Senseonics Holdings, Inc.

Good day and welcome to the Senseonics second quarter 2021 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. 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.

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 you're of. These forward-looking statements involve a number of risks and uncertainties. The list of the 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 in our annual report on Form 10-K for the year ended December 31st, 2020. Our 10-Q for the quarter ended June 30th, 2021 and our other reports filed with the SEC. These documents are available in the investor relations section of our website at www.sensionix.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 Sensionix are Tim Goodenow, President and Chief Executive Officer, and Nick Tressler, Chief Financial Officer. With that, I'd like to turn the call over to Tim Goodenow, President and CEO. Tim?

Thank you. Hello, and thanks, everyone, for joining us today. We'll be discussing our Q2 commercial initiatives led by our global partner, Essentia Diabetes Care, and provide progress updates on our clinical, product pipeline, and regulatory activities. Nick will address the second quarter financials in detail, and then I'll conclude and open up the call for Q&A. In the second quarter, Sensionics achieved revenue of $3.3 million, which included $1 million of revenue from the U.S. and $2.3 million of revenue from outside the U.S. Through the first half of the year, the global commercial partnership integration has progressed to Essentia taking full commercial operations, and we have collaboratively continued our efforts to minimize the patient-based attrition maintaining ever since users. Based off the current plan, we continue to expect that global net revenue to Senseonics for the full year 2021 will be in the range of $12 to $15 million. As we operate today under the terms of our commercial collaboration agreement, Ascensia has assumed responsibility for marketing, market access, sales, distribution, reimbursement, and customer service in the U.S., Germany, Italy, Spain, the Netherlands, Poland, and now Sweden and Norway, the last two existing markets which were transitioned ahead of plan in Q2. We at Senseonics remain focused on product development, including clinical trials and regulatory activities, along with manufacturing our systems. In the U.S., this is the first quarter for most members of Essentia's U.S. sales team. and were pleased with the steps that they have taken to establish this market coverage. To support this, they identified the skill sets that are required for sales professionals to be successful introducing our transformative CGM technology. Twenty-five new sales professionals experienced in diabetes or medical technology have now been fully onboarded and are calling on existing accounts. This team has been trained in the reimbursement landscape and how to introduce the product and procedures to clinicians. The sales professionals are supported by a team of inside sales, clinical trainers, distribution channel, market access, and customer care professionals. This comprehensive commercial infrastructure currently enables the targeting of existing providers and their intensively managed patients, as well as the payers and the trade channels. These resources invested by Essentia represent their strong commitment to Eversense and are supportive of the full commercial activities. Coming out of the height of the pandemic and our very limited commercialization in 2020 to both patients and providers, the Essentia sales force is actively reintroducing the product to both clinicians and patients who are impacted by these disruptions with initial focus on reestablishing and maintaining relationships. Their first action is calling on the existing Eversense prescribers to introduce themselves, make them aware of the transition and a reentry into the market in pursuit of servicing existing patients and new patients. This stabilization effort is targeted at rebuilding the foundation for future growth. In the second half of the year, they plan to expand their reach to training and onboarding additional prescriber practices. We know there is real work to be done to regain market traction, and we are pleased that it's now underway. To support driving growth in the installed base, continuing user retention, and ensuring greater access to Eversense, Ascensi has launched a patient assistant program. This program is designed to accommodate those whose health plans have high deductibles, coinsurance, or copay costs, and to support their out-of-pocket costs while using Eversense. Specifically, US Eversense users can access the program which covers up to $300 per sensor after the patient pays for the first $100 out of pocket. For those who qualify for the full $300 reimbursement per sensor, Eversense would generally have a lower total annual cost than other CGMs on the market. Ascensia estimates that over half of the people using mealtime insulin in the U.S. could be eligible for the patient assistance program. While the economics are different from our previous bridge program, the patient assistance program shares a similar commitment intended to help a broader group with access to Eversense. Ascensia is prioritizing raising awareness of the Eversense system within the diabetes community to drive demand with the patient assistance program and the established U.S. commercial infrastructure. There are two main initiatives aimed at increasing awareness, a direct-to-consumer or DTC digital marketing campaign and clinical education through HCPs. The DTC campaign targets social media audiences primarily aimed at intensively managed patients seeking information about diabetes technology. The initial DTC campaign has resulted in nearly 50 million impressions, or ads served to date through Facebook and Google. The campaign targets raising awareness and can be an effective sales tool for generating inbound needs. There is a strong consumer aspect to CGM that patients have the ability to ask their healthcare providers to prescribe Eversense. We anticipate that generating patient pull from DTC advertising will play an important role in driving overall adoption over time. From the healthcare provider