Senseonics Holdings, Inc.

Good afternoon, everyone, and welcome to the Senseonics first quarter 2024 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please see no 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 and then one. To withdraw your questions, you may press star and two. Please also note, today's event is being recorded. At this time, I'd like to turn the floor over to Trip Taylor. Please go ahead.

Thank you. This is Trip 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 31, 2023, our quarterly report on Form 10-Q for the quarter ended March 31, 2024, 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. Joining me from Censionix are Tim Goodenough, President and Chief Executive Officer, and Rick Sullivan, Chief Financial Officer. With that, I'd 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. We'll begin today by providing an update on our performance during the first quarter, and then transition to the several important milestones recently achieved by the company that represent critical growth catalysts for the future of Senseonics. Then, our Chief Financial Officer, Rick Sullivan, will discuss the first quarter financials in detail, and we'll open up the call for questions. We've had a very successful start to the year at Senseonics. We've advanced key strategic initiatives intended to amplify the benefits of our long-term and plannable CGM to appeal to more patients. We are making commercial progress, both with our quarter-over-quarter growth in new patient additions and by advancing a transformational collaboration with one of the 20 largest health systems in the country. Mercy has chosen to use Eversense as the foundational technology to facilitate a broad-based diabetes population management program intended to optimize care in a large targeted patient population. Importantly, we have significantly progressed our product pipeline by establishing the new Eversense remote patient monitoring solution and achieving ICGM designation from the recent FDA approval, as well as filing the 510 submission for our next generation 365-day product. With the advancement of the product pipeline and the development of new commercial initiatives, we believe the Eversense platform sits in its strongest position ever. We anticipate continuing to build on these accomplishments throughout the remainder of 2024. On the financial front, in the first quarter, Senseonics generated total revenue of $5.1 million, representing 22% growth compared to the prior year period. In the U.S., first quarter sales totaled $3.7 million, and sales outside the U.S. totaled $1.4 million. On the commercial front, with Essentia Diabetes Care, Their main objectives remain rooted in driving expanded awareness and access to Eversense within the diabetes population. They continue to drive quarter-over-quarter patient growth, both via DTC and professional sales efforts. Additionally, as we have previously announced, industry veteran Brian Hansen was appointed president of the ADC CGM business and has also been recently appointed to the Syncyonics Board. We are working closely together as he ramps into this role and formalizes plans to improve Eversense's commercial strategy and execution. Importantly, we continue to explore additional growth avenues for Eversense, notably with the expansion by Medicare to cover CGM for all patients on insulin, as well as diabetes patients not on insulin with a history of hypoglycemia, and now with similar adoption by many commercial payers, we estimate that less than one quarter of patients eligible for CGM are using one. Giving both the clinical and healthcare economic benefits for people using CGM, there remains substantial opportunity to reduce the healthcare cost of diabetes while helping patients live healthier lives. To that end, we believe Eversense is ideally suited for integration across large health systems. and accountable care organizations who are facing increased pressures to improve patient outcomes and their quality of care, all while driving down costs resulting from sub-optimally managed diabetes. With their ability to influence care pathways and the breadth of providers in their system, including those who would regularly conduct office-based procedures, such as interventional cardiologists, together with the professionals who care for people with diabetes, specifically endocrinologists and primary care physicians. We believe these health systems could certainly benefit from Eversyn and manage the efficient patient workflows to enable the broad adoption of our implantable CGM. For this front, today we announced our innovative collaboration with Mercy, a leading healthcare system and accountable care organization based in St. Louis, Missouri that spans across four states and is consistently recognized for their innovative breakthroughs in healthcare. MERSI clearly recognizes the potential value Eversense can bring to its diabetes population health management program. Together, we are working to build an innovative approach that combines Eversense CGM, advanced data analytics with MERSI's artificial intelligence capabilities, and our new Eversense RPM program to systemically monitor patients at risk. Mercy has identified up to an estimated 30,000 patients across their system who could benefit from CGM. We believe this represents a substantial opportunity to help these patients better manage their diabetes and avoid costly short- and long-term expenditures. We look forward to working with Essentia to bring as many of these patients to EverSense as we can in the coming quarters and years as we roll out this multi-state collaboration with Mercy. We are working with Mercy's executives and operational teams to design and implement the program. Mercy plans to begin a controlled launch focused on making Eversense initially available to a cohort of patients in the St. Louis metro area in July and we'll then look to further ramp operations in conjunction with a planned 365-day product launch targeted for Q4. Together, we see the opportunity to place an emphasis on type 2 patients on basal insulin, who historically trail in the adoption of advanced technologies. Our perspective is that access to advanced technologies and personalized remote patient monitoring can reduce risk to both the patient and the healthcare system. A shared goal with Mercy is to use their innovation leadership to develop this comprehensive diabetes management approach so that it can be replicated for other healthcare organizations. With an estimated 1,300 health systems in the U.S., we are