Tandem Diabetes at Canaccord Conference: Strategic Shifts and Market Focus

On Tuesday, 12 August 2025, Tandem Diabetes Care (NASDAQ:TNDM) presented at the Canaccord Genuity’s 45th Annual Growth Conference, outlining strategic shifts and market focus. The company highlighted its plans for commercial transformation in the U.S. and expansion in international markets, alongside addressing competitive challenges and regulatory impacts. While optimistic about growth in Outside the U.S. (OUS) markets, Tandem is navigating a more competitive landscape domestically.

Key Takeaways

• Tandem adjusted fiscal year 2025 guidance, increasing expectations for OUS markets and decreasing for the U.S.
• The company is executing a commercial transformation in the U.S., with a focus on expanding its sales force and enhancing efficiency through new systems.
• Tandem is expanding into the Type 2 diabetes market and leveraging pharmacy channels to reduce patient costs.
• The company expects to be free cash flow positive in the latter half of 2025 and is targeting a 3% operational EBITDA margin.
• FDA approval of the Steady Set infusion set marks a significant advancement for Tandem’s product portfolio.

Financial Results

• Fiscal year 2025 guidance is set at $1 billion, the lower end of the original range.
• OUS guidance increased due to strong performance and new patient acquisition, while U.S. guidance decreased amid commercial transformation and competition.
• A $10 million headwind is anticipated from transitioning to a direct sales model in certain OUS markets.
• Tandem aims for a long-term gross margin goal of 65%, with contributions expected from the Mobi platform and pharmacy opportunities.
• The company anticipates being free cash flow positive in the back half of this year and maintaining positive cash flow sustainably.

Operational Updates

• In the U.S., Tandem is expanding its sales force and implementing new tools, with expected benefits in 2026.
• The pharmacy channel expansion includes the introduction of the Mobi platform and moving t:slim supplies into pharmacies by Q4.
• Tandem received a Type 2 diabetes indication in March, with a pilot launch underway and full benefits expected in 2026.
• The FDA-cleared Steady Set infusion set allows for a seven-day wear time, with plans to launch next year.

Future Outlook

• Tandem plans to expand pharmacy coverage, reducing patient barriers and focusing on premium pricing opportunities.
• The company is monitoring CMS proposals on competitive bidding and pay-as-you-go models, viewing them as opportunities for increased pump therapy adoption.
• Tandem continues to develop its SIGI pump and pursue a fully closed loop trial, having completed a feasibility study in Q2.

Q&A Highlights

• The commercial transformation aims to leverage opportunities like FreeStyle Libre 3 integration and Type 2 expansion.
• CMS changes could enhance pump therapy adoption, with traditional Medicare accounting for less than 10% of Tandem’s business.
• Tandem remains focused on sustaining its business model despite potential price compression.
• The Mobi patch configuration, using a modified cartridge, is set to launch next year.

Tandem Diabetes Care’s presentation at the conference underscores its strategic focus on market expansion and operational enhancements. For further details, please refer to the full transcript below.

Full transcript - Canaccord Genuity’s 45th Annual Growth Conference:

Unidentified speaker, Tandem Diabetes Care: thank you. It’s nice to see everyone today. We appreciate you having us here. I’m just gonna give a high level overview of the company, what we do, the markets we operate in, and then we’ll dive into some questions. So we’re with Tandem Diabetes Care, and we operate in a large and underpenetrated market.

So we have a great opportunity to continue to drive business growth. It starts with type one, that’s the market that we’ve operated in for the longest period of time. In The US, there are about two million people living with type one diabetes and only forty percent of them today use pump therapy. So that means there are sixty percent of people that we can still meet the needs for through our products, through our business channel approach, through our our market model. Outside The US, the type one market in the countries where we operate has about three million people living with type one diabetes and even less penetrated.

Less than twenty percent of people on average are using pump therapy today. We were proud to announce this year that we have actually doubled the size of our market opportunity in The US with our type two indication. So now there are two million people living in The US with type two diabetes that we can go out and attract to our therapy. Only about five percent are using pumps. And so as I said, a large opportunity for us to continue to grow the business even with multiple competitors in the market.

