Insulet Q2 2023 Earnings Call Transcript

Quartr
Provided by Quartr
August 8, 2023

There are 17 speakers on the call.

Operator

Afternoon, ladies and gentlemen, and welcome to the Insulet Corporation Second Quarter 2023 Earnings Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Deborah Gordon, Vice President, Investor Relations.

Speaker 1

Thank you. Good afternoon and thank you for joining us for Insulet's 2nd quarter 2020 earnings call. With me today are Jim Hollingshead, President and Chief Executive Officer and Wade McMillan, Executive Vice President and Chief Financial Officer. Both the replay of this call and the press release discussing our quarterly results and our guidance will be available on the Investor Relations section of our website. Also on our website is our 2nd quarter supplemental earnings presentation.

Speaker 1

We encourage you to reference that document for a summary of key metrics and business updates. Before we begin, we would like to inform you that certain statements made by Insulet during the course of this call may be forward looking and could materially differ from current expectations. Please refer to the cautionary statements in our SEC filings for a detailed explanation We'll also discuss non GAAP financial measures with respect to our performance, namely adjusted gross and operating margins, adjusted EBITDA and constant currency revenue, which is revenue growth excluding the effect of foreign exchange. These measures align with what management uses as supplemental measures in assessing our operating performance, and we believe they are helpful to investors, analysts and other interested parties as measures of our operating performance from period to period. Additionally, unless otherwise stated, all financial commentary regarding dollar and percentage changes will be on a year over year reported basis with the exception of revenue growth rates, which will be on a year over year constant currency basis.

Speaker 1

With that, I'll turn the call over to Jim.

Speaker 2

Thanks, Deb. Good afternoon and thank you for joining us. In Q2, we enjoyed another quarter of sustained strong momentum And we remain on track for another successful and transformative year. The entire global Insulet team is executing at a high level, And we continue to deliver strong financial performance, while also achieving several key strategic and innovation milestones. On today's call, I'll touch on 4 main topics: our strong financial performance our consumer focused innovation and clinical achievements How we're continuing to drive penetration of a massive market opportunity with expanded access and awareness and the Omnipod 5 international launch.

Speaker 2

Starting with our financial performance. Our 2nd quarter revenue exceeded our expectations with total Omnipod growth of 33%, including U. S. Growth of 41%. We also achieved total company growth of 32%.

Speaker 2

Because of these terrific results, we've raised our outlook for the year. Omnipod V continues to disrupt The diabetes technology market as the only FDA approved fully disposable pod based automated insulin delivery system. Our flagship offering continues to be the major driver of U. S. Revenue growth and was responsible for another record quarter of U.

Speaker 2

S. And global new customer starts. And Omnipod 5 represented almost 95% of our U. S. New customer starts.

Speaker 2

Building on our success in the U. S, we are very pleased to have completed the commercial launch of Omnipod 5 in the United Kingdom. We are excited to bring our unmatched AID system to our 1st international market. Our plans to launch Omnipod 5 in Germany are on track for this fall With a broader stage rollout across our European markets in 2024. We also meaningfully advanced our clinical and innovation initiatives during the quarter.

Speaker 2

We had a formidable presence at ADA in June, where we presented compelling new real world data from the 1st year on Omnipod V in the U. S. For both Type 1 and Type 2 users. In addition, our U. S.

Speaker 2

Type 2 pivotal and U. S. Trans randomized controlled trials are progressing well. On the innovation side, we are thrilled to have submitted our 510 to the FDA for the Omnipod 5 iOS app for the iPhone. IOS phone control is one of the most requested features from our customers and we look forward to bringing this new offering to market in the near term.

Speaker 2

We entered the second half of the year with clear momentum in our business and a focused strategy to advance our mission to simplify and improve the lives of people with diabetes. Central to everything we do is our drive to deliver consumer focused innovation. That is why we are incredibly excited about Omnipod 5 and the game changing technology and experience it delivers. Its benefits are clear, simple and easy to use technology, an unmatched form factor and customer experience, Affordability and broad access to the pharmacy channel and notably strong real world clinical outcomes. Omnipod 5 continues to have very broad appeal and is attracting substantial new customer starts across all age groups.

Speaker 2

In Q2, the mix of Omnipod new customers coming from multiple daily injections and legacy tubed pumps Was an estimated 70 five-twenty 5 percentage split compared to our historical eighty-twenty mix. We continue to capture significant tube pump switches, while also growing pump adoption from those coming from MDI, which is what our Omnipod brand of products was specifically designed for. Omnipod 5 adoption isn't the only evidence of considerable impact on the diabetes community. We are also seeing stable retention rates. We also saw a sizable increase in the number of HCPs who wrote scripts for Omnipod V in Q2, 2, which was over 15,000, up from over 11,000 in Q1.

Speaker 2

That is in a market where there are 7,000 to 8,000 endocrinologists. The power of Omnipod 5 is also illustrated by the ongoing feedback we receive across the diabetes community, From potters to their parents and loved ones to HCPs and other caregivers. We recently heard from a potter who said, Since switching to Omnipod V, I have never looked back. And an endo at a very large clinic recently informed us But he has changed how he communicates with his Type 1 patients. He now strongly recommends AID therapy for all and in the clear majority of cases, They choose Omnipod 5.

Speaker 2

Our success building awareness of and access to Omnipod is Core to our strategy and ability to continue to lead in the Type 1 and Type 2 markets, both of which remain vastly underpenetrated. The market opportunity is massive. Excitingly, we see Omnipod 5 already contributing to overall pump adoption in the U. S, Reinforcing our confidence that Omnipod will drive pump penetration to well over 70% in the Type 1 market alone from the approximate 40% where it is today. The U.

Speaker 2

S. Pharmacy channel also remains a key driver of our success expanding access to Omnipod in the United States. The pharmacy channel simplifies the overall experience for patients and provides more affordable, convenient and efficient access. The vast majority of our U. S.

Speaker 2

Customers continue to pay less than $50 a month through the pharmacy channel, putting it on par with the customer cost for MDI. And we continue to hear from our customers how convenient it is to get their pod through this channel. We are capturing the market opportunity and improving the lives of our customers through through not only our advanced technology and clinical outcomes, but also our products convenience and simplicity. This quarter, we significantly advanced our clinical initiatives. We had fantastic representation at ADA, including standing room only at our product theater and a record number of leads at our booth.

