Insulet Corporation (Insulet), a diabetes care devices company, has reported revenues of $36.1 million for the full year of 2008, up 170%, compared with the revenues of $13.4 million in the previous year-end. It posted net loss of $92.8 million, or $3.36 per share, for the full year of 2008, compared with the net loss of $53.5 million, or $3.21 per share, in the previous year-end.
Fourth Quarter 2008 Results
Fourth quarter 2008 revenue increased 172% to $11.9 million against $4.4 million in the fourth quarter of 2007. On a sequential basis, revenue increased 17% from $10.1 million in the third quarter of 2008. The company added in excess of 2,200 new customers in the fourth quarter of 2008. The company reported gross profit of $1.2 million or 10% in the fourth quarter of 2008 as against a gross loss of $2.3 million or (53%) in the fourth quarter of 2007 and a gross loss of $0.1 million or (1%) in the third quarter of 2008.
Net loss for the fourth quarter of 2008 was $28.3 million, or $1.02 per share, against a net loss of $15.7 million, or $0.59 per share, for the fourth quarter of 2007 and a net loss of $20.8 million, or $0.75 per share, in the third quarter of 2008. Net loss for the fourth quarter was negatively impacted by the recording of a restructuring charge of $8.2 million related to the company’s transition of its manufacturing activities to China. The restructuring charge is comprised of a $7.4 million non-cash write-down of manufacturing equipment at its Bedford headquarters and $0.8 million in severance related expenses.
Total operating expenses increased to $28.6 million in the fourth quarter of 2008, against $13.7 million in the fourth quarter of 2007. The increase in operating expenses was mostly related to the expansion of the company’s sales organization and infrastructure during the year and the restructuring charge.
“I am extremely proud of Insulet’s achievements in 2008. We created the commercial infrastructure to drive strong top line growth and support the OmniPod’s large market potential in 2009 and beyond,” said Duane DeSisto, president and chief executive officer of Insulet. “We significantly expanded our sales footprint in the last nine months of 2008, by making the OmniPod System available nationwide. We also delivered on our goal of transitioning our manufacturing operations to China, which dramatically increased our capacity and reduced our cost per OmniPod. As a result of these accomplishments, we recorded our first quarter of gross profit.”
Full Year 2008 Results
Gross loss for 2008 was $4.6 million or (13%) as against gross loss of $12.4 million or (92%). Operating expenses for 2008 increased to $84.8 million from $41.5 million for 2007, primarily driven by increased sales and G&A expenses related to the significant expansion of the company’s sales organization and infrastructure during the year and the fourth quarter restructuring charge of $8.2 million described above.
As of December 31, 2008, the company’s cash and cash equivalents totaled $56.7 million, against $94.6 million as of December 31, 2007.
2009 Outlook & Organizational Expansion
“As we enter 2009, our focus is on efficiency and expansion,” said DeSisto. “We will increase efficiency through our continuing efforts to reduce our cost of sales per OmniPod, as well as improve productivity throughout the organization. We will continue to expand the market for OmniPod by further penetration in the U.S. diabetes market, as well as other applications for our innovative product. We also expect to begin opening new markets such as Canada, Asia, South America and Europe, where we expect to receive our CE Mark approval in 2009.”
Given the continued weakening US and global economic environment, the company is taking a cautious outlook for 2009. As a result, for the full year 2009, the company is estimating revenue to be in the range of $55 to $65 million. The company expects its 2009 operating loss to be in the range of $50 to $60 million.