Good day and thank you for standing by. Welcome to the Insulet Corporation Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your first speaker today to Deborah Gordon, Vice President, Investor Relations. Please go ahead.

Thank you, Dalam. Good afternoon and thank you for joining Insulet’s third quarter 2021 earnings call. With me today are Shacey Petrovic, President and Chief Executive Officer; and Wayde McMillan, Executive Vice President and Chief Financial Officer. Bret Christensen, our Executive Vice President and Chief Commercial Officer, is also with us today for the Q&A portion of our call. Both, the replay of this call and the press release discussing our 2021 third quarter results and guidance will be available on the Investor Relations section of our website. Before we begin, I would like to inform you that certain statements made by Insulet during the course of this call may be forward-looking and could materially differ from current expectations. Please refer to the cautionary statements in our SEC filings for a detailed explanation of the inherent limitations of such statements. We will also discuss non-GAAP financial measures with respect to our performance, namely adjusted EBITDA and constant currency revenue, which is revenue growth excluding the effect of foreign exchange. These measures align with what management uses as supplemental measures in assessing our operating performance, and we believe they are helpful to investors, analysts and other interested parties as measures of our operating performance from period to period. Additionally, unless otherwise stated, all financial commentary regarding dollar and percentage changes will be on a year-over-year reported basis with the exception of revenue growth rates, which will be on a year-over-year constant currency basis. With that, I’ll turn the call over to Shacey.

