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Senseonics (SENS)

Participants
Lynn Lewis The Gilmartin Group, IR
Tim Goodnow President and CEO
Nick Tressler Chief Financial Officer
Melanie Nuñez Stifel
Danielle Antalffy SVB Leerink
Jayson Bedford Raymond James
Call transcript
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Operator

Good afternoon. And welcome to the Senseonics Fourth Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. to Relations. conference like Lewis to now Investor of would turn over the Lynn I ahead. go Please

Lynn Lewis

Thank you Lewis And earnings Group. very much. call. quarter Senseonics’ This XXXX fourth is Lynn from Gilmartin welcome The to the

year on update discussing call, XXXX revise publicly statements Also a risks forward-looking cause forward-looking any we of except was speak suspended XX-K we results from of date enhancements, documents involve the We Relations remarks for September guidance statements to our these www.senseonics.com. under forward-looking about Factors factors company by quarter undertake to different other company’s ended is for Form financial our with XXXX. as list statements future performance uncertainties. Before that A forward-looking website In Risk implied operating section and law. by will XX, hereof. number plans, XXXX, and no management’s these materially of and statements include SEC. or today, reason be light outlook. and remind that our actual required those statements. let on report you pandemic, elsewhere only begin these regulatory and the filed detailed XXXX the XX-Q the for annual the December any at reflect events, These of in Investor could expressed be These the available or reports in our the as XXXX, ended XX, of expectations of this XX, obligation other me are matters, These COVID-XX March on matters product

Chief and With President and President Executive Officer; Tim Financial to call I’d CEO. over from and like Goodnow, me Nick Senseonics are Tim? Tim the turn Goodnow, Officer. to Joining that, Chief Tressler,

Tim Goodnow

Lynn, thank all afternoon. Great. for joining this Thank you, you us and

to derive will in accomplishments I Eversense our XXXX the recent Senseonics system today, progress how value and the detail over the have fourth call quarter positioned of our the marketplace. On in

early will including of commercial I addition, the Care, with quarter our efforts performance, transition collaboration In European distribution. Ascensia highlight Diabetes our fourth the

share financials up We developments Then quarter start, conclude discuss outlook with and before fourth Nick transformational for briefly our call pipeline. yet I detail I’d will and for questions. the year. touch open will are product to the like on To challenging our XXXX

our Ascensia. a strategic to comprehensive First, we business an a which We in model, revamped in net a plans, that raise sufficient the undertook breakeven us from based to million cash designed XXX able the engage week. calibrated sensor were we existing materially expectations with business be per to operations commercial strengthen business balance current opportunity $XXX the led Then should launch evaluation, commercial and proceeds collaboration through sheet. to on cash with agreement to fund projections, be days only cash to the equivalent believe once of flow and and the

generation have our in a Europe, and early be it are current our with experience lives U.S. of Eversense Ascensia strategy we as diabetes to with impacts place system products. future based their for people the and team the in successful our on passion shared how We XL confident as and that Eversense technology, and in well with a

With As the offer We drive the KKR Ascensia, roughly expand portfolio we with XXX our offering. innovative revenue, two that in our care in of continuous glucose engagement you glucose as Holdings Senseonics, the our with are aligned, company. driving Corporation, company between for fit XX and complementary. see countries by position Throughout sale and positioned and Senseonics, billion monitoring our organizations, diabetes. been owned their With over Ascensia global adoption will people blood to competencies and product million motivations is complementary manufacturing to market Ascensia are and them of recall, strategic very annual a seek The as are their leader Switzerland-based development commercialization. PEC strong global core diabetes a we approximately to a and a they and apparent products in company is $X missions it’s market. monitoring

that We is have we sides. executed an beneficial agreement for both believe

Ascensia global we We footprint. partnership, adds global commercialization portfolio agreement. to our and broad and enhance experience their advanced a Eversense their including a and CGM system formed leverage financing commercial

and five-year partner of distribution agreement. current share diabetes a Ascensia is over will the all revenues for now approximately and products, planned the exclusive tiered worldwide Senseonics the receive generated

