 advantages to DASH, and they are not -- in some cases they overlap and in some cases they don't. So one advantage is the pharmacy channel. That's a really attractive channel for us, an attractive channel for patients and attractive channel for physicians because it's efficient. There is less hurdles. It's really easy and a good customer experience for our patients. And for us, it's a more financially-attractive channel. And so we're using DASH to really move into the pharmacy channel.

But the pay-as-you-go strategy is sort of somewhat separate and really could apply -- we think it applies perfectly to the pharmacy channel, but it also can apply to the DME channel. So I think the verbiage you're referring to on our website just would indicate that if a DME provider, and I think we have already disclosed that United is one of these, if a DME provider is willing to transfer the value of the PDM into the Pods and move to this pay-as-you-go model then we are certainly willing to partner with them and contract with them.

So yes, it will be available in both channels. However, today, the vast majority of that is pharmacy and the vast majority of the additional lives because we had already secured United, are pharmacy.

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Jeffrey D. Johnson, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [14]

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All right. That's helpful. And as a follow-up, I guess, to that and maybe this is a better question for the DME providers, but I would assume they have a vested interest in being interested in doing that.

I mean, if pharmacy is so much easier, if you prefer pharmacy, I'd assume physicians prefer it, patients probably prefer it, I would assume there is going to be a secular move towards pharmacy for DASH. Wouldn't the DME guys just looking out for their own skin, want to be able to offer that, not lose that business to a pharmacy model?

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [15]

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I think it's a good question for the DME providers. I mean United is a great example of a payer who did that, but there is other reasons to put the product in pharmacy. We're, obviously, designated as a Part D product, and so we'll see how that plays out.

I think what we feel good about is that the coverage is strong and growing. And so that to us is just a really strong indicator that we're going to be able to transition the business to pay-as-you-go and primarily in the pharmacy, both of which, as Wayde said earlier, are just really good for us. So in a perfect world, to me, we'd have the vast majority of the business going through the pay-as-you-go model and secondarily in the pharmacy.

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Operator [16]

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Our next question comes from Margaret Kaczor with William Blair.

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Brandon Vazquez, William Blair & Company L.L.C., Research Division - Associate [17]

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This is Brandon on for Margaret. Congrats on a good quarter and good start to the year. I just wanted to focus first on kind of the DASH and pharmacy coverage. You mentioned there's 130 million lives covered now. Can you just clarify, one, the breakdown between the commercial coverage within the pharmacy channel and then Medicare, Medicaid? And then two, just how is that tracking with your expectations so far into the year?

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [18]

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Yes. So we don't share that detail in terms of the breakdown, but I will say it's a combination of Medicare, Medicaid and commercial. And I would say, at this point, we're tracking at or slightly ahead of our expectations in terms of coverage. So we feel really good about that.

And I think the thing I would like to take the opportunity to remind everybody is that it's a great position for us to be in. Because if we were launching just through the DME channel and just leveraging our existing contracts, 100 -- we may be able to convert a larger percentage, call it, 90% of people would have access to it, but they would all be stuck in that 4-year lock-in period. And so really, only a small percentage of them would be able to access DASH until they waited out their warranty period.

So we feel like this model and this I guess somewhat disruption that we're causing as we kind of do these new contracts and establish this new channel and establish this new product is worth the investment and the disruption, because as Wayde said, a long-term tailwind for us and also a great competitive advantage for the business.

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Brandon Vazquez, William Blair & Company L.L.C., Research Division - Associate [19]

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Got it. No, that's helpful. That makes sense. And as a follow-up to that, just taking kind of like a higher view of the market, it seems like think the pump market historically has probably been like a high single-digits growing market. But that said, it looks like you and maybe some of the other competitors, especially with advanced features are maybe accelerating their growth recently.

As we go into 2019, do you guys have any updated views on the market? And is it accelerating? Do you anticipate it accelerating through this year? It seems like a lot of companies are getting the MDI patient to come off the sidelines.

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [20]

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Yes. Well, it's true that still today it's the vast majority, 75% of our business comes from multiple daily injection. So we are certainly helping to grow the overall pump market. And I would say that it does feel like the market is accelerating. I don't have -- it's difficult to get great data on that.

