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spk04: Good day and welcome to the Senseonics first quarter 2021 earnings release and conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Philip Taylor, Investor Relations. Please go ahead.
spk06: Thank you. This is Philip Taylor from the Gilmartin Group. Before we begin today, let me remind you that the company's remarks include forward-looking statements. These statements reflect management's expectations about future events, operating plans, regulatory matters, product enhancements, company performance, and other matters, and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. A list of these factors that could cause actual results to be materially different from those expressed or implied by any of these forward-looking statements is detailed under risk factors and elsewhere and our annual report on Form 10-K for the year ended December 31st, 2020, and our 10-Q for the quarter ended March 31st, 2021, and other reports filed with the SEC. These documents are available in the Investor Relations section of our website at www.censionix.com. We undertake no obligation to update publicly or revise these forward-looking statements for any reason except as required by law. Also, on this call, we will be discussing our 2021 outlook. Joining me from Senseonics are Tim Goodnow, President and Chief Executive Officer, and Nick Tressler, Chief Financial Officer. With that, I'd like to turn the call over to Tim Goodnow, President and CEO.
spk09: Tim? Thank you, Trev, and good afternoon. Thank you all for joining us today. On the call, we'll discuss the implementation of our commercial collaboration with Essentia Diabetes Care, our promising upcoming clinical activities, as well as pipeline and regulatory updates. Nick will provide detailed first quarter financial results before I conclude, and then we'll open up the call for the Q&A. The first quarter of 2021 marks the beginning of Sensionics operating as a strategically realigned business. We're enthusiastic about the opportunity to advance the value of the Eversense system through our commercial collaboration with leading diabetes technology company, Essentia. To remind you, our commercial collaboration established the transfer of marketing, market access, sales, distribution, reimbursement, and customer service functions to Essentia for all of the Sensionics products over the next few years. With Essentia driving commercialization of these products, our focus within Sensionics is now centered solely around the strength of our organization, research, development, and manufacturing of our innovative long-term implantable CGM systems, and the associated clinical and regulatory activities. We have a strong partner in Essentia to drive the commercialization of Sensionics products. This agreement meets the needs of and benefits both organizations. Essentia now has Eversense in their portfolio, a highly differentiated product participating in one of the fastest-growing markets in medical technology, and Sensionics is able to have its Eversense system globally commercialized with an immediate size and scale of a more mature business and global diabetes leader. The collaboration agreement aligns our incentives, providing Essentia with a tiered share of revenue generated from Eversense sales, as we have previously described. In the first quarter of 2021, Sensionics generated revenue of $2.8 million, including approximately $310,000 in the U.S. and over $2.5 million in Europe. Essentia's commercial efforts have been expanding since their initial sales support of Eversense late last year. The early experiences played a valuable role in forming the next phase of our collaboration, the restart of full-scale commercialization in the U.S. on April 1st, which complements the transfer of commercial activities that occurred in February. With that, let me describe some of our recent progress. There are many proof points that demonstrate the strength of Essentia's commitment to Eversense. not only in the shared mission to improve and make the lives of patients with diabetes better, but also through their investment in Sensionics. Most important, but not as visible externally, is their collaborative and strategic approach to the commercial partnership. Following the collaboration announcement, our integration plan called for initial activities in the U.S. through the first quarter to familiarize Essentia with the Eversense product sales, and clinical processes. Our own experience and subsequent discussions with Essentia around optimizing the sales and marketing strategies and tactics for Eversense have formed the design of a high-touch, comprehensive approach. For example, early learnings highlighted the skill set and experience required for sales professionals to be successful in the CGM space, which may differ from the long-standing BGM market. In late March, Ascensia completed the hiring and training of the U.S. sales force, increasing to 25 marketing and sales professionals and approximately an additional 25 team members in commercial support roles, including sales, inside sales, clinical training, market access, and customer care professionals. This group was recruited to fit the specific skills that required to sell Everson. and we anticipate that backgrounds with in-office sales, procedural training, and the reimbursement process should ease their ramp up to proficiency with our product. The team is strategically positioned across geographies based on an assessment of the diabetes