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Senseonics (SENS)

Participants
Tim Goodnow CEO
Carsten Beckwith Investor Relations
Nick Tressler CFO
Mathew Blackman Stifel
Jayson Bedford Raymond James
Connex Stephenson Craig Hallum
Call transcript
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Operator

Good day, and welcome to the Senseonics Third Quarter 2021 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, today's event is being recorded. I would now like to turn the conference over to Carsten Beckwith with the Gilmartin Group. ahead. go Please

Carsten Beckwith

is This from Gilmartin the Thank Carsten Group. you. Beckwith

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

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

Tim Goodnow

this us for And Thank thank you, Carsten. all joining you afternoon.

ever for our the those activities, impacts curved HCP relative developments, and To challenges a financials for begin the I'll we the detail. third our into securing And with and the and like. brief have work in clinics. Nick On potential product update of variant, as on will reimbursement discuss The to system. would call today, XXX-day both the leads third up this are to users We of Senseonics open provide the Commercially as and conclude then products Q&A. $X.X $X.X among U.S. use of requirements new in in patients anticipation of the million the and Xnd larger awareness, This the the from believe expectations quarter will regulatory appreciate million commercial pipeline, the base. FDA call generated patients million revenue. providers installed wherever current driving this has re-engaging comfort HCPs who the and to converting We Senseonics included XX-day of Senseonics our and been for quarter, interest the an support outside $X.X healthcare inserted from we since add sensors insert the of in Delta in U.S., U.S. and signs also anticipation greatest approval launch along new the that number the with quickly quarter. prescribed

for the factors, these to stated $XX we to revenue in XXXX net our be right range expect to $XX of previously the Senseonics middle Given full-year of global million.

to of happy sustain the this revenue the with been At this version to and anticipating of the expect execute given FDA XXX-day forecasted in being year. earlier able despite U.S. our maintain expectation XXX-day our be to full-year point, course, fiscal products the contributing XXXX had contribution established to middle guidance not the approval. revenue. delayed are from of do encouraged the we our are And We year this that guidance, for range, X

And second, highest only the and the awareness focused At of benefits of CGM. the patient continues world's Eversence adoption U.S. here and patient SENS technology. raising together drive the with level, are and developed we collaboration increasing programs to access targeted to the advance have implementing on promising clinical in we're Our several first to long-term implantable HCP

We are consumer groups at ATP's as X focus and awareness you're exploring U.S. the at There on, are reinforce level. a In new aware, users to and to the our adaption. programs the of variety professional level

endocrinologists this introduce I reengage was are gains reengage previously were continues. practice. first each sales I centers again a the HCPs patients the professionals support already improve meetings on The number make begun think clinical The to now insertions And -- and with of to diabetes pursue group support we of we inserting In market SENS concerning and sensor leading $X.XXX at Eversence When themselves encouraged front small and available top the To new presentations and that to or needs particularly addition, that of with targeted the to providers, targets. the are for of acquainted SENS eversense among action account our series a this has known aware is CGM providers this their of and the expanded patients. a these to group awareness, at by eversence practices are potential awareness. to further broader their plans the lectures that quarter. reach system the work to available new prescribers as enhance are

of performance, to XXXX. these the Eversence All long-term sensor. journals and system. in adding clinical clinical confirmation published plan peer-reviewed X continue the that demonstrate value accuracy, manuscripts the implantable been the We a real CGM benefit of recently have in to world of

marketing adoption. and awareness overall community. this driving awareness patient diabetes DTC an to generate patient our strategy. and the is advertising digital DTC On impression recognition commercial remains role an expected play important And broader within in the campaign leads of The continues to side, important piece

We social strong generated long-term the remains that our sensor. media of interest are in being for with the and our leads pleased campaign number with

patients to bridge access commercial former Eversence stand program, insurance $XXX the the expense with need XXX and have patient have generation are and is are recognized financial demand coverage assistance assist program up U.S., equally limited product. favorable coverage important. in the long-term. coverage patients increasing, manage patients patient still and Ascensia the remaining the ensuring reimbursement. who With to for to to and awareness Ascensia assure assistance enables million While ability is us Eversence the high to over assisting to provides insurance it who covered lives a This eligible costs for we after Unlike per program sensor, out-of-pocket

