Insulet Corporation (PODD) Earnings Call Transcript & Summary

Hello everybody, I'm Robbie Marcus, the medical device analyst at JPMorgan. I'm very pleased to introduce Shacey Petrovic, the President and CEO of Insulet. Shacey?

Thanks, Robbie. It's great to be here this morning to discuss Insulet Corporation. Our mission at Insulet is to improve the lives of people living with insulin-dependent diabetes. And in fact, I grew up with diabetes in my family. My father has lived with type 1 for more than 40 years now. For most of his life, he was pretty poorly controlled on multiple daily injections. And I always think of him when I see this picture of Lexi. In 2015, he started to use Omnipod. It was a game changer for him. And like Lexi, my father is an avid swimmer. And he also goes to the gym quite frequently, and he needed a technology to sort of fit into his lifestyle. So you could see Omnipod here pictured on Lexi's arm. It's a 3-day disposable patch pump that delivers 3 days of nonstop insulin for people who require it. And it's designed really to help people spend less time managing their diabetes and more time doing the things that they love. Forward-looking statements, they're available on our website. So what you will hear today is that Insulet is fortunate to serve a very large, a very growing and underpenetrated market in the diabetes space. You will hear that our products and our innovation strategy are differentiated and compelling. And that we plan to continue our remarkable track record of success in terms of execution and growth through continued investment in innovation. And a fun fact, we don't use any models in our marketing materials. So not in our website, not in any of our marketing materials and certainly not in this presentation, every image is an actual Omnipod user. This is Kate Hall. Kate celebrated her 23rd birthday on Sunday, and she's a remarkable young woman. She's an Olympic Hopeful track star. And she was recently featured in Runner's World magazine, where she talked about how Omnipod has made a difference in her ability to compete at the level that she does. Diabetes is an epidemic, and it is growing rapidly across the globe. I'm curious in the audience here if anybody, like me, knows somebody with diabetes. Looks like everybody in the room, practically. And that's not a surprise because the incidence is growing across the globe. Today, Omnipod is available really in just a handful of markets, a small part of the world. Today, we are available in North America, Israel and a handful of countries in Europe. And in just those markets, we estimate that there are 10 million people today who require insulin on a daily basis and could benefit from Omnipod. So that's 10 million today. And then when you think about all of the white space that we have yet to enter into, millions more, potentially tens of millions more people across the globe who could benefit from our technology. And that's a big part of our growth story. As we think about the next several years, we plan to continue to penetrate further into the markets that we're available today and also to bring our technology to more markets across the globe. We will begin that effort in earnest this year in 2020 and anticipate entering into 5 new markets this year. So people who require insulin on a daily basis have 3 choices in terms of how they deliver their insulin. Pictured here on the left, a person can rely on multiple daily injections of insulin via either a pen or a syringe. And pictured all the way on the right is conventional tubed pump therapy. And this is a small piece of capital equipment that houses an insulin cartridge. And about 3 feet of tubing that connects that cartridge for continuous insulin delivery into the patient's abdomen. Or they can choose Omnipod, which is pictured here, you can see the pod on Tom's arm there. And these are essentially the 3 choices for insulin delivery. Across the globe, 95% of people who require insulin on a daily basis rely on multiple daily injections. That means they are injecting themselves 4 to 5 times a day with a needle or syringe. And on the right side, you see there is a small 5% of the total market opportunity, but growing number of patients who rely on conventional tube pump therapy. This was introduced in the 1980s, and the clinical data demonstrates improved outcomes, reduction in morbidity and mortality associated with continuous insulin infusion. And so the question is, why don't more people use insulin pump therapy. And the research would indicate that the first problem is that these are very expensive technologies. This system pictured on the right here will cost in the United States, a payer or a patient somewhere around $6,000, hence that is a huge barrier to adoption. The second challenge is that these systems are complex. You can see the multiple components here of the system and it typically can be challenging to learn and ramp up the learning curve on insulin pump therapy. And then the third issue is just discretion. Most people don't want to wear something on their waist advertising their disease. So Omnipod was designed to address the limitations of conventional tubed pump therapy and to get more people who today rely on multiple daily injections to benefit from the improved outcomes associated with continuous delivery of insulin without the constraints or limitations of traditional tubed pump therapy. Our target has been the multiple daily injection user. And for this user, this large part of the market, Omnipod has proven to be a very attractive option. And in fact, about 75% to 80% of