What changed in this filing

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Item 1A. Risk Factors

2025-02-21 compared with 2024-02-23 · 106 added, 118 removed, 311 unchanged (42% of the section changed)

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• competitive pricing;

• failure to appropriately forecast the demand, competition, and costs related to markets in which we compete;

• results of clinical studies relating to Omnipod products or our competitors’ products.

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Intermediaries that are in the business of selling other medical products may not devote a sufficient level of resources and the support required to generate awareness of our products and grow or maintain our product sales.

If our intermediaries are unwilling or unable to market and sell our products, or if they do not perform to our expectations, we could experience delayed or reduced market acceptance and sales of our products, which would adversely affect our business, financial condition, and results of operations.

If our intermediaries are unwilling or unable to market and sell our products, or if they or our sales force do not perform to our expectations, we could experience delayed or

reduced market acceptance and sales of our products, which would adversely affect our business, financial condition, and results of operations.

Our ability to grow our revenue depends in part on our retaining a high percentage of our customers.

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In order to manage future growth, we will be required to improve existing, and implement new, sales and marketing efforts, distribution channels, and customer support procedures.

In addition, the form and function of our enterprise information technology systems will need to change and be

improved upon as our business needs change.

In addition, the form and function of our enterprise information technology systems will need to change and be improved upon as our business needs change.

For example, we recently implemented a new enterprise resource planning system and plan to upgrade our customer relationship management system.

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Failure to secure or retain adequate coverage or reimbursement for our products by third-party payors could adversely affect our business, financial condition, and results of operations.

We expect that sales of our Omnipod products, which, for Omnipod 5, occur only through the pharmacy channel in the U.S.

and for Omnipod DASH, primarily through the pharmacy channel, will be limited unless a substantial portion of their sales price is paid for by third-party payors, including private insurance companies, health maintenance organizations, preferred provider organizations, federal and state government healthcare agencies, intermediaries, Medicare, Medicaid and other managed care providers.

We expect that sales of our Omnipod products, which, for Omnipod 5, occur only through the pharmacy channel in the United States and for Omnipod DASH, primarily through the pharmacy channel, will be limited unless a substantial portion of their sales price is paid for by third-party payors, including private insurance companies, health maintenance organizations, preferred provider organizations, federal and state government healthcare agencies, intermediaries, Medicare, Medicaid, and other managed care providers.

In the United States, we currently have contracts establishing reimbursement for Omnipod products with national and regional third-party payors and government agencies that provide reimbursement in all 50 states.

Medicare Part D Plan Sponsors may provide coverage for Omnipod products under the Medicare Part D prescription drug program, which requires negotiating with third-party payors in order to provide our product through the pharmacy channel in the United States.

While we anticipate entering into additional contracts with other intermediaries and third-party payors, we cannot assure you that our efforts will be successful, which could limit the availability of Omnipod products.

While we anticipate entering into additional contracts with other intermediaries and third-party payors, we cannot assure that our efforts will be successful, which could limit the availability of Omnipod products.

In addition, these contracts can generally be terminated by the third-party payor without cause.

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Healthcare reform laws could adversely affect our revenue and financial condition.

During the past several years, the U.S.

healthcare industry has been subject to an increase in governmental regulation at both the federal and state levels.

Efforts to control healthcare costs, including limiting access to care, alternative delivery models, and changes in the methods used to determine reimbursement scenarios and rates, are ongoing at the federal and state government levels.

It is unclear how the ACA and its implementation, as well as efforts to repeal or replace, or invalidate, the ACA, or portions thereof, will affect our business.

Additional legislative changes, regulatory changes, and judicial challenges related to the ACA remain possible.

It is possible that the ACA, as currently enacted or as it may be amended in the future, and other healthcare reform measures that may be adopted in the future, could have an adverse effect on our industry and on our ability to maintain or increase sales of any of our products.

Efforts to control healthcare costs, including limiting access to care, alternative delivery models, and changes in the methods used to determine reimbursement systems and rates, are ongoing at the federal and state levels.

Future changes cannot be predicted with certainty, and may have an adverse effect on our industry and on our ability to maintain or increase sales of any of our products.

Risks Related to Competition, Product Development and Intellectual Property

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The competitive landscape in our industry continues to undergo significant change.

We compete with companies that produce insulin pumps, such as Medtronic, Tandem, The Ypsomed Group and Roche Diabetes Care, Inc (“Roche”).

We compete with companies that produce insulin pumps, such as Medtronic and Tandem.

In addition to the established insulin pump competitors, we compete with companies that provide products and supplies for MDI therapy.

MDI therapy, including smart pens, can be substantially less expensive than pump therapy, and improvements in the effectiveness of MDI therapy may result in fewer people with insulin-dependent diabetes converting from MDI therapy to pump therapy than we expect, which could result in price pressure and decreased revenue.

In addition, some of our competitors, such as Medtronic and Roche, are large, well-capitalized companies with more resources than we have.

