Insulet Corporation (PODD)

Part I – Summary Description:

Insulet Corporation is a medical device company whose operations center on the development, manufacture, and marketing of an insulin infusion system (1) for those with an insulin dependency stemming from diabetes (Yahoo - Finance).

Insulet’s primary product, the OmniPod Insulin Management System, is an insulin infusion system that utilizes a pain-free automated cannula (2) insertion. As a package, the OmniPod System includes an OmniPod disposable insulin infusion device and a handheld wireless personal diabetes manager. The OmniPod System in essence provides customers with a diabetes management solution that allows for a comfortable lifestyle as well as other benefits. OmniPod Systems are sold directly to patients via referrals from healthcare professionals and through patient leads (Yahoo - Finance).

Insulet Corporation is headquartered in Bedford, Massachusetts and was founded in 2000 (Yahoo - Finance).

(1) Insulin infusion system refers to the intensive insulin therapy used by diabetes patients.

(2) A cannula is a tube that is inserted into the body. These tubes are generally used to remove or deliver fluid.

Part II – Summarized Financials:

Yearly/Quarterly Financial Performance (Source: Morningstar)

Competitor Comparison (Source: Yahoo - Finance)

Insulet Medtronic Smiths Medical Industry Market Cap: 573.58M 50.04B N/A 100.48M Employ­ees: 276 41,158 1,125 300 Qtrly Rev Growth (yoy): 70.40% 10.20% N/A 14.60% Revenue (ttm): 66.03M 15.45B 85.90M 48.53M Gross Margin (ttm): 27.71% 75.92% N/A 55.53% EBITDA (ttm): -54.14M 5.69B N/A 825.45K Oper Margins (ttm): -89.89% 32.01% N/A 3.22% Net Income (ttm): -79.54M 2.35B N/A N/A EPS (ttm): -2.676 2.112 N/A N/A P/E (ttm): N/A 21.51 N/A 20.79 PEG (5 yr expected): N/A 1.39 N/A 1.38 P/S (ttm): 8.73 3.20 N/A 2.33

Industry = Medical Instruments & Supplies Part III - Reasons to Buy: - As mentioned above, Insulet manufactures insulin pumps. These insulin pumps are used by diabetes patients as a means of delivering insulin into the body without having to repeatedly prod themselves with injection needles. Thus, insulin pumps allow for much easier insulin therapy treatments (The Motley Fool). - Of the 3 to 4 million Americans who require insulin, only about 300,000 currently use the more convenient insulin pumps as opposed to needles. Insulet therefore has a vast market of non-pump users to capitalize on (The Motley Fool). - The amount of diabetes patients that will begin using insulin pumps is expected to grow by 15 to 20 percent per year for the next 5 years. As a manufacturer of insulin pumps, Insulet Corporation will benefit greatly from this trend (The Motley Fool). - Insulet differs from its competitors in that Insulet’s sole product is infusion pumps (which means that Insulet will expand as the insulin pump market grows), and Insulet’s infusion pump is uniquely wireless and has gained popularity among users as a result (The Motley Fool). - While revenues are already growing at over 40 percent per year, Insulet additionally intends to combine a continuous glucose monitor with their insulin pump and intends to make some components of the insulin pump smaller. Both alterations will make Insulet’s insulin pump even more appealing to diabetes patients, which should translate into increasing revenues for the company (The Motley Fool). Part IV - Reasons to Sell: - Though unlikely to occur in the near future, if Insulet’s competitors, Medtronic or Animas (a wholly owned subsidiary of Johnson and Johnson), were to develop their own wireless, tubeless insulin pumps, Insulet would more than likely see their market share of the insulin pump market decrease significantly. This further means that Insulet would no longer possess a unique and superior insulin pump, and would face stiffer competition as a result.