$XX following the of an additional the at investment approval XXX-day of an $XX with Ascensia’s million also available commitment FDA million in Senseonics, option included our product.

by and responsibility assumes sales customer reimbursement to business anticipated financial and disagreement marketing, service, results $XX marketing eliminate streamline in are functions. impact impact managing expenses The million annually Ascensia XXXX fourth Senseonics our lasting quarter approximately have to allowed for will marketing expect resulting we going sales distribution, and and several our and it sales, is clear reduce expenses. changes relative forward. to operations, This has As

to Eversense development important beyond transition, innovative markets, glucose attention become next-generation and transformational the diabetes and Ascensia on-body to resources to full manufacturing competency. on products, and and the in use In take outside of analytes able was commercial which efforts sales began scheduled our and technology we work to our place in U.S. the with we core are focused pursue the play of as to with April. familiar We dedicate the now will in together our more This measure products quarter, The future, fourth is in of initial diabetes. and research

prescribers. At processes key unmet for assess, in informative learnings important is together belief people Xst. the been U.S. need collaboration to the early markets full on volume with Ascensia February focus value, The The Eversense and have large from the are in early assume was core stabilize relationship on shared great in for that with days sides. establish the the intended of certain responsibilities and to for we to our commercial Europe and plan needed and both addresses programs existing prepared also diabetes. market only producing centered a We Eversense

Our experience important is most and CGM a improvement desired research longer suggests systems for that sensor the duration. strongly

in XX-day offering are the of accuracy sensors, life the category, maintaining degree and this high throughout duration sensor. XXX-day long We of while a unmatched

Additionally, been Eversense transmitter. When patient’s fourth retention is ability using also early easier. $X.X the our impact million $XXX,XXX U.S. CGM presented to we and by the switching installed frequency. with only our a In new revenue from use including manageable. another, U.S. of have In incorporate we outside COVID make burdens and have from quite a $X.X of continue million, has remove the are operations removable collaboratively. but commercial product impressed U.S. make offers from they Both of support high was and whether system we sensors in limiting at that the Ascensia’s the XXXX, to days, the seen headwinds our vibratory and in start revenue lives and or follow-on feedback field patients the and believe and Eversense, to the from in alerts which the other systems of base, adjustments revenue the quarter, been quickly on-body

are they opportunities, and adjusting their strategy needs identified have they personnel accordingly. and As

matching with to for sales have they learning the have about and the the that We to product. the professionals We ensure commitment excitement and shown they capture they appreciate certainly process highly set a job will is demands differentiated. that Eversense success system the of action unique team the the and opportunity. share Eversense skill of the believe and developing are do for Our drive taking excellent an

been a establishing the Looking and be new to to underway field just train have approximately the members team ahead the in months in the quarter. U.S., planning these in first team dedicated professionals sales end They sales the in Ascensia deployed XX to and is of be over next at hiring targeted April.

and training the of in preparation involved actively are this group. We

support, and agree infrastructure training of believe additional field addition, build marketing the members. approach also expanding Ascensia this with We the functions crucial and dedicated is In access Eversense the are approximately driving XX out to clinical commercial that U.S. support team sales for another and adoption. commercial inside

We are underway. it to have excited currently

the providers raising with Still the April Most We also patients address grow as our the once to for Eversense left brand across anticipate advertising product providers This well for and as again of direct-to-consumer that the campaign off to part previously new reconnecting the in picks promotions. and social a initiatives are will creating are awareness. feel year strategy broadly in priority significantly ADC, where active with that we before We product. ads, up we the targeted we diabetes product. Together efforts and community. This of last healthcare more DTC inserting search of ceased a beginning were off pleased media awareness will to we by is as be will commercialization ADC, at help on consist marketing prescribing additional full users. Eversense. commence Eversense

can patients believe represents second XXX insurance Given significant are for making generate covered A million be mass our facing to investments technology eligible these the and our a Eversense number to category, others. access can Ascensia are to proposition. and for gain who and this strategy has Eversense. aspects to the will the which pleased this use providers successful validation proven medical with Ascensia and their reimbursement critical progress consumer their We ongoing Patient technology. generally initiative have be is of value the recognition patients awareness interest for of confident to from with approximately that of U.S. is Access we remain feel our who the lives providing We that focused number drive on from front, Today, coverage expanded we receive on payers plans. been this have our as we Support. to adoption strong be We through Eversense technology