patient population, patient access, and our ever-since opportunity. Currently, the team is in the process of managing and setting up their territories, including calling on current EverSense providers and prescribers. We are encouraged to see that as the quarter progressed, some clinic access restrictions implemented throughout COVID were being removed or eased, allowing them to return to being able to work in person with healthcare providers. At the same time, they have been pursuing virtual introductions. As Sensionics had stepped back last year from pursuing new sales of Eversense, Essentia is now pursuing the immediate opportunity to restart growth in the patient base with clinicians who were the early Eversense adopters. When these introductions to existing accounts are complete, the team will then prioritize outreach to new accounts with an initial focus on the top insulin, CGM, and pump prescribing physicians. Given the unique nature of our implantable product, the current awareness of the technology, and growing patient access, their team has identified several strategic opportunities where we anticipate focus and investment can drive further adoption of Eversense. Patients play a key role in choosing their CGM system, and continuing to raise awareness for Eversense is an important factor for adoption. Ascense is prioritizing expanding this awareness among both patients and clinicians. To address this opportunity most effectively and efficiently, they have launched a comprehensive direct-to-consumer advertising campaign. Not only is this expected to create impressions among the target patient audience, but is also to be a strong supplement to the direct healthcare provider outreach. The systems necessary for lead capture and management are now in place. Our shared goal is to deliver the benefits of Eversense to more patients with diabetes, and this program represents a proven avenue to introduce patients to the technology. As of April 1st, we are now moving to the next phase of our integration plan. This means that the full commercial strength of one of the leaders in diabetes technology now markets Eversense as a key product focus, providing patient, healthcare provider, distribution, and payer support. Many commercial health plans and Medicare have recognized the value of our implantable CGM and have implemented formal coverage policies that provide reimbursement for the product and for the implant procedure. We have completed much of the heavy lift of earning coverage for Eversense with a strong established coverage base. We're also excited to announce that Centene Corporation, a top 10 U.S. healthcare insurance company, is now covering Eversense. This coverage provides Essentia with a strong foundation to increase HCP's confidence that more and more of their patients will be covered. In addition, and as we announced, the 2021 physician fee schedule includes coverage for the Eversense system and the implant procedures, offering the benefits of our CGM system to the entire qualifying Medicare population with diabetes. To that end, we are pleased to announce that the University Hospital's Accountable Care Organization, or ACO in Cleveland, Ohio, is the first accountable care organization to adopt ever since in their practice. ACOs are integrated healthcare provider networks that offer superior care to Medicare beneficiaries at a lower cost. Under a shared savings program with the government, if ACOs can prove to CMS that they can reduce the cost of care improved quality, and improved patient experience, they are entitled to keep 50% of the savings that they've created. To date, the general ACA program has been considered a clinical and economic success with nearly 500 participating ACOs saving $1.5 billion, managing approximately 10 million patients. We believe Eversense has the potential to be another avenue of savings for such programs. One specific metric of success that is used in the evaluation that ACO's performance is in the HbA1c control of their diabetes population. We feel strongly, as we have demonstrated, with Eversense's ability to drive A1c reduction in patients, combined with its unique features, Eversense can be a particular benefit to the Medicare population. With continuous three-month glucose monitoring that doesn't require the biweekly hassle of inserting and removing a sensor, the insertions are done by providers that can address any dexterity challenges, on body vibration alerts and can address any visual or auditory issues, and the high sensor accuracy, especially at the important low glucose, all of which we believe supports greater adherence to CGM and therapy optimization. We believe that the benefits of Eversense give it the potential to be the preferred CGM for this population and will directly aid ACOs like University Hospitals at meeting their A1C and outcomes objectives. Ascensi is also launching additional efforts to win coverage from the remaining payers not yet covering Eversense. In the meantime, and in line with industry conventions, in order to support those patients who do not currently have coverage for Eversense or have high deductibles, Ascensia is implementing new Eversense access programs. First, for patients with commercial coverage for Eversense, the patient assistance program is designed to reduce the patient's out-of-pocket costs, such as co-pays, co-insurance, or deductibles that are associated with starting Eversense. This program will help accelerate growth and has a positive economic contribution for the