But you're right that historic estimates were that it would grow somewhere between 5% and 8%, and it does feel like it's accelerating. And I think it's just a testament to the fact that technology is getting better and people, especially with CGM, are just adopting technology at higher rates.

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Operator [21]

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Our next question comes from Robbie Marcus with JPMorgan.

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Robert Justin Marcus, JP Morgan Chase & Co, Research Division - Analyst [22]

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Two for me. First, can you help us get a sense of how you get comfortable around the Drug Delivery trajectory, considering what's happening in the market with generic entries and share moving to the biosimilars? And not just in 2019 because we have your guidance, but how do you think about this maybe over the next few years? And is there any other potential for more Drug Delivery options here?

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [23]

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Sure. Both questions, I guess, are tied to Drug Delivery. So in terms of the trajectory of the business, I think we feel comfortable that there are plenty of levers for growth to meet our long-term -- both our long-term revenue and margin goals, so those 2021 stated goals. Really kind of regardless of what happens with the Drug Delivery benefit because it's -- or Drug Delivery trajectory because it's become a smaller component of our business.

So we looked at things like, for example, international expansion to help offset whatever risk there might be in the trajectory tied to Drug Delivery. That said, we continue -- obviously, it's not an area of the business that we give a lot of color on because the development programs are long, but we do continue to have great activity and early exploratory work going on in that area. So we don't have specific color to offer except for that it's still an area of exploration for us.

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Robert Justin Marcus, JP Morgan Chase & Co, Research Division - Analyst [24]

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Okay. Great. And maybe as a follow-up, I was hoping you could just lay out for us some of the remaining time lines on Horizon, the development pathway? When we'll see the pivotal trial results? When you'll submit? What will actually be coming to market in late 2020? What that version of the product will look like? And then just your latest thoughts on the U-200 time lines?

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [25]

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Sure. So I don't have an update on U-200, but in terms of Horizon, the next milestone that everybody needs to look for is the pivotal. That pivotal trial will probably take us a few months to get through, and then we will consolidate that data and submit.

I think you know, Robbie, as do many on the call, that we were designated as part of the Breakthrough Devices program, and so we have a very collaborative, very frequent interaction with the FDA. So they review our clinical protocols. They review our strategy and our milestones on a regular basis. So we expect to benefit from an accelerated review process as a result of that designation. So I don't have more milestones to provide you beyond the fact that pivotals will cap in at the end of this year, and those will likely go through the early part of 2020, and then we will consolidate that data and submit.

In terms of how the launch might play out after that, I think I was mentioning that earlier, we are evaluating opportunities to be able to use the pivotal trial as somewhat of a limited market release. And some of that will depend on the access strategy and on the pricing strategy that we are kind of all working through. So I don't have a lot of color to offer you yet, but certainly, as we get closer to submitting for pivotals, we'll continue to provide those updates.

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Robert Justin Marcus, JP Morgan Chase & Co, Research Division - Analyst [26]

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And just to confirm lastly here, we're still expecting a launch in the back half of 2020? Or is that a different time line now?

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [27]

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Yes -- no, that's the same time line. No changes there.

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Operator [28]

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Our next question comes from Danielle Antalffy with SVB Leerink.

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Danielle Joy Antalffy, SVB Leerink LLC, Research Division - MD of Medical Supplies & Devices and Senior Analyst [29]

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Congrats on a really good, and I would say, very clean quarter. It's been a tough earnings season. So first, just to follow-up on the Type 2 commentary that you talked about on -- in the prepared remarks, Shacey. Can you talk about where you are? What percentage of your installed base today is Type 2?

And I know you mentioned to David's question that U-500 is more of a niche market. It feels like U-200 could be a much bigger market. How we could think about that growing over time once we do get the concentrated insulins on the market as well?

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [30]

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Yes. Sure. Thanks, Danielle. I think the way to think about it is that the Type 2 insulin-dependent segment for us is going to grow. We believe that's going to grow, frankly, with or without concentrated insulins. Concentrated insulins are helpful but what we've seen in terms of that segment's reaction to DASH, we believe that we've got a really nice pathway to continue to expand that population.

