Investors pressure Insulet shares after 1 analyst cites increased adverse event reports in an FDA database and rampant customer complaints, but another analyst finds that the uptick is "benign" due to a reporting change.
UPDATED Sept. 25 at 11:15 a.m. with Jefferies report on reporting change for adverse events involving OmniPod
Insulet (NSDQ:PODD) shares are off some 4.5% since the end of last week, after a JMP Securities report of increase adverse event reports and rampant customer complaints for its OmniPod insulin management device.
PODD shares were trading at $37.75 apiece at market's close Sept. 19, having reached a 52-week high, but fell some 5.5% the next day, to $35.69 each after JMP analysts downgraded their rating on Insulet stock to "market perform" from "market outperform."
"The company may be faced with quality control issues (maybe because of the surge in demand) that may attract FDA's attention or require retooling the manufacturing process," the analysts wrote in a Sept. 20 note to investors.
The FDA's MAUDE database, which tracks reports of adverse events submitted to the agency, shows 845 reports concerning the OmniPod through August 31 of this year. That's nearly 24% more than were filed in all of 2012, according to the database.
But Jefferies analyst Raj Denhoy said "the root cause is much more benign" because it's caused by a reporting change made by Insulet.
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