excited to develop this strategic approach to enhance the value Eversense could bring to health systems. An important component of this collaboration includes our newly announced Eversense RPM program, which we believe will further differentiate Eversense by providing a comprehensive solution for patients, providers, and the healthcare systems. While it has been well established that CGM alone produces better outcomes for people with diabetes, we're confident there is an opportunity to deliver even more. Today, patients are simply provided a CGM device, but we feel there is often limited ongoing support for understanding and utilizing the data for personal optimization, particularly in between offices. Our RPM program aims to fill in these key gaps. First, it is designed with the intent to provide patients with a strong foundation for through better understanding of their CGM data and how to use it for optimal glucose control, supported by diabetes counselors. These counselors are intended to provide coaching and insight into things impacting their glucose levels, such as medications, food, and exercise, and to enable participants in the program to make better informed choices about managing their diabetes. The program, Devised Mercy and Remedy, is designed to meet the requirements for Medicare and commercial RPM reimbursement. In addition, we also see the program as providing an invaluable communication loop between our RPM counselors and the patient's healthcare provider, enabling key interventions. By engaging with patients on a monthly basis, we aim to improve this optimization loop. The goal is that identifying corrective actions and making appropriate improvement changes which previously occurred during office visits will now be able to be done in between visits, accelerating progress and bridging the gap between traditional in-person visits. After we have finalized the development and implementation of the program and rolled it out with Mercy, we intend to make Eversense RPM system available to patients and clinicians who use Eversense generally. We see the Eversense CGM and RPM combination as providing more reasons for clinicians to make Eversense their CGM of choice. We believe our partnership with Mercy is an important testament of the need for this more comprehensive care solution, and are excited to build this program further. As we finalize the plans for these opportunities, which are expected to occur in the second half of the year, We are developing our full-year financial outlook. We plan to provide our full-year guidance in June at the upcoming ADA conference. As for the first half of 2024, we continue to expect global net revenue for Senseonics to be $10 million, representing growth of approximately 16 percent over the first half of 2023. Second quarter revenue is expected to be consistent with revenue in the first quarter, and assumes continued new patient growth as Essentia manages inventory towards normalizing levels. Now I'll turn to our pipeline where continuing to advance innovation in CGM technology remains a key strategic imperative for Sensionics and the focus of our product development teams. I'm pleased today to highlight important progress with two key milestones in our broader pipeline plan. First, We recently announced the Eversense CGM system received ICGM designation from the FDA. The ICGM designation indicates that the Eversense ICGM product can integrate with the compatible medical devices, including insulin pumps, as part of an automated insulin delivery system. As the first fully implanted device in the category, Eversense has been authorized to be marketed as an ICGM product through the FDA's de novo pathway. This authorization demonstrates that Eversense meets the high bar set by the FDA for analytical performance and accuracy, and our intent is for all future substantially equivalent devices of similar type to be submitted as Class II devices as 510 submissions. The ICGM designation has been a core component of our strategic initiatives to advance our pipeline, and we're excited to move forward with the next step to advance integration partnership discussions with leading insulin delivery device companies. At this point, we are in discussion stages with various manufacturers and aim to offer people a new interoperable CGM option that we believe is exceptionally well suited for automated insulin delivery systems. Both Senseonics and pump manufacturers recognize the opportunity to positively impact the lives of more people with diabetes with an ever-since integrated system, and we are excited by the potential to further these discussions. We plan to provide more updates as they develop. Now for our second exciting key pipeline development. Following our ICGM approval, today we are pleased to report this last week we filed our FDA submission for our next generation 365-day system as a 510 pre-market notification. This de novo ICGM designation facilitated this down regulation of submission for devices of the same type. I would like to note that despite now being on a 510 pathway, we have generated high quality clinical data and work to put together a submission with the same rigor as a PMA submission. Relying on the confidence in our technology and high-quality submission, we continue to work towards our goal of a fourth quarter launch this year. The 365-day system is unique in that it offers several differentiators. First, an anticipated full year of protection from a single sensor and a significant reduction in planned calibration frequency. We are confident that a one-year sensor with reduced calibration will be a compelling combination and are excited that this submission moves us one important step closer to that goal. Importantly, the 365-day system platform with redundant sensing capability for longer life and retained accuracy is also the basis for further development within our pipeline. Both of our subsequent generation Gemini and Freedom self-powered products are designed to leverage this technology and FDA approval as we work towards the now approaching goal of removing the need for any on-body transmitter. We're excited to continue to be on plan for the first in human testing of Gemini in the second half of this year. continue to innovate and prioritize our pipeline progression to continue to move our cgm technology forward with this exciting news i'll now turn the call over to rick for a review of our financials thank you tim and good afternoon everyone we appreciate the opportunity today to update you on our business in the first quarter of 2024