Ascensia for to program for and continuing be increasing sensors efforts charge. long-term get of training expand HCPs is insert the the to will Eversence to time, also sensor. the number targeted our provider accelerate number process of To eligible no patients make more convenient at provided sensors. at This is it HCPs certification inserters trained healthcare limited

the and additional pilot in support programs planning to to seeking In addition, expanded we of stages are implement to also access Eversence. final

in-home example, insertion the we an We a a for As provider, with mobile weeks, region provide pilot expanding with year. a establish the pilot to are to hope limited it working additional this would users. in approach within Eversence goals which option of innovative to coming program delivery to healthcare next sensor an markets

at ways We continue as the other well ease these look as patient with workflow clinician support access to procedure and to processes. its and and

the a as claim. enabling and within market. product Eversence CPT the of claim. pathway bills the by healthcare medical our Finally, durable can reimburse to through unique one professionals the traditional upfront and in the in a for equipment. as such codes Cigna Eversence the requires healthcare a professional, takes procedure established burden through the professional case, reimbursement purchases it processes CGM rather first. Medicare to the procedure is having Payers single a time the versus obtain healthcare of complete, CGM this go patient This distributor patient In and Eversence than it billing Once the greatly insertion both offers reduce

to to not the product start to professionals offices professional and at work with shelf To Europe, enable ensure across office consignment we delays about developing practice the product our establish having end patients as While ever provide always out sales build before prior patients. Ascensia's the And to clinicians team's offices processes for diabetes times clinicians specialties, access to adoption sense this that continue same-day insertions to acquisition Eversence. the optimistic our required. the across process the have are costs. transitions the Eversence help market. In ramping specialists. that markets offices, and facilitate easy observed of on the We partner, its their fast recurring plan and ability we highly smooth We're professionals have uncommon knowledge to have the having and other program tenders of on worked with from carrying without manage of to inventory a it new not healthcare even year, is healthcare product are is pilot all some are endocrinology the and stock in accommodate new approach HCP and contracts, in can to allows in their

where performance of Sweden, support support there in which continues those potential patient creating market. it the we were were are strong share has pleased tender overall already will in the that of a markets. in number that The win positive and European encouraged Ascensia regions team in currently to We market believe recently regions work to Italy, to a in region tenders, Eversence. which above We to is believe X%, are to continue tenders speaks penetration which certain in Skane we meaningful

Information which U.S. third with FDA next-generation to front, product clearance our of excited the In for the actively we are day agency. and quarter, responding been our to requests have on quarter. sensor, be of clarifying our occur to believe we we remains track later the innovation approaching XXX On major the the release in with this from engaging

these be with engaged the the are and about transformative completing a enabling benefits unexpected focused final any interactive as programs. pleased to expect the the and the agency, nearing people the stages, Certainly, has by The are continue FDA diabetes. SENS' its in other is development year. review factor this the great or collaboration potential product COVID completion no are a times other focus of and bringing highly our on partner additional one review impacts been approval are to we there end this at We of and of they on of of this if process excited in difficult delays result important to

on efforts. the our there technical intend we one the per to focused calibration to We the only the continues for of of approval the trials. device, efforts our to optimization begin will FDA IDE week, of are goal sensor, an continue submit to XXX-day and clinical The require the be advance to acutely completed, once product Eversence system. pivotal development These future-generation

our we're month, that be pilot last used are to where chemistry trial and evaluating designed product. addition, the in in In configuration States, United we here initiated XXX-day sensor a architectures

be will excited for of continue future. managing Nick would first represent diabetes that year diabetes trial the the commercialization to We the burden we results. freedom to basis to of Plan our about next this Eversence form the initiated is Products market and financial data now third system that performance in and the because users. would details half go the like transformation the of it providing configuration to of something the turn system quarter would are the look the in submit excited do is of extremely long year in clinical XXX-day the approval I'll at ultimate call of patients to product. have that formal to agency of our our We over in the the expect early clinical the pivotal the over

Nick Tressler

expert and commercial quarter everyone. of $X.X was in and net $X.X million U.S. QX million million and concerns. $X.X year activities million. inventory the million assets generation from QX the of in profit of XXXX, on prior you, the was revenue and transition period. decrease with predominantly of of to write-offs Gross was $X.X impairment Tim, profit in current to revenue cost third the charges XXXX products of decrease $X.X total U.S. $X.X for quarter to in The you third in our and third million the In loss good to U.S. outside due increase quarter Thank gross million, a results afternoon The of of was in goods related partner revenue gross XXXX. to the reflect Ascensia. related potential the compared was full $X the sold

