Tandem Diabetes Care Stock

Tandem Diabetes Care, Inc., a global insulin delivery and diabetes technology company, manufactures and sells advanced automated insulin delivery systems that reduce the burden of diabetes management, while creating new possibilities for patients, their loved ones, and healthcare providers. The company’s pump portfolio features the Tandem Mobi system and the t:slim X2 insulin pump, both of which feature Control-IQ advanced hybrid closed-loop technology.

Through its product development efforts, the company is seeking to expand its addressable market to include people living with type 2 diabetes who require intensive insulin therapy. The t:slim X2 Insulin Delivery System has been the company’s flagship technology solution. In February 2024, the company expanded its pump portfolio with the U.S. launch of Tandem Mobi. Both pumps feature its Control-IQ advanced hybrid closed loop technology, with an automated insulin delivery (AID) feature designed to help increase a user's time in targeted glycemic range. The company’s t:slim X2 and Tandem Mobi pumps can be used with a variety of infusion sets to offer patients choice in how and where their pump is worn. In addition, they are software updatable from a personal computer and compatible with the company’s web-based data management application.

In the four-year period ended December 31, 2023, the company shipped approximately 450,000 insulin pumps, which is representative of its in-warranty global installed customer base assuming the typical four-year reimbursement cycle. Approximately 310,000 pumps were shipped to customers in the United States and 140,000 were shipped to customers outside the United States.

Technology: Improving the Lives of People with Insulin-Dependent Diabetes

The company develops its insulin pump technology and related product offerings using a consumer-focused approach. The company initially relies on the use of behavioral sciences, including extensive research to ascertain what people with insulin-dependent diabetes require and prefer from their diabetes therapy. The company then look to modern consumer technology for inspiration and design its hardware and software solutions to try to meet the specific demands of people living with diabetes. This multi-step approach has resulted in products that provide users with the distinct features and functionality they seek and in a manner that makes the features usable and intuitive.

The company’s insulin pumps are generally considered durable medical equipment and have an expected lifespan of at least four years. In addition to insulin pumps, the company sells single-use products that are used together with its pumps and are replaced every few days, including cartridges for storing and delivering insulin, and infusion sets that connect the insulin pump to a user’s body.

The company launched its flagship t:slim platform in August 2012, and its next generation, the t:slim X2, in October 2016. In February 2024, the company expanded its offerings with the commercial availability of Tandem Mobi in the United States. Both pumps are fully detachable, offer Bluetooth connectivity and can be used as part of an automated insulin delivery system.

The company’s t:slim X2 and Tandem Mobi pumps feature its Control-IQ advanced hybrid closed loop technology. This AID feature is designed to help increase a user's time in targeted glycemic range (70-180 mg/dL), and is used by the majority of its customers worldwide. Control-IQ was the first AID algorithm cleared by the FDA to deliver automatic correction boluses in addition to adjusting basal insulin to help prevent high and low blood sugar. Control-IQ technology offers optional settings for sleep and exercise activities that adjust the algorithm parameters to better match the different physiological needs during these activities. Results from three independent pivotal studies using Control-IQ technology were published in the New England Journal of Medicine in October 2019, August 2020 and March 2023.

As part of its AID systems, the company offers pump integration with multiple CGM sensors, which helps provide customizable solutions for people living with diabetes. The Dexcom G7 sensor is the fourth generation of Dexcom’s CGM that the company has integrated with its pump technology since 2015. The company began offering its t:slim X2 pump integrated with the Dexcom G7 sensor in the United States in December 2023 and outside the United States in January 2024. In addition, in January 2024, the company announced that its t:slim X2 insulin pump with Control-IQ technology is the first AID system to integrate with the Abbott FreeStyle Libre 2 Plus sensor. The company’s extensive experience in CGM integration, and efforts to continue expanding the available CGM sensors integrated with its pump portfolio, represents its commitment to provide customizable solutions to help reduce burden and create new possibilities for people living with diabetes.

Tandem Device Updater

This tool allows the company’s pump users to update their pump software quickly and easily from a personal computer. It is PC- and Mac- compatible and designed to work with its pumps in a manner similar to software updates on a smartphone. The company has used this technology to offer its in-warranty t:slim X2 customers worldwide software updates.

