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Senseonics(SENS) - 2019 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q3 2019, total net revenue was $4.3 million, a decrease from $5.2 million in the prior year period, attributed to timing of sales in Europe [54] - Gross revenue for Q3 2019 was $5.9 million prior to gross to net adjustments, with net revenue of $1.5 million from the U.S. and $3.8 million from outside the U.S. [38][54] - Gross profit decreased by $800,000 year-over-year to negative $3.3 million, primarily due to lower net revenue in the OUS region [58] - Total net loss for Q3 2019 was $19.5 million, or $0.10 per share, compared to a loss of $31.9 million, or $0.18 per share in Q3 2018 [60] Business Line Data and Key Metrics Changes - The Eversense Bridge program was introduced to provide access to patients with limited or no insurance coverage, impacting revenue recognition [55] - Approximately 50% of users participated in the Bridge program, which has driven a significant portion of the patient pool [28] - The installed base of Eversense is expected to conclude the year with approximately 4,000 patients, with strong patient satisfaction and retention rates [22] Market Data and Key Metrics Changes - Recent reimbursement decisions have expanded coverage to over 150 million lives, exceeding initial goals for the first year [16] - The company generated $3.8 million in revenue from shipments to Europe, with sensor utilization at 67% compared to the prior year [46] Company Strategy and Development Direction - The company is focused on enhancing patient access through the Bridge program while working to expand reimbursement coverage [62] - A restructuring plan was initiated to reduce cash burn and support strategic goals, resulting in a 30% reduction in headcount [66] - The company aims to advance the 180-day sensor and maintain timelines for next-generation products [42][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Eversense product and its market potential, noting that patient awareness is growing through various marketing efforts [68] - The company anticipates that increased coverage and reimbursement will lead to gradual sales impacts in 2020 [24][70] - Management acknowledged that reimbursement remains the most significant factor driving utilization and that recent payer wins are encouraging [26][110] Other Important Information - The company raised over $100 million in gross proceeds in July, strengthening its balance sheet [61] - Organizational changes include the appointment of a new Chief Financial Officer and a focus on enhancing the customer experience with the Eversense CGM system [49][51] Q&A Session Summary Question: What drove the sequential decline in U.S. gross revenue? - Management indicated that the decline was due to the variability in shipments to regional distributors and inventory levels [87] Question: Do you need the 180-day sensor to drive inflection in the U.S.? - Management believes that while the 180-day sensor will enhance penetration, the 90-day product is already performing well [90][92] Question: What impact will the restructuring have on U.S. sales and physician insertions? - Management expects some transition effects in Q4 but does not anticipate long-term impacts on sales efficacy [98] Question: Can you elaborate on the Bridge program's impact on discussions with payers? - Management shared that increased utilization from the Bridge program has positively influenced negotiations with payers like Humana and HCSC [120] Question: What is the status of the IDCL Trial? - The IDCL Trial is currently on hold due to discussions with Roche regarding access to their control algorithm [125]