our new users come to us from multiple daily injection therapy. So we are very much helping to grow the category of continuous insulin delivery. And 66% of new Omnipod users indicate that they would not have adopted pump therapy if not for Omnipod. So they would have stayed on multiple daily injections. And for these people, Omnipod is a solution that's getting them better outcomes, but also fitting into their lifestyle and providing quality of life. Traditionally, or historically, a lot of our growth has come from the multiple daily injection user living with type 1 diabetes. And that user is represented on the left here by Layla, our aspiring Ballerina. Omnipod is the market leader in pediatrics. And for the type 1 user, Omnipod provides discretion, simplicity, ease of use, and also addresses access barriers. So Omnipod, unlike traditional tubed pump therapy has 0 upfront cost and is only paid for as the pods are used and the disposables are used in the system. So that reduces market access barriers. And then also, it's an easy system to learn and to train on. Recently, over the last couple of quarters, about 6 months now, we've seen a notable tick-up in the number of people living with type 2 diabetes that have begun to adopt Omnipod. And that's represented by Ernesto here on the right. Ernesto is an avid hunter. He's in his 60s. And like many people living with type 2, he was diagnosed later in life. Type 2 diabetes is a progressive disease, and so many people are diagnosed late in life, they have failed other things like lifestyle modifications or oral medications. And they have eventually progressed to require insulin. And that means that later in life, they are starting to learn how to count carbs to check their blood sugar, to manage technology and to manage all of the variables associated with diabetes. That can be very, very challenging, particularly for people diagnosed later in life. And so all of the things that make Omnipod very appealing to the type 1 user are arguably even more important to the type 2 user. The simplicity, the cost efficacy and the ease of use, these things are very important to the type 2 user. And over the last year, Insulet has been innovating our market access model and our business model in order to get more people, all people with insulin-dependent diabetes, particularly those with type 2 to be able to access and benefit from Omnipod. One really critical step in that process was establishing Medicare access. So up until 2018, we did not have Medicare access. And after a very long protracted effort, CMS finally issued guidance in 2018 that Omnipod could be covered through the Part D or pharmacy channel. This is a significant advantage for Omnipod. Omnipod is the only available insulin pump in the pharmacy. And it does fit our business model. The recurring disposable nature of the business fits perfectly into the pharmacy channel. And the pharmacy channel offers some significant advantages. All other insulin pumps are reimbursed through the Medicare Part B or durable medical equipment channel. And pharmacy offers benefits, particularly to the type 2 population. For all users, pharmacy offers a quicker turnaround time for Omnipod users. It offers the convenience of a one-stop shop. So people living with diabetes are often in the pharmacy to get probably their sensors and definitely, their insulin and other diabetes supplies. So to be able to get their pods, right, where they're getting their other diabetes supplies is a great benefit. And it also offers often favorable and predictable out-of-pocket costs. And this is very important for the payer and for the patient. So with Omnipod in the pharmacy, we have eliminated the upfront cost of the system. So that thousands of dollars that people pay for tubed pumps does not exist with Omnipod. And the payer or the patient are simply paying for the pods as the benefit of the technology is being realized. This is an important barrier to adoption that we have eliminated with Omnipod in a pharmacy setting. And what it means is that patients and physicians can think earlier in the treatment pathway about offering Omnipod to a broader swath of patients. So this innovation has helped us essentially to dramatically reduce barriers to adoption of Omnipod and it has been helping us grow the business, particularly over the last year. And Insulet has been investing not just in innovating its business model, but also in innovating its product platform. See, when it comes to innovation, our fundamental belief is that for us to bring Omnipod to the millions of people who could benefit from the technology, we must make the technology simple. And when we think about simplicity, we think your mobile phone simple. That is what we believe needs to happen in order for our technology to be adopted by the masses. And that means as we advance the technology, we cannot compromise on simplicity. And as we bring features and benefits to the technology and to the user, we must keep ease of use front of mind. So we want to continue to improve outcomes. But we don't want to do that and compromise simplicity or ease of use. So our product vision is shown here on the right. And this is where we believe we can take the Omnipod technology platform over the next several years. Our vision is, well, if you imagine that you are diagnosed with type 1 or type 2 insulin-dependent diabetes, our vision is that you can go to your physician's office or to the pharmacy even, and you could put on a pod, you could download the Omnipod app on whatever mobile phone you're using, you could select your