After regulators stepped in Friday to shut down Silicon Valley Bank and the Federal Deposit Insurance Corporation took over the management of all insured deposits at the bank, parent company SVB Financial Group is no longer eligible for inclusion on the S&P 500.
The bank will therefore be removed from the index before the markets open Wednesday—at which point Insulet will step in to take its place, S&P announced late Friday.
The S&P 500 is among the most popular stock market indices, comprising 500 of the largest companies publicly traded in the U.S. With its entrance on the index this week, Insulet will join fellow medtech giants such as Medtronic, Abbott, BD, Dexcom, Boston Scientific, 3M, Baxter and many more.
Insulet didn’t immediately respond to a request for comment on the stock index switch-up.
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The upcoming addition to the S&P 500 comes just a few weeks after Insulet reported its highest-ever annual revenues—breaking the record set just one year prior. For all of 2022, the diabetes tech maker took in $1.3 billion, marking year-over-year growth of more than 18%.
The vast majority of those earnings came from sales of Omnipod insulin pumps, after the company secured FDA clearance for the latest version of the device at the start of the year and swiftly began its U.S. rollout in the ensuing months.
Insulet’s stock price surged after the news of its selection as SVB’s replacement on the S&P 500 went live Friday evening. It jumped 7%, from around $280 to $300, in the final hours of trading on Friday, then continued a steady climb upward Monday, reaching $305 by midday—a price it hadn’t seen since the first weeks of January.
The S&P 500 also was faring better than expected on Monday. Though it slid downward throughout Friday’s tumult and kicked off Monday with another 1% dropoff, it had recovered past Friday’s closing price by late morning, then continued that upward trajectory into the afternoon.
The SVB collapse Friday sent tremors across the biotech and medtech industries, since—as the bank had proudly touted—almost half of all U.S. venture-backed tech and life science companies were counted among its clients.
As federal regulators have stepped in to backstop all deposits affected by the SVB failure and President Joe Biden promised the country on Monday that “every American should feel confident that their deposits will be there, if and when they need them,” several medtech companies have also come forward to assure investors that their finances are safe.
In a statement Monday, Dexcom said that while it has a long-standing relationship with SVB, it “does not have material exposure to the developments at Silicon Valley Bank,” since only $2.7 million of its $2.5 billion in cash, cash equivalents and short-term marketable securities are held at SVB.
In a Securities and Exchange Commission (SEC) filing (PDF) on Friday, iRhythm Technologies noted that $54.5 million of its $213.1 million in cash, cash equivalents and short-term investments is held in SVB operating accounts, and the devicemaker also has “a $35 million term loan outstanding with SVB.” Even so, iRhythm said that its holdings outside of SVB “will be sufficient to operate the company’s business and meet its cash requirements for the foreseeable future.”
Regenerative tissue developer Humacyte also joined in, adding in an SEC filing (PDF) of its own Monday that while it holds “an immaterial balance of cash” with SVB and none of the bank’s securities, it did enter into a loan and security agreement of up to $50 million with SVB.
To date, Humacyte “has drawn $30,000,000 in principal to date and does not expect to make any additional draws on the commitment,” it said in the filing. “Therefore the company believes that any change in circumstances at SVB will not have any material effect on the company’s cash balances, financial condition and operating plans.”