FDA Warning Letter to Insulet Corp. (PODD) Seems Benign; Jefferies Reiterates Buy
Jefferies reiterates a Buy rating and $30.00 price target on Insulet Corporation (NASDAQ: PODD) after an FDA warning letter doesn't appear material. Analyst Raj Denhoy believes the issue will prove temporary.
Denhoy commented, "The FDA warning letter announced today doesn’t appear material but the observations behind the letter, namely manufacturing and quality deficiencies, provide a window into the issues that have hammered the company’s recent results. We believe this issue will ultimately prove temporary and rate shares Buy."
Denhoy also added, "The FDA cited five OmniPod Eros lots it identified as having been released despite not meeting quality standards; Insulet later identified an additional three lots and alerted the agency. The FDA thus far deemed the company’s response inadequate, hence the warning letter, but the FDA acknowledges that Insulet has changed its procedures and seems satisfied with the proposed remediation plan. The company does not expect any adverse events from the distributed product."
Shares of Insulet Corporation closed at $30.25 yesterday.