administrative were of related Research $X.X reduction the to Eversense, in XX-day of the shared advertising to Third period. of development the by to quarter the QX, period. to million in increase prior-year decrease of in salary in an million Ascensia and U.S. support, was commercialization of $X.X prior the million, year due The from to clinical supplies, increase of an lower to the support was sales XXXX decrease million, an expenses. the transition an to due for QX expenses commercialization headcount, XXXX, the in $X.X $X.X of prior-year increase product R&D $X.X and in million contractor $X.X general to The the lab a compared primarily compared and $X.X offset in were expansion our the primarily the of million in compared expenses result a and $X.X and marketing period, studies General were expenses in fees. increase and increase the decrease decline professional primarily in XXXX due costs A million. million million personnel in $X.X sales

compared the the of XXXX in as compared the of loss the million, end XX, to XXXX. the to $XX.X significant million, September the Company's share of price at Xnd decline was the at For the $XX ended XXXX, The in to quarter lead X price months loss quarter third quarter gains of Company's Xnd operating non-cash end a QX. in share

total a XXXX embedded including the primarily Company's prior-year million and with to As and related PHC XXXX financing's, notes along related accounting fair notes, equity by capital period adjustments the derivatives of and other the increased value result, XXXX line compared $XX.X non-cash for credits. from income resulting to energy the charges the to

or share these these Principles value U.S. by GAAP, each marked vary to of the quarter, will as market gains required in period the the Accepted non-cash recorded non-cash change Each values instruments are value of charges and Company's volatility price. based losses or in the As the statement. these the Accounting on Generally income to for reporting we

So generally, a increases, non-cash recognized a and as loss incurred share price decreases, share gain. price we we a non-cash

in XXXX, net $X.XX XX, to For $XX.X the accounting approximately Net our in was net share. $XX.X and or million quarter third of cash million to embedded share income Compared $XX.X million. net increased value for September was or operating the XXXX. per X million due ended of $X.XX by derivatives fair total used adjustment Year-to-date, the mentioned. loss income $XX.X months a previously activities per

on penalty. of As equal and short totaled In cash long-term began payments quarter, September principal the and interest XX, our of monthly to $XXX.X investments third PBP we without XXXX, equivalents, make million. loan

interest reduce associated payment share lower We on to cash PHC cash continue payment interest terms dilution or continues in due of kind kind instead in the Paying using agreement. the to pay to the in the notes option. shareholder the the price with the pick of conversion

Senseonics looking in the expect right million. the $XX XX guidance we remainder Lastly, full-year of for to at be revenue of year, previously the the to currently middle of global net the stated revenue to range XXXX

the back continue cash be also full-year turn $XX expect range to to million. to of With Tim. in to net I call that, the used We XXXX in over operations will $XX

Tim Goodnow

awareness optimize making drive engagement you in to to are and DTC Thank with patient patient In of Nick. base advertising professional technology. steps targeted with patient Ascensia Continually conversions expect improving Eversense along access, conclusion, impacts. to continue initiatives and to we all meaningful to interest our implanted take the healthcare grow professional

are placed General commercial in With let's to Marisol created to the continued appreciate in questions. for be our Eversence a infrastructure Chief Manager XXX productive the to lasting market future in by We the Vice open President Mukul well, partnership our have the the commercial Thank and capture us share. market the that for able new believe in Operating us product your day us up customers operations. for commercial greater value Officer, launch. demonstrate of the support to Ascensia that longest our faith today, We Eversence CGM global and joining and you Panlilio, and foundation the positions call meaningful and to the are Operator, excited of time Jain, even with an innovations. deliver value our questions place

Operator

Thank ] you. go question Blackman Instructions and Operator Today's from Mathew [ comes Stifel.Please ahead. first

Mathew Blackman

for on Matt, me. from couple Hey,calling just a

turnaround what the do of that scale How actual long relation half do speed environment, given XXX-day On the anticipate first for affect and revenues expectations from in anticipate are next and will launch, the you your the to to Thanks. you take launch, flash how materially to the Eversence approval maybe long the launch? current year.

Tim Goodnow

revenue final with any on going time next it's agency obviously to the things next that with considerations include. get through a to process time it. that to has not some the transition, The the We'll agree of that final as the us. taken one us But labeling, way for the speak. we're and the come they works of the the to as final So other want year configuration, to is speak in to for yet. high motivation you'll that we view Their regards

So as partner about did XX I go the time, to support the into we be quickly it not days. that Last of might a and we some a as certainly would XX time in launch little dual distribution hand-offs will We the for manufacturing, that greater. there product, can. with but anticipate in significantly bit we assembly will XX-day

Mathew Blackman

I could if follow-up. And just once

expect middle some $XX XQ. that included to Thank guidance color us, in? still get What range for million days to You I'm else Just can year, for the be you trying you. number? a the is is of baked in $XX in XXX the to million remind

