Q1 2020 Earnings Call
[noise], ladies and gentlemen, thank you for standing by and welcome to tandem first quarter 2020.
Earnings call.
At this time, all participants Arnie listen only boat.
After the speaker presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone.
Please be advised that today's conference may be recorded if you require any further assistance. Please press start zero.
Oh now like to hand, the conference over to your speaker today, E.D.T. and cheap administrative officer, Susan Morrison Madam. Please go ahead.
Thank you and welcome everyone to Tandem's first quarter 2020 earnings call today's discussion one could forward looking statements.
Statement reflect management expectations about teacher, then product development timeline and financial performance and operating plan and speak only as if today's date.
There are risks and uncertainties that could cause actual results to defer materially from those anticipated or projected in our forward looking statements.
List of factors that could cause actual results to be materially different from those expressed or implied by any of these forward. Looking statements is highlighted that are pressrelease issued earlier today and under the risk factors portion and elsewhere in our most recent annual report on form 10, K. quarterly report on form 10, Q. and there are other S.P.C. filings.
We assume no obligation to publicly update any forward looking statements whether his result of new information future then or other factors.
In addition, today's discussion will include references to adjusted EBITDA, where do the non <unk> financial measure adjusted EBITDA key measure used by us to evaluate operating performance generate feature operating plan and make strategic decisions for the allocation of capital. These are for our to our press release issue earlier today for further information.
Today's call participants include John Sheraton, President and Chief Executive Officer, Brian Hanson Executive Vice President and Chief Commercial Officer, and Lee Bossler Executive Vice President and Chief Financial Officer.
Falling are prepared remarks will open up the call for question. Thank you in advance print limiting yourself to asking two questions before getting back into the queue with that Oh now turn the color to John.
Thank you Susan and welcome everyone to today's call.
It's hard to believe how much the world has changed and just the past two months since we held her last earnings call first we like to thank all of the healthcare providers. We work with we're finding creative solutions in waves to support people living with diabetes. During these challenging times. In addition to all the front line workers, who are working tirelessly to take care of people.
Affected by coping 19, and who are helping to keep us safe and our family said I'd like to express our sincere appreciation. Thank you.
Thank you also to our suppliers, who have continued to support a stern is challenging times without disruption and finally special Thank you to our employees who in the face of the current pandemic have demonstrated incredible flexibility in adaptability required to prioritize the wellbeing of the diabetes community.
I'm very proud of what we've achieved in his first quarter in a modern features of our product systems and services are provided even greater benefit in this environment.
Our strength in the first quarter largely be attributed to the power of control I.Q., which is bringing an unprecedented benefit to our customers wives.
As we look more recently the demand for control I Q. is offsetting some of the inherent steals pressures from coming 19. It's a stark reminder, that diabetes management is different than an elective procedure.
As a result, many people are continuing to invest in their help during a time when it is more important than ever.
You were here on today's call is that these challenging times have only strengthened our conviction that we have the products that people in the drive to continue delivering high growth to achieve or longer term goals that we have set for our company.
Conviction for the long term in place and with Kobe 19 top of mind, we thought it would be helpful to focus our prepared marks on Howard businesses operating during this pandemic to give you a better perspective on the challenges we face in the nurtured near term and how we are overcoming though first I'm going to talk about our employee base overall then.
That's our manufacturing operations, specifically and Brian will provide some perspective on what we are experiencing the field and internationally.
Touch touch up on the pipeline beforehand to the call over to leave.
Overall I have never been more proud of our employees enemies past few weeks as a concerns regarding kind of covert 19 increase throughout March we were ramping up or precaution precautionary measures, which started with the option to work from home for all employees, whose positions allowed it at our headquarters in San Diego and are smaller facilities in Boise.
And Toronto, when California issued their stay in place restriction in March our employees, who were able were successfully set up to work from home. It was a tremendous effort by our information technologies team or ability to transition so quickly come largely be attributed.
Salability efforts, we kicked off last year and our investments in technologies that support remote operations.
Departments throughout our company have risen to the occasion.
Identified creative solutions, and our stay motivated to our mission to improve the lots of people living with diabetes or customer service in technical support teams are all outfitted with laptops inter working from home and we have the systems and infrastructure in place to support doing so you know to compliant and efficient manner.
As a result, we've been able to provide a high level of service to our customers. During this time.
Help troubleshooting insurance Burke vacation for purchasing a new pop or simply quartering supplies.
Overall, it's been business as usual and that we haven't Mr. B. operationally, even though we are working in an unusual way during very unsettling times.
