Dive Brief:
- Insulet CEO Shacey Petrovic is stepping down from her role because of personal reasons, the company announced on Thursday.
- Petrovic, who has been in the post since 2019, will leave effective June 1, while she will remain on the board of directors and serve as an advisor through May 2023. “After careful consideration over some time, I have made the very difficult decision to reduce my professional obligations in light of medical issues and other circumstances that have been impacting my family and those I care deeply about,” Petrovic said during a Thursday earnings call. “I am extremely proud of what we have accomplished in my time as CEO. We have made significant strides to improve the lives of people with diabetes, while enhancing Insulet's ability to innovate and operate with excellence.”
- Jim Hollingshead will take over as president and CEO next month. Hollingshead has served as an independent member of Insulet’s board since 2019 and currently is ResMed’s president of the sleep and respiratory care business. Insulet’s shares fell 8% on Thursday and were down another 12% in early trading on Friday.
Dive Insight:
Petrovic is leaving Insulet at a key moment for the company. Its newest product, the Omnipod 5 insulin pump, was cleared by the Food and Drug Administration in January and currently it's in a limited U.S. launch. Insulet expected the pump to be cleared and launched in the first half of 2021, but the FDA’s review was delayed for months.
Last year, J.P. Morgan analysts flagged the product as a top launch not just for the diabetes technology space but for the medical device industry overall.
Insulet is in the process of transitioning from a limited release into a full launch in the U.S. in the coming months, as well as finishing the steps to get a CE mark for the European market.
SVB Securities analysts wrote in a note on Thursday that Petrovic’s announcement is “definitely a negative surprise, as Petrovic has been critical to [Insulet’s] success in recent years, notably not just advancing development of OmniPod 5 but also spearheading the company's shift to pharmacy.”
Petrovic has been with Insult since 2015, serving as the chief operating officer and chief commercial officer.
Hollingshead will take over the diabetes tech company amid rapid growth in the use of insulin pumps and continuous glucose monitors, and with further adoption expected. Companies in the space — Insulet, Tandem Diabetes Care and Dexcom — consistently have grown sales over the last two years, while other medtech companies have struggled during the pandemic.
Abbott Laboratories is a larger, more diversified company than others in the space, but its diabetes care business continues to post sales growth. FreeStyle Libre, which is the company’s CGM product, brought in about $1 billion in sales in the first quarter, representing year-over-year growth of 20.4% on a reported basis.
Medtronic is another larger medtech company in the space; although its diabetes business has recently faced a series of setbacks.
Insulet's soon-to-be CEO will be leaving ResMed amid a shakeup in the sleep and respiratory market following Philips’ recall of millions of sleep apnea and ventilator devices. The recall has opened the door for ResMed to take market share, but supply chain challenges have limited the company’s ability to fully capitalize on Philips’ ongoing safety problems.
William Blair analysts wrote in a note on Thursday that they’ve known Hollingshead for “over a decade during his successful tenure at ResMed and believe he will be a strong leader for Insulet as it continues to execute on its current growth strategies and expand its product offering into the digital space.”
The analysts added that because Hollingshead has been on Insulet’s board since 2019, “we believe Hollingshead can hit the ground running and keep Insulet’s momentum, while also adding long-term value to the company’s future potential.”
Insulet also released first-quarter results on Thursday. The company reported revenue of $295.4 million, a year-over-year increase of 17%.