partnership. Second, for patients who have insurance that is not yet covering ever since, the prior authorization program is designed to help patients submit claims petitioning to receive coverage for their system on a case-by-case basis. If there is no formal coverage policy in place with their health insurance plans, These programs are yet another example of our joint commitment to ensure we provide the necessary support to get this innovative solution to patients who choose or need to be on long-term CGM therapy. Outside of the United States, we've talked about before and we're happy to report that Essentia's initial European commercial transition in February was executed according to plan. we were able to provide patients with sustained access to Eversense and customer service. The priority here is for the successful transfer of existing payer contracts and tenders. Ascensia is now active in Germany, Italy, Switzerland, Spain, the Netherlands, and Poland. Given their international presence, Ascensia has a large sales force of more than 250 sales professionals who are very excited to have a next generation glucose monitoring system added to their portfolio. Additionally, recently we signed an agreement to accelerate the transition of Scandinavian distribution rights from Rubin Medical. This transition is now planned to happen towards the end of this second quarter. Following the successful execution of the commercial transition planned in the U.S. and Europe, We remain on track and continue to expect Senseonics global net revenue for 2021 to be in the range of 12 to $15 million. Another positive aspect of the commercial collaboration agreement is our ability to focus on advancing our implantable sensor platform. Market research of CGM patients has consistently indicated that the two most desired features in a CGM system our sensor accuracy, and longer sensor duration. Studies have continually demonstrated our positive accuracy throughout our sensor life, and we have achieved a substantial lead in sensor wear compared to the other available technologies, offering 180-day sensor life compared to the next closest competitor of just 14 days. We believe each sense-aware duration extension for our product represents a step-wise market penetration and market expansion opportunity for us. Our loyal patient base continues to highlight the lifestyle benefits provided by Eversense, and we are confident we can offer additional advancements with future generation products. Next, I'll speak to our promise pivotal study and the publication of the study results. We're excited to announce that next month we will be presenting two of the at two of the key diabetes conferences, the data from the large PROMIS study that supports the 180-day Eversense PMA supplement. First up will be the ATTD meeting, followed quickly by the annual ADA meeting, both in June. Dr. Satish Garg of the University of Colorado and the Barbara Davis Diabetes Center is presenting the clinical data on behalf of all of the PROMIS study investigators. Dr. Gard will describe the accuracy and safety results from the 181 subjects who participated across eight clinical research sites in the United States. We're excited to report these results, and as we previously shared, the data demonstrated performance matching that of the current 90-day product and achieved it with reduced calibration, yet with the useful life extended all the way out to 180 days. Though these are virtual meetings, they are two key diabetes conferences of the year and represent an important forum to showcase the clinical benefits of Eversense. At the ADA meeting, Essentia is also sponsoring a product theater that will feature prominent KOLs and patients to discuss the advantages of the Eversense technology. On the regulatory front, we are pleased to share that in mid-April, in line with the previous communicated expectations, Amid continued emergency use authorizations relating to the COVID pandemic, the FDA has now assigned a lead reviewer to our PMA supplement application for the submitted 180-day Eversense product. We believe the data to be published at the upcoming meetings and as submitted in our application demonstrate a favorable safety and accuracy profile for the product, and we are hopeful it will aid the agency in an efficient review cycle. While we are pleased with the strength of the submission, there is potential for extended review timelines based on recent public comments by agency officials on the continued residual general impact of COVID and emergency use authorization application. It's always difficult to precisely predict timelines for agency reviews, especially amid the current unprecedented environment, but we are hopeful for a straightforward review process. and progress on our next generation technology platform. This is the sensor that will last for up to a year and it continues well. This is a top priority on the development front. The team is in the process of working to lock down a chemical and technical configuration for this sensor. A sensor that lasts for a year requiring just one calibration per week will be a game changer for people with diabetes. Following a technical optimization, we expect to file a submission with the FDA for IDE approval to initiate the pivotal clinical testing. We are pleased with the progress that we're making to date and continue to plan to file the submission in the fourth quarter of this year. I will now turn the call over to Nick to go over the details of our first quarter financial results.
