Tandem Diabetes executive chairman: Global uncertainity may cause investor hesitation

In a difficult moment, I want to keep circling back to the stocks of high-quality companies that we know are in great shape because they just reported excellent numbers. Tandem Diabetes Care, which makes high-tech insulin pumps that diabetics can monitor and control via a mobile app. When you combine their product with a continuous glucose monitor like the kind that we always talk about, Dexcom, which is pretty good stock by the way, it's almost like having an artificial pancreas. Now, Tandem has been an incredible long-term performer. Emphasis on one: from the last time we spoke with the company in early March, this stock rallied nearly 2,000 percent over the previous year. Yeah, that's right, just over the course of January, February. I was worried that Tandem might need to take some time to cool off after such an epic movement. Sure enough, the stock spent the last few months trading in a pretty tight range. It's actually down 15 bucks from its high in March. And now, with this pullback, I think it's kind of looking pretty attractive, especially since Tandem reported a fabulous quarter last Thursday night. Something that's caught mostly unnoticed thanks to the market meltdown. The company delivered a monster top-line beat and a bottom-line beat. Sales up 173 percent year-over-year. In response, the stock immediately popped 8 percent on Friday, but it's now giving back every penny of those gains and then some, thanks to the sell-off. In other words, you're actually getting that unbelievable quarter for free. So let's check in with Kim Blickenstaff. He's the executive chairman of Tandem. I've been here about these results and what they mean for the future of this company. Mr. Blickenstaff, welcome back to Mad Money.

Thanks, Jim. I appreciate being here again today.

All right, Kim. I have to tell you that the analysts were dazzled. They were saying this is probably the greatest beat ever. All these guys were going nuts. What do you think happened? I know I can't talk about stocks, that's me, but it was a muted response in terms of the stock. Your company's stock has had such an incredible run that everybody already knows how great the company is doing.

Well, I would say in your opening comments, you sort of had it correct. There was just so much global uncertainty in this earnings period. Disney missed as well. And so I think there's just some investor hesitation now. People are wondering whether we're headed into a recession, and it has nothing to do with what we're doing. We don't sell and I hope we don't make in China. All of our fundamentals are intact. In fact, our sales rates in Q2 accelerated from Q1. So we're in an acceleration mode, and I don't think people really appreciate that.

Yeah, well, I searched for reasons and I started thinking: a high-quality problem. Is it possible that demand is too great and you can't meet it?

Oh, absolutely not. I mean, that is probably the only thing under our control that could disrupt this growth. And we've been looking at this, we've been looking at internal projections, and we have a very, very solid manufacturing team. We're prepared for the demand, and we have a range of volume that we think we need to get to to stay on track and handle all this growth.

A lot of talk, of course, about where people build manufacturing. I saw that you put it in Boise. Could you have done it in China, and you decided to do it in Boise because of the new regime in Washington?

No, actually, what's going to Boise is a customer support group. That's a very attractive area. We want to build within the time zones where we serve customers. So that's not manufacturing. The manufacturing is here in San Diego. Sure, we could go to China, but we need to control the product quality. That's very important. This is a very unique device, and we need to have our manufacturing near our development engineers so there's proper coordination and good focus on quality. So that's why it's here.

So you think that it's possible if you want great quality, you have to make it in America?

That's the way I feel about this particular product. This is not a cookie-cutter, generic kind of product. I mean, it's very complex, and engineering changes constantly as we make improvements.

So, Kim, tell me how you get accelerated revenue. Is that because of the partnership with Dexcom? Is that because of awareness? Because I feel a lot of people don't know that you do indeed have the best mousetrap.

Well, yeah. We talked about this last time. Only about 30% of type 1 diabetics are using a pump. So we are going to expand that market. We call those daily injectors coming over to a pump. That was a big part of our growth. And part of that dynamic was having the G6 with no finger sticks combined with our Basal-IQ. The product is simpler, it's far more effective, it makes insulin safe. And so we're expanding the marketplace. The other thing you started about awareness: we recently released our clinical trial results at the ADA, the NIH clinical trial on Control-IQ. I've never seen a crowd that big in my career here at Tandem. The awareness in the medical community was broad and widespread, and we didn't have that with Basal-IQ. So things like that surprised us, and I think Control-IQ will as well.

Okay, that's the ADA, the American Diabetes Association, rather. A market presentation study. 30% of the 1.6 million people with type 1 in the United States. I was listening to Miles White from Abbott. The actual worldwide population with type 1 is gigantic, right? It's a really monster, unfortunate problem.

Yes, it is. And all the type 1 part of this marketplace is also big worldwide. I think he may be talking type 2 or a combination, but we're finding that in Europe, it's a very significant market for us, and we are gaining traction in those markets as well. That's one of the drivers of our upside and our revised guidance as well.

Yeah, okay. One last question. We were talking about the new studies you're doing. I'm trying to figure out, when you have all four pivotal data, what's the time period from pivotal data to when it's in the market?

Well, it's the FDA gating time frame, and we're predicting we'll have approval this year. And then traditionally, how quickly could you launch that product? Normally it was a new hardware upgrade, but with us, it's a software upgrade. So our launch will be almost instantaneous. That's one of the advantages of our Tandem Device Updater that we talked about last time.

Well, that's terrific. This is unfortunately a terrible epidemic, and you've got something that really does work. Thank you so much, Kim Blickenstaff, Tandem Diabetes executive chairman. Good to see you. This is a situation where the stock is its own worst enemy. It's up so much, and even when they blow out the numbers, nobody cares. But you know, they're going to care again soon. Stick with me. Don't miss a second of Mad Money. Follow @JimCramer on Twitter. Have a question? Tweet Cramer hashtag #MadTweets. Send Jim an email to [email protected] or give us a call at 1-800-743-CNBC. Miss something? Head to MadMoney.CNBC.com.