Speaker 2

We presented Omnipod V real world evidence Demonstrating improved outcomes for children, adolescents and adults with Type 1 diabetes and for the first time, Omnipod V real world data for adults with Type 2. The combined real world data included 60,000 individuals across all age groups. Every day, we are building real world evidence that undoubtedly demonstrates that our advanced algorithm and overall system is working exactly as it was designed and improving customers' lives. Our real world data will be incredibly powerful over time since every Omnipod five user is cloud connected. We can continue to personalize and improve the overall customer experience, while also streamlining physician workflows.

Speaker 2

We will have unprecedented insight into actual population level usage patterns, which will allow us to constantly improve our offerings And to build on our already market leading product differentiation, every day we are building usage data from our rapidly growing Omnipod five customer base And we will be able to use this private secured de identified data to constantly improve the customer care experience from diagnosis all the way through the course of their lives. We'll be able to learn from usage patterns, increasingly segment our offerings and drive coaching engines. To put it simply, The better we make the customer experience and streamline workflows, the more we'll have product preference, the more data we'll have And it will effectively be a data flywheel that builds on itself. This is where we will continue to lead. Nobody else in diabetes therapy can create evidence from data that For a trial using Omnipod 5 with the Freestyle Libre 2 CGM, which will include up to 200 participants with Type 1 diabetes Across 18 institutions in the UK, France and Belgium.

Speaker 2

It will be a 13 week randomized controlled trial, including those currently on MDI with the Although not needed from a regulatory perspective, We expect the data from this trial to support our pricing and access initiatives. We are excited that our integration with Abbotslibre is far along and has advanced to the point where we will soon place study participants on the integrated system. We also announced our first feasibility study of a next generation AID algorithm, which will take place in New Zealand and for which recruitment began last month. This 11 week study will include up to 72 participants aged 16 years and older with type 1 or type 2 diabetes and is designed to assess safety and effectiveness. Our new algorithm work is informed by our incredibly strong usage data, which allows us to continue to advance our system in even more ways than we had originally envisioned.

Speaker 2

We advanced other major clinical programs during Q2, including our Type 2 pivotal study, for which we expect to complete enrollment by the end of the year. As a reminder, This is a 3 month study of up to 3 50 people, making it the largest Type 2 study we have conducted. The feedback we have received from HCPs and study participants is encouraging. HCPs are impressed with how well participants are doing on Omnipod 5 and the participants have And we are confident Omnipod 5 can have an even greater impact on this underserved population. Lastly, our final participant in France is on track to soon complete our Omnipod V with DexCom's G6 randomized controlled trial.

Speaker 2

Once complete, we will analyze and prepare the data to negotiate access and premium pricing for Omnipod 5 in our international markets. We expect providing this data will be one of many initiatives that will support our Omnipod V international commercial launches, which are now underway. While Omnipod 5 is disrupting diabetes management today and is expected to do so for a long time to come, We know a robust innovation pipeline is necessary to drive sustainable long term growth. We will soon begin our Omnipod Go U. S.

Speaker 2

Limited This will allow us to test the market and expand our reach. This new to market simplified product will grant us access earlier in the Type 2 pathway And addresses critical barriers that can prevent the initiation of insulin therapy, namely fear of needles as well as challenges with dosing accuracy and consistency. Omnipod Go will expand our addressable market by at least 3,000,000 people in the U. S. Alone who require basal only insulin.

Speaker 2

We look forward to the key learnings from our pilot program, which will help inform our full market release in 2024. We are very well positioned in the Type 2 market to grow adoption with Omnipod DASH and soon Omnipod Go, not to mention an expected future Type 2 indication We certainly have a number of competitive advantages in this space, including our differentiated form factor, an affordable pay as you go business model and pharmacy channel access. As a result, we continue to add a substantial number of type 2 patients to our customer base. During Q2, people with type 2 diabetes represented an estimated 20% of our U. S.

Speaker 2

New customer starts Across our Omnipod portfolio of products. Given the tremendous success of Omnipod V, our Type 1 customer base is growing at an incredible rate, far outpacing Type 2. However, on an absolute basis, our Type 2 new customer starts increased sequentially. We achieved another major innovation milestone in June with our 510 submission for the Omnipod five iOS app. The FDA's review is progressing and we look forward to continuing to work with the agency so we can provide the iOS platform option to our expanding Omnipod 5 customer base.

Speaker 2

We are also advancing our integration efforts with both of our CGM partners, allowing us to provide future CGM of choice with Omnipod 5, which we firmly believe is the best AID system on the market. We expect these integrations will be one of many catalysts that fuel our long term growth We continue to expand our intellectual property portfolio, which is a key asset enabling our continued growth. We also actively defend our valuable As you may know, earlier this year, we successfully took legal action against the distribution of Eoflo's In that case, the court determined that Eoflo infringes Insulet's unique technologies and the court quickly issued an injunction prohibiting Eoflo's Subsequently, after further investigation, We filed an additional suit last week in the U. S. Against Eoflo and other affiliated parties to stop the continued misappropriation of our valuable and proprietary trade We not only will enforce our patents when necessary, We also will zealously protect our valuable trade secrets.

Speaker 2

We are confident we have a clear lead both technically and in terms of scalability, And we will not hesitate to vigorously defend our IP when we see followers misappropriating or infringing on it in an attempt to catch up. Moving on to our international operations. We are excited to have commercially launched Omnipod 5 in the UK in June. While it has only been a brief period of time, the market response has been fantastic. Following launch, we saw an almost doubling of our typical customer order rates We quickly started a considerable number of Omnipod 5 users throughout last month alone, including both new customers as well as those already on brand.

Speaker 2

We are thrilled to provide our advanced technology to those who have long been waiting for it. We remain on track to launch Omnipod 5 in Germany this fall, Closer to the beginning of the season with a broader staged international rollout in 2024. By the end of 2024, Our goal is to have Omnipod 5 available for the majority of our European customers. In closing, we've reached the midpoint of 2023 and have incredible momentum in our business. We are delivering strong financial performance And achieving key strategic milestones.

Speaker 2

We've advanced our commercial, innovation and clinical programs and Omnipod V and our entire business Shows no signs of slowing down. We are well positioned to continue to expand access to Omnipod 5 globally and lead the industry in advanced innovation. It's gratifying that others in the industry see our leadership and are attempting to follow our established best in class fully disposable patch form factor. We are investing for sustained leadership and widespread international expansion. We are transforming diabetes I will now turn the call over to Wade.

Speaker 3

Thanks, Jim. We delivered another strong quarter of financial performance and strategic progress and once again delivered record U. S. And global new customer starts. We generated 32% revenue growth in Q2, Finishing above the high end of our guidance range, our outperformance was driven by global Omnipod growth of 33%.