spk05: Thank you, Tim. Our Q1 results demonstrate the advantages of our new business model Following the strategic transition into our commercial partnership with Essentia, our new business model creates a meaningful change to our financial profile by leveraging the partnership with Essentia to commercialize EverSense in both the US and Europe, enabling significant reductions to our operating expenses and cash burn rate by significantly reducing our sales and marketing expenses. In the first quarter of 2021, total net revenue was $2.8 million compared to $36,000 in the first quarter of 2020. U.S. revenue for the first quarter was $310,000 and revenue outside of the United States was $2.5 million. First quarter revenue in the U.S. was reflective of Essentia's initial sales support prior to their April 2021 full commercialization. Gross profit in Q1 2021 increased by $20.2 million year-over-year to $526,000. The positive gross margin in the quarter was primarily due to the ability to fill resupply orders with existing written-off inventory as existing patient reinsertion rates were above the expectations established in the first quarter of 2020 amid the onset of the COVID-19 pandemic. First quarter 2021 sales and marketing expenses decreased by 9.5 million year-over-year to 1.6 million compared to 11.1 million in the prior year period. The decrease was primarily due to the strategic changes in our market commercialization approach with the Essentia Collaborative Partnership. Research and development expenses in Q1 2021 decreased by 2.1 million year-over-year to $5.3 million compared to $7.4 million in the prior year period. The decrease was primarily driven by lower clinical study costs and personnel-related expenses. General and administrative expenses in Q1 2021 were $5 million, a decrease of $716,000 year-over-year compared to $5.7 million in the prior year period, mostly due to a decrease in personnel-related costs. For the three months ended March 31st, 2021, operating loss was $11.3 million compared to $43.8 million in the first quarter of 2020. This represents a $32.5 million decrease in operating loss from one year ago. The increase in the company's share price at the end of the first quarter as compared to the company's share price at the end of the fourth quarter of 2020 led to significant non-cash charges in Q1. As a result, other expenses increased by $239.4 million compared to the prior year period, primarily related to non-cash charges resulting from the accounting for embedded derivatives and fair value adjustments related to the company's financings, including the 2023 and 2025 notes along with the PHC 2024 notes and energy capital equity line of credit. As required by U.S. generally accepted accounting principles, or GAAP, we mark the value of these interest instruments to market for each reporting period, and the change in these values are recorded as non-cash charges to the income statement. Each quarter, the value of these non-cash gains or losses will vary based on the volatility in the company's share price. So generally, as share price increases, we incur a non-cash loss and as share price decreases, we recognize a non-cash gain. For the first quarter, the cash portion of the other expenses was $4.1 million of interest expenses out of the total $238.2 million. For the three months ended March 31st, 2021, total net loss was $249.5 million or 68 cents per share compared to 42.6 million or 21 cents per share in the first quarter of 2020. Net loss increased by 206.9 million due to a 239.4 million increase to other expenses primarily related to the non-cash accounting charges from the accounting of the company's company financings previously mentioned, partially offset by a $32.5 million decrease in loss from operations. I would also like to reiterate that in January, we completed a series of financing transactions that raised over $175 million of proceeds for the company. With our new business model, this capital is currently expected to be sufficient to fund the business through cash flow breakeven from operations. In Q1, our net cash used in operating activities was approximately $16.3 million. As of March 31, 2021, cash and cash equivalents totaled $178.6 million. Looking at the remainder of the year, we are reiterating our 2021 guidance. We expect global revenues to Senseonics of between $12 and $15 million for 2021. The annual revenue cadence is expected to be split roughly 40% in the first half and 60% in the second half. As a function of the current patient installed base sizes and relative growth, U.S. revenue is expected to be approximately one-third of total revenue for the year. For full year 2021, net cash used in operations is projected to be in the range of $60 to $65 million. With that, I will turn it back over to Tim.
spk09: Great. Thank you, Nick. Before we conclude, I'd like to announce and extend our gratitude and thanks to Dr. Justin Klein, a longstanding Senseonics board member. For over five years, Justin's guidance and leadership has been very valuable across the development, regulatory approval, and commercial launches of our Eversense products. Justin transitioned from NEA, the venture capital firm, where he previously participated in the private investments in Senseonics, to recently starting his own fund, and we are excited for him and this opportunity. With his term coming to an end, Justin will not stand for reelection to the Senseonics board at this year's annual meeting, which will enable him to focus on the next chapter and concentrate on future investments. We wish him the best of luck in his future endeavors and thank him for his continuing support and lasting impact he's made on the business. In the first quarter, we worked hard with our partner Essentia to transition Eversense and the commercial responsibilities for both Europe and the US. The team at Essentia has proven that they are committed to driving adoption of Eversense as demonstrated by the investments that they have made in our collaborative endeavor and in building a comprehensive U.S. commercial organization to support the Eversense product. We spent years developing, earning regulatory approval and payer coverage for our revolutionary long-term implantable continuous glucose monitoring system. Now Essentia is positioned to leverage the size and scale of their organization to raise awareness and drive patient adoption of Eversense. We are very confident in our ability to maximize the value of Eversense in the market over the long term. We look forward to providing updates in the future, and we thank you for your time. Joining us on the call for questions are Mukul Jain, our Chief Operating Officer, and Marisol Banlilio, Vice President and General Manager of Global Commercial Operations. Operator, let's now open up the call for questions.