The way we have competed up until now, we’ve historically been focused mostly on product. Our thesis is ease of use, simplicity and flexibility, and choice. And that’s something in the recent years we’ve added more choice to our to what we offer. We now have a portfolio of products. We have two platforms on the market, t slim x two, which has been around for a number of years, and Tandem Mobi, which we introduced last year in The US.

We’re very proud of what these offer. They meet different needs of people living with diabetes and and we will continue to drive that and we have more platforms in our portfolio in the future with our very rich pipeline. We have one of the richest pipelines in the diabetes space. We are expanding our business model. So how are we gonna grow differently?

How can we drive that top line even further beyond just products as our entry into the market? And so we’re very focused on how we approach the market in terms of the medical benefit versus the pharmacy benefit. DME products have traditionally been a DME benefit product, but in recent years, there’s been more of an openness to receiving them into the pharmacy channel. And that’s very important to our business model for a few reasons. There is some pricing benefit which can help from a top line and a margin perspective, but the most important thing that it offers to us is the ability to address one of the primary barriers as to why people do not adopt pump therapy, and that’s the out of patient out of pocket cost for the patients when they wanna move to pump therapy.

And so with the the different rebating and tiering system that they have combined with copay assistance, we can increase our reach to customers who have not yet seen pump therapy as a viable option through today. We are also expanding and modifying our business model outside The US where we have relied on a network of distributors up to now. We are looking at evolving that business model as well, and we’ll be going direct in certain key markets beginning in 2026. That allows us again to optimize our revenue growth opportunity as well as our margins. And so I’ve mentioned margins a few times.

We are keenly focused on driving top line but expanding both our gross and operating margins simultaneously for to to really show that we can grow with a viable sustainable business model. Today, we’re proud to say that we do serve almost 500,000 customers worldwide, and we never get tired of meeting people on the street, meeting people in the wild, and hearing them say that our pump has made a difference in their life. It is a life changing technology. So thank you, Bill. If you wanna we’ll turn it over to you for some questions.

Unidentified speaker: Great. Thank you for the overview. That’s, I think, very helpful. And so we’ll start out I’m gonna start out with numbers that I’m gonna work through, but I just wanna start out with, you know, guidance. You know, obviously, a a tough week for the stock.

I’m sure you’re feeling that. And you reframed your fiscal year twenty five guidance to be $1,000,000,000 step down in The US to about $700,000,000 step up for OUS. First, well, walk us through what you’re seeing today. Kinda why didn’t you just lower the guidance? I’ve gotten that inbound feedback.

They’re like, should’ve just lowered the guidance and reset the bar because we’re resetting it anyway. But what are you seeing in the in today in The US and why the step down in expectations? We’ll start there.

Unidentified speaker, Tandem Diabetes Care: Okay. And I I’ll respond to your comment about tough, tough week in the market for the stock too. There is a significant disconnect between everything that we offer as a business as I just went through the overview, the the breadth of the market, the way we’re approaching the business and and the market, and and and just where we are in terms of our growth and and profit opportunity. And so it’s pretty interesting how the stock does not seem to reflect anything that we offer today. Mhmm.

But when we looked at guidance so, obviously, we did adjust. It is still within our original range of expectations at just at the lower end of that range at a billion dollars in sales. And I’d like to comment first, not go straight to The US, but actually the markets outside The US because that’s where we actually increased our expectations for the year. And we’ve been seeing great strength in those markets. So we are competing very well, and this is mostly coming from new, people new to pump therapy.

We have yet had the opportunity to really capitalize on the recurring renewal revenue stream like we rely upon in The US. And so there, we’re still seeing attracting a great deal of people from MDI and competitive conversions, but we did this year start to see some real traction from the renewal opportunity. So it’s just the beginning of a recurring revenue stream to come in those markets outside The US. As I already mentioned, we also are transitioning to going direct direct in certain markets. And this year, we anticipate that that will create a headwind in sales as we prepare and our distributors prepare for that transition.

