Shares of Tandem Diabetes Care (TNDM) jumped in morning trading after the company reported preliminary sales for the first quarter that exceeded analysts’ expectations.

PRELIMINARY Q1 RESULTS: Tandem Diabetes said before the market open that preliminary sales for Q1 were $27M, up 42% from last year and exceeding analysts’ consensus estimates of $24.99M. Pump shipments are expected to be approximately 4,400 pumps, an increase of 56% from last year. In a statement, President and Chief Executive Officer Kim Blickenstaff said that “continued high-demand for the t:slim X2 Insulin Pump drove our record first quarter sales, and supports our strategy of using modern, consumer-focused technology to improve the lives of people with diabetes,” adding that “This strong commercial momentum allows us to continue leveraging our early infrastructure investments and positions us well to deliver upon our goals in 2018.”

PIPER ‘WAITING FOR MORE EVIDENCE’ OF ACCELERATING GROWTH: Piper Jaffray analyst JP McKim reiterated a Neutral rating and $4 price target, telling investors in a research note that while he is “incrementally more positive” on Tandem on its preliminary revenue beat, noting that the company benefited from the exit of Animas from the U.S. market, he is “waiting for more evidence” of an accelerating growth trend before revising his stance. Animas Corporation is one of the Johnson & Johnson (JNJ) Diabetes Care Companies, which previously announced in October 2017 that it would discontinue the manufacturing and sale of Animas Vibe and OneTouch Ping insulin pumps, close operations and exit the insulin pump business.

PRICE ACTION: Shares of Tandem Diabetes are up 11.6% in morning trading to $6.44.

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