Dive Brief:

• Three months after pausing its roughly 240-patient pivotal study of forthcoming Horizon automated insulin delivery due to a software anomaly, Insulet said Friday it has resumed the trial, reaffirming its later than originally expected U.S. launch target for the first half of 2021.
• Horizon, a smartphone-controlled, CGM-integrated automated insulin delivery system, will most immediately compete with offerings from Tandem Diabetes, namely its Control-IQ system, the first interoperable automated glycemic controller allowed by FDA. Horizon is slated to be integrated with devices from both leading horses in the CGM market, Abbott and Dexcom, and analysts at Cowen believe the system to be "the most important catalyst" for Insulet's business and stock.
• Insulet's study began at the end of 2019 and, prior to the 3-month delay, was targeting completion in July. At the time it was paused, 9,000 patient days on the system had been completed with about 12,000 to go, analysts at Stifel outlined in a note to investors Friday, projecting Insulet needs about 50 more trial days per patient, indicating an August 2020 wrap-up for the study. Analysts at Cowen, on the other hand, said the remainder of the trial shouldn't take more than three to five months, taking into account "extra logistics associated with virtual patient follow ups" and site training on new procedures.

Dive Insight:

Unlike many medtechs who've dealt with key clinical trial disruptions in 2020, Insulet's issue stemmed not from the effects of COVID-19 but from a software anomaly identified in March. At the time, the company described the issue as "rare," but acknowledged it could result in incorrect insulin dosing, which may lead to dangerous hypo- or hyperglycemia, thus necessitating immediate attention.

Competitor Tandem dealt with a similar issue during its own pivotal trial of the now FDA-authorized Control-IQ technology. By comparison, FDA's review of the Tandem system prior to authorization took about five months.

"FDA review timelines remain in flux, but the 1H21 timeline seems very reasonable," analysts at Stifel wrote in a note to investors on Friday. "We continue to believe Horizon will be a highly impactful new closed loop insulin system, likely driving both new-to-pumping patients and competitive switches."

When discussing the software issue on a May 7 earnings call, CEO Shacey Petrovic updated investors that Insulet had completed a software update and sent it to FDA for review. But given "anticipated agency review times and newly required logistics at our trial sites," the company gave its new expectation that Horizon would hit the U.S. market in the first half of 2021.

That's behind schedule from targets given during the company's prior earnings call in February, when Petrovic told analysts Horizon remained on track for a rollout at the end of this year.

While the software issue was the root of the present delay, Petrovic acknowledged some hangups tied to COVID-19, saying it "presents some challenges to how we support and monitor the trial," which likely adds "a few months to our timelines."

The restart to the trial is roughly on track, perhaps a little early, with the company's previously stated expectations. Petrovic said May 7 it would probably be "sometime into June" before restarting the trial.

Insulet's update comes a week before the kickoff of a virtual American Diabetes Association's Scientific Sessions event, where analysts expect to see pre-pivotal data on Horizon.

Last month, the company priced a $500 million common stock offering at $211 per share, with funds raised to be used for general corporate purposes. Insulet's stock is currently trading at about $169, or near early April levels, down from an all-time high of nearly $225 on May 11.