Senseonics Holdings, Inc.

Good day and welcome to the Senseonics second quarter 2022 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal the 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 a touch-tone 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 and Mr. 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. The list of the factors that could cause actual risks to be materially different from what is 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 31, 2021, our 10-Q for the quarter ended June 30, 2022, and other reports filed with the SEC. These documents are available in the Investor Relations 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 Senseonics are Tim Goodenough, President and Chief Executive Officer, and Nick Tressler, Financial Officer. With that, I would like to turn the call over to Tim Goodenough, President and CEO.

Tim? Thank you, Tripp, and thank you all for joining us this afternoon. On the call today, we'll focus on our recent activity to support the Eversense E3 product launch in the U.S., preparations for E3 launch in our European markets, and progress advancing our technology pipeline. Nick will then discuss the second quarter financials in detail, and then we'll open up the call for questions. Senseonics was founded with a vision to advance highly differentiated, cutting-edge technologies by providing people with diabetes implantable sensors that extend the boundaries for sensor duration. In that spirit, we continue today designing, developing, and manufacturing the most innovative continuous glucose monitoring products in the market. Over the first half of 2022 in the United States, Sensionics and our commercial partner, Essentia Diabetes Care, have led patients and healthcare providers through a successful transition into the next generation of long-term implantable CGM with the approval and launch of the six-month Eversense E3. We are confident the unique features of Eversense can compellingly address patient needs and that a six-month sensor can offer unrivaled convenience for people with diabetes. Currently, we are focused, together with our partner, on executing the launch plan to introduce more doctors and patients to E3 and on ensuring that we have the structure and support in place to successfully grow our product. We are now four months into a new product launch that represents a fundamental advancement in diabetes management and one that requires a new workflow in clinics, given the implanted nature of our unique technology. While we made meaningful headway with the 90-day Eversense system, The provider and patient universe in the U.S. was only briefly exposed to our product before the beginning of the pandemic significantly limited our ability to go into physicians' offices and introduce providers to Eversense. As a result, we substantially stepped back and adjusted the structure of our business. As things have normalized, we have brought new, longer-duration sensors onto the market, and we are newly positioned with our goal remaining to deliver the greatest value to the greatest number of patients over the long term. We believe that we are well positioned to work towards this goal through solid execution. We have a committed partner, the six-month Wear E3 system globally available, and the ability to be back in physicians' offices introduced people to Eversense. We're excited to have initiated this process over the last four months of the US launch, but know that there is still much more work to be done driving meaningful patient adoption. With that said, the second quarter was highly productive for Sensionics and Essentia. Highlights include successful commercial launch of E3 in the US, receiving a CE mark for E3 in Europe, the expansion of the dedicated US CGM team at Essentia, integration with distributors, including the implementation of the patient assistance program, ramping DTC advertising, and progress with payer policy conversions, including receipt of G codes from CMS, as well as meaningful new additions in commercial payer covered lives. We are pleased with these accomplishments as we work to execute our launch plan and deliver on our expectations. Together, we believe our collaboration with Essentia's position to drive growth, and patient adoption over time. As a reminder, in our collaboration, Sensionics is responsible for R&D, clinical development, regulatory approvals, as well as manufacturing. Essentia is responsible for sales, marketing, and sales operation. We collaborate closely on driving the business forward. As we advance our launch, Sensionics' priorities include focusing on operational and manufacturing efficiency to support Essentia and distributors, while advancing our pipeline towards our implantable one-year CGM technology. Our partner is actively engaging the diabetes community to introduce the E3 system and increase product awareness, while ensuring patient access to the technology through positive coverage policies from health insurance providers. Together, we are excited about the opportunity to drive meaningful patient adoption, and are both making investments to support our growth together. The second quarter, which included the initiation of the US launch of E3, Senseonics generated total revenue of $3.7 million, split between $1.2 million from the US and $2.5 million from outside the United States. With our commercial launch in the US underway, distribution logistics have been finalized. Channel partners are holding inventory and ACPs are receiving systems. We are now only shipping E3 sensors and our current commercial base has been completely transitioned to the six-month product. On the demand generation side, Essentia continues to make progress in increasing patient and HCP awareness in their key regions with sales coverage. This progress is being spearheaded by their new dedicated CGM business unit and sales force in the U.S. At this point, they have built out the initial customer-facing roles, sales management, territory managers, and inside sales professionals. The new hires have been onboarded and trained and are in the field calling on current and potential Eversense prescribers. Product excitement and interest was clear at the ADA conference in June. Engagement with HCPs and diabetes educators was strong at the Essentia Eversense booth, as well as