Thanks, Deb. Good afternoon, everyone, and thank you for joining us. Our third quarter results reflect outstanding execution by our Insulet team and momentum across our global business. We delivered 17% revenue growth, driven by total Omnipod growth of 22%. While we are experiencing headwinds related to the ongoing impact of the global pandemic, revenue growth was near the high end of our expectations. We achieved these strong results, thanks to our annuity model, which is a competitive differentiator that provides insulation from market disruption. We continue to achieve strong new customer additions, and we celebrated another record-setting quarter in the United States. We are seeing more impact from COVID internationally and expect this to continue over the short term. We are also seeing increasing preference for automated insulin delivery systems among people with type 1 diabetes, setting us up for an exciting launch of our first AID system, Omnipod 5. Until then, we expect these factors to affect our top line results in Q4 and for a portion of 2022. Nevertheless, we continue to expect double-digit revenue growth in Q4 of this year, including high-teens to low-20% for total Omnipod, with positive momentum entering 2022. Wayde will elaborate on this in his remarks. Our team has done a remarkable job navigating this dynamic time in the market, and 2021 will mark not only another year of strong revenue growth, but also tremendous advancement of our strategic priorities. Diabetes is becoming more prevalent, and pump penetration in both, the type 1 and type 2 markets is low. In fact, we believe the U.S. type 1 market can double over the coming years from its current penetration rate of approximately one-third. Additionally, the type 2 market with a U.S. penetration rate in the low single digits offers significant room for growth. We already see people with diabetes adopting technology at accelerated rates, driven by Pod therapy and automated insulin delivery. Internationally, both the type 1 and type 2 insulin-intensive markets are even less penetrated with sizable runways for expansion. We continue to disrupt the old market paradigm with a leading technology and differentiated business model that deliver an improved customer experience and improved outcomes. Our success in the type 1 and type 2 markets demonstrates the power of Omnipod and the value it delivers compared to MDI and legacy pump therapies. While not having a commercialized AID system presents some competitive headwinds in the near term, our performance without Omnipod 5 highlights the incredible growth opportunities that we will begin to unlock in 2022 and beyond. We expect AID adoption and our highly differentiated platform to provide years of exciting growth as we advance our mission to improve the lives of people with diabetes. Our journey will take a major step forward with the expected upcoming FDA clearance of Omnipod 5, which remains on track to occur later this quarter. As we recently shared, we submitted our responses to the FDA’s request for additional information in September. We are pleased to have that part of the process complete and can’t wait to bring Omnipod 5 to market, as we are confident it will be a transformative product for people living with diabetes. We are in the final stages of the review and our team is working closely with the FDA, who has been a great partner in the process. Advancing toward Omnipod 5 clearance is not the only strategic progress we made this quarter. We continue to drive growing Omnipod DASH coverage and volume through the U.S. pharmacy channel and further penetrate the type 2 market, where we are uniquely positioned with our product innovation and differentiated business model. Omnipod DASH has proven to be a terrific solution for people living with type 2 insulin requiring diabetes, where today, we have established a leadership position. Additionally, we continue to amass compelling clinical evidence that supports Omnipod’s many benefits. This includes impressive new Omnipod 5 data we shared in September at EASD. Taken together, we are on track to deliver another year of strong financial and operational performance and outstanding strategic progress. I will now speak to each of our strategic imperatives, including expanding access and awareness, delivering consumer-focused innovation, growing our global addressable market and driving operational excellence. Access and awareness both remain critically low throughout the global diabetes market, despite millions of newly diagnosed people each year. Awareness of advanced technologies like Omnipod needs to increase, especially awareness of its many benefits, such as its simplicity, discretion, improved quality of life and better outcomes. In addition, access to technology is still far too complicated. We have broken down barriers through our innovative pay-as-you-go business model in the U.S. pharmacy and raised awareness through our direct-to-consumer campaigns. We are pleased with the impact both efforts have had on improving access for many who require care. Even with our successes to date, however, many opportunities remain to improve access and awareness in order to empower more people with diabetes to live healthier, easier lives. In the United States, our pay-as-you-go business model in the pharmacy channel provides benefits for everyone. It’s more efficient for Insulet and provides an improved experience and lower out-of-pocket costs for consumers, with the vast majority paying less than $50 per month through the pharmacy. Additionally, it’s easier for physicians to prescribe and offers numerous benefits to payers. In the third quarter, we expanded Omnipod DASH U.S. covered lives to over 80%, which in turn drove increased volume through the pharmacy channel. Payers are increasingly recognizing the economic benefits of offering Omnipod DASH in the pharmacy. In the U.S., our new customer starts once again reflected the value Omnipod offers compared to MDI as well as our growing strength in the type 2 market. MDI conversions represented over 80% of our U.S. new customer starts, and the percentage that were type 2 remains in the 35% to 40% range, even with the strong new customer growth within the type 1 population. Our MDI conversion rate continues to trend upward as we successfully drive adoption among people living with type 2 diabetes, the majority of whom come from MDI. In addition to expanding affordability, we are also driving access to Omnipod in a number of other ways in order to provide more options for people living with diabetes. We recently received FDA clearance for use of Lilly’s Lyumjev with Omnipod. We are the only insulin pump manufacturer in the United States to obtain this indication, which we pursued to provide more alternatives and flexibility for customers. A key component of our awareness strategy remains our DTC advertising. Our efforts in the U.S. and select international markets continue to generate a highly positive response. The feedback has been enthusiastic and the increased awareness, interest and leads are contributing to our new customer growth. Our efforts are attracting MDI users and competitive pumpers as both base unmet needs that Omnipod helps address. Additionally, our DTC efforts are driving increased interest from individuals with type 2 diabetes as more primary care physicians learn about the benefits of Omnipod for this underserved population. So, DTC will remain a core component of our awareness efforts, and we are encouraged by the early results. We are a consumer-centric company and our innovation efforts are focused on delivering the best experience to our consumers. To that end, we are confident Omnipod 5 will mark an enormous step forward and drive accelerated adoption. Today, we offer a tubeless on-body experience that is unique compared to anything else in the market and an access model in the U.S. that has eliminated needless barriers and burdensome costs. The experience that Omnipod DASH provides is unparalleled, and Omnipod 5 will mark another breakthrough in diabetes care that builds upon our existing competitive advantages. Omnipod 5 will deliver groundbreaking technology first, including full compatible smartphone control with an algorithm residing on the Pod and SIM cards in each handheld controller. Omnipod 5 is a transformative innovation and will remain highly accessible and affordable through the pharmacy channel. It will be priced at parity with Omnipod DASH, despite the increased value and advanced technology the system offers. In turn, we believe this will drive faster coverage of Omnipod 5, and we are already off to a great start. While we eagerly await Omnipod 5 clearance, our efforts to prepare for a successful launch have been moving at full speed, including securing coverage. Payers are generally reluctant to negotiate coverage terms prior to product clearance. However, given the excitement around Omnipod 5, we already have secured substantial coverage. We expect this head start on access to position us for a highly successful launch of Omnipod 5. We cannot wait to receive clearance as we know the incredible impact our advanced technology will have on people living with diabetes. The power of Omnipod is clearly demonstrated by the compelling clinical data we have shared over the course of 2021. One recent highlight was our new pivotal study extension results for Omnipod 5 presented at EASD. This study marked a total of one year of Omnipod 5 use in ages 6 through 70 years old. We were thrilled to find that the outstanding safety and improved glycemic outcomes first observed in the 3-month Omnipod 5 pivotal study were maintained over 12 months of home use. The data demonstrated the trifecta of insulin management, a sustained reduction in A1c; improved time and range; and minimal hypoglycemia. This long-term data demonstrates the durable benefits that Omnipod 5 offers. We are also close to submitting to the FDA our preschool expanded indication down to age two and expect to do so shortly following Omnipod 5 clearance. We continue to plan for an expanded indication in 2022. Additionally, we advanced our type 2 clinical efforts and remain in the six-month extension phase of our Omnipod 5 type 2 feasibility study. The early data is very promising, and we expect to share the results at a future conference. Following clearance for Omnipod 5, we will begin discussions with the FDA on pivotal trial requirements for an expanded indication in this patient population. We are excited to be pioneers in bringing the benefits of automated insulin delivery to people living with type 2 insulin-dependent diabetes. In addition to Omnipod 5, we also presented results from our largest cohort study of people living with type 1 diabetes who use Omnipod DASH. Across approximately 4,800 people, the results demonstrated low time in hypoglycemia and a significant decrease in A1c after 90 days of use for children, adolescents and adults. For adults, the decrease in A1c was achieved while also demonstrating a 20% reduction in total daily dose of insulin used. As we build a portfolio of clinical evidence for our near-term innovations, we are also investing in the technologies required to position Omnipod for long-term growth. Our teams are diligently working on an iOS version of the Omnipod 5 mobile app, globalizing our AID system to bring it to international markets, and integrating Omnipod 5 with both Abbott’s FreeStyle Libre and Dexcom’s G7. We’re excited to continue collaborating with these two great partners and in time, offer CGM choice to our customers. We are also leveraging our significant digital capabilities to expand the ecosystem around Omnipod. Our Omnipod VIEW app was built for caregivers. Today, it allows caregivers of Omnipod DASH users to see real-time insulin data remotely. Omnipod 5 enhances the power of Omnipod VIEW because of the incorporation of SIM cards in every controller. SIM cards mean every user will have the unique experience of constant connectivity and being able to share real-time insulin and CGM data with caregivers and loved ones. SIM cards also mean no Omnipod 5 customer will need to manually upload data when visiting with his or her care team, thanks to cloud-to-cloud data transfer. Looking to the future, our algorithm and data science teams have already processed the data from our pivotal studies and type 2 feasibility study and are hard at work on our next-generation AID system. We believe we’ve built a blockbuster with Omnipod 5, and we are excited to continue to innovate on the extraordinary technology platforms it provides us. Now, turning to global expansion, where we are growing our global addressable market across attractive international regions. Our international expansion unlocks the power of Omnipod for people across the world and will further increase our global addressable market beyond the 11 million to 12 million people we estimate are living with insulin-dependent diabetes throughout the global markets we currently serve. During the last 12 months, we expanded our global presence in seven new countries within Europe, the Middle East and Asia Pacific. While it takes time for new markets to meaningfully contribute to our results given the nature of our business model, we see strong long-term growth potential through our growing presence in multiple regions. The work to bring Omnipod 5 to our international markets is ongoing, and we are making great progress. Omnipod DASH has been a major global growth driver, and we believe adding our game-changing AID system to our product offering will further strengthen our competitive position across our international markets. Moving forward, we see a number of attractive opportunities to expand our global presence, to further penetrate our existing markets and to introduce advanced technology to underserved regions. We continue to assess many markets throughout the globe where we know people with diabetes can greatly benefit from Omnipod and where we are confident we can drive strong adoption and growth. Our near-term focus is on growing our global presence throughout the Middle East and Europe, and over the medium term, we plan to expand further within the Asia Pac region. Lastly, we continue to invest in our global manufacturing operations, which will further strengthen our production capabilities, efficiency and scale. Today, we are producing tens of millions of Pods a year and doing so at the highest quality. Our manufacturing expertise is a competitive advantage. And the investments we have made over the last several years to expand our operational excellence and establish redundant manufacturing capabilities while securing strong partnerships with key suppliers are critical. This positions us to support growing global demand for Omnipod DASH, the upcoming launch of Omnipod 5, our international expansion and our innovation pipeline. It has also helped to mitigate global supply chain issues throughout the pandemic and represents an important long-term driver of sustainable revenue growth and gross margin expansion. In closing, we remain on track to deliver another year of double-digit revenue growth and have made significant progress across each of our strategic imperatives. The clearance and limited market release of Omnipod 5 are just around the corner, and we could not be more excited for just how transformative this innovation will be for people living with diabetes. Our passionate and hard-working global team is our greatest strength. And we are focused on finishing the year strong and carrying the underlying momentum in our business into 2022 and well beyond. I’ll now turn the call over to Wayde.