side, we remain actively engaged in scientific and industry meetings where we partner with key opinion leaders who experience the positive clinical impacts and patient testimonials Eversense can have in managing patients' diabetes and who can share those experiences with their peers. Two of the most important and well-attended meetings were held in the second quarter, the ADA and the ATTD meeting, both scientific conferences. And our presence at these meetings featured lead investigator Dr. Satish Garg's presentation of the clinical data from the PROMIS study. The presentation highlighted the safety and accuracy profile of the ever-since 180-day sensor. Accuracy of the system with one calibration per day during the trial is measured by MARD was an industry-leading 8.5 to 9.1%. We are very proud of these results, which were well-received by the broader diabetes community, and we look forward to seeing these results peer-reviewed published in the very near future. Together with the Essentia sales force, we are also actively and directly reaching out to local and national KOLs via one-on-one meetups or small group discussions in person or televisits where required. we will remain engaged with the diabetes community, not only to communicate the positive clinical impacts Eversense can have on diabetes, but also to learn and gather insight to fuel commercial, clinical, and product development activities. In addition, our initial involvement with the Accountable Care Organization, or ACO, is now in motion as well, with product on site and ready to be inserted in the coming days at the University Hospital ACO in Cleveland, Ohio. They are the first accountable care organization to adopt Eversense into their practice. This initial program will include 20 Medicare diabetes patients on insulin regimens using the Eversense system for at least a year. The program will assess clinical outcomes such as HbA1c reduction and patient reported outcomes such as satisfaction levels during their use. We hope to learn and share valuable clinical information from the use of our long-term implantable CGM with this important managed care population. Moving to progress outside the US, Essentia sales professionals in the European countries have added Eversense to their sales portfolios and started marketing the system in February. This team has quickly learned the sales model from plannable CGMs, as they all have extensive diabetes knowledge and familiarity with the market and its offerings. Across European markets, we executed smooth transitions from our prior distributor. Germany and Italy continue to represent two of our largest patient bases. In Germany, most payers cover our recents, and new contracts have been established with Essentia. In Italy, where we were able to transfer a majority of the previous contracts, including tenders. As different regions have experienced different impacts and regulations associated with COVID, we can complicate efforts to reach and train doctors with a new product. Ascensia is focused on servicing existing patients as restrictions allow. We are working closely to optimize sales channels to appropriate levels to support and align with patient demand. And they are off to a solid start outside the United States. And we are excited to now be marketing in Scandinavia as well. With Essentia assuming full commercial responsibilities, we have been able to focus and allocate our resources towards developing new products, strengthening our clinical profile, and advancing our regulatory activities, as we intended when we entered into this agreement. Market research of existing CGM products show that the two most sought-after features in a CGM system are sensor accuracy and extended sensor lifetimes. Studies have repeatedly shown that our sensor remains highly accurate throughout the full 180-day duration of the sensor life. Our growth strategy consists of offering patients improved benefits with each iteration of longer-lasting, less intrusive Eversense sensors, which we believe will enable us to gain share and help expand the market for CGM. As evidenced through the reinsertion rates, our patient base is shown to be loyal, which we believe highlights the distinct desired function and lifestyle benefits offered by Eversense. On the US regulatory side, the data generated from the soon to be published PROMIS study is being used to support our 180-day product PMA supplement application, which we previously announced was filed last fall. Following the emergency use authorization delays, the submission was assigned to a lead reviewer by the FDA on April 15th And we also reiterated the previous extended review timelines based on publicly made comments by the agency officials. At this time, and based on the confidence and the strength and quality of our submission, and in discussion with the lead reviewer, we continue to expect the approval of the product by the end of 2021. Though the constantly evolving situation with the pandemic and its impact on FDA workload make it hard to precisely estimate regulatory timelines. Looking forward, we continue to make progress on our next generation technology platform. We are designing the system to have a lifespan of one year and require only one calibration per week, and we are actively working on its development. The attractiveness of this product to patients would represent another stepwise function that would address the needs of additional patients, and we believe, again, revolutionize the CGM industry. The goal of bringing such a product to market represents our solution to the ultimate goal of lessening the burden of diabetes management and to offer people even more freedom. Our research and development activities are currently focused on working to realize this goal, with our efforts centered around the technical and chemical configuration of the sensor. Once the technical optimization is completed, we intend to submit the product to the FDA for an IDE, as previously discussed, and to begin clinical testing. The development of the product has been steadily advancing, and we currently expect to start the pivotal trial in the first half of next year. And I'll turn the call over to Nick, who will go over the details of our second quarter financial results.