the product theater and the presentations featuring E3. We received positive feedback on the product and insertion demonstrations. From the patient demand side, by utilizing social media platforms for direct-to-consumer digital advertising campaigns, ABC is targeting the diabetes community in specific geographies tied to their sales coverage. The campaign has proven to effectively increase brand awareness and, measured on a cost-per-lead basis, is making progress. We are pleased with the lead generation and the growing funnel of potential users. Recent insertions and leads represent a patient mix of upgrading existing Eversense users, patients transitioning from other CGMs, and patients new to CGM. We view this as an encouraging early sign with our goal being to take market share and help grow the overall market. Our partner is now focused on converting these interested leads into an increasing number of users. Successful execution on this will be key for Eversense growth. On the patient access front, payer policy transitions to six-month coverage have progressed, and we continue to expect that over the coming quarters, most payers will transition to the six-month product coverage. And in a very important development, CMS issued G codes, which became effective this past July 1st, providing access to E3 for all eligible Medicare beneficiaries. With these codes in place, Ascensia is now turning their attention to working with MACs to ensure all eligible beneficiaries have access to our products under these codes. In another validation of the value of EverSense that we provide to our patients, the second largest health insurance provider in the U.S. is now covering E3. Anthem adds over 45 million covered lives, bringing our total to approximately 250 million covered lives for E3, representing a large majority of the U.S. adult population. We're excited to see the progress in increasing the covered lives that can benefit from Eversense and look forward to working with Anthem as they implement this policy decision in their system over roughly the next quarter. As the organizations work together to build out our launch and capabilities, we are also working to establish a series of programs targeted at making Eversense more accessible. We have identified various opportunities as we engage with HCPs and patients about our product and its workflow considerations as we learn more from introducing our product to new people and new environments. These include approaches to expand the pool of options for users to have their insertions done, such as the UC2Go pilot program, as we mentioned previously, as well as other potential collaborations for insertion options. Urgent Care to Go, or UC to Go, is a regional mobile urgent care business in many areas within Texas. UC to Go's business model provides safe, quality medical practice in regional medical clinics and in the home setting. UC to Go provides mobile clinics which go to the patient's home by a convenient appointment to provide medical care and medical procedure support. Through the commercial partnership, UC2Go has accomplished multiple ever-sense insertions in their local clinics and, importantly, has now completed their first in-home insertion. We see this as an effective, convenient, and scalable approach to meet patient and physician needs for product insertions. We look forward to updating you as we have news about some of these new programs and further developments. Now transitioning to Europe. In June, we achieved CE mark approval for EC. With the important milestone, our most advanced CGM system will soon be available in all market service worldwide, and the same generation product will be available in all of our markets for the first time. This update, which offers patients sustained exceptional accuracy and reduced calibration requirements, enables incremental supply chain, manufacturing, and operational efficiencies. Patients have been actively contacted and have begun to schedule their E3 appointments, with first insertions being just completed in Germany. The E3 system will be launched in phases across Europe over the remainder of the year, optimizing the inventory transition. Further in Germany, Essentia continues to work on enhancing their go-to-market approach with a goal of improving uptake in this important market. In other parts of Europe, Essentia continues to work to expand access to Eversense by focusing on winning regional tenders as they enhance their tender preparation process. Arrangements for the launch of E3 are well underway throughout Europe as each market trains their sales force on the product features and benefits and new marketing campaigns and marketing collateral. In our product pipeline, our efforts are focused on the one-year sensor Ongoing pilot studies have provided valuable information and chemistry developments that we can incorporate into our product design. Some of these results were shared at the ADA meeting in June. We are excited about the recent advancement in these pilot studies and plan to start a pivotal clinical trial at the end of the year. Furthermore, we are currently gathering additional data on a recently approved SBA configuration to support a planned ICGM filing early next year. We're excited about the potential for the patients to be able to integrate our long-life Eversense system with a wider variety of insulin delivery devices. In addition to the advances in the sensor longevity in ICGM, we are making improvements on the digital connectivity front as well. During the quarter, we expanded data accessibility for patients to share and combine their Eversense CGM data with other data sources and 30-party integrated apps by making Eversense information available through Apple Health. This is a valuable step as the data sharing across multiple apps allows patients to combine their Eversense data with other data sources and helps patients and their providers identify correlations and gain greater insight in managing their diabetes. We believe the ability to share six months of CGM data on a single sensor provides significant value to patients and their providers, and we will continue to advance our digital capabilities with additional partners in the coming quarters. I'll now turn the call over to Nick to go over details of our second quarter financial results.