Thank you, Shacey. The third quarter marked a continuation of our strong financial performance and strategic progress. We generated strong new customer starts despite continuing to feel the pandemic’s impact, which speaks to the durable power of Omnipod and our success driving expanded awareness and eliminating access barriers. We remain incredibly excited about the upcoming launch of Omnipod 5 and what it can do for people living with diabetes. We generated 17% revenue growth in the third quarter, finishing near the high end of our guidance range, driven by total Omnipod growth of 22%. In Q3, we delivered U.S. Omnipod revenue growth of 26%, within the range of our expectations. As a reminder, our Q3 growth rate benefited from the net impact of the estimated $4 million distributor channel destocking last year. The trend of record U.S. new customer starts continued in the third quarter, falling within our expected range. We continue to execute and drive strong top line growth and expect to finish the year with continued momentum. Also in Q3, we once again increased our volume through the U.S. pharmacy channel and drove strong Omnipod DASH adoption globally among both, type 1 and type 2 customers. During Q3, Omnipod DASH drove 80% of our U.S. new customer starts, and we increased pharmacy channel volume to almost 50% of our total U.S. volume. In Q3, international Omnipod revenue grew 14%, at the high end of our guidance range. As a reminder, Q3 growth was impacted by the estimated $4 million to $5 million of distributor channel stocking that we experienced in the third quarter of last year, ahead of the international full market release of Omnipod DASH. Today, all our new customers start on Omnipod DASH, which continues to drive adoption across our markets and our expanding customer base. That said, we continue to experience pandemic-related headwinds with a lagging revenue effect due to the compounding impact of our annuity model. During Q3, we saw the biggest impact from COVID in several of our international markets due to increased restrictions implemented in the first half of the year. As a result of the virtual training and onboarding capabilities we built at the start of 2020 as well as the team’s adaptability and execution, we have successfully mitigated much of these short-term headwinds. Nevertheless, we will continue to feel the effects on our top line over the next few quarters. Additionally, we expect Omnipod DASH will drive continued solid adoption. We are seeing increased competition in some markets from AID systems. As Shacey mentioned, we are excited to advance our Omnipod 5 innovation efforts as we look to bring what we believe to be a transformative and unmatched AID system to all of our markets. The fundamentals of our international business remain strong, and we continue to grow our existing markets and expand our global footprint. We also continue to augment our team and capabilities to drive sustainable growth over the long term. I’ll touch on our near-term expectations in a moment. Lastly, our estimated global attrition in the high single digits, and Pod utilization remained stable during Q3. While we saw a slight impact on attrition in a few international markets where AID systems have been launched, the changes are not material overall. Drug Delivery revenue declined 30% during the third quarter, finishing around the high end of our expectations. As a reminder, order volumes were elevated in the prior year as a result of the pandemic. Gross margin was 68.5% in the third quarter, representing a 360 basis-point increase or a 330 basis-point increase on a constant currency basis. This performance was in line with our expectations. The primary drivers of our gross margin performance were our improved manufacturing operations and the mix benefit of growing volume through the U.S. pharmacy channel. These drivers were partially offset by the expected higher mix of costs as we continue to ramp U.S. manufacturing. Operating expenses were in line with our expectations as we continue to invest in our robust innovation pipeline, our clinical initiatives, our commercial efforts to support the expected upcoming launch of Omnipod 5 and also our continued international expansion. Operating margin was 12.2%, up 200 basis points, and adjusted EBITDA margin was 20.2%, up 210 basis points. Operating income was in line with our expectations as we invest throughout our global business to fuel our long-term growth trajectory. Turning to cash and liquidity. We finished Q3 with $857 million in cash and short-term investments and the full $60 million available under our revolving credit facility. We’re in a strong financial position with no near-term obligations, and we have opportunities to further invest across key areas of our business. We continue to take measured steps to strengthen our overall capital structure. As we noted on our second quarter call, we used the proceeds from our Term Loan B financing to repurchase 92% of our convertible notes due 2024. In July, an additional 5% of the outstanding balance was converted, which resulted in a $1.5 million loss on extinguishment during Q3 that is excluded from adjusted EBITDA. Also in July, we raised an additional $43 million of cash through an equipment financing, which further helps to reduce our overall cost of capital. Now, turning to our outlook for the remainder of this year. We are updating our full year revenue guidance and now expect 18% to 20% growth, including Omnipod revenue growth of 18% to 20%. We now expect full year U.S. Omnipod revenue growth in the range of 22% to 24%, driven by increased access and awareness, our strong U.S. new customer starts throughout this year, the benefits of our annuity-based model and our growing volume in the type 1 and 2 markets and through the pharmacy channel. For international Omnipod, we now expect full year 2021 revenue growth in the range of 12% to 14%. The ongoing adoption of Omnipod DASH and expansion of our customer base continued to fuel our international growth. We expect the tailwinds in both our U.S. and international product lines will be partially offset by the lagging impact of the pandemic, which has a cumulative impact on our results as well as some competitive pressure from AID systems in the market. Lastly, we now expect revenue growth of 11% to 16% for Drug Delivery based on our partners’ increased forecast. Turning to gross margin. Looking at Q4 specifically, we continue to expect a sequential decline, largely due to higher production costs as we ramp our automated manufacturing lines. While this causes some anticipated fluctuation in our quarter-to-quarter performance, we remain on track for full year gross margin in the range of 68% to 69%, likely closer to the low end of the range. Our gross margin performance represents a notable year-over-year increase and reflects both, our enhanced manufacturing capabilities as well as the benefits of our growing volume through the U.S. pharmacy channel. We continue to expect operating expenses for the full year to rise in line with revenue as we have been investing in our innovation pipeline, sales and marketing capabilities, global manufacturing and international expansion. We believe these investments are critical to sustaining the momentum in our business and building upon our foundation for long-term sustainable growth. We are reaffirming full year operating margin in the low double digits range. The key drivers of our growth include our strong top line revenue growth and gross margin expansion. We continue to expect an approximate 100 basis-point improvement in our operating margin on an annual basis going forward. Finally, we expect capital expenditures in 2021 will slightly decrease from 2020 compared to our previous expectations of an increase, primarily due to timing. We continue to invest throughout our global manufacturing operations as well as our strategic initiatives. Turning to our fourth quarter 2021 guidance. We expect total company revenue growth of 19% to 25%. This includes total Omnipod revenue growth of 17% to 22%. For U.S. Omnipod, we expect Q4 revenue growth of 22% to 27%. The core drivers of this growth are the cumulative impact from our record new customer starts during 2021, the benefits of our annuity model and increased Omnipod DASH volume through the U.S. pharmacy channel. We expect Q4 international Omnipod revenue growth of 7% to 13%, driven by continued Omnipod DASH adoption across our international markets. We expect the tailwinds in both product lines will be partially offset by the same headwinds mentioned for the full year guide. Lastly, we expect Q4 Drug Delivery revenue to increase 45% to 65%, based on our partner’s current forecast. In conclusion, we are on track for another successful year as we continue to deliver solid financial performance and broad strategic progress. We’re focusing on finishing the year strong and are excited for the expected upcoming clearance of Omnipod 5. We’re investing in the critical areas of our business that will build on our current competitive advantages and drive further differentiation in the near and long term. There are significant growth opportunities ahead, and we remain well positioned to continue to drive meaningful value to all of our stakeholders. With that, I’ll turn the call over to Dalam to open up for questions.