to their Medicare schedule procedure and and included suited by programs of benefit. is XXXX our base providers installed of logistics quarter, the the we quarters, feel have Eversense Over to beneficiaries. This to patient Recently, Medicare benefit In positive for payment coverage. the with features represents ADC. the and win a Ascensia new the for the from Eversense. payment national this service in introduce coverage Strategies the patients, continued insertion for population greater support initial being uniquely to like physician population benefit to of fee fourth decisions confirmed added are we this associated past access a levels we plans also developed patient EmblemHealth. In to two medical incremental expand patients from were

it program. plan The place. not This support if a coverage in authorization first their petitioning is Eversense basis on in does have aids policy cover prior individual an patients formal a to

to plans insured and also technology. access to Eversense utilization as Assistance non-government helpful Ascensia for with be will patients, initiate to This Patient product they Along the of addition assist payers. evaluate a industry beginning this and that a In patients, these demonstrates lines, the at assisting also the the them to demand are to high. gaining patients when programs Program the for to patients. year of deductibles especially are benefit throughout Such continue common

as Roche our and to distribution to with quarter through as with have support, European towards in when transition last our of plan shipment is coverage through contracts in have and efforts, continued technical our agreement ensuring For projected is wherever access transferred Europe service. successful product working top the Ascensia needs a of demand reinsertion tenders for groups January Ascensia fourth contracted HCPs possible priority to and our patient Patients expired. we to and we been payer their instituted had transition a their seamless organization target maintained their The serving and well. supplies their according these

performance million with projected the information have XXXX our to across we Ascensia continue range end efforts the COVID, Switzerland, in of launched Poland Germany, able in Netherlands expect markets, have markets. of of on and and Senseonics be resurgence to the global of million a net sales base. that to to all Xst. Italy, February reviewed Based to-date we notable we the to the XXXX Ascensia portion our $XX in revenue were installed $XX we at on Despite Spain, their regarding maintain

clinical and regulatory regarding new product, our objectives. Finally, our

of related patients emergency. plan on greater received extended focused be expect continued product As about market a duration, increased the the commercial ADC supplement for we promised in communication to approval the PMA Starting our potential and efforts, the from extend our a and products platform. assumes We and to each further agency sensor we the sensor applications we create submission for health innovation update reallocation to XXX-day excitement the by February public COVID-XX see to regarding momentum of with FDA address HCPs product U.S., to effort penetration. from emergency responsibility Eversense with an delivering authorization for the late use resources the the

delayed our reviews has what generally, affecting companies with XXX-day reported. noted, have which this Eversense we product, other including marketing all situation the technology As medical been previously consistent been has application understand

informed We reasonable XXth the assign and are a turnaround. process are place that is to to no file hoping under review FDA a it and than our started review now April we once expects for the reviewer later

is However, in six-month this exact to a the is review We guidance. the plan project. difficult period, FDA timing with environment, which generally consistent for

So of planning the the study future. from of the remain in expectation extension we at the provide up for on look strong on in the with new this third the approval in this FDA, year. timelines to FDA, time demonstrates our or Based data review are XXX quarter plan we label an that the fourth PROMISE uncertainty passage forward publishing justifying and the later this to Eversense, an belief we We at the ADA quarter do days this meeting update on to and year. confident of performance progress around

to future provide IDE a support review all FDA approval the key clinical one with what sensor, complete is worn subject sensor our submission a for trial to would intended initiate a of for we FDA XXX-day up to XXX-day possible in the the Finally, objective of submission. the to clearance under these sensor are year. to considered development group. pushing a diabetes this next-generation us to regulatory boundaries for Again, is years be technology, availability business IDE

the architecture are sensor optimizing working this requirement to once are new reducing for We calibration program and we drive this week. chemistry formulation generation while forward, and the are now per to we also

to We quarter now on fourth the And for in the are excited the turn to will provide over this I the details updates Nick. on future. important financials, product call

