Tandem Diabetes Care Maps Growth Plan With Pharmacy Shift and Tubeless Mobi

Key Points

• Tandem is shifting U.S. pump distribution to pharmacies through a pay-as-you-go model designed to reduce upfront costs, with about 45% formulary coverage achieved so far. The company aims to route roughly 80% of U.S. pumps through pharmacies within two to three years.
• The company is awaiting FDA clearance for a tubeless Tandem Mobi system expected to offer up to seven days of wear and both tubed and tubeless options. Tandem is also advancing a fully closed-loop Control-IQ+ system and plans to begin its pivotal trial later this year.
• Tandem is pursuing growth among insulin-dependent type 2 diabetes patients and internationally by expanding direct sales. Direct operations in select European markets have increased selling prices by at least 30%, while Mobi represented more than half of new pump starts in the latest quarter.

Tandem Diabetes Care NASDAQ: TNDM highlighted its plans to expand insulin pump adoption through a shift to pharmacy distribution in the U.S., direct sales in additional international markets and upcoming product launches, including a tubeless version of its Tandem Mobi pump.

Speaking at Canaccord’s 46th Annual Global Growth Conference, Chief Financial Officer Leigh Vosseller said the company sees substantial room for growth in an underpenetrated market. In the U.S., about 2 million people live with type 1 diabetes, with approximately 40% using pump therapy, she said. More than 2 million people with type 2 diabetes use insulin, while only about 5% use pumps, according to Vosseller.

Outside the U.S., Tandem operates in about 25 markets that include roughly 3 million people with type 1 diabetes, where pump penetration is about 20%, she said. Tandem currently has about 500,000 people globally using its technology.

Pharmacy Shift Targets Affordability

Vosseller identified the U.S. pharmacy conversion, regulatory clearance for tubeless Tandem Mobi and the transition from distributors to direct sales outside the U.S. as the company’s three principal near-term priorities.

The company began its pay-as-you-go pharmacy model in March. Under that approach, Tandem said it can provide the pump at no cost and have patients pay for supplies over time, rather than face potentially higher upfront costs associated with the durable medical equipment, or DME, channel.

“Cost has been one of the number one barriers to people starting pump therapy,” Vosseller said, noting that DME out-of-pocket costs can range from $800 to $1,000 or more for some patients.

Tandem has reached about 45% formulary coverage for its pharmacy offering, Vosseller said. The company is working with pharmacy benefit managers, or PBMs, representing approximately 80% of covered lives, while also seeking to add payer participation to those arrangements. She described the early progress as strong but said the company remains focused on its two- to three-year goal of moving about 80% of its pumps through pharmacy channels.

The transition requires educating physicians on new prescribing processes and helping existing users compare their pharmacy and DME benefit options, Vosseller said. Some patients may not see a compelling cost difference for supply orders or may be reluctant to alter an established process, she added.

Product Pipeline and Tubeless Mobi

Tandem filed its tubeless Mobi system with the Food and Drug Administration during the second quarter and is awaiting clearance, Vosseller said. Following clearance, the company expects to begin a scaled launch. She said the product could address a market segment in which Tandem has not historically competed.

The company expects the system to offer up to seven days of wear time. Vosseller said Tandem believes the product will be differentiated by its extended-wear capability and by giving users the option to use the system in either a tubed or tubeless configuration when changing supplies.

Vosseller also pointed to the company’s Control-IQ+ automated insulin-delivery technology as a central component of its competitive strategy. Tandem plans to advance the platform with a fully closed-loop algorithm, she said.

Chief Administrative Officer Susan Morrison said a fully closed-loop system is intended to reduce the amount of interaction required from users while still allowing patients who want to provide additional information to personalize their experience. The company received investigational device exemption approval in the second quarter and plans to begin its pivotal trial later this year, according to Morrison.

Morrison said the system is being designed for people new to pump therapy, individuals using multiple daily injections and people converting from either Tandem or competing pumps. The trial is intended to include people with both type 1 and type 2 diabetes. She said such studies generally take about 18 months, though timing will depend on enrollment.

Type 2 Opportunity and GLP-1 Use

Management said it views GLP-1 medicines as complementary to automated insulin delivery for insulin-dependent type 2 diabetes patients. Morrison cited a clinical study published in The New England Journal of Medicine last year that, she said, showed the greatest improvement in outcomes when GLP-1 treatment was used alongside automated insulin delivery.

While GLP-1 therapies could slow the number of patients who become insulin-dependent, Morrison said type 2 diabetes is progressive and that a large existing population already requires insulin.

Tandem’s MDI, or multiple daily injection, conversions grew by the mid-single digits in the second quarter, Vosseller said. She also said Tandem Mobi accounted for more than half of the company’s new pump starts in the period, supported by the earlier launch of FreeStyle Libre 3 integration and the addition of Android compatibility for Mobi.

For people with type 2 diabetes, management emphasized ease of use, lower training requirements and hardware flexibility as potential adoption drivers. Morrison said Mobi’s tubeless cartridge holds 200 units of insulin, but users can replace the cartridge without changing the infusion site, reducing reliance on the amount of insulin available at one time.

International Direct-Sales Expansion

Tandem is also shifting selected international markets from distributor arrangements to direct operations. About 13% of international sales were direct as of the prior quarter, according to the discussion. The company began direct operations in the U.K., Switzerland and Austria at the start of the year and plans to enter France later this year.

Vosseller said each market moved to direct sales has represented at least a 30% increase in selling prices, while direct relationships may also help Tandem improve patient renewals and expand volume. The transition requires new customer relationship management and enterprise resource planning systems, customer-support capabilities, sales teams and reimbursement expertise in each market, she said.

Morrison said the company is transforming its U.S. and international business models with the aim of driving profitable growth and broadening its impact in the diabetes community.

About Tandem Diabetes Care (NASDAQ:TNDM)

Tandem Diabetes Care, Inc NASDAQ: TNDM, headquartered in San Diego, California, is a medical device company focused on the design, development and commercialization of innovative insulin delivery systems for people with insulin-dependent diabetes. Founded in 2006, the company introduced its first product, the t:slim® Insulin Pump, in 2011 and has since built a portfolio of next-generation pumps featuring touchscreen interfaces, remote software updates and integrated continuous glucose monitoring (CGM) capabilities.

The company's flagship offering, the t:slim X2® Insulin Pump, is engineered to work with leading CGM sensors and features automated insulin delivery algorithms that adjust basal insulin rates based on real-time glucose trends.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Add As Preferred Source