MDI therapy, including smart pens, can be substantially less expensive than pump therapy, and improvements in the effectiveness of MDI therapy may result in fewer people than we expect converting from MDI therapy to pump therapy, which could result in price pressure and decreased revenue.

In addition, some of our competitors, such as Medtronic, are large, well-capitalized companies with more resources than we have.

These companies may have competitive advantages over us, including:

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In addition, even the perception that new products may be introduced, or that technological or treatment advancements could occur, could cause consumers to delay the purchase of our products or impact our stock price.

In 2023, for example, ongoing adoption of the GLP-1 class of drugs in diabetes and news surrounding the expansion of use of GLP-1 drugs in obesity led to speculation regarding the impact on the insulin therapy market.

We believe this speculation was the cause of a decline in our stock price in 2023.

Our own new product development initiatives may prove to be ineffective or not commercially successful.

Our new product development initiatives may prove to be ineffective or not commercially successful.

The healthcare industry is characterized by continuous technological change, resulting in changing consumer preferences and requirements.

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Even if we can develop, manufacture, and obtain regulatory and reimbursement approvals for our new products, the success of those products depends on market acceptance.

Market acceptance for our new products could be affected by several factors, including the availability of alternative products from our competitors, the price of our products, the timing of our market entry, and our ability to market and distribute our products effectively.

Our failure to introduce new and innovative products in a timely manner could have a material adverse effect on our business, results of operations, financial condition, and cash flows.

and distribute our products effectively.

Our failure to introduce commercially successful new and innovative products in a timely manner could have a material adverse effect on our business, results of operations, financial condition, and cash flows.

If the third parties on which we rely to conduct our clinical trials and to assist us with pre-clinical development do not perform as contractually required or expected, we may not be able to obtain regulatory clearance or approval or commercialize our products.

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If these third parties do not successfully carry out their contractual duties or regulatory obligations or meet expected deadlines, or if the quality or accuracy of the data they obtain is compromised due to failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our pre-clinical development activities or clinical trials may be extended, delayed, suspended, or terminated, and we may not be able to obtain regulatory approval for, or successfully commercialize, our products on a timely basis, or at all, and our business and operating results may be adversely affected.

Furthermore, our third-party clinical trial investigators may be delayed in conducting our clinical trials for reasons outside of their control.

Future market or clinical studies may be unfavorable to our Omnipod products and their efficacy, which could hinder our sales efforts and have a material adverse effect on our business, results of operations, financial condition, and cash flows.

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Despite these measures, any of our intellectual property rights could be challenged, invalidated, circumvented, or misappropriated.

Companies could produce competing products using the stolen intellectual property and counterfeit products could also be developed.

The latter could be damaging to our reputation if the products do not work properly.

We may not be able to develop additional proprietary technologies that are patentable, and we cannot ensure that our pending patent applications will result in the issuance of patents to us.

To protect our intellectual property, we may need to assert claims of infringement or misappropriation against third parties.

To protect our intellectual property, we may need to assert claims of infringement or misappropriation against third parties, as we are currently doing in several cases.

Any lawsuits that we initiate could be expensive, take significant time, and divert management’s attention from other business concerns.

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We have been involved in patent infringement suits in the past and may be again in the future.

As our revenue increases, the number of companies with whom we compete grows, and the functionality of products and technology in different industry segments overlaps, the risk of third-party infringement claims increases.

Third parties may currently have, or may eventually be issued, patents on which our current or future products or technologies may be alleged to infringe.

Any of these third parties might make a claim of infringement against us.

As the number of companies with whom we compete grows and the functionality of products and technology in different industry segments overlap, the risk of third-party infringement claims increases.

Third parties may currently have, or may eventually be issued, patents related to our current or future products or technologies and any of these third parties might make a claim of infringement against us.

Such litigation, regardless of its outcome, could result in the expenditure of significant financial resources and the diversion of management’s time and resources.

In addition, such litigation could cause negative publicity, adversely affect prospective users, cause product shipment delays, limit or prohibit us from manufacturing, marketing or selling our current or future products, and/or require us to develop non-infringing technology, make substantial payments to third parties, or enter into royalty or license agreements, which may not be available on acceptable terms or at all.

In addition, such litigation could cause negative publicity, adversely affect prospective users,

cause product shipment delays, limit or prohibit us from manufacturing, marketing, or selling our current or future products, and/or require us to develop non-infringing technology, make substantial payments to third parties, or enter into royalty or license agreements, which may not be available on acceptable terms or at all.

If a successful claim of infringement were made against us and we could not develop non-infringing technology or license the infringed or similar technology on a timely and cost-effective basis, our revenue could decrease substantially, and we could be exposed to significant liability.

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We rely on agreements or licenses to intellectual property or other rights in order to sell our current product and commercialize new products.

We rely on agreements or licenses to intellectual property or other rights in order to sell our current products and commercialize new products.

If we cannot retain or obtain these agreements, licenses, or other rights, we may not be able to sell, develop, or commercialize our products.