Nick Tressler

revenue you, $X outside In good fourth $X.X U.S. the was $XXX,XXX and and States compared was of Tim, quarter was everyone. million. revenue net Thank million, fourth the afternoon, quarter $X.X for to of United in XXXX. the fourth revenue XXXX, total million quarter the

The million compared and expense prior development and a expenses of in was the $X.X our in year fair Roche decreased existing study Ascensia. and of inventory mentioned $X orders the shipments by XXXX to the related to million million, to the expenses through as extinguishment PROMISE as decrease by debt million the agreement changes to General we to last $XX.X to million, and gross was year-over-year $X.X to on personnel personnel-related as our year $X.X due reductions finances. costs compared primarily activities established year-over-year and year the period. Gross XXXX by represents of lower mostly revenue OUS stock-based the gains profit This expectations January compensation. period, COVID-XX year The QX XXXX year-over-year above offset with the by was written-off rates patient strategic clinical ability to quarter issuance service to in million $X.X demand of issuance due of included $X related to driven XXXX the the $X.X positive adjustments the the previously, increased to the costs to reinsertion was to As QX agreement. the with at decrease in increases of period. in decrease to cost commercial and primarily profit predominantly to compared resupply expiration prior expenses. million. debt company’s million, losses Fourth to the in Other value onset were Research $X.X due in period $XX pandemic. decreased result sales recent in administrative and by compared million a million XXXX marketing collaboration expenses QX prior fill prior

derivatives, share For to increase embedded to quarter lost including $XX.X offset XXXX. or to the primarily increased $X.XX a in the $X.XX by fourth operations. XXXX, million loss million net to million per from December total the loss financings, by XX, due other the of million, related three changes $XX $XX.X $XXX.X company’s Net to partially $XX.X million months per ended accounting expenses, was compared decrease the share, a or in of

as January, cash, turning restricted XX, sheet, December to In proceeds. equivalents balance $XX.X we $XXX closed cash the XXXX, of financings, and Now in million. approximately raising cash totaled three million

that projections, through of January fund existing equivalents be on sufficient from our business totaled to As current believe XXXX, $XXX.X plan, expectations operations. business XX, and we and cash, equivalents cash the cash cash Based restricted million. cash flow cash the breakeven and should

between for revenues million Looking ahead, expect global net million $XX $XX we and XXXX.

XXXX, operations range to projected With be million $XX is in Tim. full to will For I that, turn in million. cash back of $XX year it used the to

Tim Goodnow

in faced by you, Early that were XXXX as we many Thank pandemic the companies. exacerbated challenges Nick. by experienced

We we have $XXX our clear activity address now there the that Eversense. the recent CGM allow strengthens the adoption growing with meaningful sheet added Ascensia The opportunity. should in access and focus and unmet that the ramp Ascensia, us top to of they up development have capital on are we to us of awareness to strengthen concrete ways capabilities drive quickly million to commercial on transitioned technology. market. raises to into commercial and address With balance a continued and outlined well-positioned will our believe the Their need large partnership commitment plans focus investments is We dramatically are the execution. concentrate allows our and that believe to have to

on focus originally with a product next the leading review for the the the cadence on in FDA resource the of of reestablishing for deployment planned launch. product several submissions XXX-day use to delayed coordinated to we U.S. As authorizations with mentioned, in have months, emergency we general, focus XX-day

we XXXX, to as the becomes tailwind to through and penetration is visit moderated, normalizes. more frequency pandemic headwind COVID expect move we become impact established vaccine As a office

substantial a offer are to build-out and positioned capabilities larger could with we From see be pleased DTC, be building them perspective, planning with authorization again We and to Eversense forward sales company. they is more With to force, quarter success. throughout support, team, to to and inside field Patient happier easy to are sales start why the the campaign, diabetes Ascensia. very XXXX, and In prior of be it commercial of have of benefits Assistance leading Program, the not look advertising global the patients. made we our working progress fourth further

our Joining Jain, us Panlilio, go are General up Manager Officer; of Mirasol ahead and Operator, the Operations. for Mukul President questions Chief open Vice call for questions. Operating let’s and Global and Commercial