Tandem Source

The company’s web-based data management platform provides users, their caregivers and their healthcare providers with a fast, easy and visual way to display diabetes therapy management data from its pumps, integrated CGMs and supported blood glucose meters. It also provides the company with data that it can analyze to reveal patterns, trends, outcomes and associations that can be used to improve its products and in the analysis of clinical outcomes data. Tandem Source is designed to bring together the features of Tandem’s legacy t:connect, t:connect HCP, and t:connect Portal offerings with new comprehensive data reporting in one central, scalable platform. It offers automatic data transfers from pumps using the t:connect mobile app to keep online data current and remove the need for manual pump uploads.

Sugarmate

Sugarmate is a mobile app that is designed to help people visualize diabetes therapy data in innovative ways. It allows users to log glucose data and health and nutrition information, and can provide notifications and alerts to users, their family, and their caregivers.

Strategy & Future Technologies

The company’s strategy is to address the individual needs of people with insulin-dependent diabetes and their care team flexibility and choice in intelligent insulin delivery systems, through an accessible portfolio of market-leading pumps, applications, and insights.

t:slim X3

Advancing the company’s flagship t:slim platform, the t:slim X3 is planned to include enhanced technology, such as greater processing power and capacity to support its advanced algorithms, as well as increased battery life and improved durability.

Mobi: Tubeless

This offering is intended to provide an alternative tubeless infusion site option for Tandem Mobi pump users. It will allow a Tandem Mobi pump to be worn completely on the user’s body with no tubing.

Sigi

The ergonomic, rechargeable Sigi Patch Pump is intended to reduce the burden of managing diabetes through its use of pre-filled insulin cartridges and compatibility with AID technology.

Extended Wear Infusion Sets

Infusion sets provide additional choice and flexibility to people living with diabetes.

Control-IQ Advancements

The company is continuing to drive innovation in its algorithms, emphasizing automation, personalization and simplification to continue to improve therapeutic outcomes and provide a positive patient experience. In 2023, the company began a pivotal study to support expanding indications to include people living with type 2 diabetes. In late 2023, the company’s Control-IQ technology was cleared with additional features for people with type 1 diabetes age 2 and older. The company is also researching the use of different insulins with its Control-IQ technology.

Markets and Distribution Methods

The company’s technology solutions are now available in the following 25 countries:

In the United States and Canada, the company employs direct sales, customer support, and clinical teams. The company also partners with independent distributors for order fulfillment. Outside the United States and Canada, the company contracts with distributors who have substantial responsibility for sales, customer support, clinical efforts and order fulfillment.

Revenue Concentrations and Significant Customers: A small number of independent distributors in the United States and Canada are responsible for order fulfillment. Outside the United States and Canada, there may be variability in inventory levels among the company’s distributors, particularly when they first begin product sales or surrounding the launch of new products. For the year ended December 31, 2023, two independent distributors each accounted for more than 10% of the company’s worldwide sales.

Third-Party Reimbursement

In the United States, customer orders are typically fulfilled by billing third-party payors on behalf of the company’s customers, or by using its network of distributors who then bill third-party payors on its customers’ behalf.

The company is accredited by the Community Health Accreditation Program and is an approved Medicare provider. The company enters into contracts with national and regional third-party payors to establish reimbursement for its insulin pump products, single-use insulin cartridges and other related supplies. Outside of the United States and Canada, the company’s distribution partners are responsible for all reimbursement, tender application and fulfillment activities.

Manufacturing and Quality Assurance

The company purchases all of its marketed infusion sets from a third-party supplier, Unomedical A/S, a subsidiary of the ConvaTec Group. Unomedical is responsible for all manufacturing, testing, sterilization and packaging of the infusion sets under the company’s brands.

The company has received certification from BSI Group, a Notified Body to the International Standards Organization (ISO), of its quality system. A Notified Body is an entity that has been designated and accredited by the national competent authority of an EU Member State in accordance with applicable EU legislation to perform third-party conformity assessment activities including calibration, testing, certification and inspection of a medical device. Certain processes used in the manufacturing and testing of the company’s devices have been verified and validated as required by the FDA and other regulatory bodies. As a medical device manufacturer, the company’s manufacturing facility and the facilities of its sterilization and other critical suppliers are subject to periodic inspection by the FDA, certain corresponding state agencies, and Notified Bodies and foreign regulatory authorities.

