Revenue Grows 87% Year over Year

Manufacturing Efficiencies Drive Significant Expansion in Gross Profit Year over Year

BEDFORD, Mass., May 7 /PRNewswire-FirstCall/ -- Insulet Corporation (Nasdaq: PODD), the leader in tubing-free insulin pump technology with its OmniPod(R) Insulin Management System, today announced financial results for the first quarter ended March 31, 2009.

First Quarter 2009 Results

First quarter 2009 revenue increased 87% to $12.5 million, compared to $6.7 million in the first quarter of 2008. Gross profit for the first quarter of 2009 was $2.0 million, or 16%, compared to a gross loss of $3.3 million, or 50%, for the first quarter of 2008.

Operating loss for the first quarter of 2009 decreased by 13% to $17.5 million from $20.0 million in the first quarter of 2008. Net loss for the first quarter of 2009 was $19.6 million, or $0.71 per share, compared to a net loss of $19.9 million, or $0.73 per share, for the first quarter of 2008. Total operating expenses increased to $19.5 million in the first quarter of 2009, compared to $16.7 million in the first quarter of 2008. The increase in operating expenses was mostly related to the expansion of the Company's sales organization and infrastructure throughout 2008.

'Our impressive top line growth and gross margin expansion in the first quarter are the direct result of investments made in 2008 to establish a national sales force and significantly increase our manufacturing capacity,' said Duane DeSisto, President & Chief Executive Officer of Insulet. 'Now that we have received CE Mark approval for the OmniPod System, we have commenced discussions with several potential partners and distributors to facilitate our international expansion.'

Net interest expense was $2.2 million in the first quarter of 2009, compared to net interest income of $0.1 million in the first quarter of 2008. The increase consisted primarily of $1.2 million in cash interest expense on the Company's outstanding 5.375% convertible notes, which were issued in June 2008 and $1.0 million in non-cash interest expense related to the Company's adoption on January 1, 2009 of FASB Staff Position APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement). This new standard required the Company to reclassify a portion of its long-term debt related to the outstanding convertible notes as a debt discount within equity. This amount will then be amortized into the income statement as non-cash interest expense over the remaining term of the convertible notes. As of March 31, 2009, the amount reclassified was $23.8 million.

As of March 31, 2009, the Company's cash and cash equivalents totaled $68.2 million, compared to $56.7 million as of December 31, 2008. In March 2009, the Company entered into an agreement with Deerfield Management Company, to provide the Company with up to $60 million in financing through a flexible credit facility. Under the agreement, the Company initially borrowed $27.5 million and issued warrants to purchase 3.75 million shares of common stock under the agreement at an exercise price of $3.13. The remaining $32.5 million is available to be drawn down by no later than November 2010 in increments of $6.5 million upon the Company meeting certain financial targets. For each additional $6.5 million increment in additional borrowing drawn by the Company, the Company will issue warrants to purchase an additional 300,000 shares of its common stock. Interest will accrue on drawn amounts at a rate of 9.75% per annum and on undrawn amounts at a rate of 2.75% per annum.

Recent Highlights

• In April 2009, the Company received the CE Mark approval for the OmniPod System allowing the Company to distribute the OmniPod System throughout the European Union and in other countries that recognize the CE Mark.
• The OmniPod Insulin Management System was awarded the top honor at the 2009 Edison Best New Product Awards, which recognizes excellence in new product development, marketing, and innovation.

Guidance

The Company reiterates its estimate for full year 2009 revenues to be in the range of $55 to $65 million and its estimate of operating loss to be in the range of $50 to $60 million.