On the heels of a first quarter that saw its sales slip and operating loss widen, Tandem Diabetes Care is banking on making big moves in the second half of the year to turn things around.
Though the global tally of current users of Tandem’s insulin pumps grew by 22% year over year—reaching a total of 430,000 around the world—the number of pump shipments still slipped almost 18% in the first three months of the year, according to an earnings report released Wednesday.
The quarter’s sales weighed in at $169.3 million, down nearly 4% from the $175.9 million the company earned during the same period last year.
Those sales weren’t enough to outweigh the more than $210 million in operating expenses that Tandem racked up throughout the quarter, which, along with the cost of goods sold, sent the company’s net loss to nearly $124 million—more than eight times larger than the $14.7 million loss it registered in the first three months of 2022. Contributing to those expenses was Tandem’s recent acquisition of insulin patch pump maker AMF Medical in a deal that cost the devicemaker $79 million to close in January.
Despite those setbacks, however, Tandem upheld the financial predictions it made going into 2023: It’s still expecting to take in sales between $885 million and $900 million—calculated on a non-GAAP basis—which would represent year-over-year growth as high as 12%.
“We’re coming out of the first quarter with confidence about our ability to achieve our key operational and commercial goals we set for this year,” CEO John Sheridan said in a call with investors on Wednesday afternoon.
That confidence is helped along in particular by the company’s plans for a spate of product expansions and launches later this year.
“Overall, there’s an enthusiasm at Tandem as we approach being able to offer another wave of innovative products to the diabetes community,” Sheridan said. “With these launches, we’ll be building upon our reputation for offering high-quality products and services that reduce the burden of diabetes management.”
Among those launches will be the integration of Dexcom’s G7 continuous glucose monitor sensor and Abbott’s FreeStyle Libre 2 and 3 into Tandem’s t:slim X2 insulin pump system, which Sheridan said would make Tandem’s device “the first FDA-cleared insulin pump integrated with multiple CGM sensors.”
Those additions will come in the form of free, remote software updates, per the CEO, with the first updates slated to begin rolling out in the coming quarters. For each of the three integrated CGMs, Tandem will perform “internal walkabout testing” before adding them to its t:slim system in scaled launches first in the U.S. and then internationally; the process has already begun for Dexcom's G7 and Abbott's Libre 2 sensors, with the Libre 3 on track to be a “fast follow-up” after the previous model’s U.S. launch this fall.
Sheridan suggested that a “meaningful number of customers” could be using a G7-connected t:slim pump by the third quarter, while the FreeStyle Libre version of the tech should reach that same nebulous milestone in the fourth quarter
Alongside the upgrades to its t:slim X2 pump, Tandem is also eyeing an upcoming launch for its new Mobi pump, which is still under FDA review. The pump is about half the size of the t:slim models and can be completely operated via a smartphone app.
“Our dialogue with the agency remains constructive as we work through the process of FDA review and responding to questions,” Sheridan said. “In the meantime, we continue to prepare for its launch in the second half of the year.”