Senseonics Holdings, Inc.

Please stand by. We're about to begin. Good day, everyone, and welcome to today's Senseonics third quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session, and please note today's call will be recorded. I'll be standing by should you require any assistance, and it is now my pleasure to turn the conference over to Mr. Jeremy Pfeffer from LifeSci Advisors. Mr. Pfeffer, please go ahead, sir.

Thank you. This is Jeremy Pfeffer from LifeSite Advisors. 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, 2024, and our 10Qs and our other reports filed with the SEC. These documents are available in the investor relations section of our website at www.senseonics.com. We undertake no obligation to update publicly or revise these forward-looking statements for any reason except as required by law. Joining me today from Senseonics are Tim Goodnow, President and Chief Executive Officer, and Rick Sullivan, Chief Financial Officer. I'll now turn the call over to Tim.

Thanks, Jeremy, and I appreciate everyone's time joining us today. As mentioned in our earnings release earlier today, the third quarter was truly exceptional for Senseonics. We're pleased to see the growth in interest and adoption of Eversense 365, supported by Scentsionic's DTC campaign and sales efforts. Our third quarter revenue grew by 90% from Q3 last year. During the quarter, we also executed a memorandum of understanding with Ascensia Diabetes Care to reassume control of Eversense commercialization. We're excited about the upcoming change and seeing it as enabling us to control the strategy and investments into building Eversense. Through this change, commercialization efforts will continue to be led by Brian Hansen, who has been appointed as Chief Commercial Officer of Sensionics. I'll provide some additional details on the progress we've made with the Essentia CGM division in a few minutes. But first, I'll share some additional accomplishments from the third quarter. This time last year, we committed to doubling the number of patients on Eversense in 2025, and we are on track to achieve that goal. The 90% year-over-year revenue growth in the third quarter was driven by 160% in new patient shipments for the quarter over the prior year period. These growth numbers are a testament to the effectiveness of our direct-to-consumer marketing, which we continue to invest in. driving demand with patients asking their physicians to prescribe the world's only 365-day continuous glucose monitor. During the quarter, we made meaningful DTC investments to augment Essentia's spend, leading to an increase in patient leads through our digital campaigns of 300% year-over-year and 85% sequentially. Approximately 60% of our new patients in Q3 originated from our DTC advertising and 40% from HCP referrals, a historically larger portion now coming from DTC due to the scaling of our direct-to-consumer strategy and investments. We will continue to invest in direct-to-consumer marketing, primarily through social media. Our increased spending has directly contributed to our increased number of leads, prescriber referrals, and prescriptions written. In the third quarter, we continued to break records for the most new patient starts, with September being our highest number of new patient starts in a month and Q3 being our highest quarter in the company's history. New insertions increased nearly 150% year over year. and more than 50% sequentially. As a result, our installed base grew over 150% year-over-year and nearly 40% sequentially, reflecting accelerating adoption of ever since 365 among both patients and providers. As expected, reorder volumes were minimal for the quarter following the one-time transition to the 365-day sensor. This means that essentially all of those patients inserted with Eversense in the quarter were new users. In Q4, with the first 365 adopters coming up for reinsertion, reorders will make a more meaningful contribution to sales. Our HCP channel continues to expand and deepen engagement as well. The number of providers actively prescribing ever since grew more than 55% year-over-year, reflecting broadening awareness and confidence in the 365-day system. Importantly, we added 75 new trained inserters in the quarter, 140% more than the same time last year. The capacity of our inserter network continues to expand, ensuring continued access and scalability as demand accelerates. Many of these new patients that we added are now supported by our EonCare direct insertion business, which provides greater access to Eversense through our network of providers. EonCare delivered a standout quarter, advancing its role as a key strategic driver of insertion capacity, access, and standardized patient experience. While still early in its development, Eon now represents approximately one quarter of all insertions nationwide. And we continue to expand EON's capacity by adding significantly more inserters in the network in Q3. EON is a central enabler of nationwide access and adoption. Patients love the convenience and affordability, and prescribers appreciate having a trusted, certified Eversense inserter they can refer patients to. We will continue to expand EON's capacity in Q4 and beyond as it becomes an increasingly important enabler of Eversense growth. In new product development, our CE-MART application for Eversense 365 in Europe was submitted in February. And while in the final stages of review, we continue to expect to receive the approval before the end of 2025. Approval in Europe is anticipated to support additional growth beginning with our planned launch in the first half of 2026, now utilizing our own Senseonics European Salesforce after the transition away from the Essentia BGM team. Prior to the European launch of 365, we expect to work with Essentia through transition service agreements while we set up our own infrastructure to support a smooth transfer of some employees, the hiring of new CGM dedicated sales reps, and transferring current customer contracts and tender agreements. In contrast with the U.S. commercial integration, which we expect to be in place by January 1st, the European transition will be taking place in the first half of 2026 with support from ABC. We are currently finalizing these arrangements with Essentia and planning this transition in a collaborative process. We've made good progress since the announcement in early September. Nearly all of the employees from ADC's U.S. CGM business have elected to join the Senseonics team for the planned transition on January 1st, including Brian Hansen's leadership team. The European CGM employees are expected to transition over later in the first quarter. The sales operation team has been extremely busy getting our CRM system up and running, and many of our distribution agreements between the distributors and Senseonics are already in place or in the process of being transitioned. We appreciate the cooperation between the Senseonics and EDC teams for working hard to ensure that we get this right for the patients and the providers. I'm pleased with the execution that's taken place over the past 60 days to bring Essentia's CGM business into Sensionics. Our partner, Sequel, is working towards expanding its launch of the Twist insulin delivery system and to include compatibility with Eversense 365, representing another top-line growth driver for us in 2026. As a first pump integration, we're excited for the opportunity to be part of the closed-loop system with Sequel's Twist Pump, making insulin delivery decisions based on the data received from Eversense. We expect this closed-loop system to allow patients to forget about glucose monitoring for an entire year, as their Eversense 365 communicates directly with the Twist for real-time adjustments in insulin delivery. Beyond CEQA, we hope to make additional announcements on insulin pump integrations in the coming quarters. In addition to the integration work, our R&D team remains focused on delivering our seminal pipeline of products, Gemini and Freedom, with the IDE for Gemini on track to be submitted in the fourth quarter and the U.S. approval still planned for late 2026. We expect to file the IDE for freedom in the second half of next year with a commercial launch of our truly invisible transmitterless 365-day CGM targeted by early 2028. I'd also like to highlight the margin improvements that Rick will speak to. We are currently seeing meaningful improvements from the 365 product and expect to see even more as a result of the commercial integration. Based on what we've seen in the first three quarters of 2025, we are on track to hit out of the year with gross profit margins now north of 40%, compared to 25% at the end of 2024, based on the benefits and performance of ever since 365. And we expect our transition with ADC to further positively impact our margins. As noted when the deal was announced, we currently project that our gross margin would grow to roughly 50% in 2026 and reach approximately 70% at scale for the unified business. Hopefully, this update on our growth drivers and our strong performance during the first year of the Eversense 365 launch gives you a good sense of where we are headed. To continue to drive shareholder value and meet the needs of our patients and providers, we remain committed to expanding access to our unique system and continuing to advance our technology to simplify glucose testing for people with diabetes. I'll now turn the call over to Rick to walk through the Q3 financials, highlighting revenue growth, margin improvement, cost reduction, and steady progress on execution.