Speaker 3

On a reported basis, for total revenue, foreign currency was a 20 basis point tailwind compared to Q2 of last year. U. S. Omnipod revenue growth was 41%, exceeding our guidance range. Revenue growth continues to be driven by our Annuity based model with consecutive record new customer starts and growing U.

Speaker 3

S. Pharmacy volume. This includes an increasing contribution from Omnipod 5 and a premium for the Omnipod 5 and Omnipod DASH Pods In the U. S. Pharmacy, where we provide the personal diabetes manager at no charge.

Speaker 3

Omnipod V ramp dynamics Resulted in an estimated net headwind of approximately $4,000,000 Similar to last quarter, we benefited from an estimated $16,000,000 net volume benefit associated with new Omnipod 5 customers, in large part Due to existing customer conversions from Omnipod Dash and Classic Omnipod, who received their starter kits and first refill orders in the quarter, as well as some initial stocking in retail pharmacies. This estimate is net of some Omnipod five customers Skipping an order in the period. This benefit was more than offset by a reduction in estimated Channel inventory days on hand of approximately $13,000,000 and another $7,000,000 reduction associated with an increase in actual And expected sales returns for Omnipod Dash and Omnipod Classic as retail pharmacies convert their inventory to Omnipod 5.

Speaker 4

The benefit

Speaker 3

of the pharmacy channel continues to be a competitive advantage and we remain focused on driving increased volume through this channel, which in Q2 represented over 90% of our total U. S. Volume. International Omnipod revenue increased 15%, in line with our expectations. Growth was driven by continued strong adoption of Omnipod DASH in our international markets As well as a combination of items associated with order and revenue recognition timing that contributed approximately 300 basis points of growth.

Speaker 3

On a reported basis, foreign currency was a 50 basis point tailwind over the prior year. Our estimated global attrition and utilization remain consistent. Drug delivery revenue increased 18%, Above the high end of our guidance range due to favorable production fees and timing. Gross margin was 66.8%, Up approximately 320 basis points. Cost of revenue included income of 800,000 due to lower estimated costs associated with the medical device corrections we announced last year.

Speaker 3

Excluding this benefit, gross margin was 66.6%, slightly above our expectations Due to favorable manufacturing costs and higher than expected revenue, including favorable mix. The 320 basis point year over year increase in gross margin was primarily driven by a premium from volume growth in the pharmacy channel, Improved manufacturing efficiencies and a decrease in warranty expense. These were partially offset by higher costs Associated with Omnipod V production, higher expected production costs as U. S. Manufacturing continues to ramp And become a larger portion of our total production as well as inflation.

Speaker 3

Operating expenses were up year over year to support higher than expected revenue and investments in our business To further drive our strong growth trajectory, adjusted operating margin and adjusted EBITDA We're 7.6% and 15.5%, respectively. Both exclude the favorable medical device correction adjustment of of $800,000 and both were above our expectations due to higher than anticipated revenue and gross margin. Turning to cash and liquidity. We ended the quarter with $660,000,000 in cash. In June, we extended our credit facility 4 years and increased our borrowing capacity under the facility to 300,000,000 all of which is currently available.

Speaker 3

This strong financial position gives us the flexibility to invest in our expanding pipeline And other key areas of our organization and build on our foundation for long term sustainable growth. Now turning to our 2023 outlook. For the full year, we are raising our expectation for total Omnipod revenue growth To a range of 25% to 28% and total company revenue growth of 22% to 25%. For U. S.

Speaker 3

Omnipod, we are increasing our revenue growth outlook to 33% to 36%, Driven by continued strong Omnipod 5 adoption coming from both record new customer starts And ongoing conversions from other Omnipod products as well as recurring revenue from Omnipod DASH And the benefits of our pay as you go model in the pharmacy channel. As a reminder, we have a tougher comparison in the second half of the year, Resulting from the Omnipod 5 U. S. Full market release, which started in August of last year. This includes the related 2 script and retail channel stocking volume benefits, which were in large part due to the accelerated pace of customer conversions in the second half of twenty twenty two.

Speaker 3

For international Omnipod, we are raising the low end of our range And now expect 7% to 10% constant currency growth. On a reported basis, We estimate a favorable foreign currency impact of approximately 300 basis points. We expect growth Will be driven by ongoing Omnipod DASH adoption, partially offset by AID competitive headwinds. We are excited to have kicked off our Omnipod 5 international rollout. As a reminder, given the nature of our annuity model, We expect the Omnipod V launches to start inflecting in our growth rate in the second half of twenty twenty four.

Speaker 3

For drug delivery, we are raising the low end of our range and now expect a decline of 50% to 45%, representing a dollar decline similar to what we experienced in 2022. Turning to 2023 gross margin. We continue to expect adjusted gross margin to be in the range of 65% to 66%, consistent with 2022 at the high end. Favorable impacts to gross margin include increasing volume in the U. S.

Speaker 3

Pharmacy channel, Geographical sales mix and improved manufacturing. These drivers are expected to be offset by higher costs Associated with our U. S. Manufacturing ramp, product line mix due to increasing Omnipod V volume and inflation. As we've previously stated, we expect many of these factors to continue to impact our results into 2024.

Speaker 3

However, we expect gradual improvement over the course of the coming years. We still expect gross margin in the second half of the year To be closer to the high end of the range. Given our market leadership position and large unpenetrated market opportunities, We continue to expect operating expenses to rise with investments in our commercial, innovation and clinical efforts And scaling our support functions. We are reaffirming our guide of adjusted operating margin of high single digits and expect it to be closer to the high end of the range. We also expect improvement in the second half of the year over the first half Due to timing of investments and improved second half gross profit, we remain committed to margin expansion and anticipate leveraging our investments in 2024 and beyond.

Speaker 3

We continue to expect capital expenditures to be at a lower level than 2022. Turning to our Q3 2023 revenue guidance. We expect total Omnipod growth of 20% to 23% And total company growth of 18% to 21%. For U. S.

Speaker 3

Omnipod, We expect growth of 27% to 30%. Our growth drivers remain the same. The ongoing adoption of Omnipod 5, including the benefits of the U. S. Pharmacy channel and our continued strong new customer starts as well as the benefits of our annuity model.

