Senseonics Holdings, Inc.

Good day and welcome to the Senseonics fourth quarter and full year 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 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.

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 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, 2021, our 10-Q for the quarter ended September 30th, 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 2022 outlook. Joining me from Censionix are Tim Goodenough, President and Chief Executive Officer, and Nick Tressler, Chief Financial Officer. With that, I'd like to turn the call over to Tim Goodenough, President and CEO. Tim?

Thank you, Trev, and thank you all for joining us this afternoon. On the call today, we'll provide an update on our launch plans and collaboration with Essentia for the recently approved Eversense E3 CGM system. We'll discuss strategic updates in Europe, and we'll touch on our product pipeline. Nick will discuss the fourth quarter financials in detail, and then we'll open up the call for questions. To start off, last month we announced a major milestone for Sensionics, achieving FDA approval of the Eversense E3 continuous glucose monitoring system. This is the third-generation product approved for Sensionics and speaks volumes about the leading scientific and technical pedigree of the company. We are very proud to extend extend the duration of the longest lasting CGM system to six months in the United States. Not only is this the longest lasting CGM by over 12-fold, but it also offers patients top-tier glucose measurement accuracy with a MARD of 8.5%. I'd like to thank our team, the PROMIS study investigators and study participants, and the diligent professionals at the FDA managing through the demands of the pandemic all of whom helped us achieve this milestone. This is a major advancement for patients who continue to seek alternatives to the short-term transcutaneous sensors and for the limited choices that exist in the market today. Six months of wear, just two insertion procedures per year, makes E3 even simpler, more convenient, and less expensive for patients. From our market feedback, it is clear that users have profound interest in a CGM that lasts for six months. We believe each sensor wear duration advancement represents a stepwise market penetration and market expansion opportunity. Later in the call, we'll touch on the commercial launch plans we've been developing in collaboration with Essentia. Before we look ahead, I'd like to recap the successes that we had in 2021. Through significant collaboration, we have transitioned global commercial operations to Essentia diabetes care, both in the U.S. and in Europe. For patients and providers, we continue to expand access to Eversense through positive commercial and Medicare coverage policies. Awareness of Eversense continues to grow through patient advocacy and direct-to-consumer digital marketing campaigns. Essentia is establishing its field sales and clinical teams, marketing channels, and a distribution network, and has more recently been building dedicated CGM-specific expertise in preparation for the E3 launch. They are re-engaging healthcare professionals with Eversense, who we believe are excited to have another solution backed by robust clinical evidence to help patients better manage their diabetes. On the insurance coverage side, we were able to add a number of additional payers covering Eversense, including Medicare, as previously reported, and more recently, over 8 million additional covered lives with positive coverage decisions from payers such as Blue Cross Blue Shield of Michigan, Medical Mutual of Ohio, and CareSource, now all covering ever since. On the financial front, we were able to raise capital to support our ongoing business initiatives with an emphasis on our product development programs. All considered, we have laid a solid foundation to reach the support for more patients and to advance our technology. For revenue, in the fourth quarter, Senseonics generated $4 million, which included $700,000 from the U.S., and 3.3 million from outside the United States. We understand that from our users, the satisfaction with the Eversense technology remains strong, but the user base was affected by our prior withdrawal from the U.S. sales and marketing efforts, the COVID-19 pandemic, and by the transition of our distribution partner. The learnings from these factors have informed Essentia's commercial planning, and they are working hard to be prepared to launch the E3 system in the U.S. in the coming week. As our commercialization partner, Ascensi's key focus in our collaboration is to increase the rate of patient adoption of Eversense. Over the past year, they have been working to gain greater experience in the CGM market and optimize their sales strategy. This has resulted in a newly dedicated CGM commercial organization. Rather than sharing resources and focus with the BGM business, Ascensi is now establishing dedicated marketing and sales functions for CGM. This team is being designed to provide the infrastructure for high patient engagement, determined interaction, and the experience required to deliver the full potential and value of E3 to our users. We are pleased to see this focused commitment to the Eversense product. In the coming quarters, ADC will be primarily focused on transitioning current patients to the E3 system, as well as expanding the new patient and clinician adoption and ensuring continued patient access through the transition from 90-day to six-month insurance coverage. Significant investments are being made across each category to support programs targeted in these initiatives. We're excited about the E3 commercial launch in the U.S., and it's now approaching. It is scheduled for the beginning of April, which includes product availability and broader marketing efforts. To prepare for launch, Senseonics is ramping manufacturing, implementing product packaging according to the received FDA