Tandem Diabetes Care
TNDM
recently formed a definitive agreement to acquire a Swiss insulin pump developer, AMF Medical. The latter has its proprietary Sigi Patch Pump, which is yet to be commercially available.
According to Tandem, the acquisition aligns with its motto to drive growth through innovation in the field of insulin pump therapy globally.
More into the News
This Sigi patch pump claims to reduce the burden of managing diabetes through its pre-filled insulin cartridges and compatibility with automated insulin delivery technology.
After being incorporated into Tandem’s portfolio, it is expected to boost Tandem’s type 1 and type 2 addressable market opportunities. This insulin delivery solution accelerates time-to-market for a patch pump in Tandem’s portfolio of technology offerings.
It will also help Tandem advance with its sustainability objectives by offering an additional pump that minimizes electronic and battery waste generation.
Financial Terms
Per the company’s announcement, a previous strategic investment of Swiss Francs (CHF) 8.0 million was paid in the third quarter of 2022. In addition, a cash payment of CHF 62.4 million is due at closing. In addition, an additional contingent earnout payment of up to CHF 129.6 million, in aggregate, is payable upon the achievement of certain milestones. These include the completion of key development milestones as well as obtaining FDA’s regulatory clearance of an automated controller enabled (ACE) pump.
The transaction is expected to close in January 2023.
Industry Prospects
Going by a Fortune Business Insights
report
, the global Insulin Pump Market is projected to grow to $13.17 billion by 2029, at a CAGR of 16.3% in the forecast period of 2022-2029.
Looking at this enormous prospect of this space, we believe Tandem’s latest investment in AMF Medical is well-timed and strategic.
Strategic Portfolio Expansion
Tandem constantly undertakes innovation and develops products to cater to consumers’ and clinical needs. Currently, products under development include delivery device solutions to address the varying needs of type 1 and type 2 diabetes patients, the Tandem Mobi, and the t:slimX3 platform.
Image Source: Zacks Investment Research
Earlier in 2022, Tandem gained FDA clearance for the t:connect mobile app — the first-ever smartphone application capable of initiating insulin delivery on both iOS and Android operating systems.
Another notable product under development is the Mobi, a novel miniaturized durable pump. The Mobi is intended to be fully controlled through a mobile app on a personal smartphone, with the t:connect being at the foundation of its mobile control functionality.
The Control-IQ technology is currently available across all the geographies where the company operates. Tandem Diabetes noted that the real-world experiences for the Control-IQ technology continue to be overwhelmingly positive.
Share Price Performance
Tandem Diabetes has been underperforming the
industry
for the past year. The stock has lost 71.7% compared with the industry’s 26.2% fall.
Zacks Rank and Key Picks
Currently, Tandem carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader medical space that investors can consider are
ShockWave Medical, Inc.
SWAV
,
Orthofix Medical Inc.
OFIX
and
Merit Medical System
MMSI
.
ShockWave Medical, sporting a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 33.1% for 2023. The company’s earnings surpassed estimates in all the trailing four quarters, the average beat being 180.1%.
ShockWave Medical has outperformed its industry in the past year. SWAV has gained 35% against the industry’s 32.6% fall in the past year. Orthofix Medical currently carrying a Zacks Rank #1 (Strong Buy), reported third-quarter 2022 adjusted EPS of 13 cents, which beat the Zacks Consensus Estimate by stupendous 550%. Revenues of $114 million outpaced the consensus mark by 2.7%.
Orthofix Medical has an estimated next-year growth rate of 58.97%. MMSI’s earnings surpassed estimates in the trailing three quarters and missed in one, the average being 129.1%. You can see
the complete list of today’s Zacks #1 Rank stocks here.
Merit Medical, currently carrying a Zacks Rank of 2, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.
Special Report: The Top 5 IPOs for Your Portfolio
Today, you have a chance to get in on the ground floor of one of the best investment opportunities of the year. As the world continues to benefit from an ever-evolving internet, a handful of innovative tech companies are on the brink of reaping immense rewards – and you can put yourself in a position to cash in. One is set to disrupt the online communication industry. Brilliantly designed for creating online communities, this stock is poised to explode when made public. With the strength of our economy and record amounts of cash flooding into IPOs, you don’t want to miss this opportunity.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