We have been deemed essential helped her business.
Based on the critical nature of the products, we opera in the community we serve.
As an essential business or manufacturing operations in warehouse teams have dealt diligently continue to come to the facility to reform their jobs. They realize the importance of their roles and assured that we are able to continue to provide palms firm supplies to people with diabetes and it was the result, we are meeting all of our production goals.
We have taken an extra precautionary measures to help keep these employees safe and are grateful for the dedication.
Our supply chain has been another area of significant focus since early in this pandemic or procurement team has regular communications with our component suppliers.
Not experience or do not anticipate any shortage and components needed to manufacture our pumps or cartridges over the next several months also are pumping inventory as well as the available manufacturing capacity meets or exceeds our target levels and the bears and position says well against unforeseen disruption in the near future.
As legal discuss further we observed customers purchasing cartridges and it's using sets at a higher rate I anticipated at the end of the first quarter and as a result or inventory for Finnish cartridges and infusion sets is below our target levels part third party Carter's manufacturer recently commenced commercial scale manufacturing to supplement or.
Parks manufacturing capacity, and we will be steadily scaling volumes across this year.
<unk> our primary infusions that manufacturer is currently working through inventory constraints and so we are carefully managing our supplies inventory, while we worked to overcome these temporary challenges.
I'd like to try to call already Brian provide perspective, one or commercial team our partners are experiencing the field Brian.
Thanks, John.
Been incredible to see our employees worked so closely with the diabetes community as we navigate this pandemic together.
The commercial organization is always the face of the company to our customers in health care providers that I'm very proud of how they represented themselves and tandem during these challenging times.
At the star the quarter, our focus was on training more than 7000 us healthcare providers on our control I.Q. technology.
It received high marks for being easy to learn and easy to teach.
That in late January we commenced you pump shipments with control I.Q. and also began offering it as a no cost software update to our in warranty T. Slim X. two users.
More than 30000 people have updated their t. slim x. two to control I.Q. technology and the feedback from customers continues to support why it so often referred to as life changing.
As we look at the last portion of the quarter covert 19 began to significantly impact People's Daily lives.
This is where I will be focusing the majority of my comments to try and help provide perspective on what our sales in clinical teams have been experiencing over the last few months.
At the beginning of March our employees reported little disruption due to cope in 1910 throughout the month things began to change daily as the virus spread nationwide with increasing restrictions and many of our healthcare provider offices.
Some representatives were asked not to visit if they were not feeling well or had been traveling internationally and others were restricted to meeting only specific conditions or office staff.
Throughout March we at 10 were also increase in the restrictions for our employees.
As we close to help the quarter more and more practices were limiting in person patient visits to emergencies, only and moving to tell health for continuity of care appointments.
Keeping the health and safety of our employees in the diabetes community at the forefront all in person feel based activities were suspended.
Field team was able to quickly pivot to an all virtual sales and critical model leveraging our existing technology, making the transition quite seamless.
In states, where there aren't restrictions a few conditions have reported they are still seeing patients in person a day or two a week, but the vast majority are conducting appointments rude tele help while somebody just delayed the visit til later time.
In this transition to tell a health our team really shined in using technology to virtually support both customers and healthcare providers.
Many conditions turned to us to help them optimize the use of our tools to support their telly health practices and the trust they placed in US it's something we do not take lightly.
A key part of our virtual solution is R.T. connect data management application.
The cloud based system allows a patient to upload their pump information and allow access to their healthcare provider.
This provides our customers condition with critical information such as their patients blood glucose trends.
And CGM information all in one place, which helps them better manage their therapy.
As we move to a virtual world, it's really highlighted where the ease of use of R.T. slim x. to an automated insulin delivery technologies standout.
We are now offering all new customers remote training options, including people, who are new to pump therapy.
We begin dedicated efforts to create a virtual pumped training program a few years ago, and so have had time to develop and refine it.
Patients who have trained remotely report high levels of satisfaction with their training and importantly, we have not seen an increase and call volume to our customer services groups from these customers.
As you saw and our results pumped sales in the first quarter with strong.
Port to remind you that in our domestic sales cycle a person typically starts the purchase an insurance verification process about 30 days before making a purchase decision.
So are pumped shipments in March were largely initiated in February what is encouraging in that in addition to our shipments being strong demand has continued through April and it's natural to think that would've been even greater absent covert 19.
Worried about control I.Q.'s benefits is spreading.