Thank you, sir. [Operator Instructions] I show our first question comes from the line of Margaret Kaczor from William Blair. Please go ahead.

Hey. Good afternoon, everyone. Thanks for taking the questions. I wanted to start with type 2. You guys mentioned a few updates on the call, specifically kind of on the algorithm side and trying to make progress on O5. So, I was curious what kind of pivotal study that -- what that pivotal study could look like. And then, as you think about the types of patients that could benefit from Omnipod and O5 specifically, would it be intensely managed, or could you actually kind of accelerate some of the efforts into other types of type 2s and why?

Thanks, Margaret, for the question. Yes. So, maybe I’ll take us back a few months. If you remember, we shared really compelling data at ENDO back in March that demonstrated the impact of Omnipod 5 that it can have on people living with type 2 insulin-dependent diabetes. And that data demonstrated -- early data, but it demonstrated more than a doubling of time and range from 27% to 59%. So, we do believe that the technology has tremendous potential to make a positive impact on outcomes for people living with insulin-dependent type 2 diabetes. We are looking at the intensively managed group for this technology. And as -- one trend we see -- macro trend in the market that we see is that there is growing utilization of CGM among type 2 users, particularly intensively managed type 2 users. So, our belief is that as more CGM use happens, that will drive more seeking of these patients for tools to manage their disease, and that Omnipod 5 will be right there with the best wearable AID system for this population. In terms of what the pivotal study could look like, I think that’s a great question. This is unchartered territory for people living with type 2 diabetes. And so, we are really proud to be doing the work to bring this technology to this population and to be pioneers. The feasibility data looks promising, and we still need to really have the discussion with the FDA on what a pivotal could look like. I think, we could see a lot of range here. It might be that we can use some real-world data because it’s clear that there will be type 2 users of Omnipod 5 upon launch because of the access position that we’re in or it could look like a full-blown pivotal like we did in the type 1 population. So, that will remain to be seen once we’ve had the conversation with the FDA. And we’ll certainly keep everybody posted because we do view this as a really exciting opportunity for that segment.

I show our next question comes from the line of Robbie Marcus from JP Morgan. Please go ahead.

Wayde, I wanted to ask on U.S. and international Omnipod for fourth quarter. And I was hoping you could just sort of walk us through some of the puts and takes here. It looks like in the international market that the midpoint of the guide is down sequentially on a dollar basis. So, just wondering what would drive that. Are people using less Pods? I would imagine with the annuity model, if utilization was the same, it’d probably increase. And then, also, in the U.S., you’re still seeing record new patient starts. So, I was just sort of wondering what brought you down off the top end of the guidance range there, and walk us through some of the dynamics there. Thanks.

Sure, Robbie. Yes, happy to. So overall, we’re still holding the high end of our total company beginning of your guide at 20%. So, no change there. And we’ve raised the low end up to 18%. So, we’re 18% to 20% now for both, total company and total Omnipod. But, as you mentioned, we’ve tightened the guidance ranges for each product line for the year, although still really strong growth, especially in the United States. So, what are we factoring in? We’re factoring in the lagging impact of the pandemic as well as some competition from AID systems in the market, as we mentioned in our prepared remarks. So, overall, our Q4 guide is very strong. At the high end, it is our highest growth rate for the year for both, Omnipod and total company, with 17% to 22% for total Omnipod and then 19% to 25% for total company. As is our annual guide, it’s still 18% to 20%, we keep an eye on the annual guide as we think about Q4 as well. So, despite some COVID-19 headwinds and the pandemic’s impact on new customer starts last year that factored into the growth rate this year as well as the delayed clearance here for the launch of Omnipod 5, we’re still at that high end for the full year. And if we hit the high end, we’ll have now grown 20% for the last two years through COVID and with increasing AID competition here. So, a couple of specifics. Robbie, international down sequential at the midpoint. We don’t really think about the midpoint. We factor in our total puts and takes, and it’s sequential growth at the high end, sequential decline at the low end. One of the things we have to watch for internationally is some order patterns. We sell a lot of our products through distributors internationally, and sometimes there’s order pattern, so we have to account for that in addition to the other factors I just mentioned. And in the U.S., again, we have the strongest guide for the year at 27% for Q4. And so, although we’ve tightened the ranges somewhat, we’re still looking at a very strong quarter for Q4.

