(Reuters) - Insulet Corp's shares hit an over three-year low on Thursday on concerns that strong demand for a new class of diabetes drugs that also aid in weight loss could hit sales of its insulin pumps.
CEO James Hollingshead said at the Wells Fargo Healthcare Conference that GLP-1 drugs, which are used to treat type-2 diabetes and obesity, could delay the onset of insulin dependency in diabetes patients.
"What we might see is GLP-1s impacting the time to progression on the insulin therapy," said Hollingshead, adding that the company does not expect its long-term market for insulin pumps to be impacted.
GLP-1s are highly effective weight-loss drugs that some analysts predict could become a $100 billion market by 2030. They help regulate blood sugar and also mimic a gut hormone, which reduces appetite and increases the feeling of fullness after eating.
Insulet's shares were also pressured by data from a 10-patient study published in the New England Journal of Medicine that showed Novo Nordisk's semaglutide, also called Ozempic or Wegovy, cut the need for mealtime insulin in type 1 diabetes patients.
Data also showed the need for basal insulin, taken between meals, was eliminated in seven patients.
Shares of Massachusetts-based Insulet fell about 12% to $170.87 and were on track to wipe off about $1.6 billion from the company's market capitalization if losses hold.
Insulet's executives sought to allay investor concerns over the study, pointing to its small size and arguing that it was common to go through a "honeymoon" period in type 1 diabetes where some patients only need minimal insulin.
"It's really common (that) insulin needs come down in that first year," said Insulet's medical director Trang Ly.
Insulet manufactures and sells insulin delivery devices, which eliminate the need for multiple daily injections for people with insulin-dependent diabetes.
(Reporting by Bhanvi Satija in Bengaluru; Editing by Anil D'Silva and Shinjini Ganguli)
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