spk04: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Chris Pasquale with Guggenheim. Please go ahead.
spk08: Thanks. I have a few questions. I wanted to start with the revenue build. Can you give us an update on what you think your installed base was in the U.S. and international markets as of the end of 1Q? And then as we think about the better than expected international results this quarter, Was that driven by essentially bringing new patients on, or was there a catch-up in terms of restocking of distributor inventory or something like that that may have contributed to the results?
spk09: Thanks, Chris. In regards to patient account, we've stuck to an annual update. You'll recall the most recent information we put out. was at the end of last year, beginning of this year, there were about 4,000 patients in Europe that were on the technology and about 1,000 in the U.S. So I don't have a quarter update for you. We'll go ahead and stick to that annual cadence of putting information out. In regards to the performance in Europe, that is in line generally with our expectation. Do recall that That also includes purchases that Roche made to complete their responsibility for a portion of Q1. They went through the end of January. So it really is pretty representative of patient demand. There is not material stocking that's occurring, but it is the servicing of the existing patients that are on the product. Thanks, Tim.
spk08: And then Nick, just hoping on gross margin, you can give us a little bit of a better sense of what to expect from here on out. Have you now worked your way through the written off inventory? And so going forward, should we see something that's a little bit more normalized? And I think back to September, you talked about a negative 30% gross margin for this year, and it seems unlikely it's going to be that low after this starts. So just updated thoughts on what the full year is going to look like. Thanks.
spk06: Sure, yeah, happy to take that.
spk05: So we've worked through the majority of the material that we have written off a year ago.
spk06: And in terms of gross margin for the year, recall that we still expect back half of the year to be greater.
spk05: So as we move into Q2 and through the back half, and so we still continue to maintain the range that we provided of negative 25 to negative 35% for the full year.
spk04: Was there a follow-up, Mr. Pasquale?
spk08: No, that's helpful. Thank you.
spk04: Thank you. The next question comes from Matthew Blackman with Stifel. Please go ahead.
spk02: Good afternoon, everybody. Thanks for taking my questions. Let me just start, Tim. I just want to get a better feel for the U.S. relaunch and how it sort of phases over the next several quarters. Um, sounds like phase one is, uh, is going after previous high volume ever since in planters and then moving to just high volume insulin prescribers who may be new to ever since. So how does that play out over the next few quarters? Is 2Q focused on existing accounts and then the second half of the year is when you start going after new accounts, just any help, um, you know, with the cadence of, of how the, uh, how the, uh, us, uh, relaunch will, will play out. And then I've got a few followups.
spk09: Sure, Matt. Directionally, I don't think that that sounds unreasonable, although the timing is going to be gated by success. And, of course, this is appropriately under Essentia's timing and direction. But the focus for sure, especially with the new reps and the dynamics of not being able to get to see them for some time, is to get to reestablish the relationships with the existing prescribers and inserters. So that's current. As the areas get comfortable, the territories are comfortable, then expansion to the bigger prescribers and opportunities will happen in the future. It's not currently in place. Right now it really is about getting a new rep, getting established in their territory and working with their their prior inserters and prescribers. Recall that it's been just about a year that we took our sales force out of the field. So those docs and those patients have been out without a sales rep for quite some time. So I do expect it'll take us a little while to build that back up again, and hence the cadence that we've guided to on the U.S. in the back half of the year versus the first half.
spk02: Okay, makes sense. And then, Tim, you mentioned some clinics are now starting to lift restrictions in the U.S. I'm just curious how much of a headwind that still represents today, whether it's access for essentially reps or the implant specialists. Is that still a big hill to climb? I just got one more follow-up.