For example, our rights to incorporate the FreeStyle blood glucose meter into Classic Omnipod is governed by a license agreement with Abbott.

In addition, we have a commercial agreement with Dexcom that allows us to sell

Omnipod 5 with integration to Dexcom’s CGM and have a development agreement with Abbott to integrate Abbott’s CGM with Omnipod 5.

For example, we have commercial agreements with Dexcom and Abbott that allow us to sell Omnipod 5 with integration to Dexcom’s and Abbott’s CGM sensors.

The loss of any of these rights could impair the functionality of our products or prevent us from selling our products without significant development and regulatory activities that may not be completed in time to prevent an interruption in the availability of our products to consumers.

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Risks Related to Economic Conditions and Operating Internationally

The continuing worldwide macroeconomic and geopolitical uncertainty as well as the impact of the COVID-19 or other global pandemics may adversely affect our business and prospects.

The continuing worldwide macroeconomic and geopolitical uncertainty as well as the impact of global pandemics may adversely affect our business and prospects.

Continued concerns about the systemic impact of potential long-term and wide-spread recession and geopolitical issues, including wars and terrorism, have contributed to increased market volatility and diminished expectations for economic growth in the world.

Our business and results of operations may be adversely impacted by changes in macroeconomic conditions, including inflation, bank failures, rising interest rates and availability of capital markets.

Uncertainty about global economic conditions, particularly in countries with government-sponsored healthcare systems, may also cause decreased demand for our products, consumers may reduce their spending, new orders for our products may decline and our user attrition rate may increase, which could have a material adverse effect on our business, sales, financial condition, and results of operations.

Another global pandemic like COVID-19 has the potential to significantly impact our supply chain if the manufacturing plants that produce our products or product components, the distribution centers where we manage our inventory, or the operations of our logistics and other service providers, including third parties that sterilize our products, are disrupted, temporarily closed or experience worker shortages for a sustained period of time.

As a result of the COVID-19 pandemic, many employees have transitioned to a remote or hybrid work environment, which has increased risks associated with our information technology systems and networks.

These increased risks include cyber-attacks, computer viruses, disruptions, or shutdowns that could result in a failure to protect our information technology systems and data integrity.

Uncertainty about global economic conditions, particularly in countries with government-sponsored healthcare systems, may also cause slower adoption of new technologies such as Omnipod 5, resulting in decreased demand for our products and increased competition, downward pricing pressure, and increased user attrition, which could have a material adverse effect on our business, sales, financial condition, and results of operations.

A weakening of macroeconomic conditions may also adversely affect our suppliers, which could result in interruptions in supply.

In addition, continuing social and political concerns and divisions in the United States and throughout the world, could have a material, adverse effect on the economic conditions in markets we serve, and on our results of operations, cash flow and financial position.

Elections and political changes in various countries, including the United States, may further exacerbate geopolitical and geoeconomic tensions and market instability.

Another global pandemic could adversely impact our business and financial condition.

Another global pandemic or new variants of COVID-19, and the requirements to take action to help limit the spread of illness, could impact our ability to carry out our business as usual.

For example, the COVID-19 pandemic diverted healthcare resources away from the conduct of clinical trials and interrupted the operations of the FDA, which delayed product approval timelines, including for Omnipod 5.

Following the onset of the COVID-19 pandemic, many employees transitioned to a remote or hybrid work environment, which has increased risks associated with our information technology systems and networks.

These increased risks include cyber-attacks, computer viruses, disruptions, or shutdowns that could result in a failure to protect our information technology systems and data integrity.

In addition, another global pandemic like COVID-19 could significantly impact our supply chain if the manufacturing plants that produce our products or product components, the distribution centers where we manage our inventory, or the operations of our logistics and other service providers, including third parties that sterilize our products, are disrupted, temporarily closed, or experience worker shortages for a sustained period of time.

Our financial condition or results of operations may be adversely affected by international business risks.

In addition to the United States, we sell our products in Europe, Canada, the Middle East and Australia.

Our international operations are subject to risks that are inherent in conducting business under foreign laws, regulations, and customs.

International sales made up 24% of our revenues in 2023 and we expect international sales to contribute significantly to our future growth as we launch Omnipod 5 in our international markets.

dollar strengthens in relation to the currencies of other countries where we sell our products, such as the euro, our U.S.

dollar reported revenue and income will decrease.

Changes in the relative values of currencies occur regularly and, in some instances, may have a significant effect on our operating results.

International sales made up 25% of our revenues in 2024 and we expect international sales to contribute significantly to our future growth as we continue to launch Omnipod 5 in additional international markets.

We also rely on third-party suppliers located in other countries.

For example, a significant portion of our products are manufactured by a third-party contract manufacturer in China.

Our efforts to introduce or expand our current or future products in international markets may not be successful, in which case we may have expended significant resources without realizing the expected benefit.

Ultimately, the investment required for expansion into international markets could exceed the results of operations generated from this expansion.