I show next question comes from the line of Danielle Antalffy from SVB Leerink. Please go ahead.

Apologies if I missed this, but my first question, Shacey, is for you on your confidence in Omnipod 5 approval by the end of the year. Just trying to push a little bit, make sure this isn’t going to slip again. So, just curious, what gives you the confidence? Are we just waiting now for FDA, or have you had more back -- is there still more back and forth happening with FDA? And then, I have one quick follow-up.

Okay. Danielle, we may need your follow-up now or you might not fit it in. So, do you want to ask it now?

Oh, sure. Sorry. So, just as you -- as it relates to the Omnipod 5 launch as well, I’m curious if you guys think about what learning -- what you could learn early on in the launch, or do you think launching an integrated system is not going to be all that different from sort of how you’ve launched the Omnipod in the past? Just curious if there’s anything different about launching an integrated system versus launching just a standard Omnipod. And should we be thinking about this launch differently than sort of how you’ve been present in the market in the past? And that’s it for me.

Great. Okay. Thank you for your questions, Danielle. Yes. So, I’ll take the one on Omnipod -- confidence in Omnipod 5, and then I’ll let Bret just what we expect to learn with an integrated system launch. So, the interactions have been frequent and very collaborative with the FDA. As I mentioned in my prepared remarks, obviously, we had submitted the update to the app back in September. And since then, we’ve had multiple back and forth with the FDA. And frankly, it’s that back and forth that gives us the confidence that the system will be cleared before the end of the year. We are down to the final mile, and we’re really appreciative of the FDA’s responsiveness and engagement. It is a breakthrough device-designated technology, and it is a breakthrough device because of so much breakthrough technology in the system with full phone control, with the algorithm on the Pod. No one has ever done this before, including the FDA. And so, we are plowing new ground here, which we’re excited about. But, we feel very confident in the quality of the submission and very positive about the interactions that we’ve had with the FDA. And then, I would just say before I pass it off to Bret, the teams are doing a terrific job. Bret is leading a lot of this effort, just an outstanding job preparing for our limited market release. And that includes all of the testing of the training systems, the support, the benefits investigations, obviously, establishing coverage, which I spoke to, manufacturing the product, all of that stuff. So, we are ready to go and couldn’t be more excited. And I’ll let Bret answer your second question.

Yes. Hi Danielle, it’s Bret. So, there’s a lot that we can build upon from the learnings of DASH. And Shacey highlighted some of what we anticipate in the LMR. The reason we’re doing the limited release is so we could test some of these things and establish access early. We’re well ahead of the game on access and as well as the user experience, which is some of what I think you’re getting out with the integrated systems. There’s a lot to understand there. So, with the introduction of Omnipod 5, the onboarding experience will be unique and different from anything we’ve ever done, which is part of what we’ll be testing in the LMR. Some of that depends on their experience with both Dexcom and with Omnipod. And depending on their experience, each onboarding experience is unique to the individual. And in some cases, they’ll be able to completely self-serve and onboard. And so, that’s going to be really exciting. It’s going to establish tremendous commercial scale for us, enable us to onboard many of our existing Podders that are so excited about Omnipod 5. And all of that -- the cooperation between Dexcom and Insulet on customer support will also be unique as we’ve sort of worked through all, the different use cases and scenarios, where there’ll be warm transfers going back and forth to different -- the companies depending on what the potential issue could be. But all of that stuff is -- when we talk about the customer experience is what we’ll be testing in the limited release before we move to a full market release, but we’re well prepared for all of those things.

I show our next question comes from the line of Lawrence Biegelsen from Wells Fargo. Please go ahead.

Just, Shacey, one big-picture question on international. We’ve seen it slow the last couple of years and the midpoint of the guidance is 13% this year. How should we think about international growth before Omnipod 5 launches outside the U.S.? And any color on whether that could start happening in 2022, or should we be thinking about international Omnipod 5 launch as more like 2023?

I think, our international business has been performing well, as Wayde said, in the face of some challenges related to COVID and some market dynamics around AID adoption. DASH has really been helping us to drive that growth. And I think, ultimately, we are seeing double-digit growth, despite the fact that the environment is changing in terms of CGM access, in terms of AID access and awareness. And so, that’s great. We expect that to continue. We expect new patient adds to continue in our international markets. And it’s one of the reasons why we’re working so hard to bring Omnipod 5 to our international markets. We’re not going to give a time line on that yet. We really wanted to wait to get Omnipod 5 into the market before we give guidance, so you can expect that sometime next year. But, I can tell you that the work is underway, fully committed to bringing our system to our global markets, and we will do that as quickly as we can. I think ultimately, these trends, while they present some near-term headwinds, they are very favorable trends for us, both in the U.S. and internationally. As we think about increasing awareness and adoption of AID in the U.S., as we think about increasing access for Dexcom’s CGM and increasing access and adoption of AID in our international markets, that paves the way for a successful launch of Omnipod 5. So, while it presents some near-term challenges, really medium term, it should be a great trend for us.

I show our next question comes from the line of Jeff Johnson from Baird. Please go ahead.

Wayde, you’ve mentioned the competitive impact of AID systems a couple of times. Every time you do, it seems like it’s focused on the international market. So one, we’ve got at least one of those AID systems here in the U.S., you’re not mentioning it as much from a U.S. perspective. Is that just given the pharmacy access, the t2 access, things like that that’s covering that up, or is there something specific in the international markets relative to the U.S. that is causing some of that issue, number one? And number two, Shacey, just to push on that OUS O5 time line and commentary you had. Regulatory-wise, what would you have to do? Can you use U.S. pivotal data to get a CE Mark and launch in Europe, maybe in Canada, things like that, or would you have to go through trials there that you haven’t yet contemplated or started? Thanks.