We had originally estimated about a 15 to $20,000,000 headwind this year in particular, but now we as we’ve gotten more information, we’ve become more confident that it would be more around the $10,000,000 mark from a headwind perspective. And so we were very excited to share that the the OUS business is doing very well, and they we had increased confidence in our expectations there. Now I’ll flip to The US business, which is what you actually ask, and I talk a little bit more about that reframing. And so you can really break it down into two pieces, if you will. There is a piece that I would say well within our control, and it’s about a commercial transformation that we’re executing on.

It is and people have asked, why are you doing this? What’s the importance of it? It is very important for us to make this change for our next level of growth for the organization. We have to be able to scale appropriately, And it started with a Salesforce expansion. It’s also about putting new tools in place for our Salesforce, for our internal teams where we have new systems.

It will help us to operate much more efficiently in the future and also as we pivot more into the pharmacy channel. Channel. So this was necessary for us to do and was necessary to do at this time. What we saw though was that we expected more benefit to come more quickly, I would say. And where we are as we look back over the first six months, the benefits are gonna take a little more a little longer time to realize.

And so that’s part of what we factored into the expectations for the remainder of the year is that those benefits are are are going to be extended over time. But in 2026, we expect to really reap the benefits of what we’re doing today. The second piece of this I would point to is more of an external factor. It continues to be a highly competitive market. There is a new entrant this year.

When we came into 2025, we fully expected that they would be launching this year, but what we learned more recently was the size and scale of their launch. The number of people they expect to have in the field is more than double what we originally anticipated. And if you follow the diabetes space, you will have seen over the years anytime a new entrant comes to market or a new product is introduced, there tends to be some dynamics that creates a little bit of turbulence. It’s not really about the long term competitiveness of us with the new entrant. It’s more about the near term with physicians and patients alike understanding what that product has to offer, digesting it, wanting to see it in in the market before they make decisions.

And so many times, it can create a pause in terms of timing of when people might make their make their pump purchase. And so those factors together we factored in, and I think it’s important to say we haven’t seen this turbulence yet. We haven’t seen evidence of pausing. We’re just being cautious because we’ve seen it time and time again, and it makes sense for us to factor it in. So those are the pieces that went together to reframe The US, but there is one really exciting benefit for us in the fourth quarter of this year.

We have entered into the pharmacy channel with Mobi only. And so as Mobi’s been building up volume, we’re getting experience and we’re really learning and understanding what pharmacy offers to us. And the proof points have proved out the thesis I said earlier, which is it can really reduce that barrier for patients, is the out of pocket cost. And so we’ve decided to accelerate our strategy and where we were starting just with Mobi, we are now moving t slim supplies into the pharmacy channel, and that will kick into gear in the fourth quarter. So as people are looking at the cadence of sales for the remainder of the year with this reframing, many folks are seeing what looks like a a might be an outsized fourth quarter and and having trouble understanding those dynamics.

It’s it’s more about when you do the normal building blocks, your renewal scaling, your typical seasonality, but it’s the addition of this pricing benefit that we expect from this entry into the pharmacy channel with supplies.

Unidentified speaker: And I I think let’s jump around a little. You mentioned you have contracts with about 30%, for pharmacy, which is that those supply shift to pharmacy? Not all of them. Just the ones you’re contracted for today or by then.

Unidentified speaker, Tandem Diabetes Care: That that’s correct. That’s correct. And I and that’s a good point you make there. So we do have coverage for thirty percent of lives in The US. These are actual contracts not just with PBMs but with payers.

We’ll be adding the tSIM supplies to those contracts. We also have more coverage. We will have it in the coming weeks effective this year, so we will be increasing that 30% rate before the end of the year. And then, obviously, everyone’s in the same cycle right now already negotiating and discussing their 2026 coverage. And so 30% is the floor.

We do expect to continue to grow that coverage in the coming years, and ultimately have a much broader access.

Unidentified speaker: And I think, you know, we had an investor dinner last night, and this was coming up a lot, just tandem in general. And I think for the investment community, especially those that have, been investors in the company, The opportunity, the breadth of the product offering, the type two, but we’re it’s like, you know, we look at the new patient flow from some of the other competitors and, they’re doing a little better. And so where is the disconnect between the portfolio, the offering, and the competition and, like, the execution? Like, what and I know you’ve said the tools and expanded the Salesforce, but I think, you know, we’re still confused from the investment community of what exactly is going on. Because it seems like with just the product set, it’s the broadest out there.