sensor, you could enter 1 parameter like your weight, for example, and you could be off to the races, easily and simply managing your diabetes and achieving optimal glucose control. So that is our overarching product vision and where we want to go for people living with insulin-dependent diabetes. Both Omnipod DASH, our current platform available today and Omnipod Horizon, our next-generation system coming this year are really exciting steps forward towards that product vision. So let's take a look at DASH. DASH is pictured here on the left. And DASH is the first ever FDA-cleared insulin delivery system controlled by a consumer android device. It is essentially a locked down android phone that acts just as the handheld controller for the Omnipod. But it offers the same simplicity and intuitive user experience that a cellphone might, very modern, touchscreen, easy to use system. It communicates via Bluetooth to the pod and via Bluetooth to the cloud. And so it comes with a host of mobile apps. 2 of them are shown here. In the center is our Omnipod display app. And this app is designed to give users a view of their Omnipod data right at the touch of their fingers on their mobile phone. So you can imagine, you are an Omnipod user and you're on the golf course and you have your PDM buried in your golf bag, and you want to quickly look at your CGM data and/or your Omnipod data. You can do that simply by touching your mobile phone and seeing the snapshot of the data available to you. And then all the way on the right is our caregiver app that we refer to as Omnipod VIEW. Omnipod VIEW is designed to give the loved ones of Omnipod users peace of mind. So for a spouse or a parent, they are able to view the Omnipod data of their loved one. You can imagine you're the parent of a type 1 child, and you send that child off to a sleepover or to a soccer game, it gives the parent a firsthand view of how that child is doing on their Omnipod. So really important features that add peace of mind and ease of use to our users. We launched DASH 9 months ago in the United States, just through the pharmacy channel primarily, and we launched DASH just a month ago, just in December in select European countries. So very excited about what this platform will do for us and for Omnipod users. And it is on this very simple, intuitive platform that we built our next generation system, Omnipod Horizon. Omnipod Horizon is our partnership with Dexcom and their G6 sensor, and it is our automated insulin delivery system. The user will wear an Omnipod and a Dexcom G6, you can see that pictured here on Jenna but the difference is that the Omnipod will contain the Horizon algorithm. This is a smart algorithm that will connect directly with the G6 sensor. It takes a CGM reading every 5 minutes, and then it directs the pod to deliver -- to deliver insulin based on where that CGM trend is going over the next hour. And the goal here is to deliver, again, unparalleled outcomes with unparalleled ease of use. So we made some very specific design choices with the system to be able to deliver on those 2 goals. The first thing we did is design for greater time in closed loop. We put the algorithm directly on the pod, which never needs to be removed for exercising or showering. With the goal of keeping the user in closed-loop regardless of how close they are to their phone, for example. And this, we believe, will deliver more time in range, which then has the potential to drive better -- sorry, more time in loop, which then has the potential to drive more time in range. The second thing that Horizon offers is personalized therapy. The algorithm is adaptive, and will learn and grow with the user. So as a user, for example, goes through a growth spurt and might require more insulin or somebody who adopts an exercise routine more regularly, the algorithm will adapt and will adjust the insulin dosage as necessary to deliver optimal glucose control. And then finally, and probably most exciting for our users, we will be the first to market with a personal smartphone control of Omnipod. And this is the single most asked for feature in our system. What this allows us to do is take a component of the system away, that handheld device. And Omnipod Horizon will be controlled by a secure app on your mobile android phone if you choose to use that feature. So very exciting. We know that the diabetes community is eagerly awaiting this technology. You can see a quote here from independent research indicating that Horizon is a top pick in terms of AP or AID technology, thanks to phone control and the Omnipod platform. So I wanted to demonstrate a little bit how the algorithm works. This is an animated slide. And what you will see across the top is Horizon users' CGM trend. And across the bottom, you will see how the system will dose insulin accordingly. So you can see across the top, as the insulin is flat and within range the -- as the glucose is flat and within range, the system suspends. And as the prediction is that the glucose is headed high in the next hour, the system will deliver micro boluses of insulin, very similar to how your pancreas works. And then as the system predicts that your CGM is coming back in range or going low, it will adjust, reduce or suspend your insulin accordingly. All of this happens with no interaction from the user. So it's really designed to massively reduce the cognitive burden of managing diabetes and also achieve optimal glucose control. So here's a brief video on how this algorithm, and this product will translate in terms of the user experience. [Presentation]