Intellectual Property

As of December 31, 2023, the company’s patent portfolio included numerous issued patents and pending patent applications in the U.S. and other countries, which in the aggregate, to be important to its business. Patents are generally effective for 20 years from the date the earliest application was filed in the patent family, and in some cases may be extended. The company’s issued patents as of December 31, 2023, are set to expire over a range of years, from 2024 to 2042, subject to any extensions. The company also has various registered U.S. trademarks, registered European Community trademarks, and other trademark registrations and pending trademark applications in other countries and regions of the world. In addition, the company has entered into exclusive and non-exclusive licenses in the ordinary course of business relating to a wide array of technologies or other intellectual property rights or assets.

Research and Development Expenses

The company’s research and development expenses included $169.7 million for the year ended December 31, 2023.

Competition

The company competes in markets worldwide with companies that manufacture insulin delivery devices, primarily Insulet, Medtronic and Ypso

Government Regulation

The company’s products are medical devices subject to extensive regulation by the FDA in the United States, corresponding state regulatory authorities and other regulatory bodies in other countries. The company has obtained clearance on multiple devices in both Class II and Class III, including Control IQ, the tslim:X2 and Tandem Mobi.

To obtain 510(k) clearance for any of the company’s potential future devices (or for certain modifications to devices that have previously received 510(k) clearance), it must submit a pre-market notification demonstrating that the proposed device is substantially equivalent to a previously cleared 510(k) device. The FDA’s 510(k) clearance pathway generally takes three to 12 months from the date the application is completed but can take significantly longer. A 510(k) application must be supported by extensive data, including technical information, labeling, human factors data and potentially clinical data to meet any Special Controls.

The FDA requires each manufacturer to make this determination initially, but if the FDA disagrees with a manufacturer’s determination, the FDA can require the manufacturer to cease marketing and/or recall the modified device until 510(k) clearance or PMA is obtained and assess significant regulatory fines or penalties for failure to submit the requisite 510(k) or PMA application(s).

In June 2018, the company’s t:slim X2 was the first insulin pump designated by the FDA as compatible with integrated continuous glucose monitoring (iCGM) devices. In 2019, the company received FDA approval of the company’s de novo application to classify the t:slim X2 to a Class II device, under the new insulin pump classification referred to as Alternate Controller Enabled Infusion Pumps (ACE pumps). In 2019, the company received FDA approval of its de novo application to classify its Control-IQ technology as the first automated insulin dosing software in a new interoperable automated glycemic controller (iAGC) category that automatically adjusts insulin delivery to a person with type 1 diabetes age 6 and older by connecting to an ACE pump and iCGM. In November 2023, the company’s Control-IQ technology was cleared with additional features for people with type 1 diabetes age 2 and older. In connection with the de novo applications for both the ACE pump and the iAGC category, the FDA established certain special controls that the company will need to continue to satisfy.

The company is sponsoring or supporting several clinical trials that are intended to support future enhancements to its AID products.

The company’s use of t:connect data is hosted on secure servers and the company’s use of t:connect data is subject to internal policies and procedures that are designed to comply with the federal U.S. Health Insurance Portability and Accountability Act of 1996 (HIPAA), as well as applicable U.S state privacy laws HIPAA, as amended by Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), imposes certain requirements on covered entities, which include certain healthcare providers, health plans and healthcare clearinghouses, and their business associates and covered subcontractors that receive or obtain protected health information in connection with providing a service on behalf of a covered entity relating to the privacy, security and transmission of individually identifiable health information. Although t:connect, t:connect HCP and Tandem Source are not generally available to users or healthcare providers outside the United States, the company is also mindful of requirements under Canada’s Personal Information Protection and Electronic Documents Act, referred to as PIPEDA, and similar provincial laws, and the E.U. and United Kingdom (U.K.) General Data Protection Regulation, collectively known as GDPR, and similar E.U. member state laws. Collectively, these laws and regulations set standards that may be applicable to the company regarding safeguarding the privacy and security of the personal information it collects and uses from customers, healthcare providers and other individuals.

History

The company was founded in 2006. It was incorporated in the state of Colorado in 2006. The company was formerly known as Phluid Inc. and changed its name to Tandem Diabetes Care, Inc. in 2008. The company was re-incorporated in the state of Delaware in 2008.