Right? And now you have type two. You’re the only second player with type two, but it’s not really a contributor. Is that just you had you know, we’ll start with type two. You haven’t launched there yet, or kinda what’s going on?

It’s we’ll start there.

Unidentified speaker, Tandem Diabetes Care: Okay. So maybe I’ll just broader, and then we’ll talk about type two in particular. I think what you’re touching on is part of our evolution. We’re on the cusp of many of these things coming to fruition. So this commercial transformation, this was the right time.

It it it puts us in the right place to to capitalize on these other opportunities. And so, for example, we have FreeStyle Libre three, which is in early access. We have type two, which is in a in a pilot launch. We have pharmacy, which we are rapidly expanding. All of these provide tremendous opportunities for us going forward, and so it’s a matter of where we are today.

And I think, importantly, it’s these these are execution items, so they’re within our control. We’re not subject to these outside factors that we can’t manage or or deal with. These are things that we can control how we move through them and how we capitalize on them. But maybe, Susan, if you wanna talk a little bit about the type two pilot in particular.

Susan, Tandem Diabetes Care: Absolutely. So for type two, we got the indication in March, and at that time we had a publication in the New England Journal of Medicine. It highlighted a few things. First was our ability to successfully demonstrate positive clinical outcomes when people were able to simplify their bolus process using fixed dosing. And oftentimes the bolus process can be very intimidating for people, especially if you’re not used to diabetes management.

And so for type two in particular, it’s a great feature to be able to promote. The other was ease of onboarding. So at the time when somebody’s starting a pump, rather than needing to enter a series of information, they’re able to just put in their body weight as well as their total daily insulin use. And so what we wanted to do is to take this information and go out into pilot territories and talk to health care providers. How do they receive that messaging?

Do they have patients they feel confident putting onto the product? Also, we’ve got two different great options from a product platform perspective. T slim that has a 300 unit cartridge that’s particularly well suited for people with higher insulin needs, as well as the mobi pump that has greater discretion and offers that flexibility to disconnect. So understanding how are both products resonating within the type two community. The other piece we wanted to focus on was training.

This is a different patient population, again, with some of those ease of use features. And then underlying all of it was better understanding the reimbursement environment. So we were encouraged with what we learned. There was great feedback on our products as well as the ease of use of the products. So we’re expanding those efforts in the second half of this year.

And you can think of them as scaling, and then you’ll see the full benefit beginning in 2026.

Unidentified speaker: So I think it’s if I’m hearing you correctly, it’s you made all the changes, you put everything in place, maybe we got a little ahead of ourselves in expecting what was going to happen financially and it sounds like you’re queuing up to kind of exit the year running full speed with pharmacy in the fourth quarter, type two next year, early the sales force hitting maturity and the tools being in place. Is that a fair assessment?

Unidentified speaker, Tandem Diabetes Care: I think that’s a fair takeaway.

Unidentified speaker: So I think the remaining kind of risk or fear is what’s going on with CMS these days, right, and how that could impact you and what can that do to your cash flows. So if you wanna just rather than me throw 20 questions at you, which I usually do, I’ll let you kinda hit it from your standpoint of how you view it and how it can may or may not impact Tandem.

Unidentified speaker, Tandem Diabetes Care: Sure. So CMS has made two proposals. The first is to put insulin pumps out for competitive bidding, and the second is to convert to a pay as you go model. And so just in totality, when we heard the proposals, first of all, traditional Medicare is a small piece of our business. It’s less than 10% of our business today.

We’re gonna keep a close eye on it because we are pushing into the type two population at a greater rate, but any changes shouldn’t have that material of an effect on us. The other piece of it is when you step back, you say, well, why are they making these changes? It should help make things more affordable. It should draw more people to pump therapy, And anytime that happens, that’s an opportunity for us. So we think that we could, you know, capitalize on that and drive more business for Tandem in particular.