labeling, and preparing to ship product into the distribution channel. Ascensia has been focused on distributor negotiations, Salesforce training to our new label, and preliminary conversations with HCPs to coordinate formal product introductions, as they also continue to build their dedicated CGM team. Right now, in preparation for April, we are leveraging the momentum created by the E3 announcement to prepare the market for launch. A key element of the strategy is to increase Eversense awareness via a direct-to-consumer digital advertising campaign, leveraging population algorithms targeting the diabetes community through Facebook and other social media platforms. We believe that the leads that were generated in 2021 demonstrate the potential to make an even bigger impact in 2022 with the E3 product. Ascensia has plans to ramp up the campaign meaningfully upon our April launch. Diabetes professionals and healthcare providers are also a target audience for specialized marketing. Investments are being made to increase engagements with this group at diabetes trade shows and medical meetings. We expect a patient pull from our DTC marketing will encourage increased engagement with existing providers and for those who are new to Eversense. ADC will initially prioritize resources to penetrate the market in geographies with the highest insulin prescription concentrations where coverage for Eversense currently exists and where there are active inserters. On the patient access front, ADC is driving with the goal that every patient with coverage for Eversense will receive E3 when they are due for a new sensor starting in April. We are planning for a rapid transition to the new longer-life six-month product. With the launch of E3, we plan to bolster the patient assistance program to offer E3 to any patient with commercial insurance coverage for a $99 out-of-pocket maximum for their first E3 sensor. That means six months of CGM for no more than $99. We see this as an incredibly attractive program to try ever since. This is a significant investment to drive adoption and initiate product familiarity. With our expectations, this program can drive increases in the user base as a result of putting both new patients on the product and converting users from other CGM systems. Following a patient's first E3 sensor, the program is designed to provide ongoing assistance capping a patient's out-of-pocket on a monthly basis. Additionally, Essentia plans to provide co-pay smoothing options, allowing patients to pay their out-of-pocket on a monthly basis rather than all up front. And to further ease HCP access, we have initiated a pilot consignment program. This program reduces the acquisition barriers for HCP offices by limiting their initial costs to carry systems prior to their Medicare reimbursement. On the back end, transitioning payer coverage policies from 90 days to six months is a process we anticipate will run through the coming quarters. We expect the transition to be fairly seamless with some payers and be more intensive with others as they require updates to their systems. Conversations have begun with commercial payers as well as with Medicare to expedite this transition where possible. In Europe, ADC is making important adjustments to optimize their CGM business. They are working on taking the learnings from 2021 to inform changes and updates in the European markets and drive growth in the patient-installed base, particularly in our largest markets of Germany and Italy, where they see potential for EverSense's channeled delivery and competitive tender preparations improve as ADC designates resources to provide a higher touch patient experience. In Germany, Essentia is implementing this patient-centric product delivery strategy provide users and HCPs with improved product experience. They are transitioning from an indirect distribution model and increasing their dedicated Eversense resources. They have already implemented Eversense internal sales specialists to support patients from prescription to insertion and have begun to provide patient training. This offers greater sales process control for Essentia with our CGM. Regarding the product pipeline, where we continue to make strides to advance CGM innovation, The E3 system is currently under review by our notified body in the EU to achieve a CE mark. This evaluation is progressing and we are hopeful to launch this system in Europe in the third quarter of this year. We would enable the latest generation to be available globally, which would allow us to turn to greater realization of manufacturing and operational efficiencies and to bring our product with lower calibration requirements to the users in Europe. In our research and development efforts, we have shifted our focus to the advancement of our one-year sensor. Recent pilot studies have provided valuable information that we continue to incorporate into the technology design. We look forward to sharing some of these results at the upcoming ADA meeting in June. We are progressing with the sensor design and continue to plan to submit for IDE approval from the FDA in the second quarter, which would enable the start of a pivotal trial in the second half of this year. Our current plan is that once this one-year sensor study is approved, we will focus on submitting the ICGM designation for E3. We are excited about the potential for patients to be able to integrate our lifelong Eversense with the wider variety of delivery devices that are available. In addition to the advances in the sensor longevity, we're making improvements in the interoperability and remote patient monitoring for Eversense. We are working with several partners in the diabetes space to provide real-time CGM data to the connected apps through both the Eversense Cloud and directly from our transmitter. And we'll also be providing the CGM data through Apple and Samsung Health. And now I'll turn the call over to Nick to go over the details of our fourth quarter financials.