It's approximately 15% of our U.S. business today, and it was actually about 15% of the DASH limited market release, too, which is why we got good visibility to that data and how they were sort of reacting to the DASH user experience, and it was just tremendous. So we feel really good that we have a product that's going to be very appealing to both people living with Type 1 and also insulin-dependent Type 2 diabetes.

So I think you're right and that U-200 is the larger opportunity and could contribute more. But I think what we've seen is that, in fact, because Omnipod is reducing total daily dose of insulin by almost 20% in people living with Type 2, we actually have just had much larger opportunity there to grow that business even without concentrated insulin. And we're looking forward to U-500 and U-200, but we won't wait for them to grow that business.

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Danielle Joy Antalffy, SVB Leerink LLC, Research Division - MD of Medical Supplies & Devices and Senior Analyst [31]

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And just as a follow-up on that. Does the move to a pharmacy actually help you access the insulin-dependent Type 2 market? I mean could you talk about how coverage is there for insulin pumps? Are there any barriers you need to knock down from that perspective than what you're doing to knock those down?

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [32]

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Yes. So that's actually the great news, and one of the reasons why I alluded to the fact that it's likely that that segment will really appreciate the pharmacy channel because the actual barriers to coverage, particularly for people living with Type 2 insulin-dependent diabetes are much lower or in fact nonexistent relative to the DME channel.

So just one example is the C-peptide test, which is a requirement in the DME Medicare channel and is not a requirement in the Medicare pharmacy Part D channel. So we feel actually good that we're in a really strong position. It's one of the strategic benefits of kind of building out the pharmacy channel is the great coverage for people who -- all people who require insulin on a daily basis, not just Type 1s.

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Operator [33]

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And our next question comes from Jayson Bedford with Raymond James.

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Jayson Tyler Bedford, Raymond James & Associates, Inc., Research Division - Senior Medical Supplies and Devices Analyst [34]

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Just a couple of quick ones for me. With the full market release of DASH, logistically, does this mean that every new user gets DASH?

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [35]

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Well, it's access-dependent. So every new user that has access and wants it can get it. But obviously, we've got 130 million covered lives, so that's about 33%, 35% of all covered lives. And so that's about the segment I would guess of new patients that will have access to DASH.

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Jayson Tyler Bedford, Raymond James & Associates, Inc., Research Division - Senior Medical Supplies and Devices Analyst [36]

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Okay. That's fair. And then just secondly, you mentioned securing distribution with Cardinal as you launch DASH. It doesn't seem like this in the guidance, but are there stocking orders implied just to fill the channel? Is that contemplated in the 2Q guidance at all?

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Wayde D. McMillan, Insulet Corporation - Executive VP & CFO [37]

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Jayson, so working with -- through this with our teams right now, we're not expecting a significant amount of channel build in Q2. However, it is something we're monitoring very closely. So not in Q2. And we're working with the teams to understand it as we work through this new channel. And if we do see it, we'll be sure to let you know.

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Operator [38]

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And our next question comes from Ravi Misra with Berenberg Capital.

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Ravi Misra, Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst [39]

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So just one on the pharma versus DME kind of patient pull-through. And then I have a follow-up. So as you are getting more and more exposure to this pharma channel, I'm just curious what kind of patient is coming to that -- is coming that way? Is it the kind of the MDI newbie? Or is it existing pump users who have come off warranty and now they have an easier way to access it? Any detail there would be appreciated.

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [40]

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It's a great question. And I actually, Ravi, I don't have color to offer that to you kind of in front of me. I will say that at a high level, the patient mix hasn't changed. So we don't have a change in the number of patients coming from pumps versus MDIs. Still today about 75% of our patients come to us from multiple daily injections versus pumps.

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Ravi Misra, Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst [41]

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Okay. And just do you have any expectations of how that plays out in the future? And then kind of my follow up is, just with the DASH ordering, it sounds like it's making it easier obviously for the patient to receive the technology. How is that playing through them kind of on the P&L? Are we seeing that? Was that kind of factoring in, in some of the G&A leverage that we saw in the quarter? And how do we think of that going forward?

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [42]

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Sure. I'll just -- I'll quickly answer the first and let Wayde weigh in on the second. So we don't have expectations in the plan that the mix of patients coming from pumps versus MDI will change in the pharmacy relative to the DME. So we fully expect to continue to stick with our strategy, which is to convert MDI users.

