Tandem Diabetes Care (TNDM) Conference Summary Company Overview - **Company**: Tandem Diabetes Care (TNDM) - **Industry**: Diabetes management technology, specifically insulin delivery systems Key Points and Arguments Market Expansion - Tandem has expanded its focus from primarily Type 1 diabetes to include Type 2 diabetes, which has more than doubled its addressable market in the U.S. [4][7] - The company is also exploring opportunities in the pharmacy channel, which could enhance revenue and margins [5][21] Product Offerings - Tandem's product portfolio includes the t:slim and Mobi insulin pumps, with Mobi designed to attract new users, particularly in the pediatric population [10][12] - Mobi has seen double-digit growth in new pump starts, particularly among those transitioning from multiple daily injections (MDI) [12][14] Pipeline Developments - Upcoming products include enhancements to Mobi and the introduction of the SIGI pump, which will offer tubeless functionality [15][17] - The company plans to share updates on its Control IQ study at the upcoming ADA conference, which could further validate its technology [19][20] Financial Outlook - Tandem aims for gross margins of 60% by 2026, with a long-term goal of 65% [21][22] - The introduction of Mobi and its lower cost profile, along with pharmacy channel penetration, are expected to drive margin improvements [23][24] Sales Strategy - Tandem is transitioning to a direct sales model in select international markets, which is anticipated to improve margins and market penetration [27][30] - The company has been expanding its sales force in the U.S. to enhance market awareness and support for physicians prescribing insulin pumps [50][51] Competitive Landscape - The competitive dynamics may shift with Medtronic's business changes, but Tandem remains confident in its ability to compete effectively [60][61] - The company is focused on differentiating its products, particularly with the upcoming SIGI pump [62][63] Pharmacy Channel Opportunity - The pharmacy channel is seen as a significant growth opportunity, with about 30% of lives in the U.S. covered under pharmacy agreements [34][40] - Tandem is testing the waters in the pharmacy space, with the potential for it to become a material part of the business before the SIGI launch [32][34] Investor Sentiment - There is a growing appreciation among investors for Tandem's pharmacy opportunity, which is expected to enhance revenue and profitability [74][75] Additional Important Insights - The company is focused on innovation as a driver for market adoption, with expectations for increased penetration rates in both Type 1 and Type 2 diabetes populations [42][44] - Tandem's strategy includes offering a diverse portfolio of products to meet varying customer needs, which is expected to enhance its competitive position [65][66]

Financial Data and Key Metrics Changes - The company achieved record first quarter sales of $234 million, representing a 22% year-over-year growth [19] - Adjusted EBITDA improved by five percentage points year-over-year, indicating enhanced profitability [19][24] - Gross margin for Q1 was 51%, consistent with historical trends, driven by reduced per unit costs [24][29] Business Line Data and Key Metrics Changes - In the U.S., sales reached $151 million, a 15% increase year-over-year, driven by healthy pump shipments and strong supply sales [20] - Internationally, sales were $84 million, reflecting a 35% year-over-year growth, supported by demand for the t:slim X2 platform [23] - The product mix between the t:slim X2 and the new Tandem Movi is healthy, with a significant portion of new starts coming from patients converting from multiple daily injections [10][11] Market Data and Key Metrics Changes - Approximately 30% of U.S. lives are now covered under the pharmacy benefit, up from 20% previously reported [21][68] - The company anticipates that more than 70% of sales for the year will come from predictable and recurring revenue streams from supplies and renewals [26] Company Strategy and Development Direction - The company plans to launch new sensor integrations and enhance its technology ecosystem, including the introduction of the Control IQ Plus algorithm [32][34] - Direct sales efforts in select international markets are progressing well, with plans to enhance sales support and technology offerings [17] - The company aims to achieve sustained double-digit sales growth and profitability through improved pricing and disciplined cost management [30][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 commitments despite a dynamic economic environment [25][72] - The company is focused on expanding its pharmacy channel access and scaling growth into the type two diabetes market [37] - Management highlighted the importance of the Control IQ Plus launch and its potential to double the addressable market [15][78] Other Important Information - The company ended the quarter with nearly $370 million in total cash and investments, anticipating a return to positive free cash flow in the second half of 2025 [25] - The company is committed to bringing an industry-leading fully closed loop algorithm to market, with ongoing