spk09: We certainly see it improving. I would say that February was better than January, and March was better than February. So I certainly believe it's in the right direction. I think it's... We all tend to feel in the U.S. that we're making good headway with the vaccine penetration. There's always more to do, but it does feel like we're starting to get back to normal, and we would hope that certainly by later in Q2, certainly by Q3, that we'd be pretty good shape to have in-office visits and trainings and so forth back on the docket for everyone.
spk02: Okay, and then the last one, I appreciate the comments on the PROMIS study. Is there anything we should pay particular attention to or be sensitive to when the data comes out? Anything interesting that you think, and you don't have to be too specific, but just curious if there's any part of the data you think we should pay close attention to? Thanks.
spk09: Yeah, I think obviously one of the key metrics, of course, that the agency is going to look at is just how How accurate the devices and we've always felt it's always been a number one focus for us the ever since technology is is quite frankly very accurate and very competitively positioned against the other devices that are out there. So we feel quite good about that. And I think when you get a chance to see the full data set. You will you will as well. So obviously safety is is another element and we feel pretty encouraged that we we didn't certainly see anything new. We didn't see anything of note or materially more complicated than you would see with a 90-day product. So overall, we feel pretty good about it and look forward to getting it published and having people take a look at it. All right.
spk02: Appreciate it, Tim. Thanks so much.
spk04: The next question comes from Danielle Antelfi with SVB Lyric. Please go ahead.
spk03: Hey, good afternoon, everyone. Thanks so much for taking the question. Kim, I had a follow-up on the ACO partnership, and that sounds really interesting to me, and I'm just curious about how that came about, and does that potentially represent a more meaningful opportunity and an underappreciated opportunity for Senseomics over time?
spk09: Well, Danielle, as you know, we're pretty excited about the opportunity we have in Medicare because of the alignment of the the capabilities, the features and benefits of Eversense for that population. So the ACO is a group that, you know, part of the group that we've reached out to, and this particular group was pretty active in getting back to us in regards to their interest as well. As I said, they've got, you know, just over 20 specific metrics that they are definitively, specifically measured on, and one of them is their A1C reduction. So it's pretty well known and pretty well documented that when you put people on ever since, that we will reduce their A1Cs. And, you know, that's the intent of the evaluation that we're going to do with this group. And I do think we're pretty excited about the opportunity in all of Medicare. The focus that you get in NACO and the additional attention around the economic return, we're pretty excited about as well.
spk03: Yeah, that makes a lot of sense. Okay, and perhaps you could leverage whatever outcomes you see with this ACO to drive adoption and other, or drive a similar partnership in other ACOs. Is that sort of like the overarching strategy?
spk09: Absolutely, and Dr. Fran Kaufman is staying, you know, very close to this. You know, she's well familiar with the group. It's a high-quality group, and she'll certainly be partnering with them, and we look forward to results and experience publication out of that as well.
spk03: Got it. And then just one follow-up, Nick, this is probably for you, but just around the readiness for the 180-day from a manufacturing perspective, you know, how quickly can you ramp up if, in fact, that does prove to be an inflection point, which, you know, I sort of feel like it could from an adoption perspective. Thanks so much.
spk09: Yeah, I guess I'll jump in, Danielle. I would say that obviously we're doing a lot of planning right now in anticipation for that. We are reading the tea leaves in regards to the timing on it. We've begun the investment, the preparatory investment for the process, building the capacity. So we feel pretty good about the ability to ramp. We have a strong partnership with strong capability where we've invested direct capital with them previously. So we feel pretty confident that we're going to be able to support the growth and excited about what it's going to grow as well, because it is going to be certainly an improvement in the likability of the product, and we know that adoption is going to go up as well.
spk04: Thank you. Again, if you have a question, please press star then 1 on a touchtone phone. The next question comes from Jason Bedford with Raymond James. Please go ahead.
spk01: Good afternoon. I hope everyone's doing well. Just on the 180-day, Tim, you talked about timelines. I realize it's difficult, but just in terms of your expectation as to when you'll get approval for the 180-day?
spk09: Yeah, so as you know, a review such as this is a PMA supplement. It's not a primary review. PMA supplements typically would be a 180-day review. So we don't have a reason to believe that it should vary from that other than the dynamics of COVID and what it might take a particular review or review team's time to clear off their desk from some of the prior work they were doing. So that's what we really don't know. probably why we're trying to be a little bit oblique on the timing. I certainly hope that it wouldn't be much, much longer than the traditional review time periods, but I do know it was a group that was notably impacted by the diagnostics responsibilities with COVID diagnostics. Our feeling is that it'll be in probably that time period.
