Tandem Diabetes: ADA Presentations Reaffirm Control-IQ Excellent Performance

About: Tandem Diabetes Care, Inc. (TNDM)
by: Leonard Yaffe

I attended the ADA this weekend, including a Sunday afternoon session that had clinicians presenting data on Control-IQ in adults and children.

Both trial results demonstrated impressive glucose control, time in range, closed loop use and, importantly, user satisfaction.

The introduction of t:slim X2 with Control IQ should put Tandem in the technological lead regarding insulin pumps.  Both Medtronic and Tandem have advanced the glucose control of diabetic patients.

Importantly, I do not expect Medtronic's next system, the 780G, to be available in the U.S. market before 2021. This should give Tandem time to establish Control-IQ, slated for a Q4 2019 introduction.

Data presented by two studies, one NIH funded and one performed in France, supported the safety and efficacy of the Tandem (TNDM) t:slim X2 with Control-IQ. In a 6 month study in adults, when compared with sensor-augmented pump therapy, Control-IQ demonstrated better time in target range, lower HbA1c levels, lower mean glucose levels and decreased incidence of both hypoglycemia and hyperglycemia. Impressively, 100% of participants completed the trial and were actively using the system at the end of 6 months. Participants using Control-IQ expressed a high degree of satisfaction with respect to ease of use, trust, and desire to continue on this therapy. In the French study, which included 30 patients between ages 6-12, data after 12 weeks showed tight glucose control, 97% of the time in closed loop and reduced mean glucose. It was also noted that any advanced hybrid closed loop system must be easy to understand and use, or the benefits of the technology are not fully realized, and that the t:slim X2 with Control-IQ achieves both of these objectives.

From my perspective, the major recent advances in pump therapy revolve around reducing dangerous hypoglycemic episodes while minimizing bothersome alarms. Better systems are still needed in order to fully automate the closed loop and prevent post-prandial hyperglycemia. Efforts to resolve this issue are ongoing, and involve advanced algorithms, adjunctive medications and methods to accelerate insulin action. However, I am comfortable that system advances over the next five years will involve hybrid closed loop technologies and miniaturization of both pumps and sensors. I also continue to forecast the pump share of the U.S. type1 diabetic market to increase from 30% to 50%, driven by these aforementioned improvements. I expect Tandem to increase its U.S. market share from 15% to over 30% during this time frame. As I have stated repeatedly, Tandem's stock is expensive using conventional valuation. However, I maintain that the company will readily exceed analyst expectations for at least the next 18 months. Furthermore, as I have previously discussed, Tandem will continue to benefit from the four year pump renewal cycle, given its growing base since 2013, when the company sold 6500 pumps in the U.S., versus over 30,000 in 2018. I continue to recommend the stock.

Disclosure: I am/we are long TNDM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.