The murder Baysal, I.Q., where we sold momentum build over multiple quarters, we expect control like you to do the same.
It's not uncommon for a person with diabetes to give consideration to pump therapy for a period of weeks or months following a quarterly visit with their condition and they often take time to do their own research before making a decision.
Is likely why we will continue to see people purchasing the t. slim x. too, even though bunch of the country has shut down.
That being said depending on the depth the duration of this pandemic, we anticipate that we will begin to experience a greater slow down and customer orders until people start to resume their normal daily activities.
In the first quarter, we continued to see approximately half of our new customer adopt pumped therapy for multiple daily injection and the remainder coming from competitive conversions.
Hi rate of convergence is notable that's a percentage of former enemies customers has declined as anticipated from an average of 18%. The first three quarters of last year to less than 5% of new customer shipments this quarter.
These trends have also been consistent throughout April which is interesting because there is a natural assumption that people using multiple daily injections, maybe less likely to start pump therapy in this environment.
We're also cognizant that a global economic recession could cause people to limit their spending.
However, when someone purchases baysal I.Q. or control I Q, they're making an investment in their help particularly when you consider the potential for reduction hospitalization and other complications that can be very costly.
Overall health care as an area that people tend to prioritize particularly at this time and so we could see things like greater utilization of flexible spending account and high deductible counts, which could contribute to greater seasonality in the year.
As a reminder, people with diabetes took we pay about 20% of their co pay out of pocket.
We've offered payment plans as have our distributors for quite some time to allow customers to pay month to month, but it's actually a program that is rarely utilized.
We will continue monitoring to see if usage increases in the current environment and are offering accommodations for people in their payment plans.
We will always look at creative options for our customers. If this upfront payment Pittsburgh some.
Our customer renewals are also continuing to be more meaningful part of our domestic business and we've increased our internal resources focused on this effort.
We saw increase momentum in the first quarter, a growing more than 80 per cent year over year tour, approximately 2200 renewal pump shipments and I'm pleased with the progress we are making.
While the majority of our sales take place in the United States. We believe the effective cobin 19, we'll have a greater proportional impact on our international markets.
This is mainly due to the difference in the diabetes care motto outside the United States in that patients are more often seen through the hospital systems versus a standalone endocrinology clinic and those hospitals systems are currently focused on taking care of the critically ill.
We were made in close contact with our international distributors were responsible for all selling and customer support activities. It's monitored the impact of coping 19 odd them. During these times.
They are still open servicing customers and taking care of business and we remain confident that post cope in 19, our international sales will continue to be a meaningful driver for our company.
You regions, we're entering this year, Germany, France, and Benelux had been ramping up in preparation for launch.
Our training for our distribution partners and these regions was completed before cope in 19 began picking up and travel restrictions were in place.
Their initial orders were place at the end of the quarter and their launched the customers will be dependent on the state of the pandemic in each country.
We are hearing the same overwhelming positive feedback on base, so I Q outside the United States that we heard historically here in the U.S.
Similarly, we are hearing great feedback on the tandem device updater, which was launched outside the United States to existing T. Slim X. two customers beginning in the latter part of 2019, we're thrilled to bring the benefits of our technology to more people with diabetes worldwide and still expect to begin rolling out control I.Q. later this year.
Overall I'm very competent the products, we offer are continuing to change the standard of care and insulin pump therapy. Our team has done amazing job.
Our patients and our partners during this pandemic and we believe and you slow down relating to cope in 19 will be short lived in hopes that we will see a continued flattening of the curve and that people can safely resume their day to day activities.
Them, our teams remain busy and we are here for the diabetes community.
Thank you Brian.
As exciting as we are about our current products were also continuing our new product development efforts, while being mindful of yesterday's public communication in mid March that they are understandably prioritizing Kobe 19 related devices like most of us the F.D.A. Ruby Yours are also working from home. So we expect that review times maybe longer than usual.
We are fortunate that a clinical trial control like you for Pediatrics was completed earlier this year during the first quarter. The data from this study for children page six to 13 was included in the submission to the F.D.A. to lower the age indication for control I Q.
There's always an inherent uncertainty with any F.D.A. submission, but during these unprecedented times, it's even more difficult to predict the timing.
Approval process.
In the meantime, we will continue to prepare for an extended expanded age indication pending the F.D.A.'s review.
We are not actively into clinical trial space for any of our other products in development. However, we had planned a significant amount of human factors testing and the second quarter for both the Teast. One next to mobile bowls feature and for T. sport are smaller pot that has control entirely true of mobile.