So a little bit of challenge with the audio there, it will be available on our website. But really designed to provide an unparalleled user experience. So very excited. We are currently in our pivotal study for Horizon. We are evaluating -- recruiting and evaluating 240 individuals across ages 6 to 70. You will note that our plan, unlike other systems available today, is to launch to market with a pediatric indication. Omnipod is a -- the market leader in pediatrics. And so our goal is to bring this to that population upon launch. And you should expect us to follow-up with studies at younger ages after our pivotal as well. We benefit from the breakthrough devices designation, which has given us a very collaborative, interactive review process with the FDA, designed to expedite clearance of the system. And our plan is to be in the market in the second half of this year with horizon. This study will evaluate safety and effectiveness of the system and look at a number of parameters like time in range, A1c and other patient outcomes. But very excited to get this to market as quickly as possible. So we are innovating in terms of the business model and market access model through the pharmacy and pay-as-you-go. We are innovating the product platform, and we are also innovating as it relates to our manufacturing operations. Up until the beginning of last year, the company manufactured primarily -- actually only in China. And last year, we opened our worldwide headquarters in Massachusetts and launched our first highly automated U.S. manufacturing line. This is a really critical investment because it enables us to grow our capacity which we need with our rapidly growing customer base. And it also enables us to expand margins. So what we have done here is essentially established because of automation, a line that will provide 50% of the capacity, one line -- thanks to high automation, 50% of the capacity in China with 90% less headcount. It enables us to replicate our supply chain and manufacturing operations, so create redundancy in the supply chain. It certainly gives us capacity and it is a key driver for us to be able to continue to make progress on expansion of margins. And I think the last thing that it does for us is give us the ability to bring our innovation and our manufacturing operations close together on one roof -- under one roof and get world-class at technology transfer for all of the innovation that we are bringing to market. But it is a key driver in our -- maintaining our financial trajectory on the margin front. So you can see Insulet's remarkable financial trajectory here. In 2013, just 6 short years ago, the company was $185 million in revenue, 48% gross margins, and we were not profitable. Can fast forward to 2019, and we guided to over $720 million in revenue. We guided to margins being relatively consistent with last year. That's just over 65% as we ramp our U.S. manufacturing, and we guided to mid single-digit operating margin. And we are well on track to achieving our 2021 targets of $1 billion in revenue, 70% gross margins and mid-teens operating margins. And most importantly, well on track to continue to make good on our mission to improve the lives of people living with diabetes. I think at the end of the day, very few companies of Insulet's scale are growing at the rate that we're growing, and really just scratching the surface of this incredible market opportunity and incredible unmet need before us. We are investing in consumer-driven innovation and strategies to continue this growth trajectory and continue to help more people like Kate living with insulin-dependent diabetes across the globe. Thank you.

