Piper ‘cautious’ on Tandem Diabetes acquisition but stays Overweight

Piper Sandler analyst Matt O’Brien is "cautious" on Tandem Diabetes’ acquisition of AMF Medical, the developer of the Sigi Patch Pump. He sees pros and cons to the transaction. On the positive side, it takes some developmental risk away from Tandem’s internal patch program and could provide a unique form factor for patients, O’Brien tells investors in a research note. On the negative side, there is no guarantee of approval and there will be near term spending on the development, "which is concerning as the timing of profitability improvements seems to be getting pushed," says the analyst. O’Brien adds that his caution on the deal does not dissuade his thesis that Tandem Diabetes shares are "cheap given the current and future outlook of the business." He keeps an Overweight rating on the name with a $70 price target.