Tandem's Control-IQ+ Algorithm Cleared for Type 2 Diabetes, Expanding AID Market

Tandem Diabetes Care has received FDA clearance for its Control-IQ+ algorithm in Type 2 diabetes, marking a significant expansion in the automated insulin delivery (AID) market. The company's AID system, which integrates with Tandem's insulin pumps, can now automatically calculate and deliver basal insulin for people with Type 2 diabetes.

Expanded Indication and Market Impact

The FDA's decision allows Tandem to provide its AID technology to all insulin-using Type 2 diabetes patients, more than doubling the company's total addressable market in the U.S. This expanded indication applies to users of Tandem's t:slim X2 tubed pump and the smaller Tandem Mobi pump.

Tandem CEO John Sheridan emphasized the significance of this development during a recent earnings call, highlighting the potential for substantial market growth. The company plans a pilot launch of the updated software in March, according to Chief Commercial Officer Mark Novara.

Clinical Trial Results and Algorithm Modifications

Tandem will present results from a 300-person randomized, controlled trial that supported the FDA's decision at the upcoming International Conference on Advanced Technologies & Treatments for Diabetes. The company has made modifications to the Control-IQ algorithm, including expanded weight ranges and total daily insulin ranges, to better accommodate the needs of Type 2 diabetes patients.

Competitive Landscape and Market Challenges

Tandem's device is the second AID system cleared by the FDA for people with Type 2 diabetes, following Insulet's Omnipod 5, which received an expanded indication last summer. Both companies now face the challenge of increasing awareness and adoption of insulin pump therapy in the Type 2 diabetes population, where it has not been widely accepted previously.

Insulet CEO Jim Hollingshead expressed confidence in his company's position, stating, "We are very confident in our position and think we have a clear right to win." Insulet reported that Type 2 diabetes users represented more than 30% of new customers in the fourth quarter, indicating growing traction in this market segment.

Financial Outlook and Market Potential

Tandem reported revenue of $940.2 million in 2024, representing year-over-year growth of 26%. For 2025, the company projects sales between $997 million and $1 billion. Insulet's revenue grew by 22% to $2.1 billion in 2024, with expectations of 16% to 20% growth in 2025.

Both companies see significant potential in the Type 2 diabetes market. Insulet estimates that about 2.5 million people in the U.S. with Type 2 diabetes take multiple daily doses of insulin, with another 3 million taking basal insulin only. This large patient population represents a substantial opportunity for AID system manufacturers.