In addition to the risks discussed elsewhere in this Item 1A, other risks associated with doing business internationally, include:

A significant portion of our products are manufactured by a third-party contract manufacturer in China, and we also manufacture products at our facility in Malaysia.

Our future and existing international operations may subject us to a number of additional risks and expenses, any of which could harm our operating results.

These risks and expenses include:

• political instability and actual or anticipated military or political conflicts;

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• negative consequences from changes in or interpretations of tax laws;

• currency fluctuation;

• difficulty in establishing, staffing, and managing international operations;

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• difficulty in collecting accounts receivable and longer collection periods.

In addition, government policies on international trade and investment such as import quotas, capital controls or tariffs, whether adopted by individual governments or addressed by regional trade blocks, can affect the cost of and the demand for our products and services, impact the competitive position of our products, or otherwise adversely affect our ability to sell products in the affected countries.

The implementation of more restrictive trade policies, such as more detailed inspections, higher tariffs, or new barriers to entry, could negatively impact our business, results of operations, and financial condition.

For example, a government's adoption of “buy national” policies or retaliation by another government against such policies could have a negative impact on our results of operations.

Failure to comply with the U.S.

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Because of the predominance of government-sponsored healthcare systems around the world, most of our customer relationships outside of the United States are with governmental entities and are therefore subject to such anti-bribery laws.

Because we do business in the U.K., the U.K.

Bribery Act also extends to our interaction with public and private sector entities and persons outside the U.K., including in the United States.

Because we do business in the United Kingdom, the U.K.

Bribery Act also extends to our interaction with public and private sector entities and persons outside the United Kingdom, including in the United States.

Our policies mandate compliance with these anti-bribery laws.

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Our inventory is produced and maintained in a limited number of locations.

While we expect to begin production at our newly constructed manufacturing facility in Malaysia in 2024, currently our products are manufactured in two locations, at our U.S.

manufacturing facility in Massachusetts and on manufacturing lines owned by us at a facility located in China that is operated by a third-party contract manufacturer.

Our products are manufactured in three locations:

at our manufacturing facility in the United States, at our newly constructed manufacturing facility in Malaysia, and on manufacturing lines owned by us at a facility located in China that is operated by a third-party contract manufacturer.

Political or financial instability, currency fluctuations, the outbreak of pandemics such as COVID-19, labor unrest, transport capacity and costs, port security, weather conditions, natural disasters, or other events that could slow or disrupt port activities and affect foreign trade are beyond our control and could materially disrupt our supply of product from China, increase our costs, and/or adversely affect our results of operations.

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In addition, substantially all of our inventory in the United States is held at a single location in Massachusetts and our inventory in Europe is maintained by a third-party logistics entity primarily at a single location in the Netherlands.

We take precautions to ensure that our third-party contract manufacturer and logistics entity safeguard our assets, including maintaining insurance, enacting health and safety protocols, and storing computer data offsite.

We take precautions to ensure that our third-party contract manufacturer and logistics entity safeguard our assets, including maintaining

insurance, enacting health and safety protocols, and storing computer data offsite.

However, a natural or other disaster, such as a fire or flood, could cause substantial delays in our operations, damage or destroy our manufacturing equipment and/or inventory, and cause us to incur additional expenses.

The insurance we maintain may not be adequate to cover our losses in any particular case.

Further, the insurance we maintain may not be adequate to cover our losses in any particular case.

With or without insurance, damage to our facility, manufacturing equipment, inventory, or other property, or to any of our suppliers, may have a material adverse effect on our business, financial condition, and results of operations.

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• our suppliers may encounter financial hardships unrelated to our demand, which could inhibit their ability to fulfill our orders and meet our requirements, and

• our suppliers may fail to comply with conflict minerals, anti-slavery, or other applicable laws, thus impairing our ability to source materials.

• our suppliers may fail to comply with environmental, conflict minerals, anti-slavery, or other applicable laws, thus impairing our ability to source materials.

An interruption, delay, or inability to obtain components, products, and raw materials from our third-party suppliers at acceptable prices in a timely manner, could hinder our ability to manufacture our products in a timely or cost-effective manner and have a material adverse effect on our business and results of operations.

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The manufacture of our product is highly exacting and complex, due in part to strict regulatory requirements.

While we manufacture our products in the United States, a third-party contract manufacturer in China manufactures and supplies a significant portion of our inventory and we expect to begin additional manufacturing in our new facility in Malaysia during 2024.

While we manufacture our products in the United States and at our new facility in Malaysia, a third-party contract manufacturer in China manufactures and supplies a significant portion of our inventory.

We and our contract manufacturer may encounter problems during manufacturing for a variety of reasons, including equipment malfunction, failure to follow specific protocols and procedures, defective raw materials, and environmental factors.

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Significant manufacturing problems could have a material adverse effect on our business, results of operations, financial condition, and cash flows.

In addition, as we commence operation of new manufacturing lines, we could experience quality issues and unexpected operational delays that decrease our gross margins and cause a shortage of product supply.