Yes. Hey Jeff, I can certainly start that. And I appreciate the question on this evolving dynamic that Shacey just highlighted, eventually becomes a positive for us. We do think the dynamic is different between the U.S. and international. In the U.S., certainly, we’ve got AID systems to contend with. But, as you mentioned, we have done a great job with other significant growth drivers, DTC, our business model in the pharmacy channel with pay-as-you-go. Certainly, DASH has performed well in the U.S. So, we have a lot of momentum behind it. In international, we’ve just launched DASH over the last year and have good momentum there, growing in the mid-teens internationally. But as we mentioned in the prepared remarks, we have seen a couple of countries start to see some more stronger AID competition. And as Shacey mentioned, as CGM adoption ramps, certainly, that brings AID systems with it. So, we do think the headwind is stronger internationally.

And Jeff, to your question regarding Omnipod 5 internationally, there is not a clinical trial requirement to get CE Mark to be able to sell and market Omnipod 5 in our international markets. It is a regulatory pathway, the MDR pathway that we will submit through for CE Mark. And there will be clinical work that is done to establish increased adoption and increased access and coverage of the technology, but we don’t actually require any type of clinical to get clearance to be able to sell and market the technology in our international markets. So, the work that is underway is the technical work around translations, unit of measure, that stuff for the system, internationalizing the label and the system. And then, of course, we’ve got some regulatory work and then some clinical commercial work really for more of the commercial elements of the launch.

Thank you. I show next question comes from the line of Matt Taylor from UBS. Please go ahead.

So, I just want to ask one about international, just as a educational question. I mean, you talk a lot about pharmacy and pay-as-you-go in the U.S. And I just wanted to characterize how much of those types of channel and trialing advantages were translatable in the international markets, given they’re heterogeneous and you have a different go-to-market strategy there. Could you talk a little bit about that?

Yes. Matt, it’s such a great question. And so, I’ll kick us off, and then I’ll ask Bret to weigh in as well. So, I think it is -- most of the dynamics that are driving our success in the U.S., you highlighted them, pay-as-you-go and type 2, for example, those are opportunities outside of the U.S. It’s just a matter of time. And as you know, the OUS markets are fragmented and complex. And so, it will be more fragmented in terms of how we deliver on those opportunities outside the U.S. And for type 2, there really is less coverage. One of the reasons why we’ve had so much success in the United States in the pharmacy with type 2 is because of the differentiated access position. It is much easier to access Omnipod through the pharmacy than it is to access pump therapy through the DME channel. And so, that is what is fueling part of our growth and why we’ve got 35% to 40% of our new starts type 2. The same value proposition exists in terms of the clinical impact, the improvement in A1c and the reduction in total daily dose of insulin. But we’ve got more work to do clinically to demonstrate that healthcare economic argument outside of the U.S. and to establish reimbursement and coverage access really for type 2 outside of the U.S. And then, Bret, I know we’ve had some progress on pay-as-you-Pod. If you want to talk a bit about that?

Yes. Sure. Matt, it’s a great question, because the growth drivers today are a little bit different in the U.S. than they are internationally, but we see those as opportunities. And Shacey highlighted that we can move to pay-as-you-go, the pharmacy channel type 2. Those are related because remember, the reason why we have such great type 2 access in the U.S. is because we don’t build that upfront fee. And so, pay-as-you-go really is more key than the pharmacy channel is. And we’ll be looking at all of these opportunities internationally. But, certainly, we see lots of opportunity to move to a pay-as-you-go reimbursement model in the markets that we’re in and in future markets. That could open up the door for type 2 access. We think that’s a good start because when you don’t charge that upfront fee, you eliminate that risk for the payers. So, all these things that are carrying us today in the U.S. that really make the growth rates different than they are internationally as headwinds are fairly similar. Those are all opportunities for us in the international markets.

Thank you. I show next question comes from the line of Travis Steed from Barclays. Please go ahead.

Just curious, Wayde, if you could give a little more color on kind of what you’re seeing with COVID vacations. And are you seeing staffing issues at ENDO offices? And a little color on kind of how you see some of the puts and takes on 2022? Obviously, Omnipod 5 is a big unknown at this point when that actually comes. But, just curious if you could give some puts and takes on next year, especially given some of the unusual seasonality we saw this year with COVID.

Sure. And we’re lucky enough to have Bret on. Bret, do you want to touch on what we’re seeing internationally and around vacations and staffing and things? And then, I can pick up on some thoughts on 2022.

Yes, sure. I can touch on both of those. So, I guess, the vacations and staffing are both -- I think the staffing is actually more of a real issue within some of the endocrinology offices. And that becomes an issue for companies like ours, only if we rely on those staff to do some of the work for onboarding. And that’s an effort that we’ve had underway for a long time now to take that work away from healthcare providers, to do more of the trainings, to do more of the onboarding. And we believe that we are the easiest product to train and onboard on because of the ease of use of Omnipod. And so, we don’t see that as a real headwind, although those are real issues for our customers and endocrinology offices, it’s not slowing us down in any way.

Great. And just picking up on 2022. So, regarding how we’re thinking about our outlook there at this point, we don’t issue formal 2022 guidance until Q4 call in February, per usual. However, happy to give you some of our thinking here. And we do think that we’re in a good position to start strong again in the 15% to 20% range for total diabetes. It’s a good place to start. We do have some differences between the regions given the different dynamics, some of them we’ve talked about here. I think, we see U.S. Omnipod with really strong momentum. And we’re thinking, again, it’s probably high-teens, low-20s kind of a start to the year; international, more in the low double digits, at the lower end of that 15% to 20% or even below. So, it’s looking like 15% to 20% for total Omnipod, which is strong growth off a growing base. And we have opportunities to exceed that, but certainly some risks to consider. For Drug Delivery, you can expect it to decline year-over-year, coming off a very strong year elevated by the pandemic here. So, overall, we’re thinking about our total company revenue growth in the mid-teens. This can change as we close out Q4 and plan our official guidance here. But, that’s how we’re thinking about it today. Maybe some color on the U.S. Regarding U.S., we need to keep in mind that Omnipod 5 will be in a limited market release for some time and ramping during the year with access growing. And it takes time for our annuity model to build momentum and accelerate revenue. So, we’ll get some benefit from Omnipod 5 in 2022, but there are many factors to determine how much. And we’ll certainly provide updates as we go through the year. But, we won’t see a full year impact from Omnipod 5 until 2023 and beyond. But, that really sets us up for multiple years of strong growth from there.