These studies are typically performed in multiple geography is with diverse demographics do the current cobin 19 environment, we have delayed commencing the testing for both of these future products as a result since the data is required for our regulatory filings the target submission timing for both <unk> sport well, we pushed out.
Until it's safe to travel again, and the protective government restrictions are lifted.
That being said we remain very excited about both products are mobile application with remote bullets capability for the TCIL next to is one of the most highly requested features by our customers. It's built based on the new mobile.
Form that is the foundation of our digital health strategy.
The first generation of this had a beta line to the first quarter and we'll be rolled out more broadly and the upcoming weeks. This apple did patients by allowing her teeth. One next to to wireless Lan upload data from their poppins CGM to our cloud based T. connect data management application.
True that will provide even greater benefit in this current environment, but it's also significant and it takes away I burdensome step for our customers and their health care providers of having to upload data to the U.S.B. cable to see tracking and training information in T. connect.
As a shared in the past H.T.T., the up and tell us that they waste meaningful office time accessing data from different insulin pumps each day.
The launch of this new out we will be offering the first wireless phone based solution to address this issue and thereby improving office proficiency by streamlining that this providing important resource for telling health initiatives.
Now I'd like to turn the call over to lead to discuss our financial results as well as financial guides.
Thank you Karen and good afternoon, everyone.
Our entire organization has executed remarkably well, let me think treated challenge is presented by the uncertain time.
Focusing on our performance in Q. why we are proud of our actions, particularly the logic control right here.
Credible feedback we continued to receive performance.
The impact of current 19 would likely be much greater on our business, but Alex.
And as a result, we are not feasible.
Other health care sector.
Our first Prairie dog for only modestly impacted by curbing 19.
Yeah.
We begin the here with 98 million in worldwide therapist quarter, which is our second how ever behind only our most recent port choir.
That's a very dark directories.
Tricky for next year at Harvard benefit that perfection.
We shipped 17400 come from the first quarter versus 14700, a year ago.
Our first quarter therapy, including 18 million for an international geography.
Our domestic perhaps that makes a 13236% year over year, delivering 80 million sales for the quarter.
Able to achieve its growth on the strength of control like you even with the outside.
In the first quarter, a t. back in 19.
Altered our Connecticut, Caspar 50 million with the remainder come from.
I started mentioned, we observe some customers purchasing Carter kit and infusions, that's more frequently than the routine quarterly cycle potentially stocking up I'm surprised.
Estimate that that's resulted in an acceleration of fails from the second quarter of approximately 3 million.
We ship 4200 pounds to market outside the U.S., including our initial orders to Germany, and France late in the first choir.
That's what our highest international personal quarters think the animals opportunity, which makes me think complete and the second quarter at 2001 pool.
The 5100 times shift in the first quirky out the 19 benefited in large part for animate conversion at Berkeley be getting a bit turn around from a backlog in 2008.
Therefore, there's no meaningful things in comparison to be made against Turkey.
First quarter International results.
Are what else my own warranty and therapy screener, approximately 155000 customers, which are the greater than 90 per cent year over year increase enterprise.
This brings cancer of factory 127000 people in the hero and 28000 people outside the U.S.
Sounds represented 61% of totally fail, followed by a teaser sets at 27% cartridges x. about personal.
We have the guts experience and expect to continue to see downward pressure on our sales in the face that that could make banking crisis as health care providers impatient structured the disruption to their typical interaction and temptations, she has to delete or purchasing decisions due to financial uncertainty.
As we discussed what is encouraging if the extraordinary feedback we have received on control here, which we've been read helps mitigate started and failing.
Difficult to estimate with any degree of certainty that debt and duration of covered nightclub impact on our bed.
Therefore, it. This time, we are we're trying our 2020 on your guidance and rinse that provide color for the near term based on the back information we have available.
As Brian mentioned the dynamics are anticipated to vary greatly between the U.S.
In the record if not only typical for <unk> thievery across the quarters in a calendar year ask people began to meet their insurance deductible.
Oh come across the week.
Requires accordingly March with our highest thank you want.
We expect your achieve at least 70 519 domestic fails on a second choir, which implies that me, 7% crest compared to the second quarter of last year.
We are not assuming the things he's now progression across the weekend, the second quarter or even the third quarter until we see signs of her recovery.
Despite the excitement Kirby like you outside the U.S., we expect that the international market for our experience a greater impact because their patients tend to be treated more commonly used the huh.