In addition, as we commence operation of new manufacturing lines, we could experience quality issues and unexpected operational delays that

decrease our gross margins and cause a shortage of product supply.

Failure to scale manufacturing appropriately to meet future demand could also result in product shortages.

Our non-insulin Drug Delivery product line faces challenges which, if not met, may impair its future success.

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Risks Related to Government Regulation and Litigation

We are subject to extensive government regulation, which could restrict the sales and marketing of our products and could cause us to incur significant costs.

We are subject to extensive government regulation, which could restrict the sales and marketing of our products, could cause us to incur significant costs, and impact our profitability and competitiveness.

Our medical device products and operations are subject to extensive regulation by the FDA and various other federal, state, local, and foreign government authorities.

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• administrative detention by the FDA of medical devices believed to be adulterated or misbranded;

• operating restrictions, suspension or shutdown of production;

• operating restrictions or suspension or shutdown of production;

• refusing our requests for regulatory clearance of new products, new intended uses, or modifications to our Omnipod products;

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The occurrence of any of these events may have a material adverse effect on our business, financial condition, and results of operations.

As described elsewhere in this 10-K, in October and November 2022, we issued voluntary Medical Device Corrections (“MDCs”) relating to the batteries and/or charging of our DASH PDMs and Omnipod 5 Controllers, which are manufactured for us by a third-party.

In addition, the FDA may change its clearance and approval policies, adopt additional regulations, revise existing regulations, or take other actions that may prevent or delay approval or clearance of our products under development or impact our ability to modify our currently approved or cleared products on a timely basis.

The FDA is in the process of reviewing the 510(k) clearance process and criteria and has announced initiatives to improve the current pre- and post-market regulatory processes and requirements associated with infusion pumps and other home use medical devices.

Any change in the laws or regulations that govern the clearance and approval processes relating to our current and future products could make it more difficult and costly to obtain clearance or approval for new products, or to produce, market, and distribute existing products.

We also sell our products in Canada, Australia and certain countries in Europe and the Middle East.

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A government-mandated recall could occur if the FDA finds that there is a reasonable probability that the device would cause serious, adverse health consequences or death.

A voluntary recall by us could occur as a result of any material deficiency in a device, such as manufacturing defects, labeling deficiencies, packaging defects, or other failures to comply with applicable regulations.

A voluntary recall by us could occur as a result of any material deficiency in a

device, such as manufacturing defects, labeling deficiencies, packaging defects, or other failures to comply with applicable regulations.

Adverse events involving our products have been reported to us in the past, and we cannot guarantee that they will not occur in the future.

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Doctors may prescribe our products off-label, as the FDA does not restrict or regulate a doctor’s choice of treatment within the practice of medicine.

However, if the FDA determines that our promotional materials or training constitutes promotion of an off-label use, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, including the issuance of an untitled letter, a warning letter, injunction, seizure, civil fine, or criminal penalties.

However, if the FDA determines that our promotional materials or training constitutes promotion of an off-label use, it could subject us to regulatory or enforcement actions, including the issuance of an untitled letter, a warning letter, injunction, seizure, civil fine, or criminal penalties.

It is also possible that other federal, state, or foreign enforcement authorities might take action if they consider our promotional or training materials to constitute promotion of an off-label use, which could result in significant fines or penalties under other statutory authorities, such as laws prohibiting false claims for reimbursement.

In that event, our reputation could be damaged, and adoption of the products could be impaired.

Although our policy is to refrain from statements that could be considered off-label promotion of our products, the FDA or another regulatory

agency could disagree with our characterization of certain statements and conclude that we have engaged in off-label promotion.

In that event, our reputation could be damaged, and adoption of our products could be impaired.

Although our policy is to refrain from statements that could be considered off-label promotion of our products, the FDA or another regulatory agency could disagree with our characterization of certain statements and conclude that we have engaged in off-label promotion.

In addition, the off-label use of our products may increase the risk of product liability claims.

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To ensure compliance with Medicare, Medicaid, and other regulations, government agencies conduct periodic audits of us to ensure compliance with various supplier standards and billing requirements.

Risks Related to Privacy and Security

Risks Related to Information Technology, Privacy and Security

We are subject to complex and evolving laws and regulations regarding privacy and data protection, many of which are subject to change and uncertain interpretation, which could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.

We are subject to a variety of laws and regulations relating to privacy and data protection, data security, data retention and deletion, personal information, electronic contracts, and other communications.

We are subject to a variety of laws and regulations relating to privacy and data protection.

The introduction of new products or expansion of our activities in certain jurisdictions may subject us to additional laws and regulations.

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privacy rules under HIPAA protect medical records and other personal health information by limiting their use and disclosure, giving individuals the right to access, amend, and seek accounting of their own health information, and limiting most use and disclosures of health information to the minimum amount reasonably necessary to accomplish the intended purpose.

At least fifteen states have adopted new privacy laws in the past few years.

In California, the CCPA, which provides certain privacy rights and consumer protection for residents of the state became effective in 2020, and additional regulation under the CPRA, which amends and expands the CCPA, will take effect in 2024.