Speaker 3

With strong new customer start momentum, we continue to accelerate sequentially and as a result are guiding to strong sequential dollar growth In Q3, for international Omnipod, we expect growth of 2% to 5%, Driven by ongoing Omnipod DASH adoption and a modest contribution from our Omnipod 5 launch, partially offset by increasing AID competitive headwinds. On a reported basis, we estimate a favorable foreign Exchange impact of approximately 800 basis points. Finally, we expect a Q3 drug delivery revenue decline of 30% to 25%. In conclusion, we are delivering solid financial performance, Achieving critical milestones and further positioning Insulet for long term sustainable growth. We're on track to deliver another strong year of revenue growth And new customer starts, while also investing in key areas throughout our global business in order to drive sustainable growth and long term value creation.

Speaker 3

With that operator, please open the call for questions.

Operator

Thank you. Our first question comes from Larry Biegelsen from Wells Fargo. Please go ahead. Your line is open.

Speaker 5

Good afternoon. Thanks for taking the question and congrats on another nice quarter here. So Jim, I heard you say you're seeing no signs of slowing down. But as Wade said, you're going to start lapping some tough comps in the second half of this year. The second half twenty twenty three implied worldwide Omnipod sorry, growth is about 21%.

Speaker 5

So how do you keep the momentum going at Pod? Do you see yourself as a 20% plus grower beyond 2023 and how are you thinking about these GLP-1s? Thank you.

Speaker 2

Thanks, Larry. Thanks for your congrats too and thanks for your question. We're not seeing any kind of pause. The new customer starts for Omnipod 5 and the demand for Omnipod 5 It continues to be terrific. We obviously had record starts in the quarter.

Speaker 2

We see a lot of momentum across all age groups as we said. And so We're very bullish on the growth. I know you're asking me a question to guide beyond 23 because you ask Wade that question, but I'm actually going to throw this to Wade so he can work through the numbers there for the second half.

Speaker 3

Sure. Thanks, Jim. And Larry, you're exactly right. We are almost completing 12 months of Omnipod 5. So it's been incredibly Exciting to see the ramp here over the 1st few quarters.

Speaker 3

And we've got a couple of one time things to account for. If you recall, in the second half of 2022, the first two quarters of Omnipod 5 were benefiting from a significant contribution from 1st customers and converting customers getting 2 scripts in the quarter and we called those out. They're similar to the benefit we got this quarter, dollars 16,000,000 What's different is that we're now seeing some reduction in days on hand inventory as well as some increased return reserves in the pharmacies. So A lot of dynamics playing out in the 1st year as we ramp up Omnipod 5. But as you call out, we've got a really strong guide, 30% For Q3 and implied for Q4 in the U.

Speaker 3

S. At the high end of the range. And so we're really excited about Continuing to grow Omnipod 5 here at these.

Operator

Our next question comes from Robbie Marcus from JPMorgan. Please go ahead. Your line is open.

Speaker 6

Yes, thanks. And I'll add my congratulations As well on a really nice quarter. I hate to waste the question on this, but given the moves in the stocks Today, particularly in diabetes stocks. I thought it would be good, Jim, maybe if you want to just address Your view on, I guess, it would be more relevant to Type 2 diabetes, particularly increased GLP-one use. There was some good cardiovascular data today in obesity.

Speaker 6

Just your views on how GLP-1s may or may not impact The progression to Type 2 diabetes and basal and intensive insulin and Just any impact and help investors frame it to your overall business. Appreciate it. Thanks a lot.

Speaker 2

Sure. Thanks, Ravi. I know it's a question of high interest. So, as we've said before, we think it's terrific to see the pharmaceutical companies continue Innovate with therapies for people with type 2 diabetes. We get up every day to help people with diabetes, people living with type 1 and type 2 diabetes.

Speaker 2

So We think it's terrific that innovation is happening across all fronts. And the GLP-one class of drugs has actually been out for a while, but this latest generation of GLP-1s is clearly having A really big impact and has additional efficacy from the existing class. And so And obviously, their optic may start. So we think all that innovation is really good. Having said that, we're confident it doesn't impact our TAM.

Speaker 2

And just to give you a couple of reasons why. The first one is the global problem with type 2 diabetes is enormous. There are more than 500,000,000 people living with diabetes around the world, and that number continues to grow. Most of them have type 2 diabetes. So it's a massive unmet medical need globally and in the U.

Speaker 2

S. And Massively underserved as a population. So that's the first thing. The second thing is, when you look at our offerings, even in the U. S.

Speaker 2

Alone, there are 2,500,000 people living with In the U. S. TAM, whose condition has progressed to where their relevant target market for us to help them with Omnipod DASH and soon with Omnipod 5. And so we're just scratching the surface of that market penetration in that market is in the low single digits, maybe the mid single digits. And the Omnipod platform has a right to win in that market because of its simplicity and its channel access and etcetera.

Speaker 2

And the other thing I'd point to is that we know that GLP-one class of drugs has long coexisted with insulin. We saw that in our own Type 2 feasibility trial, which we published 2 ATPs ago, a lot of that population that used OmniPOD5 in trial was already also using that was an all commerce study in terms of the population. And many, many of those patients were using GLP-1s and still We benefit from the Omnipod 5 in that trial. So we're very confident that we have a huge market of People who need our help with our Omnipod platform and when we get the label with Omnipod 5. And we don't see the GLP-1s changing our TAM.

Operator

Our next question comes from Margaret Taser from William Blair. Please go ahead. Your line is open.

Speaker 7

Hey, everyone. Thanks for taking the questions or the question. I wanted to go a little bit deeper into guidance On the U. S, I know I appreciate your comments to Larry, but the midpoint of the guide obviously is quite sizable relative And you listed a variety of benefits. But can you give us a rough sense on a percentage basis how meaningful each of those impacts is to the guidance range?

Speaker 7

And then whether you're seeing kind of some more meaningful, I guess, sequential increases in new patient adds that maybe is A typical for a traditional in flight year. Thanks.

Speaker 3

Okay. Margaret, I can start that one off and just give you a little bit more insight to how we think about the guidance. The first part of your question Related to the impact of the guide, depending on high end or low end, the headwind from the tough comp in last year's Omnipod V ramp benefits In Q3, Q4 between a 5% 10% headwind to our guidance range. But really the reason we have confidence And still being at 30% growth at the high end and continuing to grow at these accelerated rates is The result of our durable business model and the annuity factor and so we've had record new customer starts for several quarters, Which gives us momentum into the second half here and we're going to continue to build momentum. The high end of our range assumes we'll continue to See record level new customer starts and given the momentum that we have today, we've got high confidence in doing that.

Speaker 3

So those are really the major factors. As we called out in our prepared remarks, we see stable attrition and utilization. So we're assuming that continues at the high end as well. We don't see any major impact to attrition or utilization. A couple of other things to think about in the second half is we've had a good contribution to the premium moving into the pharmacy channel By converting a lot of our existing customers from the DME channel, we'll still continue to get that benefit.