Tim Goodnow

needs be to if even likely right year. point occur just within that away, talked we product given it's transition commercialize to we this At approval as got the able would that not about, we this

products the XX, middle -- would sell to U.S. in of time the product the in XXX-day to we that's of the no XX-day anticipate to that range continuing in point. is so U.S. for there anticipated So XX that

Operator

Okay. Thank you.

at ahead. Bedford James. Jayson from Please Our next Raymond today question go

Jayson Bedford

SENS a give can us around a kind kick in of you a Tim, -- terms any talked of a the way number or bit of Maybe standpoint. you questions are U.S. good me. from sense from awareness starting where you physician program little is Hi, of the users in afternoon. few

Tim Goodnow

to annual to patient the We going stick count. were

you As little X,XXX bit a recall, patients, we year just were ago. more than about a

some we to, seen that, but course, back. are of have reduction working We that will from

the that as next in bit on base we've update a call. installed we'll So recall do And Europe of well. larger that got quite

Jayson Bedford

from injector you standpoint, idea any today? many Tim of is device kind though give an us implanting can a a of how are standpoint, about of way there folks from What physician

Tim Goodnow

numbers and are I those Don't and XXX are So all Jason. actually the inserting. are invest detecting actively there is trained know over bit if about -- a little folks -- actively [Indiscernible] believe is are that of

As you interest heard feedback very day the XXX in products, that have were way had from that's encouraging back a up this step, on there to get started is when available. some again and the we

Jayson Bedford

will IC GM And you Okay. for file the when label?

Tim Goodnow

little We're get bit that of get I'm a is there soon that we XXX(k), review. with transition. some is as that to going Recall advantages, complexity to a this has but as to which through

have about We the it. talked agency to

of is our they a a device, is need that combination there to As device little do. work bit

that But product. expect primary focused time. to some this continue we're we'll XXX-day do at take point, I all the on So

Jayson Bedford

Nick. little I'm of And look bump a just receivables, maybe should from A just in Okay. how level level standpoint? for right sales the percent of at quarter-on-quarter. receivables? the wondering, either DSO, we What's ideal

Nick Tressler

from that expect XX standpoint. XX Sure. day receivables Yeah. a I'd to range

Jayson Bedford

It will from current the expectations? That's I come down believe. levels,

Nick Tressler

That's the expectation.

Jayson Bedford

Thank Alright. Okay. you.

Operator

Instructions]. [Operator

please ahead. question go from Craig-Hallum, Alex with comes [Indiscernible] next Our

Connex Stephenson

the Thanks on for Hey Alex. is questions. Stephenson for Connex everyone. taking This

the the pretty FDA I products. any window into with what's want about hard. out Do of with slipping confident approval by the diabetes given the It see other in pound year, like market approval XXX-day but happening thrown the this happening you're the So clocks to risk sounds you end XXXX? of don't too

Tim Goodnow

a there that be was technology won't year, say this back no review is the they never that issue get are all the I active at point, in to majority. resources in are back would certainly having able week, to certainly but risk, their earlier back they are we for to the I'd X the of days us. say diabetes

very been it's certainly review the never the we're headed risk, of direction. much that are that say we through, that and encouraged we've cadence expectation on So fuel and our that interaction but based in no we'd inner believe the there's and

Connex Stephenson

Okay.

XXX Sounds just good. Are isn't And Ascensia there reached like, day a then the by that. covenants approval with follow-up to certain a point? if any contract

Tim Goodnow

ultimately of some waste today. If to consideration, never quite There bit it. are is receive out we but is we from it a where were just

Connex Stephenson

Sure.

FDA currently premature the then current what Ascensia expected in? And improve is And like the database, failure to through a with Okay. looking that day? is rate XXX

Tim Goodnow

on. body's certainly X% that. focus the the to oxidative rate those continue The in XXX response. based we design and significantly go are X% that obviously or area U.S., sensors early is But an the will to on moderate failure premature That's of the is about

Connex Stephenson

Okay. Great. Thank you.

Operator

like conference final the this management remarks. to our session. over for I'd question-and-answer concludes back Gentlemen, any turn the team to

Tim Goodnow

quarterly and Thank Great. updating much to the -- everyone's very performance the the We you. you full-year on at look at call. appreciate we forward next time

that So day, good with

Operator

Thank This you. We concludes thank you all today's conference presentation. today's attending for call.

wonderful disconnect lines have a and your may You day.