These consumer rights include the right to know what personal information is collected, the right to know whether the data is sold or disclosed and to whom, the right to request a company to delete the personal information collected, the right to opt-out of the sale of personal information, and the right to non-discrimination in terms of price or service when a consumer exercises a privacy right.

The California laws have served as a model for many subsequently adopted laws in other states.

In 2023, similar privacy laws became effective in Colorado and Virginia.

At least 15 states have adopted new privacy laws in the past few years.

For example, CCPA

and CPRA provide privacy rights and consumer protection for residents of California, including the right to know what personal information is collected, the right to know whether the data is sold or disclosed and to whom, the right to request a company to delete the personal information collected, the right to opt-out of the sale of personal information, and the right to non-discrimination in terms of price or service when a consumer exercises a privacy right.

The California laws have served as a model for many subsequently adopted laws in other states like Colorado and Virginia.

California and other states’ laws apply more broadly and now or in the future may reach data we hold that relates to employees and healthcare providers, not just customers.

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These changes or increased costs could negatively impact our business and results of operations in material ways.

For example, the GDPR imposes requirements in the European Economic Area relating to, among other things, consent to process personal

data of individuals, the information provided to individuals regarding the processing of their personal data, the security and confidentiality of personal data, notifications in the event of data breaches, and use of third-party processors.

For example, the GDPR imposes requirements in the European Economic Area relating to, among other things, consent to process personal data of individuals, the information provided to individuals regarding the processing of their personal data, the security and confidentiality of personal data, notifications in the event of data breaches, and use of third-party processors.

If we fail to comply with these standards, we could be subject to criminal penalties and civil sanctions, including significant fines and penalties.

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As our efforts to gain insights from data increase for the operation of our products and services and for the improvement of business processes, including sales and marketing, our exposure to increasingly complex privacy regulation may impede our ability to use data in this way.

We rely on the proper function, availability, and security of our product and information technology systems and a successful cyber-attack or other breach or disruption of our product or these systems could have a material adverse effect on our business and results of operations.

We rely on information technology systems to process, transmit, and store electronic information in our day-to-day operations.

The nature of our business involves the receipt and storage of personal and financial information regarding our customers, including sensitive medical information.

We use our information technology systems to manage or support a variety of business processes and activities, including sales, shipping, billing, customer service, procurement, supply chain, manufacturing, and accounts payable.

In addition, we use enterprise information technology systems to record, process, and summarize transactions and other financial information and results of operations for internal reporting purposes and to comply with financial reporting, legal, and tax regulatory requirements.

Many of our information systems are cloud-hosted and managed by third-party vendors, some of which may have access to confidential business, employee, healthcare professional, and/or customer information.

Our information technology systems may be susceptible to damage, disruptions, or shutdowns due to computer viruses, attacks by computer hackers, failures during the process of upgrading or replacing software, databases or components thereof, power outages, hardware failures, telecommunication failures, user errors, or catastrophic events.

Any failure by us to maintain or protect our information technology systems and data integrity, including from cyber-attacks, intrusions, disruptions, or shutdowns, could result in the unauthorized access to customer data and personally identifiable information, theft of intellectual property or other misappropriation of assets or the loss of key data and information, or otherwise compromise our confidential or proprietary information and disrupt our operations.

Additionally, the FDA has warned that insulin pumps may have cybersecurity vulnerabilities and could be manipulated by hackers, causing danger to people with diabetes.

After extensive testing and research in conjunction with an independent third-party firm, a potential security vulnerability in Classic Omnipod was identified.

Successful exploitation of this vulnerability may allow an attacker to gain access to the Pod to intercept, modify, or interfere with the wireless radio frequency communications to or from the PDM.

This may allow attackers to read sensitive data, change pump settings, or control insulin delivery.

Insulet is aware of a specific group of people with diabetes who have been able to duplicate the Pod communication protocol using a smartphone and a bridge, which in turn allows the Pod to be controlled using an unauthorized device.

This practice is commonly referred to as Do-It-Yourself (DIY) and is not the intended use with Omnipod products.

Insulet has not provided the DIY community with any type of information or input on the product, nor has Insulet been provided with any information proving that this form of off-label use is a safe use of the system.

This practice does not exist with Omnipod 5.

We rely on the proper function, availability, and security of our product and information technology systems;

a successful cyber-attack or other breach or disruption of our product or these systems could have a material adverse effect on our business and results of operations.

We rely on IT systems to process, transmit, and store electronic information, including personal, financial, and sensitive medical information.

Our IT systems support various business processes, including sales, shipping, billing, customer service, procurement, supply chain, manufacturing, and accounts payable.

In addition, we use enterprise IT systems for internal financial reporting and to comply with external financial reporting, legal, and tax regulatory requirements.

Many of our systems are cloud-hosted and managed by third-party vendors who may have access to confidential business, employee, healthcare professional, and/or customer information.