Speaker 3

That benefit has grown each Quarter as we've moved more and more volume into the pharmacy channel. And again, as we said in our prepared remarks, 90% of our volume is now in the pharmacy channel, so a Significant increase from this time last year. And so that premium is benefiting us here and will continue to benefit us in the second half, but it will be to a lesser extent Because we're starting to reduce the number of converting customers each quarter, and as you recall, we have planned to be through most Of our existing customers converting to Omnipod 5 in the pharmacy channel through the end of this year, we think most Those conversions will be done by the end of 'twenty three and we think that will wane and to a lesser extent be a benefit here in the second half. So those are the major changes when you look at the growth rate. But again, we are a volume business.

Speaker 3

And by far, the largest contributor to our growth rate Is our volume growth, which is based on our customer base growing and we continue to see that growing with new customer starts Throughout the second half of this year again. So strong guide, strong momentum in the business, lots of tailwinds to help us continue here

Operator

Our next question comes from Chris Pasquale from Nephron Research. Please go ahead. Your line is open.

Speaker 8

Thanks. Congrats on the quarter. I want to talk a little bit about the international business and the 5 rollout there. Curious how much Your current international footprint, UK and Germany represents. And I understand the comment about the installed base model and it taking some time to flow through.

Speaker 8

But If we just look at the U. S. Example, the Omnipod five launch led to a pretty immediate growth inflection. So why couldn't we see something earlier Then back half of next year outside the U. S.

Speaker 2

Thanks, Chris. I'll start with that And then maybe Wade will provide some color. So we're really excited about the OmniPie 5 launch in the UK. It's going really well. I'll just Share one story with you.

Speaker 2

There's so much pent up demand for OmniPod 5 across our European markets and all of our markets. And One of the clinics we work really closely with was had so many customers waiting to get on therapy. They actually put up Decorations all over their office and put up a disco glitter ball as they brought people in to get set up on therapy. It was a huge celebration. And as we said in our prepared remarks, our order rate has doubled.

Speaker 2

So it's off to a great start in the UK. We're really excited about Germany. As to the percentages, we haven't broken those out. I don't think you'd find them materially different a lot of medtech markets, but we haven't materially we haven't broken out those specific numbers for the markets. In terms of the growth in the U.

Speaker 2

S. Versus the growth In European markets, every market is a little bit different. One of the reasons, maybe the main reason we had such an effect on anticipated growth with Omni55 All of the customer sources in the U. S. Were at the high end or above the high end of our expectations, and that's because of the pharmacy channel.

Speaker 2

So, in most of the European markets, customers who are on a therapy are locked into a contract. And in the U. S, You're locked into a contract with your 2 pump, you can cross over into a pharmacy benefit. And so that's in the U. S.

Speaker 2

What's allowed us to have so many competitive conversions In our new customer starts, in the European markets, it's a little different everywhere, but it's less flexible for patients who are on a therapy. They have to typically wait for their contract to come up. So therefore, most of our new customer starts are customers who are new to therapy. And we're getting some upgrades from our own products and then we'll be bringing in new customer starts who are converting, but they're converting in that Whatever the angle cycle is, whether it's a 4 year cycle, in some markets it's a 5 year cycle. So when they come available, they're really relevant targets for us to move off of competitive pumps.

Speaker 2

But that just changes. It changes the dynamic of the flow.

Operator

Our next question comes from Jeff Johnson from Baird. Please go ahead. Your line is

Speaker 9

Thank you. Good afternoon, guys. Wade, maybe I think we're all trying to kind of feel you out obviously on U. S. Growth rates for next year and I know you're Guiding to next year, but a couple of the moving pieces that you talked about this quarter, that reduction in channel inventory of $13,000,000 to $7,000,000 in return, How much of that do you think is left to play out to go away as a headwind maybe as we get deeper into this year and heading into next year?

Speaker 9

And then I know you keep calling out every quarter this patient behavior of doubling up and getting maybe 4 months of Inventory in a 3 month period when you first start 2005, but that behavior has stayed pretty consistent now for the better part of a year. So it doesn't seem like there's a whole lot Change going on there. So to me, it almost feels like this net kind of neutralizing of those two factors should drop away On the headwind side and maybe you keep a little bit of that tailwind. So I guess my point on all that is you seem to be guiding to about 25% growth in the U. S.

Speaker 9

Omnipod business for the back half of this year, obviously, a very strong number against that low to mid 40% comp. Is that crazy to think that could be a starting off point on how we think of next year as you get the tough comps, you maybe get a little bit less Of that premium upgrade from DME to Pharmacy, but you also get a little drop off of those headwinds that I was talking about. Thank you.

Speaker 3

Hey, Jeff. Happy to talk about guidance a little bit more here and certainly a lot of dynamics moving and you've called out Several of them. So why don't we just touch on them, each of them again and make sure it's clear. So as we think about the days inventory on hand, And I'm glad you brought that one up because it is something that we obviously don't have control over the distribution channel And we are seeing the pharmacy channel be more efficient. And so maybe just to summarize what we've seen to date With Omnipod V, in Q2 of last year, we saw $7,000,000 inventory build and so it was a bit of a headwind for us this quarter.

Speaker 3

And then we saw really stable inventory days. We've estimated pretty stable inventory days up until last quarter when we saw a reduction in days inventory on hand and we thought that that was pretty settled out at that But then we again saw days inventory on hand, a few days reduction again this quarter. So we're curious to see if this is where The pharmacy distribution channel settles out or if they're down a couple of days and we'll see that come back. But we don't factor that into our guidance Going forward because we can't predict it. So, days inventory in hand from here, we don't know.

Speaker 3

However, we do see it trending A few days lower than we have seen over the past several quarters. And so there is potential that we could see some of that come back. You mentioned the 2 scripts. Again, this was another dynamic that we were curious to see how it would play out. As you said, on the Growth side of it or the total benefit side of it, we have seen a pretty consistent benefit.

Speaker 3

But remember, Over half of that benefit has been the result of converting Omnipod customers from Dash and our classic Omnipod onto Omnipod 5. And that is starting to ramp down here in the second half and we're expecting to be through most of that in 2023. So interesting enough, the last two quarters that benefit has been more than offset by the day's inventory in hand reductions as well as some Our increase to our returns reserve. And so we haven't really seen it as a total net benefit because those dynamics all basically wash each other out. So to your point, if we don't see any more increases in return reserves and we don't expect that we will and we Don't see any changes to days inventory on hand.