I think, Travis -- Wayde, that was very well articulated. Travis, I would just point out to what Wayde is saying that Omnipod 5 will be an accelerator. It’s just a matter of when we can get into full market release in the U.S. and then when we can get it into market in our international markets. And obviously, the work is underway and the teams are very focused on making that happen. And then, as we look beyond 2022, we couldn’t be more excited because we’re launching what we think is going to be the most differentiated technology in the AID space. We see follow-on indications pretty rapidly with pediatrics. We see international expansion. We see iOS. And we see additional CGM integrations over the coming couple of years. And so, really exciting trajectory of innovation and growth over the next few years.

I show our next question comes from the line of Jayson Bedford from Raymond James. Please go ahead.

Geez, Wayde, after that last answer, I’m kind of tempted to ask about 2023 guidance, but I won’t. So, I have a couple of pharmacy questions. Pharmacy access, it’s now near 50% of your U.S. volume. Can we assume that the majority of these folks will have access to Omnipod 5 upon launch? And then, my second question is for the other half of folks that are not accessing Omnipod through the pharmacy, it looks like two-thirds may have coverage but are not yet going through the pharmacy. I’m just wondering, why are those folks not choosing to go through what seems like a better access point?

Yes. Hi Jayson, it’s Bret. I can take those questions. So, I think what you’re referencing is 50% of our volume is now in the pharmacy channel. Our access is actually quite higher than that as DASH access is 80% now, which is -- the bulk of that is all in the pharmacy channel. So, very strong access in the pharmacy channel. And your question as to what we can expect at launch, we’re well ahead of DASH at this time and didn’t think we’d have any access with Omnipod 5 until we got clearance from the FDA. So, we’re quite pleased with where we’re at. The conversations with payers are going very nicely as we’ve talked about AID systems, the pivotal data. And I think they’re just waiting for clearance to start that process to contract and then add us to formulary. There’s really no reason at all why we wouldn’t expect Omnipod 5 access to very quickly reach the access that we have today with DASH in the pharmacy channel. So, it’s just a process and a little bit of time. And then, your question about why wouldn’t somebody start in the pharmacy channel, knowing that it’s a better product and a better experience. While the vast majority of co-pays are less than $50 in the pharmacy channel, it doesn’t mean all of them are. And in some cases, our legacy access is different than DASH. And so, there are situations, most probably access related why somebody may not choose to go into the pharmacy channel right upfront. And so, that access, we’re continuing to get stronger and build every day, and that’s why the percentage of new starts that are DASH into the pharmacy channel continues to rise.

Thank you. I show our next question comes from the line of Cecilia Furlong from Morgan Stanley. Please go ahead.

I wanted to ask about just the percentage of patients coming from MDI. It sounded like it ticked up slightly this quarter. But, just as you think about O5 launch going forward, how do you think about the ability of O5 to really expand pump utilization versus drive competitive conversions going forward relative to DASH?

Thanks, Cecilia. It’s a great question. What we know is those percentages will change. It’s a little hard to predict. But, when I think about Omnipod 5, I think about it as a additive growth driver. So, all the exciting growth that we’re driving because of the pharmacy and because of type 2 adoption, which is primarily multiple daily injections today in the type 2 users, that will continue. We know we’ve got a leadership position there and we have a differentiated technology for the type 2 user. But Omnipod 5 will be additive in terms of the growth eventually when we get into full market release and in terms of the patients that it’s bringing in, and it should make us more competitive for those users that are choosing AID over pump therapy. And we know that that’s the primary reason why somebody doesn’t choose Omnipod when they come on to pump therapy. So, we would guess that our pump conversions will increase with the launch of Omnipod 5.

Thank you. I show our next question comes from the line of Anthony Petrone from Jefferies. Please go ahead.

Thanks and congratulations on a good quarter. I have three quick ones. Just a quick update on DTC, continuing to see the TV ads, and so just wondering if there’s any update on return on investment there on DTC? And what are the plans as you get into O5? And then, just on supply chain constraints, as we look into 2022, do you see any potential impacts to the working capital cycle as we get into next year?

Yes. Hi Anthony, I can start that one with an update on DTC. It continues to be a really strong growth driver for us in the U.S. We know that awareness is one of the problems we need to solve for, not just in the U.S. but internationally. And so, our spend has been pretty constant for DTC. We started this, remember, in September about a year ago, and it continues to be a real growth driver for us. We’re getting better at it. We’re getting better at converting leads into new starts. And we’re getting really creative with our messaging, too. We launched different campaigns over the summer, called the Summer of Omnipod, which highlights the form factor of Omnipod, some of the benefits that we have and the freedom that Omnipod offers. We’ve also dabbled a little bit internationally. So, we’ve done -- run some TV commercials in the UK, some in Germany, some in Canada. And we’re trying to learn the ROI in those specific countries, too, because we just see it as a really massive opportunity to increase awareness. And the ROI has been positive. I won’t throw out any numbers there, but we know it’s a good investment for us and something that you can expect that we’ll continue to do.

And on the supply chain question, I can maybe start us off and then ask Wayde to comment about the impact on working capital. But, what I can tell you is that our teams are doing a marvelous job managing these dynamics. And to me, it highlights the value of the investment that we’ve made over the last several years, not just in manufacturing redundancy but in supply chain redundancy. And that investment has really helped us to manage through some of the challenges that we’ve seen in all environments, all industries in terms of the supply chain around freight, around certain components, et cetera. So, our team -- while we may have incurred some additional costs, they’ve also done a terrific job offsetting those costs. And ultimately, there’s been no impact at all to customer supply. So, that’s a testament to how hard our teams are working to support the growth and also manage through these very real challenges that exist today.

Yes. I could just add to the redundancy and supply chain improvements and investments that Shacey just talked about, we have been very successfully growing our inventory ahead of revenue. So, our inventories have grown significantly over the last year. We feel very good about that given where the -- where we were in the pandemic. Our teams did a fantastic job managing through that. We actually built inventory through the pandemic. And then, with the more recent supply chain challenges globally, team has done a really nice job managing that. And so, I think what you’ll continue to see us do is continue to build capacity and build inventory ahead of our operational performance. And we do that to make sure we’re in the best position possible to serve our customers and for new customers coming on board. So, I don’t see a major change to our working capital cycle just given that we’ve increased inventories so much to this point. But, you will see us continue to invest in a growing inventory number to make sure that we’ve got more than ample supply for our existing customers and for our future growth plans.

