Diabetes is the seventh-leading cause of death in the United States. This chronic condition occurs when the body either doesn't produce enough insulin or can't properly use the insulin it makes, and that results in high levels of blood glucose, which in turn can damage organs and tissues throughout the body. In 2017, the Centers for Disease Control and Prevention (CDC) reported that more than 100 million people in the U.S. have diabetes or pre-diabetes. Of the 30 million U.S. adults with diabetes, the CDC estimates 7.2 million are undiagnosed.
The vast majority of them, about 90% to 95%, have type 2 diabetes, which often develops later in life. While the condition is incurable, research has yielded advances in diagnosing and managing it, and new drugs and devices are improving the lives of those who suffer from it. Let's take a look at three companies making those advances.
Insulet pumps up sales with Medicare-covered products
One of three insulin pump providers, Insulet's (PODD -1.45%) is business is performing well thanks to a rise in Medicare-covered sales of its devices in pharmacies, and its adoption of a no-fee-upfront, pay-as-you-go model for its pumps.
In the third-quarter results it delivered Nov. 5, Insulet reported its fifth straight quarter of revenue growth in excess of 20%. The company also raised its full-year guidance -- it now expects revenue growth of at least 28% versus the prior expectation of at least 24% growth.
The FDA is expected to approve Insulet's newest insulin pump system, the Horizon, in the second half of 2020. The Horizon provides continuous glucose monitoring technology within a hybrid closed loop system. It uses the data from that continuous monitoring to predict the user's future blood glucose and adjust insulin delivery accordingly.
The strong pharmacy sales link Insulet has established will be important for the new product introduction. Pharmacies move this type of product faster than other distribution channels, and it's easier for patients to learn about the product and use it correctly if they acquire it in-person at a pharmacy.
Image Source: Getty Images.
Novo Nordisk is first with a diabetes pill
About 80% of Novo Nordisk's (NVO -2.77%) business is centered on diabetes, and the company has a large catalog of treatments for it.
The company's flagship drug, Ozempic, continues to build on its blockbuster status. According to its third-quarter report, Novo Nordisk now sells Ozempic in 24 countries and the drug has a 37% market share in the United States. Sales of the drug came to $7.55 billion for Novo Nordisk. In the third quarter, Ozempic was the fastest-growing drug globally in terms of sales percentage, according to Tommy Carstenson of MidgardFinance.com.
But even bigger third-quarter news for Novo Nordisk was the FDA's approval of the first-ever diabetes treatment in pill form: Rybelsus. It's an orally delivered version of Ozempic, which is a once-weekly injection. This will give people with type 2 diabetes a new option for lowering their blood sugar and promoting weight loss. Pricing is on par with injectibles.
Rybelsus and Ozempic also reduce patients' risks for heart attack, stroke, and heart-related death. This is important given that people with type 2 diabetes have substantially higher than average risks of heart disease.
Abbott Laboratories collaborates for innovation
Diabetes treatment is the fastest-growing product segment at Chicago-based Abbott Laboratories (ABT 0.41%). Abbott's latest earnings report revealed that sales came in slightly light in the third quarter, but its guidance for 2019 overall was solid.
CEO Miles White said Abbott is on track to achieve earnings per share and organic sales growth at the high end of its initial guidance ranges for the year. The initial forecast was for EPS in the $3.15 to $3.25 range and for organic sales growth of 6.5% to 7.5%.
In October, the company announced a deal with Tandem Diabetes under which Tandem's insulin pumps will be integrated with Abbott's Freestyle Libre glucose monitor for diabetes treatment.
Food and Drug Administration clearance of Abbott's Freestyle Libre 2 is still pending. If the device is approved, it would enable diabetes sufferers to customize their glucose alarms using Bluetooth technology. The system can be set up to alert the user if their glucose is low or high, then deliver the proper insulin dose using the Tandem Diabetes pump.
The FDA also could clear Freestyle Libre 2 for use with other medical devices, possibly triggering additional partnerships and sales.
What does this mean for investors?
All three of these companies are durable and successful, with promising futures.
But if you are investing today Novo Nordisk is the best choice. Ozempic and Rybelsus are off to the races in the market, while Insulet and Abbott Laboratories are still waiting on FDA approvals for their latest potential blockbusters. There is no way to calculate how long those approvals will take, or even if they will be granted at all.
Novo Nordisk is also aggressively forming partnerships with heavy hitters including Gilead Sciences, Abbott Laboratories, and Medtronic to address the myriad issues facing people with diabetes. Its pipeline of innovation is growing, while prior efforts are already bearing fruit.
