Oppenheimer: After FDA Approval Of Tandem's Insulin Pump, Investor Focus Will Shift To 2018 Opportunities

Late Thursday, Tandem Diabetes Care Inc TNDM announced FDA approval of its t:slim X2 insulin pump with Basal-IQ for Type 1 diabetes patients, which is planned for an August launch. With the company’s balance sheet position recently improved, investors will likely shift their focus to further new opportunities in 2018, according to Oppenheimer. 

The Analyst

Oppenheimer’s Steven Lichtman maintained an Outperform rating on Tandem with a $24 12-18-month price target. 

The Thesis 

With the launch of Basal-IQ planned for August and Control-IQ up next in the pipeline, Tandem has several opportunities ahead in 2018, Lichtman said in a Friday note. 

The Basal-IQ algorithm is used to predict glucose levels, the analyst said. The system suspends insulin delivery when low glucose is predicted, and will resume insulin delivery once glucose levels begin to rise.

Next up in Tandem's pipeline is the Control-IQ system, used to reduce both high and low blood sugar events by adjusting insulin delivery, Lichtman said. 

Lichtman estimates total sales growth of 32 percent, with core U.S. new patient growth in the mid-teens in 2019.

“In addition to having the second CGM-connected pumps on the market, TNDM should benefit from what we expect will be market acceleration owing to new technology introductions.”

Plans for international expansion in the second half of 2018 are also underway, representing an additional opportunity for the year, the analyst said.

Price Action

Tandem shares were rallying more than 11 percent to $22.55 at the time of publication Friday. 

Related Links:

Baird Sees 'Improved Odds' Tandem Diabetes Care Will Survive

Benzinga's Biotech Pulse: FDA Greenlights Tandem Diabetes' Insulin Pump, More IPOs On Tap

Photo courtesy of Tandem Diabetes Care. 

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