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Wayde D. McMillan, Insulet Corporation - Executive VP & CFO [43]

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Thanks. On the question of leverage, so not yet. So one of the things that we've had to invest in is being able to support the new move into the pharmacy channel while we kept the investment for our other direct and DME businesses.

And so we do expect over time given that it's a more efficient model that as we scale, we'll be able to reduce the investment on the traditional side of the business and ramp more efficiently on the pharmacy side. But that certainly does not have an impact on the current quarter, and we probably won't see that for some time, given that we still have to support the base business in our traditional channels.

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Operator [44]

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The next question comes from Matt Taylor with UBS.

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Matthew Charles Taylor, UBS Investment Bank, Research Division - Equity Research Analyst of Medical Supplies & Devices [45]

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So the first one I wanted to ask is a relatively simple question. You talk a lot about how your access has expanded over the course of the last year in Medicare, Medicaid and with some of the commercial. And I was wondering if you could help us by trying to quantify how that access expansion has impacted your results? Or if you could just provide some color that what percentage of patients or something like that are coming through Medicare or any of those channels?

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [46]

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I don't have specific numbers to provide, only to say that I think I have now said 3 calls running that we have had record new patient starts at quarters, 3 or 4 calls running now. And I think that is a direct result of the impact of market access.

And so we certainly have started to see, for example, our age group, in the Medicare age group, increase more significantly and contribute more significantly to new patient starts and likely also to retention. So I don't have a sense of what percentage is it contributing, but it is definitely driving outsized performance in new patient starts.

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Matthew Charles Taylor, UBS Investment Bank, Research Division - Equity Research Analyst of Medical Supplies & Devices [47]

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Okay. And then I just wanted to follow up on some of the questions here about DASH. I think if there is one thing that some investors are concerned about is that the PDM loss may cause you to have an air pocket.

And so I was wondering if you could talk to us about how you've thought about the pacing of the $6 million to $8 million in developing your second quarter guidance? And how much control do you have over which patients go onto DASH by how you release it or how you promote it to be able to try and hit the targets through the year?

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Wayde D. McMillan, Insulet Corporation - Executive VP & CFO [48]

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Matt, it's Wayde. So the $6 million to $8 million, as we mentioned before, from a pacing standpoint, we think it's pretty consistent across the quarters of the year. As we move into the DASH release here, we're assuming that it will be more in Q2, 3 and 4 certainly than it was in Q1.

And the thing I think is important to know is that our PDM revenue is a small percentage of our total revenue. And so the headwind from last year, even if we didn't have any PDM revenue. In other words, if we were successful and had all customers move to the pay-as-you-go model, it would probably be slightly outside of our guidance range, but it wouldn't be that significant. And so we think we've captured the right amount in our guidance for Q2. It's one of the reasons why it's ticked down a little bit from our annual run rate from the prior year at 19%.

And we think that once we get more customers on the pay-as-you-go model and we start to accrue the benefit from that, it becomes neutral and eventually becomes a tailwind for us. So I don't think I would make a huge deal out of that. And so just given that it's a pretty small percentage of our revenue overall.

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Operator [49]

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Our next question comes from Suraj Kalia with Northland Securities.

And it looks like Suraj's line has disconnected.

Our next question comes from Doug Schenkel with Cowen.

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Ryan Blicker, Cowen and Company, LLC, Research Division - Associate [50]

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This is Ryan on for Doug. Maybe just going back to patient starts. You mentioned another quarter of record new starts in the U.S. Just to be clear, does that mean an absolute record across any quarter. Meaning you added more new patients in Q1 than you did in Q4? Or specifically a record for any historical Q1?

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [51]

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Yes. Great. Thank you for clarifying that. It's a record for any historical Q1.

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Ryan Blicker, Cowen and Company, LLC, Research Division - Associate [52]

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Okay. And is it fair to assume that historically your new patient adds in the U.S. have historically been seasonal in the U.S. typical to overall revenues? Just trying to make that clear because that would be a pretty impressive acceleration if that is typically the case.

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [53]

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Yes. That's right. So we did actually have a stronger Q1 by quite a bit, but it is true that Q1 is our seasonally lightest quarter.

