Insulet Corp. posted strong third-quarter results, with increased revenues and narrower operating losses, prompting the Bedford, Mass.-based firm to increase its full-year sales and earnings forecasts.
The insulin management system maker posted revenues of $18.7 million during the three months ended Sept. 30, up 85.3 percent compared with $10.1 million during the same period last year.
Net losses widened to $24.7 million, up 14 percent compared with $21.7 million during Q3 2008, but operating losses narrowed by 32 percent, falling from $19.8 million during the third quarter last year to $13.5 million during the just-ended quarter.
The gains came as Insulet slashed total operating expenses by more than 92 percent as a percentage of revenues, via reductions in research and development costs (down 14 percent as a percentage of revenues); general and administrative expenses (down 29 percent as a percentage of revenues); and sales and marketing costs (which fell nearly 50 percent as a percentage of revenues).
Insulet made another significant financial move during the quarter, amending its $60 million credit facility with Deerfield Management Co. in a move it said would save $12 million over three years.
The original deal, inked in March, called for the company to borrow $27.5 million, with another $32.5 million available at Insulet’s discretion.
The amended deal will see Insulet repay that nut with 2,855,659 shares of stock for $9.63 per share — a 6 percent discount from its $10.28 Sept. 25 closing price.
For its part, Deerfield agreed to eliminate performance-based milestones on the remaining $32.5 million, reduce the annual interest rate to 8.5 percent from 9.75 percent and forego the remaining 1.5 million warrants that would have been issued on future draws.
Insulet said it will draw down the remaining $32.5 million immediately; the entire $60 million nut, plus interest, is still due in Sept. 2012.
The positive third-quarter results led to Insulet increasing its full-year sales and earnings forecasts. The company is now predicting sales of between $64 million and $66 million, compared with prior expectations of between $58 million and $65 million. Operating losses are now expected to be between $58 million and $60 million for fiscal 2009, compared to previous guidance of $55 million to $60 million.