Alright, thanks everyone. We can get started with the management of Insulet. You've had a great 2019. You had the launch of the DASH earlier in the year. You've seen tremendous outperformance throughout the year. As you look back and -- realizing you haven't announced fourth quarter numbers yet, but as you look back over the course of the year, what do you think if you could pick out #1 or 2 things that really drove the great performance we've seen so far.

I think 2019 was a year of just the culmination of years of strategic work, right? Pharmacy, anniversarying Europe, there were key things that drove significant growth in 2019 that were a result of years of work. So I liken that success to really the talent behind our strategies and behind our execution. We built incredible talent across the organization that enabled us to execute on multiple fronts, through the year. And for an organization of our size, I think it was a tremendous year that has set us up really because we're just starting in many of those areas, have set us up for, I think, a really exciting next few years at the company.

So when I look at the business, we have the U.S., we have international and then let’s put drug delivery aside just for a moment. In the U.S., at least from my point of view, the biggest catalyst is the shift into the pharmacy and the material impact not so much in the ongoing cost of utilization, which is material, but also in the cost to try. It makes it much more affordable for a patient to experiment with pump therapy, which can be complicated. So maybe spend a minute on that. And how important is the pharmacy to Insulet's success today and in the future?

Yes. Probably a good question for you...

Yes. So I think it's really important. Because if you look at the barriers to entry with pump therapy and pod therapy, cost is a big one. This commitment of -- committing to a technology for 4 years and then being locked into that technology for 4 years is a big one. And if you couple that with the fact that prior to 2018, we didn't have Medicare reimbursement. We didn't have the same access with type 2. All those things came together and pharmacy has been this tremendous play for us and really a catalyst to growth because now you're right, physicians can very easily write a prescription for Omnipod. Patients can try it, see if they like it. And that sounds like there's some risk there for us for attrition, but we spent years looking at the retention of Omnipod users. We know that when they try it and they like it, that they stay with us. And so we were more than willing to remove this upfront cost, not lock them into the technology for 4 years because we know that we can retain those patients over time.

So -- excuse me, I forget the exact numbers of where you ended the third quarter, I want to say something like 40%, 50% of new patients in the pharmacy, 20% or so in the installed base are getting their Omnipod through the pharmacy. So let's fast forward. Let's say, 2 years, 3 years, when access to everyone is potentially 100%, do you see any patients down the road getting their Omnipod Horizon or DASH through the DME channel? Or do you think it will be 100% pharmacy?

You're never quite at 100%. But what we do see is that our access mirrors very closely the percent of new starts that start in the pharmacy channel. And so that's encouraging for us because we've said that we are around 50% at the end of Q3 access for DASH, the majority of those patients start with pharmacy. And so as long as we see the percent of new starts mirror the access in the pharmacy channel, that's where we anticipate patients going and [ ending up ].

I think it'd be instructive for people. Let's -- if we could walk through a hypothetical patient, let's say, January, they haven't hit their deductible yet. I get diagnosed, I want to do pump therapy, Insulet I go to the pharmacy, was at $40, $50 to try 3 months of therapy, let's say $150 to $200 for the year. And then compare that -- what would it cost to a patient without -- someone who hasn't hit a deductible yet, if they just wanted to go in and say, take -- [ buy 10 a ] pump or [ try a ] pump and the ongoing cost each year.

It's a good question. So -- and we've talked historically about seasonality and other pump companies talk a lot about seasonality. Because in the DME channel, those deductibles are real. And so it matters for new patient starts, for sure, especially considering if you're going to pay several thousand dollars, up to $6,000 out of pocket, what you end up doing is not starting on insulin pumps until later in the year when you've hit that deductible. But what we saw even with reorders is that patients would try to stock up on supplies at the end of the year knowing that to get a refill at the beginning of the year that it's going to be very costly for them. So what the pharmacy channel brings for us is a lower out-of-pocket cost in general, but a more predictable, actually a fully predictable cost for patients as every 90 days, they'll pay that same co-pay. So it takes the seasonality out of the equation, and we think utilization should be higher due to that.

So this question may sound a little greedy, but you've had -- you've had great performance year-to-date. You have, by far, the better structural pathway to lower cost for patients. What is it -- when you do your internal research, what does it show as to why the patients are not choosing Omnipod and choosing a different pump? Because from my point of view, the patch pump, the lower cost to use, to try and to -- and the ongoing cost seems very attractive.

Okay. I can take a stab at that. So first of all, it's fair to say that there's not a solution out there that meets the needs of everybody, right? So there's not one magic bullet that meets the needs of everybody. But what we do see is that the vast majority of our patients come from MDI. It's always been our focus. So between 75% and 80% of our patients come from daily injections. That's been our focus. Some patients do choose an alternative technology like a tubed pump and what we've always believed is that they're not choosing tubes as that feature that they're looking for. They're really choosing something that Omnipod may have historically not offered. For instance, full CGM integration, phone control, we don't -- it's the number one request for MDI patients. But it will be interesting when we launch Horizon and more of those boxes or all those boxes are checked, we'll see a real utilization from MDI patients and with the technology that they'd use.

What percent of -- sorry.

Just going to say that the market research is clear that people don't adopt pump -- tubed pump therapy because of cost, complexity and discretion. So those are the issues that we've been trying to solve for Omnipod. I think the technology platform solves a lot of that. But this last year, eliminating the upfront cost of the system and making it available in the pharmacy. That is a game changer in terms of reducing barriers to adoption. And we see it already that patients and physicians are willing to trial the technology because they're not committing to 4 years, and they're not committing to thousands of dollars. I think as we as we continue down that path and drive more awareness, that's a lever we have not pulled, but we drive awareness around the fact that you can try this technology that can probably get you better outcomes and a better quality of life without that huge investment of time and money. I think that will be also a next wave of adoption.