Speaker 3

We would assume we'll continue to see a 2 script benefit moving forward, but to a much Lesser extent as we move into 2024. So all those things together, Jeff, we still think that the Largest part of our growth by far is going to be the new customer start metric. And at consistent attrition and utilization rates, It really is a volume business and that's what we would highlight for you and the others here is really focus on those new customer starts, the growing customer base And how we accelerate volume from here, and that's what gives us confidence to be even with these pretty strong Tough comps in the second half to be guiding at 30% at the high end of our range.

Operator

Our next question comes from Jayson Bedford from Raymond James. Please go ahead. Your line is open.

Speaker 10

This is Glenn Schell on for Jason. And I just had a quick question with regard to moving the Omnipod classic users To Omnipod 5, where are we in that conversion? And are you seeing higher attrition from the Omnipod Classic as it's discontinued?

Speaker 3

Yes. Hi, Glenn. Thanks, Glenn.

Speaker 4

Go ahead.

Speaker 2

No, no, you go.

Speaker 3

Okay, sure. Happy to start this one, Glenn. So we are through most of the Omnipod Classic exchange to either DASH or Omnipod 5 In the U. S, and so we have announced in the U. S.

Speaker 3

That our plan is to move our customers and discontinue the product in the U. S. Having said that, we're going to wait and see where we're at by the end of the year to make a final determination there. Obviously, we're going to take care of all of our Omnipotters, Our customers that have been with us for some time, but they've got great options to move to DASH and Omniglot 5. Given the coverage levels that we have in the pharmacy channel now for both DASH and Omnipod 5, it is a lot easier For our former Omnipod Classic customers to move on to DASH, and so we are not seeing a higher attrition rate.

Speaker 3

In fact, Our early estimates show us that our converting customers are staying with the product and really either classic to DASH or classic In both cases, we've seen that at accelerated rates and the attrition has been really strong.

Operator

Our next question comes from Travis Steed from Bank of America. Please go ahead. Your line is open.

Speaker 4

Hey, thanks for taking the question. A quick clarification, Wade. When I put up all the numbers that you gave in the adjustments, I got to like 48% U. S. Growth.

Speaker 4

Just wanted to clarify that number to make sure that was right, once I accounted for all the adjustments. And then on the Q4 guide, it looks like if you look at the Q4 implied guide, you're somewhere around 20% U. S. Growth. Is that the right way to think about the starting point For 2024 and next year, as you think about lapping some of the tougher comps.

Speaker 4

Thanks a lot.

Speaker 3

Hey, Travis. I wasn't quite tracking with you on which quarter for the 48%, but you may be thinking about the net headwind of $4,000,000 which just adds a couple of percentage basis points on a normalized basis to this quarter. So it does benefit I think that's the direction you're heading is we do get a benefit because of that net headwind this quarter. And I guess if you're adding in the tough comp For the second half, that also benefits us. But maybe what I would focus on out of your question was just the implied guide for Q4.

Speaker 3

So of course, We don't guide to Q4 at this point. We just do Q3 and Q4. But in that implied guide, you should be near 30% At the high end of the range and that's our expectation is that given the strong momentum in the business here, we have 30% at the high end of the range for Q3 and close to 30% in the range for the implied Q4 as well. Thanks, Travis.

Operator

Our next question comes from Joanne Wuensch from Citigroup. Please go ahead. Your line is open.

Speaker 11

Good evening and thank you for taking the questions. I'm a little bit curious about the timing of the iOS application, the integration with G7 and the integration with L2. And what you think once those next steps come along, you think the benefit may be for the franchise? Thank you.

Speaker 2

Thanks, Joanne. We're really excited about all three of those programs. And as you know, as we said in the prepared remarks and we said at ADA, the Ios App is filed with the FDA. And so we're waiting clearance there and then we'll be prepping for launch as soon as we can, as soon as we practically can. So Really excited about that, very requested feature.

Speaker 2

It's interesting and on that one specifically, there are a lot of customers And so when I talk to physicians out when I'm out in the field, There's a lot of patients who are carrying their controller and their phone. They just they want to not have to carry both. And so that's a big requested feature. Having said that, I'm sure there's some people who are waiting for iOS to come on to Omnipod 5. So it's hard for us to estimate what that is, but we do think That'll give us a boost and it'll certainly be a big customer satisfier for us and certainly help us to continue with such Great retention rates and customer experience.

Speaker 2

So we're really bullish on that. With the 2 with G7 and with the Freestyle, with our 2 partners Avid and And Freestyle family of sensors, obviously, we're working hard working really well with both of them, great collaboration with both of them. We want to get on we want to get the sensor of choice Just as quickly as we can and the programs are proceeding really, really well. As you know, we don't forecast timings or talk about that I'll talk about timings for those things, but it's obvious we have to be fairly far along with FreeStyle Libre 2 to be embarking on that study we're doing in the UK. We're very bullish on that, but the partnership with both of them does really well and we're working hard to get those to market as quickly as we can.

Speaker 2

And we think that both of them provide a boost for us. Obviously, when you think about G7, it's off to a very quick launch and is a good really good customer experience. And when you think about The Freestyle Libre family of sensors is very, very well positioned, particularly in other geographies. And so we think they provide Sustained growth for us and they provide a great customer experience for us to be able to provide that kind of choice as quickly as we can to our customers.

Operator

Our next question comes from Steve Lichtman from Oppenheimer. Please go ahead. Your line is open.

Speaker 12

Thank you. Good evening, everyone. On the HCP prescriber increase, I thought the sequential increase was notable. Can you talk about what you're seeing that's driving that prescriber expansion? Is it use of Omnipod 5 in type 2 even before formal labeling there?

Speaker 12

And are you calling on these HCPs or is this sort of more organic? Thanks.

Speaker 2

Thanks, Steve. Yes, we're really heartened to see that. I think that there are a number of things driving it. The first one is, OmniPie 5 is just so accessible As a product and as an experience, and we're seeing increasing confidence with the writing of prescriptions for OmniPhyPhy across the whole range of HCPs. So you'll see Endocrinologists and physicians writing those scripts, you'll see nurse practitioners, physician extenders, physician assistants writing those scripts.