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Operator [54]

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The next question comes from Suraj Kalia with Northland Securities.

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Suraj Kalia, Northland Capital Markets, Research Division - MD & Senior Research Analyst [55]

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Can you guys hear me all right?

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [56]

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Yes. Got you.

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Suraj Kalia, Northland Capital Markets, Research Division - MD & Senior Research Analyst [57]

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So Shacey, forgive me, multiple earnings calls going on. And forgive me if somebody has already asked these questions. I heard something about forward-looking at least on the overall market on insulin pumps. I understand your answer from a strategic perspective, but I'm curious if you can shed some color on a tactical basis?

Tandem also, essentially has a [lunar] trajectory on its pump placements. When we look at it on a tactical basis, let's say, Insulet and Medtronic and Tandem now, give us some color, how is the hand-to-hand combat on the ground? I'm really curious, is this something -- there seems to be a ground shift.

Obviously, all the companies are putting in tremendous amount of R&D effort. But more so, how does the decision process work? If Suraj comes in, how is he choosing between Tandem t:slim versus 6/70 versus Omnipod? Anything there on a practical basis would be greatly appreciated?

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [58]

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Sure, Suraj. So I think it's a fair question. So first, I'll say, it's very, I guess, challenging or difficult to compare the growth rates because the business models are very different. So I just want to make sure that we're all clear, right? They take 4 years of revenue upfront, and we've got this recurring revenue model. And so challenging to kind of compare those growth rates.

It's also, by the way -- and I also think that CGM integration is a big piece of what's driving, for example, Tandem's growth trajectory, which is kind of why we're so excited about DASH, which gives CGM light integration and Horizon.

But what we understand and what we hear from clinicians is that Omnipod is differentiated for MDI users who don't want to move to a tube pump, who they would not otherwise have adopted a tube pump. And that's supported by data that we get on a quarterly basis of our new patient starts where 66% of them now tell us that they would not be on pump therapy if not for Omnipod. So we really do believe that they're distinct segments and that we're helping to grow the overall population.

That said I think we should all acknowledge that we're kind of coming up on the innovation curve, too, as it relates to CGM integration. And it's one of the reasons why the business model shift was so strategic for us. Because if we now enable patients to be able to move to our new technologies like DASH and Horizon, when they want without having to wait out their 4-year period, as we bring these innovations to market, like DASH and like Horizon, we'll really enable people to kind of adopt those as they want to.

So both are important to us to continue to invest in innovation and also this business model move that enables us to drive growth as we bring innovation to market at the cadence that we bring innovation to market.

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Suraj Kalia, Northland Capital Markets, Research Division - MD & Senior Research Analyst [59]

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Fair enough. Shacey, then I'll keep it one follow-up. In our discussions with clinicians, Shacey, a couple of comments were made that piqued my curiosity. Essentially, some of the payers, there seemed to be some discussions of moving towards monthly payment model and get away on this whole lump-sum upfront model. Have you guys sensed any of that in the marketplace? I'd be very curious to get your perspective.

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [60]

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Sure, Suraj. And yes, the answer is -- I mean it's clearly demonstrated in why we're building access so quickly for DASH. It's because payers are really attracted to the pay-as-you-go model. So you call that a per-member, per-month fee or you just call that Omnipod, right?

Both are the same in that they are pay-as-you-go models, and they are risk-adjusted for the payer because they are not plunking down thousands of dollars upfront and then just hoping for patient compliance. It really eliminates that risk for the payer. And it's one of the main reasons outside of this other kind of innovation piece that I talked about that we moved to that model.

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Operator [61]

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Our next question comes from Joanne Wuensch with BMO Capital Markets.

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Steven Plachtyna, BMO Capital Markets - Analyst [62]

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This is Steve on Joanne. Can you update us on DASH in Europe, just general timing? Maybe, which markets. Will this have the same feature set as DASH in the U.S.? And maybe any hints toward phone control internationally?

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [63]

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Yes. It's a great question, Steve. So we do plan to bring DASH to Europe. We don't plan to do that in a substantive way until 2020, because we're only 10 months into that business. And so we really wanted to make sure that the team and the business and all of our functions were well established before we brought new products into the mix in Europe.