Have you seen anything from your competitors, clearly, they are not disposable systems. It will be very difficult to make the argument to move into the pharmacy and offer the same pricing structure. Have you seen any changes so far, whether it be a really aggressive reimbursement contracts they're trying to go after, any changes in the way that will lower the out-of-pocket cost for patients.

Yes, I think we've seen competitors offer free technology upgrades, try to go at risk with payers. So certainly reacting to this dynamic in the marketplace. But it's very challenging. We are fortunate to benefit from a business model that is just naturally an at-risk business model that fits into this channel. It's a more challenging endeavor for the legacy business model that is the capital equipment, kind of large cost upfront to be able to pivot to this at-risk, no upfront cost model.

Want to check, is there any questions?

[Indiscernible]

I had a question. You talked about deductibles mattering, in Q1, in particular, patients do not want to adopt pump therapy so we're kind of thinking about that as well patients will defer their tubed pump purchase until the back half of the year, whereas you'll see less seasonality in your business, but is it actually kind of beyond that, where in Q1, Pod has a chance to take a disproportionate amount of market share because when you want to go on therapy for type 1 diabetes, you want to go on as soon as possible. So should we be thinking about it more in that kind of offensive way and less kind of in the defensive way where less seasonality [ in there. ]

Yes, it's a great question, Travis. Hopefully, everyone on the phone heard that. But that -- the question was around deductibles, is it just about seasonality or is it also being able to take more share at the beginning of the year when deductibles have this bigger impact. I do think it is about both. People shop for insulin pumps the way they shop for a consumer device. It's why we are such a consumer-focused company. And I think our disposable revenue model, the fact that the customer base and retention is so important to us that it's a cultural dynamic in our company. But see when you shop for something, you really want to be able to access that immediately. And so pharmacy does 2 things for us. It certainly means that people have the same and often favorable coverage throughout the year, which is important. But it also shortens the time frame for people to access the technology. So in the pharmacy channel, a patient becomes interested in the technology, and they can access it days later, they can get the technology. In the DME channel, that could be weeks. And so there's advantages in terms of just better coverage all of the time and then advantages being able to access this more quickly that I think will translate into durable advantages for Omnipod.

Any other questions?

[ Kelly ]?

Yes. Thank you so much. It's amazing that you're now -- did you say in the presentation before that you're the top [Indiscernible] the #1 player in pediatrics.

We have been the market leader for a while now, but we are the market leader in pediatrics.

Yes, pediatrics. That's amazing. I was wondering if you could talk about how do you [indiscernible] in your trials kind of talk about getting the soft landing that pump and CGM [ and the ] algorithms are enabling and then how that's causing less overcorrections and greater time in [ indiscernible ]. Because I think what we've been [indiscernible].

Yes. Thanks, [ Kelly ]. The question was around Omnipod Horizon prepivotals. And we have less insight into pivotals. We -- that's a blinded study to Insulet. We won't really get that insight or that feedback till the end. But in prepivotals, we did receive quite a bit of feedback from trial participants, particular pediatrics and how great the control has been and how this lack of excursions, not chasing highs and lows. Means that people are much more confident in the system, particularly around meal times and around changing of routines. We also believe, and this will -- we'll see if this bears out that if we can keep people in range, it's another opportunity to drive insulin reduction, of total daily dose reduction. We know today that Omnipod reduces the total daily dose of insulin anywhere from 16% to 27% depending on whether you're type 2, type 1 or MDI or pump user. But by keeping people in range more consistently, we should be able to further reduce the total daily dose of insulin required by users.

I just want to point out, you did announce in the slides that you are in the pivotal trial, which is new news. I imagine in the past few days that probably has kicked into gear. Correct?

Yes, we are so excited. So we moved in, in the very end of December. And obviously, the prepivotal patients who rolled into pivotal and then we are opening up recruiting for all of our sites across the U.S., fully expect to recruit 240 patients by the end of February.

I saw there were a couple of other questions in the back.

Just one quick one. Is iOS a difficult hurdle to manage the device [indiscernible]?

Great. The question was about iOS. And is that a difficult technical hurdle to offer iOS control. I wouldn't say it's a difficult hurdle. It is technical work that needs to be done. And we chose Android first because DASH was an Android platform. And so it was the quickest path to market for phone control. And we had already had a clear consumer device through the FDA that was an Android device. But we fully expect to follow with iOS, and there isn't an unusual technical hurdle there.

Question in the back.