Speaker 2

So it's Very broad and it's because of the ease of use of Omnipod 5, it's an easy thing to write for. And that's what we're seeing in the expansion Of our prescribing population. And I'll tell you, the interest is really robust, all across the board. And so just as an example, Our team was just down in Houston over the weekend at the ADCES conference and which is the conference for diabetes educators and We just had phenomenal interest in the product platforms and in Omnipod 5. All of our workshops and showcases were sort of standing room The attendance beyond what was like better the bigger than the room space kind of Attendance and that just demonstrates the broad reach and the ease of use of the Omnipod five product, which is of course a huge advantage for us because the pod platform, the pod experience So easy compared to our 2 pump competitors and that's why we're seeing the expansion of prescribers in the market.

Speaker 3

Jim, I can pick up on the Type 2 part of Steve's question as well. As you saw in our reported results here, Type 2 making up 20% of our new customer starts and that's a tick up from what we've seen in the last three quarters. We've been running in that 15% to 20%. And so with a record new customer start quarter, we are still seeing good new customer That is partially driven by DASH. But as you said, HCPs are writing for Type 2.

Speaker 3

We cannot market for Type 2 yet. As you know, we do not have the label. And so we don't condone it by any means. And our team is working incredibly hard, as Jim touched on in his prepared remarks to get our Type 2 pivotal trial for Omnipod V completed And submit that to the FDA so that we can get on label and start to market Type 2 for or Omnipod V for Type 2 patients. And so It is certainly core to our strategy and a lot of people with diabetes with type 2 that we would like to bring Omnipod five to and we're certainly working as hard as we can to do that.

Operator

Our next question comes from Josh Jennings from TD Cowen. Please go ahead. Your line is open.

Speaker 13

Hi, good afternoon. Thanks for taking the questions. I wanted to just ask about segment of the new patient starts and just on Competitive pump conversions, do you have any data on those conversions being end of warranty conversions versus middle of warranty conversions And how that's trending? And then potentially, just how are you thinking about a direct to consumer campaign for Promnipod 5? Any historic successes with DTCs in the past as a reference would be helpful too.

Speaker 13

Thanks a lot.

Speaker 3

Sure. Hi, Josh. I can start that one on the new customer start question and then pass it to Jim for an update on our DTC or direct to consumer Strategy, so we continue to see strong competitive conversions, although the mix has changed in our reported numbers Somewhat. The total number of competitive conversions continues to be strong and certainly elevated above The levels that we saw before Omnipod 5, and so we don't break out the specific numbers for you there About like we don't actually track from them whether they're in warranty or not in warranty. That's just not part of our Data set.

Speaker 3

We just know customers that tell us if they're converting from a competitive pump or not. So we don't have that insight for you, Josh, even to give any color on in warranty or out of warranty. We make estimates, but it'd be too much of a stretch To try to quantify that. And then Jim, maybe a little bit on our DTC strategy.

Speaker 2

Yes. Thanks for the question, Josh. DTC is a very And we're really confident that we have a strong return on investment in our DTC program. One thing that I'll just flag is DCC doesn't just mean TV for us, right? We have a very robust mix of the way we reach out to customers and consumers and That includes social and includes what's called over the top or streaming media and it will include more broadcast TV and it includes Influencers, we have a really active campaign with influencers and so on.

Speaker 2

And we have a really good sense of which levers to pull and so on. And I'm very confident in what our team is able to produce and we're getting really good at dialing it up and down, based upon the results. And so, you'll continue to see us Doing DTC campaigns, you might periodically see us ramp up on TV, as we feel like we need to, but we have a very broad mix and a very, Very effective approach to it.

Operator

Our next question comes from Matthew O'Brien from Piper Sandler. Please go ahead. Your line is open.

Speaker 14

Thanks for taking that question. I know we're getting a little late here. Just Wade or Jim, just as you talk about The key growth drivers for the business being on the volume side. If I think back, I think it was 3 or 4 quarters ago, sixty-forty was the split between MDI and Conversions and then seventy-thirty, I think last quarter, now seventy five-twenty five. So what I'm asking for, and I know the denominator is getting a lot bigger, but Are you seeing any kind of slowdown in your ability to convert competitive, pumpers right now?

Speaker 14

I don't know if it's because of Medtronic being in the market or something like that. And then It seems like the enthusiasm for 405 from the MDI patient population is as strong, if not Stronger than this time last year when we first launched it. Is that fair? Just maybe talk about the trajectory of those 2 groups of patients? Thanks.

Speaker 2

Thanks, Matt. We're not seeing any kind of pause in the enthusiasm for Omnipod V and we continue to garner a lot of competitive conversions from both of to bump competitors. And so the patient demand is really strong, physician demand is really strong and it's across all age groups really interestingly. And so, yes, no pause, great positioning. And I've already forgotten the second half of your question.

Speaker 2

Can you repeat the second half of your question for me? Yes, I

Speaker 3

think it was just go ahead, Matt. Sorry.

Speaker 14

The enthusiasm around 2005 with an MDI, is it even stronger?

Speaker 2

With an MDI, yes. Yes, that's if anything, the enthusiasm is even stronger. We're seeing record new customer starts. We're seeing The percentage mix is changing more because of MDI NCS on the top, right? And so I think we're just so well positioned and we're not It's the momentum for the business is terrific and Omnipod 5 is just very, very broadly adopted and accepted.

Speaker 2

I'll give you an example. I was just out in the field Last week, and I was in a pediatric clinic, sitting with a physician who's Been writing for us and for one of our main competitors for a long time. And she said to me, listen, Omnipod 5 is so good. But at this point, I'm not writing really for your competitive pump unless somebody specifically asked for it. And not just that, but everybody I've converted from the competitor pump on the Omnipod 5 just does better.

Speaker 2

And I started to probe around why and the details here. So they just do better. They just have better outcomes. They have a better experience. And so I think that's A really good sign for us in terms of how the learning curve of the market here at year end, I think the market has learned a lot about Omnipod 5, How easy it is to use, what kind of great real world outcomes this is driving.

Speaker 2

And we just see a ton of momentum across age groups and across all sources of customers, including MDI.

Operator

Our next question comes from Danielle Antalffy from UBS. Please go ahead. Your line is open.

Speaker 15

Hey, good afternoon, everyone. Thanks so much for taking the question. Congrats on continuing to deliver really strong results here. Lee, this question I think is for you and it's again, appreciating you're not giving guidance for 2024, but just qualitatively Looking at the different potential tailwinds that could offset some of the headwinds from a comp perspective and the benefit from the 2 script for every new patients added in 2023. And just want to make sure we are thinking about these offsets correctly.

Speaker 15

So thinking, Appreciating not giving time, but L2, G7 integration will come, you have to go, like maybe walk us through qualitatively

Speaker 3

Yes, it's a great way to look at it, Danielle. And I think you're right. The tailwinds vastly outweigh the headwinds for next year. As we think about the business where we sit today, after halfway through 2023, we've had really strong new customer starts for several quarters. So that gives us great momentum into the second half.