And the other reason is because one of the whole theses of going into Europe was to establish a direct presence there, so we could better understand what's the right configuration and the right go-to-market strategy for DASH in these various markets in Europe.

So what we know is there is great demand. We know that the configuration will be slightly different than what we see in the U.S. One example is there are different privacy requirements, and frankly, different value propositions tied to data and tied to apps. And so that may look different, and we'll see where we go with that.

But our plan is to have the product configurations and the market launch plans finalized by the end of this year. And we're also doing the work to do the translations for this year, and we should be moving into limited market releases with DASH sometime in early 2020.

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Steven Plachtyna, BMO Capital Markets - Analyst [64]

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Okay. Great. That's very helpful. And then could you just give us your latest views on ACE pump designation? Has anything -- has your thinking evolved here? Do you have plans to submit Horizon for FDA approval with an ACE designation?

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [65]

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Yes. We do believe we'll be taking advantage of that pathway, and so we're not really in any hurry because it's tied to the Horizon clinical development pathway, which has some runway yet. And then also, there is no other iCGM at this point. And so there is not real advantage from that perspective, but it's a great, I think, avenue that we'll all want to take advantage of eventually. We review the special controls and don't have any issues meeting the special controls.

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Operator [66]

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The final question comes from Raj Denhoy with Jefferies.

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Rajbir Singh Denhoy, Jefferies LLC, Research Division - MD, Equity Research & Senior Equity Research Analyst [67]

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Wonder if, Shacey, if you could let me just ask a question on pharmacy. It's intriguing that you talk about the price uplift you get in that channel? And I'm curious, one, if you'll tell us what that is? And two, as you are expanding in that channel and signing up more pharmacies, what the discussions look like? And whether you are able to maintain that premium as you expand in that channel?

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [68]

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Yes. Raj, nice try. We're not giving the price uplift. Just suffice it to say that we have sort of transitioned the value of the PDM into the Pod's price. And for that, pharmacies are relatively open because we are eliminating a risk and an upfront cost for them. So we haven't -- obviously, I think just the fact that we have established a strong access in a short period of time is just a testament to the fact that the value proposition works for the payer in the pharmacy. We, obviously, feel good about our position. I don't think we would expect to give any guidance on pricing and kind of how we view the future there anytime soon, but we do expect that segment of our business to grow. We expect to be a more attractive segment, both from a top and bottom line.

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Rajbir Singh Denhoy, Jefferies LLC, Research Division - MD, Equity Research & Senior Equity Research Analyst [69]

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Along the same lines, I guess as you expand in that channel and given that it is a more profitable, I should say, at least a higher revenue channel for you, will you be disclosing the percentage of your patients or anything in terms of the mix in pharmacy? I imagine it's quite low now, so probably isn't meaningful, but as you get bigger, is there something you're going to share with us?

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [70]

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Yes. I think it's a good question because we obviously want to be able to give you guys some color around both pharmacy and DASH. DASH is a big piece of pharmacy. So we're looking at various things like maybe percentage of new patients in the pharmacy or percentage of the business in the pharmacy. We're still discussing what metrics we'll provide, but we certainly committed to giving you guys some qualitative and where we can quantitative color on how DASH and pharmacy are going. So we'll figure that piece out. But the other thing, just to be clear, the other thing that we -- I have said is that where the revenue growth and the customer base growth diverge, we will give that color. And that certainly did not happen this quarter or we would have given you that color. And going forward, if that diverges because of the pricing model being different in the pharmacy, we will provide that color.

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Operator [71]

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Thank you. And that does conclude today's question-and-answer session. I'd now like to turn the call back over to Shacey Petrovic for any closing remarks.

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Shacey Petrovic, Insulet Corporation - President, CEO & Director [72]

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Thank you, and thank you all for joining us today. We're off to a great start this year, and we're set up for a remarkable 2019 and even brighter future. As always, I want to thank the Insulet team across the globe working to improve the lives of people living with diabetes. We couldn't be more excited about the strong momentum we have throughout our business, and that's very much down to the team and their execution. So we look forward to updating you again next quarter on our progress. Thank you, and have a great evening.

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Operator [73]

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Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program, and you may all disconnect. Everyone, have a great day.