Operator

[Operator ahead. Stifel. will go from of first our And Instructions] come question Please today Blackman Mathew

Melanie Nuñez

be in is This Hi. for manufacturers to where of that Bionics, have follow done an integration to needs and then ask a Thanks looking for for your I on is taking wanted pump partnerships questions. Melanie at Beta up? your I the agreement with you priorities I just the Matt. or some potential pump about have on of with what and quick there. but know other any players

Tim Goodnow

Sure. us. The course, are, folks to important pump at of insulin very

with a and we As have some we exciting clinical testing have partnership done Bionics you them. do pretty noted, Beta with

the move ICGM partners. around In effort designation, forward addition, our really makes to is much the the more the pumping with integration facile which next program

point, behind for we right At review product effort. ICG have in the focus. this the and XXX-day that, our that’s So, we anticipate

with the pump and folks that. a step the then partnerships is one So right that’s after step

Melanie Nuñez

Got sense. quickly And you. question. picture bigger then Thanks. makes just a That

companies and anything other go you provide at some but on have glucose but else said, there see And we the their to something about look you that? this there, just call, like sensor color analyte. platforms mentioned heard can any might You when beyond mentioned you like talk Thanks. that, is other expanding we and

Tim Goodnow

analyte. a accurate the ability it of opportunities which -- analytical number different very means Sure. a frankly quite product is Obviously, our has to miniaturize very and the measure parameter,

very about oxygen diabetes focused much actually history. direct we with sold on We for in dollars now. right have as million have a experience oxygen But sensing very of we with an glucose example, people and worth have our

a XX% today As billion market you $X-plus at a about know, it’s growing CAGR.

have glucose we that very, But $X are going do we off we that we what from expand beyond billion So, look internally revenue very to coined is have to and that. the of our going to broad first generate are technology.

opportunity. on The us the that gives about it that up some excited yet fact think, I really before, a have pretty are do we to shown We have other leg technologies it.

Operator

from Danielle comes Please Leerink. Antalffy next ahead. The SVB of question go

Danielle Antalffy

everyone. are go-to-market stand they are they today volume far CGM confidence as $XX Tim a of Hey. guidance, in strategy the for have the discussed that they what that just and a this higher on $XX bit Thanks what decent question your guidance, million U.S. million drives or centers? obviously you haven’t question. going adoption? a What how predicated to is, Are much as ball today is little Good about and to the afternoon, really I hearing? $XX so here we the taking in million driving portion that of on the sort $XX target how the to target question stand I the in guess had like that Ascensia’s million? gives up confidence they as as picking thinking you you where is Are Ascensia what Nick, going centers we to with adopted

Tim Goodnow

Sure.

Ascensia because when transition So with last have the and there back opportunity we in the at summer began worked significantly with we them. confidence this frankly goes to the very look to

very well. commercial And the look the in our only our not activity have remember, CGM, together deeply at we for we as for a is opportunity quite So opportunity CGM. what certainly implanted history

and continue grow return installed there, So that the opportunity very to to interested a that space. out we in know there’s very and and dedicated base to

just that of we feel unfortunate a in offers Even more interest sticky, so incredibly downturn patients. portion and very, freedom large were become It’s them a interest thankfully. we is dependent on a differentiated so the to feel on on because have good that able COVID, pretty very during our that technology. based Eversense significant We just people It from the they it. is about were retain much that such

we have extensively we only have now available that it opportunity the partnership work clinical work, in a the we well. at So but have new completely the direct survey looked into also us space a done, we as have the organization as with work responsibility not as that we looked to have dug

So when you there out given guidance what first be that will given that really combine million we to of research, that years. We confidence to to have be able Europe, these the couple is $XX larger $XX continue we we million. drives that deliver for the -- have installed to in the that the do think of base

XX market installed another those We commitment encouraging their for and us targets. dedicated anticipating revenue, to from add because sell as drive come speak the But said heads as know to to and about great we is to to about interesting we going are you Eversense two very also thirds still is Europe opportunity the do base that is at of year. U.S. this the