Our IT systems are vulnerable to damage, disruptions, or shutdowns due to various factors such as viruses, hacking, power outages, user error, hardware failures, and catastrophic events.

Failure to protect our IT systems could lead to unauthorized access to customer data, theft of intellectual property or other misappropriation of assets, loss of key data, or disruption of operations.

If our product is breached or our information technology systems are breached or suffer severe damage, disruption, or shutdown and we are unable to effectively resolve the issues in a timely manner, our reputation, business, and operating results may be materially adversely affected.

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In addition, as the regulatory environment related to information security, data collection and use, and privacy becomes increasingly rigorous, with new and constantly changing requirements applicable to our business, compliance with those requirements could also result in additional costs.

The rapidly-changing technical and regulatory environment and our AI-related activities may have an adverse effect on our business.

We develop and license from other developers, and deploy, AI tools including Generative AI tools for use in our operations.

Our teams collaborate on the development of responsible AI policies and practices and deployment of AI tools in accordance with those policies and practices, which are in turn based on relevant laws and standards, including the EU AI Act (which is taking effect in stages, through August 2026).

While we anticipate being able to capitalize on opportunities using AI tools including Generative AI tools, improving efficiencies and creating more personalized experiences, doing so is not without risk.

Risks include potential inappropriate disclosure of personal information and confidential information and potential use of inaccurate information contained in Generative AI outputs.

Risks Related to Our Debt

We may not be able to generate sufficient cash flow from operations to service our debt, which is substantial.

As of December 31, 2023, we had debt of $1.4 billion, including $800 million aggregate principal amount of Convertible Senior Notes, which mature in 2026.

Our ability to make scheduled payments or to refinance the Convertible Senior Notes or other debt obligations depends on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business, and other factors beyond our control.

If our cash flows and capital resources are insufficient to fund these obligations, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional capital, or restructure or refinance our indebtedness, including the outstanding Convertible Senior Notes.

We cannot assure you that we would be able to take any of these actions, that these actions would permit us to meet our scheduled debt service obligations, or that these actions would be permitted under the terms of our future debt agreements.

If we do not generate sufficient cash flow from operations, and additional borrowings, refinancings, or proceeds from asset sales are not available to us, we may not have sufficient cash to enable us to meet all of our obligations.

Our Credit Agreement imposes restrictions on us that may adversely affect our ability to operate our business.

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In addition, conversion of the Convertible Senior Notes could depress the price of our common stock.

Our ability to use net operating loss carryforwards may be subject to limitation.

Section 382 and 383 of the U.S.

Internal Revenue Code imposes an annual limit on the amount of net operating loss and tax carryforwards that may be used to reduce taxes payable when a corporation has undergone significant changes in its stock ownership or equity structure.

The issuance of common stock in connection with the conversion of our Convertible Senior Notes, or the consummation of other equity transactions could limit our ability to utilize net operating loss and tax credit carryforwards to offset future U.S.

federal and state taxes payable.

General Risks

Our success depends on our ability to attract, motivate, and retain key personnel.

Our success depends on our ability to retain our employees and to attract and retain additional qualified personnel in the future.

We face intense competition for employees, particularly in light of recent labor shortages and as people are increasingly able to work remotely.

We face challenges in maintaining employee well-being, recognizing that the additional financial, family, and health burdens that many employees may be experiencing in the wake of the COVID-19 pandemic and related economic uncertainties may adversely impact job performance and employee retention.

Additionally, during the second half of 2023 we introduced a new organizational operating model, which initially may be disruptive or confusing to some employees as job and reporting structures evolve, causing dissatisfaction or resulting in departures.

Losing members of our senior management, and other highly skilled personnel could prevent or delay the implementation and completion of our objectives or divert management’s attention to seeking qualified replacements and ensuring seamless transitions.

Additionally, the sale and after-sale support of Omnipod products is logistically complex, requiring us to maintain an extensive infrastructure of field sales personnel, diabetes educators, customer support, insurance specialists, and billing and collections personnel.

We face considerable challenges in recruiting, training, managing, motivating, and retaining these employees, including managing geographically dispersed teams.

If we fail to maintain and grow an adequate pool of trained and motivated personnel, our reputation could suffer, and our financial position could be adversely affected.

As Insulet continues to quickly grow, our success is highly dependent on attracting the right talent, retaining our employees, and keeping them engaged and focused on our mission.

Amidst significant competition for talent, we continue to support our employees working remotely, where feasible.

While this policy aids in recruitment and breadth of candidate pools, it could impact job performance in some cases.

In addition, the sale and after-sale support of Omnipod products require a complex infrastructure of field sales personnel, diabetes educators, customer support, insurance specialists, and billing and collections personnel.

Recruiting, training, managing, motivating, and retaining these employees, especially in geographically dispersed teams, presents challenges.

If we are unable to successfully recruit or retain employees as needed, we could experience significant operational disruptions, which could in turn negatively impact our customers, our reputation and our financial condition.

Acquisitions or investments in new businesses, products, or technologies could disrupt our business.

