Insulet Corp. Update

PODD : NASDAQ : US$42.95
BUY
Target: US$53.00

COMPANY DESCRIPTION:
Insulet is involved in the development, manufacturing and
marketing of a novel insulin infusion system designed for
individuals that have been diagnosed with insulin-dependent
diabetes. The primary focus for the company is its OmniPod
insulin delivery system, which gained FDA approval in January
2005.
All amounts in US$ unless otherwise noted.

Life Sciences — Biomedical Devices and Services
THOUGHTS INTO 2014; RAISING PT
TO $53 AS ROLL OVER TO 2015 METRICS
Investment recommendation
We maintain our BUY rating on Insulet as we focus our attention
on 2014 and frame out the impact of longer-term strategic
initiatives. That said, we expect an in-line Q4/13 and 2014
guidance in-line with current expectations.
Investment highlights
Manufacturing continues to ramp, with all 3 manufacturing
lines running and expanding efficiency as the company
works towards ~1M pods/month/line.
Competitive tethered pump launches from MDT and TNDM
have not impacted new patient adoption as Insulet remains
the only patch pump on the market and the first decision
from new pumpers remains patch vs tethered pumps.
Longer term – the company continues to focus on integrating
a CGM sensor into its existing OmniPod, highlighting the
market opportunity by noting that ~30% of its customer base
currently uses a CGM.
Valuation
We maintain our $53.00 price target based on a 7.5x EV/Sales
multiple applied to our 2015E sales estimate of $381.6M.

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