So that’s where we stand right now on the proposals. When you think about pay as you go, for example, in the pharmacy channel, we’ve already been contemplating that type of model. So we feel like we would be able to manage that transition very well. And that’s part of the reason when you think about the t slim supplies, why are we moving those into the channel today? We have hundreds of thousands of t slim users, again, limited by the coverage piece.

But if we get supplies put in the channel at a premium to the pricing we see in DME, that will reduce the reliance on the pump sale in the future and or mitigate or offset if there’s any headwind on a pump sale in a transition to a pay as you go model. So it’s actually setting us in a good spot for these types of changes in the future. And competitive bidding, it’s something that we’ve seen with insulin pumps before. There’s been, I’ll call it, the threat of it. It’s been on and off the list many times.

It’s never actually gone all the way to fruition, so we’ll see what comes out of it. But for now, we’re looking for it as a potential opportunity for us going forward.

Unidentified speaker: And what’s the next major data point from CMS that you’re looking for timing wise? Is this, you know, the fall time frame, and what specifically are you looking for?

Unidentified speaker, Tandem Diabetes Care: Sure. There’s a comment period which we and I assume all the other players will participate in. We expect a ruling probably in November of what the outcome will be, and then it’s unlikely that any of this would go into effect before 2027. So there’s plenty of time for us to, adapt and pivot into and and, you know, digest whatever that they put out there.

Unidentified speaker: And I I think one of the biggest fears from investors is there are some, maybe a larger player that’s lost share for a long time that may be willing to go where others won’t on price just to grab share back. Any commentary on that thought?

Unidentified speaker, Tandem Diabetes Care: You know, we haven’t seen price as being a challenge or, in within our space in in the many years that we’ve been here. So something that we’ll keep an eye on. Today, we’re gonna take advantage of all pricing opportunities that are in front of us, and with pharmacy, and we’ll continue in the future to think about how we might manage differently. But we see a a nice premium opportunity in the coming years, and we’re also focused on our cost structure. So if there’s an inevitable time where maybe price becomes a bigger part of the conversation and there’s price compression, we’ll have, have adjusted our the rest of our operating model to be able to sustain the business, and to still show profitability.

Unidentified speaker: And I I think that’s kinda the final kinda question concern is just looking at the balance sheet. You’re you’re you’re just on that cusp of becoming free cash flow positive consistently. And as you know, with all this uncertainty, it kinda it it makes it a bit more challenging to clearly see where you can be in the next ’26, ’27, ’28. What level of confidence do you have that you’re able to improve the free cash flow generation of the company? Right?

Because at the end of the it’s all about future dilution, I think, and which has been one of the big drivers down to this level?

Unidentified speaker, Tandem Diabetes Care: Yes. So from a free cash flow perspective, we expect to be positive in the back half of this year, and we’re focused on maintaining that on a sustainable basis. We’re when we look at how to do this too, it’s it’s back to the operating structure. So, for example, in gross margin, we have a few opportunities, mostly product related. Mobi is the first big step for us.

With our long term gross margin goal of 65%, Mobi as a platform when we get to full scale will get us more than halfway there. We’re starting to reap the benefits from the pump this year, and it will increasingly improve margin through the end of the year. Next year, cartridges will come into play and provide a bigger contributor to the gross margin movement. With the pharmacy opportunity, that just solidifies our ability to really get to our gross margin target faster than we had originally anticipated. And so with those pieces, we’re, you know, focused on if if you again, fixing that cost structure so that the pricing isn’t as much of an element going forward.

And then we’re also very focused on operating expenses. Our r and d expenses have been flat for the last four or five quarters now. And so we had to make significant investments in prior years, but we’re to the point where we can really leverage that. And we’re focused with our on our, portfolio of products, how to get efficiencies across the platforms. So how to appropriately invest, deliver on all these commitments, but not continue to drive an increase in spending going forward.

And this year, the investments have really been focused on the s g and a piece. It’s really about the commercial transformation, but that’s just setting the building blocks for efficiency in the future. And so our margin opportunity this year is expanding both on gross and EBITDA margin excluding I don’t if you wanna talk about the one time effect of the IPR and E charge. But and then, again, we have we’re we’ve made a commitment to 2026 and beyond to continue to improve those margins, which again turns into free cash flow.