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In addition, integration of an acquired business may require management resources that otherwise would be available for development of our existing business.

If an acquired business fails to operate as anticipated or cannot be successfully integrated into our existing business, our stock price, business, financial condition, and results of operations could be materially and adversely affected.

If an acquired business fails to operate as anticipated or cannot be successfully integrated into our existing business, our stock price, business, financial

condition, and results of operations could be materially and adversely affected.

Furthermore, we may have to incur debt or issue equity to pay for any future acquisitions or investments, the issuance of which could be dilutive to our existing stockholders.

We may need to raise additional funds in the future, and these funds may not be available on acceptable terms or at all.

We may in the future seek additional funds from public and private stock or debt offerings, borrowings under credit lines, or other sources, and we may need to raise additional debt or equity financing to repay our outstanding Senior Convertible Notes or other debt obligations.

If we issue equity or debt securities to raise additional funds, our existing stockholders may experience dilution, and the new equity or debt securities may have rights, preferences, and privileges senior to those of our existing stockholders.

In addition, if we raise additional funds through collaboration, licensing, or other similar arrangements, it may be necessary to relinquish valuable rights to our potential future products or proprietary technologies or grant licenses on terms that are not favorable to us.

Our ability to raise additional capital may be adversely impacted by current economic conditions, including inflation and worldwide political unrest, and we may not be able to raise any necessary capital on acceptable terms, or at all.

If we are unable to raise additional capital due to these or other factors, we may need to further manage our operational expenses, including potentially curtailing planned product development activities.

Our ability to raise additional capital may be adversely impacted by economic conditions, including inflation, higher interest rates, and worldwide political unrest, and we may not be able to raise any necessary capital on acceptable terms, or at all.

If we are unable to raise additional capital due to these or other factors, such as a worldwide or U.S.

financial crisis, we may need to further manage our operational expenses, including potentially curtailing planned product development activities.

In addition, we may not be able to execute our business plan, take advantage of future opportunities, or respond to competitive pressures or unanticipated customer requirements.

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Broad market and industry factors such as these could materially and adversely affect the market price of our stock, regardless of our actual operating performance.

We have identified control deficiencies that have been determined to be a material weakness in our internal control over financial reporting.

This issue, if not remediated, could result in material misstatements in our financial statements and cause us to fail to meet our reporting and financial obligations.

As disclosed in Item 9A, “Controls and Procedures,” we have reported a material weakness because we did not maintain effective information technology general controls over systems that support our financial reporting outside of North America.

The material weakness will not be considered remediated until the enhanced controls operate for a sufficient period of time and management has concluded, through testing, that the related controls are effective.

We cannot assure that the measures we take will remediate the material weakness or that additional material weaknesses will not arise in the future.

Any failure to remediate the material weakness, or the development of new material weaknesses in our internal control over financial reporting, could result in material misstatements in our financial statements and cause us to fail to meet our reporting and financial obligations, which in turn could have a negative impact on our financial condition, results of operations or cash flows, restrict our ability to access the capital markets, require significant resources to correct the material weaknesses or deficiencies, subject us to fines, penalties or judgments, harm our reputation or otherwise cause a decline in investor confidence and cause a decline in the market price of our stock.

Changes in tax laws or exposures to additional tax liabilities could negatively impact our operating results.

We are subject to income taxes, as well as taxes that are not income-based, in both the U.S.

and jurisdictions outside of the U.S.

Changes in tax laws or regulations in the jurisdictions in which we operate, including the U.S.

and as led by the Organization for Economic Cooperation and Development for a global minimum tax, could negatively impact the Company’s effective tax rate, results of operations and cash flows.

In addition, our future effective tax rate could be unfavorably affected by numerous other factors including a change in the interpretation of tax rules and regulations in the jurisdictions in which we operate, a change in our geographic earnings mix, or a change in the measurement of our deferred taxes.

We are also subject to ongoing tax audits in various jurisdictions, and tax authorities may disagree with certain positions we have taken and assess additional taxes.

A material weakness in our internal control over financial reporting could result in material misstatements in our financial statements and cause us to fail to meet our reporting and financial obligations.

In 2024, we worked to remediate a material weakness related to the effectiveness of information technology general controls over systems that support our financial reporting outside of North America, which has now been fully remediated.

We cannot, however, guarantee that additional material weaknesses will not arise in the future.

The development of new material weaknesses in our internal control over financial reporting could result in material misstatements in our financial statements and cause us to fail to meet our reporting and financial obligations, which in turn could have a negative impact on our financial condition, results of operations or cash flows, restrict our ability to access the capital markets, require significant resources to correct the material weaknesses or deficiencies, subject us to fines, penalties or judgments, harm our reputation, or otherwise cause a decline in investor confidence and cause a decline in the market price of our stock.

Market Risk .

See Item 7A for additional risks relating to interest rates, market-sensitive instruments, and foreign currency exchange.

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What changed 10-K

Item 1A. Risk Factors