Insulet Corp

Insulet is a medical device company with a near-monopoly in insulin patch pumps through its Omnipod platform. Despite Q2 revenue and earnings exceeding expectations, shares declined after Insulet lowered 2026 US Omnipod revenue growth guidance due to weaker-than-expected 90-day retention among Type 2 diabetes users. Importantly, demand remained strong, with Type 2 patients representing over 40% of US new customer starts, and management expects retention to improve following its patient support program rollout. We believe Insulet’s patch pump leadership, strong demand and substantial opportunity in Type 2 diabetes support attractive long-term growth.

Insulet is the market leader in insulin pumps and offers the only tubeless automated insulin delivery system on the market. The company continues to benefit from strong patient adoption, expanding penetration in the type 2 diabetes market and the advantages of its pharmacy-based distribution model. However, we exited the position as increasing competition in the insulin pump market has reduced visibility into the company’s medium-term growth and market share outlook. While we continue to view Insulet as a high-quality franchise, we believe the growing competitive landscape introduces greater uncertainty around the durability of the profit cycle and chose to redeploy capital into higher conviction opportunities.

Insulet Corporation is a leader in medical technology, primarily known for its Omnipod Insulin Management System. Despite facing manufacturing and legal challenges, the underlying business is performing exceptionally well, as evidenced by a Q1 2026 revenue of $761.7 million, up 33.9%, and management raising their full-year revenue guidance to 21% - 23% growth. Insulet is aggressively targeting the Type 2 basal-only market, where the simplicity of a 'patch' has much higher adoption potential. Their technology is adaptable for delivering non-insulin drugs, which positions them well in the growing trend of subcutaneous drug delivery.

Insulet Corp (PODD) experienced two voluntary recalls totaling 7 million units in the period due to a small tear in the tubing of its insulin pumps. This fed competitive worries as more tubeless alternatives are expected to hit the market over the next 18 months. The recalls have raised concerns about the company's product reliability and its ability to compete effectively in a market that is evolving with new technologies.

Insulet, the maker of insulin patch pumps, also detracted amid broad medtech weakness, minor product quality issues and rising concerns around potential future competition.

Insulet Corporation (NASDAQ: PODD) is a leader in medical technology, primarily known for its Omnipod Insulin Management System. The company is strategically pivoting to target the Type 2 basal-only market, where the simplicity of a 'patch' has much higher adoption potential than complex tubed pumps. By 2027-2028, they aim to launch Omnipod 6, featuring further miniaturization and enhanced 'no-input' AI algorithms. Insulet operates on a 'razor-and-blade' business model, driving consistent revenue through the recurring sale of disposable pods, making it a pivotal player in the shift toward simplified, automated diabetes care.

Shares of Insulet (PODD) fell approximately 25% in the quarter despite continued acceleration in revenue growth and profitability. Investor concern shifted toward emerging competition and the potential for pricing pressure. This suggests that while the company is growing, external factors may be impacting its stock performance negatively, leading to a cautious outlook.

We added Insulet, the sole manufacturer of tubeless insulin pumps to treat diabetes. We believe Insulet is years ahead of its competitors, and its addressable market could increase significantly if the company successfully expands from Type 1 to Type 2 diabetics. Insulet has durable competitive advantages from its intellectual property and proprietary production processes, positioning it well for future growth.

Insulet was a relative contributor in the quarter, showcasing its strong performance amidst a challenging healthcare sector. The manager believes that commercial stage companies with marketed products, like Insulet, have strong growth prospects. This positive outlook is further supported by the avoidance of benchmark holding Sarepta, which faced significant safety concerns, highlighting Insulet's stability in comparison. The addition of Insulet to the portfolio reflects confidence in its potential for continued growth.

We added exposure in Insulet Corp. (PODD) by participating in its inaugural senior unsecured bond deal used to refinance part of its 2026 convertible notes. This marked a meaningful evolution in PODD’s capital structure—from a growth-phase mix of converts and loans to something more befitting its scale and cash flow profile. We see it as a high-BB credit, anchored by a market leadership position in insulin delivery, strong free cash flow, and modest, declining leverage near 2.5x. Price talk came in at 7%, roughly 50 basis points wide of comparable high-quality healthcare credits. That kind of mispricing doesn’t just offer near-term yield. It sets up longer-term potential upside as our upgrade thesis plays out.