Speaker 3

I think the answer to your question will lie in the second half. If we continue to see strong new customer starts, Record new customer starts in the second half of this year. That will give us great momentum into next year. And then as you teed up there, we have A significant pipeline of new innovations teed up. We haven't given the timing on those, whether there'll be 'twenty three or 'twenty four, even beyond yet.

Speaker 3

But as those new innovations start to layer in and of course with our annuity model, they don't have an immediate sizable increase, but they do Start to help us accrue more customers over time. And so we're going to continue to build momentum. On the other side of the coin, obviously, AID competition is really strong for us outside the U. S. On the international side.

Speaker 3

And so What we provided an update in our prepared remarks today is that as a result of lower new customer starts than we usually Had internationally, we've got lower growth rates to contend with there for the next four quarters, so that you can see our guide for the second half for international And that will continue into the first half of twenty twenty four. But given Omnipod V launching internationally and we're going to add more countries next year, We expect the second half to start to inflect internationally. And so now we've moved into the mid to low single digits. We think the second half of next This year should be approaching that high single digits, low double digits type of range. And so again, we're not providing specific guidance, But that gives you a feel for what we think is really strong momentum for the U.

Speaker 3

S. And improving positioning as we'll be able compete in the AID side of the market internationally better at the end of this year and into next year. And then as that builds into the annuity model, We'll see an inflecting growth rate in the second half of twenty twenty four internationally. So with all that in, again, it's such a dynamic Launch here, we know it's going to be strong. We just don't know how strong.

Speaker 3

And so we can't provide numbers at this point. We'll typically give some color At the end of the Q3 call on what we're seeing going into 2024, then we'll provide our guidance like we do every year For 2024 at the end of the Q4 call.

Operator

Our next question comes from Matt Taylor from Jefferies. Please go ahead. Your line is open.

Speaker 2

Good afternoon. This is Mike Sarcone on for Matt. Thanks for taking the question. Just had a question on Omnipod Go. Can you just talk about what's left to do commercially ahead of the full market release in 2024?

Speaker 2

And maybe comment on how you're thinking about Financial contribution next year? Thank you. Sure. I'll start on the pilot plan and then I'll let Wade talk about financial contribution. So we're really bullish on getting that market out in the hands of our pilot physicians and clinics.

Speaker 2

And the great thing about Go is that it solves a lot of problems for people who are initiating insulin therapy. As we said before, it resolves the needle phobia, It resolves dosing and so on, but it's new to world and it's new for us and it's new for those clinics because some of those clinics are places where we don't necessarily have a very strong Callpoint footprint. And so what we need to

Speaker 14

do is get it out

Speaker 2

in the clinics. We'll need to go out and educate the clinics on the use of Go, which is incredibly simple experience. And we need to kind of test the waters with a couple of things about the dosing SKUs and some other things. So we need to see it in the real world, in the hands of the clinics, in the hands of our reps And make sure we just have we have the approach to the selling pitch correct, make sure we understand how to support the clinics that we're going into and so on. And we're giving ourselves time because it's a new world offer, and it's a new there's some things about it that are kind of new commercial model for us.

Speaker 2

And so that's why we're saying We're going to pilot it here in the near term. We're going to learn what we learn, give ourselves some time to adjust and then commercialize in 2024. And Wade, if you want to talk about

Speaker 3

We have many financial scenarios internally. But as Jim just said, we're going to take our time. We want to do this right. It's a new to world product. And so It's really difficult to know how fast Omnipod Go will ramp.

Speaker 3

We've obviously got the limited market release, as Jim said, this year. We're going to learn a lot there, and that's going to help us Start to dial in our models for 2024. But I think at this point, I would stay really Thinking about Omnipod Go as a light contributor to our 2024 growth rates, and let's just Give it some time to see how fast it does ramp. And when it starts to become a material contributor, that's when we certainly will start To layer it into our guidance and we'll talk about more of it from a financial contribution standpoint. But until then, just given the new to world concept, we're Not going to be communicating financial numbers forward at this time.

Operator

And we have time for one last question. It will come from Matt Miksic from Barclays, please go ahead. Your line is open.

Speaker 16

Hey, thanks so much for squeezing me in here. Just one Maybe to follow-up on that on the Omnipod question, that's just maybe as you build inventories, Is that something that we're expect to show up in any of your sort of days inventory numbers, You're understanding that it's a pilot launch, but you, I'm sure, want to be prepared for demand where it to pick up. And I'll just leave it at that last follow-up, but thanks so much for squeezing me in.

Speaker 3

You bet, Matt. It's Wade. I can certainly take that one. And it is something that our teams are working through today. And in fact, we're going to learn a lot through this limited market release.

Speaker 3

1 of the Key things or key learnings that we're working on is what is the optimal staging or building of inventory in the channel To support the Go launches and but I think just qualitatively, you're right. Just like with Omnipod 5, we're going to have Enough inventory in the channel to serve the customers. And so like we saw in Q2 last year, When we did the limited market release for OmniPod 5, we called out a day's inventory on hand build for OmniPod 5. Assuming the same plays out

Speaker 14

For Omnipod Go, we'll let you guys know if there's a

Speaker 3

material amount of inventory that has to go into the channel to launch with Omnipod Go. But nonetheless, it's an exciting program. The teams internally are really excited to see how the limited market releases go. We're going to learn a lot. There's certainly a very large market, an underserved market that needs better technology.

Speaker 3

We are the natural owner. We've got many benefits with Omnipod and our auto injection as well as our fluid mechanics. And I think the teams have done a really nice job of Simplifying the Omnipod for this group of customers. And so we'll see how the limited market releases go. We'll have probably a lot more

Operator

I'm showing no further questions at this time. I would like to turn the conference back to Jim Hollingshead.

Speaker 2

Thanks everyone for joining us today. We are incredibly proud of the milestones we've achieved and the progress we've made. Thanks to our disruptive offerings and dedicated team. We're further along than our original expectations in setting our sights higher than ever before. Insulet has come a long way and we are energized by the enormous market opportunity we're pursuing and the opportunity to drive rapid growth And substantial value for Insulet shareholders, while fulfilling our mission to improve the lives of people with diabetes around the world.

Speaker 2

We look forward to continuing to update you on our progress over the year and next quarter. Thank you all for joining and have a great evening.

Operator

Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day. You may all disconnect.

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Insulet Q2 2023
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