Danielle Antalffy

Europe that about follow-up, U.S. the as one I you Thank and the color the just That a what you rate, alluded to that’s reinsertion thinking as versus about you obviously, saw rate thinking rate give going so through a reorder strong as that we don’t is launch, then COVID. super little in should about bit helpful. can but know anything about how retention And guys different I far that’s quick forward we I be much. and how should that it And guess exactly is reorder a we more even XXX, or is if you guess, -- be that if actually here? expecting be XX-day there should this is

Tim Goodnow

Sure.

by reinsert first had Eversense of So, to use the the where believe sensor, about chosen in the they the that and and it’s Danielle, after time they fully about saw that reimbursement on long-term. rates. are typically more XX% sensor the about experience the third we years in consistent Europe, second really sensor we After obviously couple than U.S. of time, a have XX%, people that the in we pretty

the So that we rates are seeing are in reimbursement mid-XXs.

the times. Now, rates during did of routine be the back is are we planning it at that see expectation year our current come coming in But compromise we the out beyond. that those and COVID. as some environment to to ‘XX COVID and is that in We

Danielle Antalffy

helpful. you. Thank Very

Operator

Instructions] next Jayson And [Operator Raymond of ahead. Please Bedford come from the go James. question will

Jayson Bedford

afternoon. Good me. Excuse Hi.

couple a the of up you can am questions, just Tim, second for us cadence. for international the quarterly build million first $XX U.S. Any expectation I ‘XX? the half the cadence ‘XX. here $XX appreciate I on color give to million or to Just either wondering type half,

Tim Goodnow

Yeah.

to we are XX% we So are XX% half. modeling that first going do in about in the back the and half

the installed you European still will two-thirds with going about by one-third. as be base the are imagine and to would And given we So I we as the ramp on seeing are said side the the -- investment, come. still anticipating are majority of folks

Jayson Bedford

do you me recognize you Okay. Ascensia customer end or revenue sell takes remind when And those? into the revenue when recognition,

Tim Goodnow

Yeah. That’s right.

sell we Given sharing, revenue do the a -- product but is this to them.

it. There take recognize is we that targets. revenue So different the for some we will consideration

But into recognized is we goes as it that Ascensia. to sell to -- globally calculus well. as sell our now So

Jayson Bedford

do revenue Roche, the quarter? And quarter to in fourth you Okay. the the you fourth quarter any the recognize is recognized first to Roche that in in or fulfilled

Tim Goodnow

fourth No. the sold obligation to That January. the to through We them completed in was quarter. Roche actually

Jayson Bedford

Okay.

Tim Goodnow

January on Roche. what months, it year filled perspective, Europe consider needed only well with as we Ascensia because was to by has XX because a -- calendar So part is that of

Jayson Bedford

quantify give than you terms you can of Anything you can Medicare sorry taking alluded Medicare in in of Okay. traction quarter. questions, more Thanks. in more to, expansion there alluded percent And any but you quarter? fourth to the of for way two terms in of the patient? Is the fourth us

Tim Goodnow

with pretty training It been it. focus different reimbursed our sale, of the practice for Medicare and in then still clinical Jayson. the from the bit early, because gets a little a medical It’s actually does partnership Ascensia. Most on as has purchase benefit is product

through work So, that. we

support have We have documentation shown we that it. the

comfortable are with So ordering and how now place. sure it’s in a matter to the of get reimbursement people that do making

an number, of it’s quite XXXX part a Jayson. for portion and is So of future small plan. our But it U.S. sales in our still sure important a

Jayson Bedford

All right.

you. Thank Okay.

Operator

I This concludes closing to turn Goodnow to question-and-answer session. would like our any CEO, the back Tim for conference over remarks.

Tim Goodnow

their thank diabetes a XXXX today. want year ability the challenging serve and partnership I the are It’s been in in we rewarding to great. with for the we and for and very to XXXX. are Well, for participation people position support their yet and excited everybody

We today. time day. the look to quarter. for Good you thank So forward next you updating

Operator

all Thank now for The now disconnect. conference concluded. and attending you today’s is may you presentation