Unidentified speaker: K. Well, eight eight points on a billion dollars is $80,000,000, so that helps. Mhmm. Yeah. That helps a lot.

Unidentified speaker, Tandem Diabetes Care: Yes. But we’re gonna improve margin even without that in there. So we’re we’re focused on the 3% operational EBITDA margin, and we will expand from there.

Unidentified speaker: Excellent. And then, let’s talk about I mean, you just got the steady set the day after earnings. Thanks, FDA, for waiting.

Susan, Tandem Diabetes Care: It actually was during the call. During the call. Yes. Yes.

Unidentified speaker: You can’t. You didn’t get to a real time congratulations. Okay. Is that the study set, is that does that have the TOBY cartridge improve it? Give us some details on that actual approval and clearance and what what all goes with it because you’ve got a lot of moving parts on this.

Susan, Tandem Diabetes Care: Absolutely. It’s an exciting technology that allows for us to have an infusion set that extends the wear time from three days to up to seven days. So we’re able to use that as part of an independent infusion set, which would then be used with the t slim and with the mobi pump today. But we’re also using that same technology as part of the site that’s used for mobi when you use it with a tubeless cartridge. So next year, we will launch Mobi in a patch configuration.

It uses the same pump that’s available today, but by using a modified cartridge, you’re able to wear it as a patch pump. So one of the things we announced on the call is that we’re using this extended wear technology as part of that site. So what it allows you to do is to change the portion that you wear in your skin separate from the timing of when you change the insulin cartridge. So it allows for that extended wear time, reduction of burden to the patient, which is especially important for higher volume insulin users as we expand into type two. So from here, we will launch the extended wear site next year along with we’ll do a separate regulatory filing for the cartridge portion for Mobi that includes this extended wear technology as a predicate device.

So that’s another filing that we’ll need to do, but we have the clearance today for the independent infusion set, but we’ll file another five ten k for use of the extended wear technology as part of the tubeless Mobi feature.

Unidentified speaker: Okay. That’s clear. So Okay. You can’t launch TOBI yet, but you can do Mobi and t slip.

Susan, Tandem Diabetes Care: Exactly. But it’s an important step to get us towards offering But

Unidentified speaker: I think you also press release. You need to build the manufacturing capability and build up inventory. So it is in twenty six months.

Susan, Tandem Diabetes Care: So something else. Another thing to look forward to next

Unidentified speaker: year. Okay. Any questions from the audience? I could go on forever, but I just wanna see if anybody has anything. Okay.

The closed loop trial. Well, let’s let’s hit SIGI first because we only have a minute left, then we’ll have closed loop. I think twenty seven, if I remember correctly, is what the commentary was, or I may be words in your mouth.

Susan, Tandem Diabetes Care: We just don’t have timelines that are out there for it. And so stay tuned on that. But to the closed loop trial, because I’d say those are the two areas we are investing heavily in within the internal r and d group, and it’s about advancing our product pipeline, the portfolio of the different platforms that we offer. But what overlays them all, you’re right, is that fully closed loop trial. And so we are pursuing that actively.

We completed a feasibility study in the second quarter, and these are all stepping stones. They’re milestones towards getting us to what our ultimate claim in the construction of the trial is going to be, which we haven’t given timing to either. But they’re two projects that we have in active development, and stay tuned, and we’ll continue to provide more updates.

Unidentified speaker: And just simply for the audience, you know, if I think of Mobi and I think about the Toby, the tubeless Mobi, isn’t a tubeless Mobi a patch pump? Why is it not? And then why even bother with Siggi?

Susan, Tandem Diabetes Care: It is a patch pump. So next year, we will launch our first patch pump. SIGI is another option. It’s more ergonomic. It uses a prefilled cartridge.

And right now, we’re looking how are some of the features and benefits that we offer through Mobi today transferable over towards that SIGI platform. So we think it’s just continuing to enhance our overall portfolio.

Unidentified speaker: I think with that, we’re out of time. Thank you very much.

Susan, Tandem Diabetes Care: Thanks for having us. Thank you. Really fast.

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