I show our next question comes from the line of Matt O’Brien from Piper Sandler. Please go ahead.

Hi. Good afternoon. This is Drew on for Matt. Thank you for taking questions. Congrats on the solid quarter here. I appreciate the color on next year. I just want to follow up a little bit so I can understand it better. Obviously, your U.S. business is growing 20% plus the last couple of years, even despite the pandemic in here that should fade a bit next year and then definitely some room on DASH penetration and, obviously, the O5 launch at some point next year. So, is the 15% to 20% really a function of your U.S. business more towards the higher end of that range and OUS more towards the lower, or is that more a function of your expecting that ramp of O5 to not kick off in a meaningful way to the business until more later in the year?

Yes. Drew, I can start that and then Bret may want to add some color as well. So, specific to the numbers, yes, 15% to 20%, I think you have it right in the sense that the U.S. will be at the high end of that range. We’re calling it high-teens, low-20s just to give ourselves some room there. But, as you said, the U.S. has lots of momentum, and you’ll certainly see low-20s in that range. And then, international at the other end of the guidance, as we said, low double digits because of the dynamics we’ve just talked about on the call today. Although double-digit growth internationally still good growth, strong growth on the back of DASH, we don’t have an AID system there, and we haven’t announced when we will yet. And so, we always put a thoughtfully appropriate guide in place for the year. We think diabetes at 15% to 20% on what’s now a $1 billion base of business is a good place to start. And again, we haven’t given formal guidance yet, just trying to help people understand some of the major puts and takes heading into 2022. And then, as you mentioned, Omnipod 5, that has a lot of variability to it. We’ve talked about here the limited market release and how long that takes. We’ve said publicly before, it’s usually a three to nine-month time frame. Depending on how fast that can be will dictate how fast we move to full market release. Access is also another gating factor. We’re starting really strong in a good position here, but it may take some time to build enough access. So, there’s just lots of things to consider around Omnipod 5. What we said is that we’ll start somewhere in this range, and we’ll update as we go through the year and as we progress with Omnipod 5. And so, I don’t know, Bret, if you want to add anything else there?

Yes. Well said, Wayde. Drew, I would just say, your question is right. It really is a stronger U.S. growth next year that’s really driven by the current growth drivers. So, DTC, our type 2 access, the pharmacy model, all those things will continue to drive the U.S. growth. We did build in some growth for Omnipod 5, as Wayde suggested. But again, with the annuity model, it takes a little bit of time. So, there’s still some uncertainty of the length of the LMR, the time to get to full market release. And then, once we get to full market release, the annuity model doesn’t really represent growth right away. It takes some time to build that into the rates and revenue.

Thank you. I show our last question comes from the line of Joanne Wuensch from Citi. Please go ahead.

Thank you so much for squeezing me in. I really appreciate it. I’m trying to get my head around something, which is when Omnipod 5 comes out, what does it do in terms of the portion of the market that you’re most likely to address? And so, what I’m also trying to do is cross-reference that with increasing new patient starts in type 2. Do you see your market splintering? Maybe splintering is a wrong word, or expanding? Or just help me understand when it arrives and as it arrives, what happens?

Sure. Joanne, I will start and perhaps Bret will have some additional thoughts to offer. But, we believe that Omnipod 5 will be additive to our growth. So, as you think about the momentum that exists today in our business, we’ll focus on the U.S. because that’s where we’re going to launch first. There’s a lot of momentum being driven today by DTC, so increasing awareness. There’s a lot of momentum being driven today by type 2 users of DASH, the increasing use in the pharmacy, and then the benefits of the pharmacy for all users and then, of course, our differentiated form factor. And that’s what’s driving our growth today. All of that remains. And then, Omnipod 5 comes and is additive, and we believe will make us more compete in the type 1 space. And there is also likely to be type 2 users of the technology, although we will not market directly to them until we have an expanded label. But, we do think the technology has value there to offer. So, I think we know for all of the people that are coming out of MDI and on to pump therapy, the primary reason that someone doesn’t choose Omnipod, which is clearly tests and market research to be a preferred form factor is AID. And with Omnipod 5, obviously, we check that box, and we believe we check that box with the very best system that will be on the market. And so, we think we get a lot more competitive, which is why I said earlier that the numbers will change, the ratios will change. Today, we get 80% of our users from multiple daily injections. We’re going to continue to get those people, and we will get more. We will get more competitive switchers as a result of Omnipod 5.

Yes. I think, those 2 percentages that we often speak to 80% of our new starts coming from MDI and 40% of our new starts being type 2, I think we’re okay with those percentages going down with the introduction of Omnipod 5, as long as new starts go up, which they will for sure. The other thing to think about, Joanne, as you know, all these tailwinds that we’ve spoken about, that Shacey mentioned, are still going to be there with Omnipod 5, and we remove really one of the biggest headwinds that we have today, which is AID competition. So, Omnipod 5 does check all the boxes. It’s why we think it’s going to be a best-in-class product offering. And we’re so excited about what it does to grow once we get to full market release.

Thank you. That concludes our Q&A session. At this time, I’d like to turn the call back over to Shacey Petrovic for closing remarks. Please go ahead.

Thank you, Dalam. And thanks, everyone, for your participation and questions today. As part of a company-wide event last week, we hosted several Omnipod users, including a few Omnipod 5 trial participants still using the system. And it was incredible to hear the impact Omnipod 5 has had on this diverse group of customers. Dwight, a grandfather living with late onset type 1 diabetes, said that because of Omnipod 5’s simplicity, he truly trusted the system right away when he walked out of the clinic. Morgan, a young woman living with type 1 diabetes for 19 years, told us, "Omnipod 5 is magic. It’s unreal. I don’t ever have to think about my diabetes. I want everyone to know about it. It has changed my life." And Valentino, a first generation American who has participated in other AID system trials said of Omnipod 5, "All I can say is wow. I’m waking up normal. I don’t ever have to think about my diabetes. It brings peace." So, I want Dwight, Morgan, Valentino and others in the community to know that we hear you. We are working hard to get Omnipod 5 into your hands and to make sure that everybody knows about and can benefit from this remarkable technology. Thanks again for joining us today. And have a great evening.

Thank you. This concludes today’s conference call. Thank you for your participation. And have a wonderful day. You may all disconnect.