R&D efforts [36] Q&A Session Summary Question: Update on sales force changes and realignment - Management confirmed that the territory realignment is complete and expects gradual improvement in sales productivity over the next several quarters [40][41] Question: Impact of pricing on U.S. sales - Management indicated that pricing contributed approximately 2% to 3% for pumps and around 10% for supplies, suggesting this is a sustainable level moving forward [45][46] Question: Competitive dynamics in the U.S. market - Management noted that the U.S. market remains competitive but has not seen significant changes recently, with confidence in their product offerings [92][94] Question: Expectations for pharmacy channel contributions - Management stated that pharmacy contributions are expected to be modest in 2025, but early experiences indicate strong potential for future growth [53][68] Question: Guidance reaffirmation after strong Q1 - Management reaffirmed guidance due to the dynamic economic environment, despite a strong performance in Q1 [72] Question: Type two diabetes market potential - Management highlighted that the recent approval of Control IQ Plus has provided access to approximately 300,000 people, with modest contributions factored into 2025 guidance [77][78]

Financial Data and Key Metrics Changes - The company achieved record first quarter sales of $234 million, representing a 22% year-over-year growth [17] - Adjusted EBITDA improved by five percentage points year-over-year, indicating a strong operational performance [22] - Gross margin for Q1 was 51%, consistent with Q4, driven by reduced per unit costs of pumps [22][28] Business Line Data and Key Metrics Changes - In the U.S., sales reached $151 million, a 15% increase year-over-year, driven by healthy pump shipments and strong supply sales [18] - Internationally, sales were $84 million, reflecting a 35% year-over-year growth, supported by demand for the t:slim X2 platform [21] - The product mix between the t:slim X2 and the new Tandem Movi is healthy, with a significant portion of new starts coming from patients converting from multiple daily injections [7][8] Market Data and Key Metrics Changes - Approximately 30% of U.S. lives are now covered under the pharmacy benefit, up from 20% previously, indicating improved market access [19][67] - The company anticipates that sales outside the U.S. will be relatively flat for the remainder of the year due to a timing shift in orders [27] Company Strategy and Development Direction - The company plans to enhance its sales efforts and technology offerings outside the U.S. as it prepares for direct sales in select countries starting in 2026 [15] - New product launches, including the Control IQ Plus algorithm and sensor integrations, are expected to drive growth in both U.S. and international markets [30][32] - The company is focused on improving profitability through increased pricing, margin improvement initiatives, and disciplined cost management [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 commitments despite a dynamic economic environment [23][73] - The company is optimistic about the growth potential from the type two diabetes indication, which more than doubles the addressable market [13][79] - Management reaffirmed guidance for sales, gross margin, and EBITDA for 2025, indicating a strong outlook for the year [24][73] Other Important Information - The company has completed its sales force expansion and territory realignment, which is expected to enhance productivity over the coming quarters [9][39] - The recent FDA clearance of Control IQ Plus for type two diabetes is a significant milestone, with initial commercial efforts already underway [11][13] Q&A Session Summary Question: Update on sales force changes and realignment - Management confirmed that the territory realignment is complete and expects gradual improvement in productivity over the next several quarters [39] Question: Impact of pricing on U.S. sales - Management indicated that pricing contributed approximately 2% to 3% for pumps and around 10% for supplies, suggesting this is a sustainable level moving forward [44][45] Question: Competitive dynamics in international markets - Management noted that the competitive environment remains stable, with strong demand for their technology and products in international markets [88] Question: Expectations for pharmacy channel contributions - Management stated that pharmacy contributions are expected to be modest in 2025, but early experiences indicate significant long-term potential [52][68] Question: Clarification on SIGI development timeline - Management clarified that the termination of the previous agreement allows for more control over the development path, potentially improving time to market [58][59] Question: Gross margin performance and future expectations - Management highlighted that improvements in pump costs and the introduction of Mobi are key factors in achieving long-term gross margin targets [62][63] Question: Type two indication and market access - Management acknowledged that while there is coverage for type two patients, Medicare approval processes may present initial challenges [78][80]