Just quickly I guess [indiscernible] patients are [indiscernible] they do not know about product pipelines or [indiscernible]. In your experience, [indiscernible] there are more [indiscernible] .

So the question is around in the field, are patients aware of product pipelines and are they aware that Horizon is coming. I would say the most active patients that do their research probably can find out. But we're not promoting Horizon, we're not talking about it in any way with physicians. And so what physicians hear is what we talk about in events like this, in trade shows, in ADA and those patients that are probably most involved in what's coming to the marketplace do know about it, but there hasn't been an effort, of course, to promote it in any way. So that will start in earnest once we get approval for that product.

I have a question just on [indiscernible] as far as [indiscernible]. Just wondering how you guys are thinking about kind of what part of that [ will really ] come to you, and what part of that [indiscernible]. Is there a kind of [indiscernible], how do you break that down?

Great. That question was around the $10 million -- or 10 million person addressable market of insulin-dependent patients in the countries that we exist in today, how do we segment that market? How much of that do we believe we have the right to win. And I would say that all of those patients can benefit from Omnipod. We have worked hard to reduce or eliminate the barriers to adoption for insulin-dependent users. But that varies across the markets. So in the U.S., we have been very successful at securing broad access for both type 1 and insulin-dependent type 2s. As you get into international markets, there may be health care systems or payers who don't reimburse as broadly for all insulin-dependent users versus just people living with type 1. You also mentioned, is there a segment of people who don't want to wear devices. I would say that may exist, although it is changing rapidly as CGM use becomes more prevalent, people get more comfortable wearing a device, and that is actually a great propellant for people adopting Omnipod. People put on a device, they get over the psychological barrier of wearing something on their body. They get visibility to their glucose trends, they understand how little time they are spending in range, and they look for tools to help get better time in range. And so that actually is changing, I think, although I do think it was previously a hurdle. I think it's becoming less so of one today.

Shacey, we spent most of the time talking about the U.S., most diabetes patients are outside the U.S. And you've taken over your European operations from a distributor, you're now direct there. Maybe how should we think about -- what's the underlying growth in your existing markets outside the U.S. as we heard you were going to have 5 countries this year in the presentation. How do we think about the underlying and then the incremental from these new launches?

Great. I'll start, and Bret runs the international business, so I'm sure he'll have additional insights. But in terms of our international business, what we have historically said, what we said this year about our European business is that the underlying growth rate, we think, is high teens, low 20s. We had an inflated growth rate from that in 2019 because we had anniversaried the business. So it's a very fast-growing base of business that we have converted to direct operations in 2019. As we enter new markets, it will be more incremental in terms of the growth that it contributes. Because our revenue comes from that annuity. And so as the base, the customer base growth -- grows, that's really when our revenue growth [ grows. ] So unlike other traditional tube pumps, for example, where you're taking 4 years of revenue upfront, it takes us a longer time to ramp the business. But over the long term, very exciting to see us now be in a position to expand the international business and see that be a long-term growth driver for us over the next several years.

Maybe just to help frame expectations, these 5 additional countries, is this an incremental 5% patients, 20% of -- how should we think about the impact?

We haven't given guidance, except for to say that we don't believe there will be a material impact in 2020 as a result of the new country entrances. This is really about the long-haul as opposed to what it will contribute next year.

How do you think about your market share outside the U.S. versus inside the U.S.? Obviously, there are different payer dynamics that are helping you in the U.S. versus outside the U.S. But where do they stand versus each other? And is there any room to close the gap in one geography versus the other?

Yes, I'd say it's mixed, right? So there are countries where we've got work to do to gain the type of share that we have in the U.S. and there are countries that are actually even exceeding the performance we have in the U.S.. France is an example that we point to often, where we are the market leader. And doing just fantastically in France, and it's a market that we typically point to that of what's possible even in the U.S. And so it's a mix. In general, we are less penetrated outside of the U.S. than we are in the U.S., but there are countries that are exceptions to that.

When we think about closing the gap, I think a lot about awareness. And we point to France as great evidence for the value that DTC could drive for Omnipod. Because in France, every newly diagnosed person is given their options via a government-run website. And when presented with all of their options, they will choose Omnipod, and we are the market leader in that market. And so the value of DTC to us as we think about the United States and other markets where we're not as penetrated, making everybody aware of their options, we know will drive more Omnipod use.

Any last questions? All right. Great. Maybe we can end it there. Thank you so much.

Thank you.