Goldman Sachs analyst David Roman has begun coverage of Beta Bionics (BBNX, Financial), assigning it a Neutral rating with a price target of $16. This evaluation is part of a larger review of the Diabetes Medical Technology sector. According to the analyst, the diabetes technology field is set to continue experiencing strong growth rates, and Beta Bionics is particularly well-positioned within a certain segment of the Type 1 diabetes market.
Though Beta Bionics is expected to outpace its Diabetes and SMID cap MedTech peers in the short term, existing market estimates already account for this potential. The company's valuation reflects both the anticipated growth levels and the future need to secure additional funding to reach cash flow breakeven.
BBNX Key Business Developments
Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Beta Bionics Inc (BBNX, Financial) reported a 36% year-over-year growth in net sales, reaching $17.6 million for Q1 2025.
- The company saw a 48% increase in new patient starts, with 3,853 new patients adopting the islet in Q1.
- The pharmacy channel adoption exceeded expectations, with over 20% of new patient starts reimbursed through this channel.
- Beta Bionics Inc (BBNX) increased its 2025 annual revenue guidance to $82-$87 million, up from $80-$85 million.
- The company is making significant progress in its innovation pipeline, including a patch pump and a bi-hormonal pump, with a target commercialization by the end of 2027.
Negative Points
- Gross margin decreased to 50.9% from 55.7% in Q1 2024, primarily due to the increased pharmacy channel mix.
- Operating expenses rose by 66% to $27.6 million, driven by the expansion of the field sales team and costs related to operating as a public company.
- The pay-as-you-go pharmacy model results in lower short-term revenue compared to the DME channel.
- There is a potential $1 million revenue headwind in 2025 due to the increased pharmacy channel mix.
- The company faces seasonal headwinds in new patient starts, which typically decline in Q1 as patients' deductibles reset.