spk01: And just to be clear, the clock started in mid-April?
spk09: Correct. Correct. And the reviewer picked it up.
spk01: Okay. And just also just for clarity on Ascensia and revenue recognition, I think you mentioned the international revenue pretty much matched underlying demand. Is that correct?
spk09: Correct. Correct.
spk01: Is there going to be a quarter where Ascensia takes a bit of a bolus of inventory?
spk09: We're certainly going to be working together to always be driving the inventory up, but we are, unlike the relationship we had with a prior distributor where there was a dire desire for them to hold a bolus for a long time period, we're That's not the same distribution partnership that we have with Essentia, so I would not expect that same. I would imagine that we'll continue to do as close to just-in-time manufacturing as we can support while keeping the channel appropriately full in all of the markets.
spk01: And then I guess just lastly, on the U.S. revenue, I realize things are just starting up again, but is there any way you can break out of the U.S. revenue, what came from new users versus those that were getting re-implanted?
spk09: In the first quarter, recall that we had pretty limited coverage, so the predominance of that, I don't have the full breakout, Jason, but the predominance of that is re-implanting of existing patients, right?
spk01: Okay, thank you.
spk04: The next question comes from Alex Novak. with Craig Hallam Capital Group. Please go ahead.
spk07: Hey, guys. This is Trent McCarthy. I'm for Alex. Just a quick question on Essentia. With Essentia selling the product compared to the internal team, are you finding the reception to be different? Do they have certain call points that are helping? And if you could just speak to the initial response you're seeing to the DTC campaign here through the first part of Q2.
spk09: It's quite early. in Q2 for us to have the feedback on it. The reception we believe is quite positive because recall the predominance of the folks that they're calling on are our existing prescribers. So they're certainly encouraged to have us as a partnership back in a more formal commercial relationship with the clinicians because that actually helps them. We now have sales reps that can speak with patients and help them handle issues and transition and so forth that we were not able to fund for the previous year. I would say as we expected, it's pretty positive, but we're back in with the most interested users at this point. As we grow, we'll expand beyond that. The early DTC, the impressions that we're getting, I know that Essentia feels really good about. But we'll continue to work to push those through the funnel. And it does take some time with the insurance adjudication that it needs to occur and so forth. Pull through a new start. So that's the active work that's going on today.
spk07: Okay, got it. That's helpful. And then just one follow-up. Diabetes care has definitely seen a significant jump in competition as of late. What is your... game plan to address this? And I mean, do you think ever since sensors have enough to effectively compete with products like Libre 3 and G7? And I guess just what do you think is key in making for a highly competitive continuous glucose Meijer?
spk09: Well, certainly in the CGM space, it is, you know, it is very attractive because the recognition is that essentially if you're on insulin, you should be on a CGM. And I think you're seeing that in the market growth that everyone is experiencing. We're very excited about our differentiation. Our key point is of course the duration, right? We're the one group that can go for a long time, but a very, very long time. So expansion for us, um, you know, the one 80 in the U S bringing that along, bringing it up to where the Europe already is. And as I described, we're actively working on the, on the three 65. So we know the excitement level for those longer duration sensors increases significantly with people's desire to go into the office and have the insertion procedure done. We are very confident that our long-term sensors are going to be highly competitive with the transcutaneous sensors that are getting smaller, transmitters are getting smaller, so on and so forth, but it's still creating a small open wound that you need to keep patent the entire life of the sensor, and there are issues with adhesives and so forth. Duration is important for us. As we talked about, we're going to have a fully implanted system, so no on-body transmitter. That gets people very, very excited. So we're very confident in our technology platform and what we can do and how we can compete in the future in what's a very meaningful and pretty exciting market.
spk04: This concludes our question and answer session. I would like to turn the conference back over to Tim Goodenough for any closing remarks.
spk09: Great. Well, I would like to thank everybody for their time and participation. As you heard, we're very excited about the opportunities that we have and the emerging work that we're doing with Essentia both here in the U.S. and in Europe. So we appreciate everyone's time and look forward to future updates in the coming quarters. With that, thank you and good day.
spk04: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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