And the second quarter of 2020, we anticipate at least 10 million an international affairs, primarily driven by the fight for our existing in South Bay.
Keep in mind that the second quarter was already lined up to be a difficult comparison for our international fair based on the same factors that influence our first quarter results for last year.
In summary, we anticipate are worldwide sales and the second quarter to be at least 85 million.
We have with China.
Obviously have known secondary to what cause like 19 recovering currently.
Yeah, not completely just make the possibility of a scenario that could result in achieving our original guidance roll as more and more people experience the benefits of control like here.
Wrapping up our first quarter performance gross margin was 51% next quarter consistent with the prior year, we found improvement at each of the individual product margins compared to the first quarter actually the other night.
Based on higher volumes and progress on the initiatives that were driving through our long term gross margin will have greater than 60%.
Benefit like partially out that by the impact that product next what purpose, representing 61% of worldwide sales in the first quarter of 2020.
70% in 2019.
We also recognize right. Okay. Thanks in conjunction with the launch a control like you in January for New part Shepherd.
I think that occurred within the choir.
The resulting royalty conflict approximately 1% of total choir.
Noncash stock based compensation was equivalent your every year at approximately 2%.
We demonstrated leveraging our operating expenses as reflected in improvement to adjust thinking big which is the impact of noncash dot com.
The adjust to even have margin increase the 4% of the first quarter from essentially break even in the prayer.
Mary fixed straight quarters of positive adjusted EBITDA.
I bring the expensive screen is 60.9 in the first quarter, including 14 million and nonstop Dot com up we continue to drive programs to support our long term market leadership.
Support and profited already objected.
Compared to operating expenses at 40, 49, and the prior year, including only nine nine dot compensation.
<unk> dot com charges are expected to start declining in the second half a 2020 from these higher levels, we have seen in the last few years.
We ended the first quarter with 160 million in total cash and investment which is they 16 million decrease from the end of the year.
Kramer's anticipated in part due to capable first quarter seasonality, where we experience nowhere pumps down river associated with the tiny a customer insurance deductible reached that.
The decreases magnified by other point in Boston.
Capital expenditures for manufacturing capacity and facilities expansion.
Inventory I mean, basically socks I worked for protection against the fighting description and the palace and your one kind of compensation or work.
It's spending was partially offset by perceived from employee stock option exercises have 11.
Even in light of uncertainty is due to Kobe thankful, we are focused on making pretty insightful electric any organization <unk> and ensure achievement I for a long term care can profitability initiative.
These activity you think he continued recruitment of <unk>.
Advancement of the R. and D. pipeline and implementation of advanced technology solutions, which may be confident additional decreasing cash them in your car.
Continue to evaluate our plan uses a cash in the coming months as new information becomes available and make changes.
Okay.
Considering our near term outlook for kids to 2020 fail and our intention to continue making t. investment.
Expect gross margin to be relatively flat.
Compared to Q1 with modest pressure on adjusted EBITDA margin.
We remain committed to achieving our long term margin.
With that I will turn it over to the operator for question.
[laughter].
Operator or are there any questions on the line.
Mm.
Well, we apologize it'd be half of the system because it looks as though there is some sort of technical difficulty happening and operator is unable to connect to be able to ask questions. So maybe we'll give it a minute more in case they are able to resolve this issue and if not then we'll change over and apologized that happy.
He didn't do any questions or things and follow up or if people would like to email me directly our analyst you up my email address this is Susan more so than if you want to send it to me I'm happy to be able to actually just facilitate these amongst us and the management team now.
Well wait for my son, good causes 10.
[laughter].
Thank you for your patients.
Again to ask the question. Please press star wanting to touch tone telephone.
Our first question comes from the line of Chris <unk> of Guggenheim. Your line is open.
Thanks gave me okay.
We can.
Okay perfect.
I was hoping to start off with you could give us a little bit more color on the assumptions behind the 5 million dollar number for two q., what do you assuming in terms of the pressure on a new patient starts and then have you thought about how that progress is relative to what you saw in April.
Thanks for the question, Chris and it keeps you guidance is really based on what we've already seen through right. Now. So as you can imagine we already know what April look site and we have orders in the system that will dictate pretty much how may or connect the biggest question Mark right. Now is what happens in June and asked me progressed forward at this.
Point, we haven't anticipated a typical seasonal scale, which would mean that Jim would normally be the highest mountain the quarter. So we're just going to keep monitoring that but at this point based on what we already know today and about our international order is that we have in hand.
Confident that we can hit at least 85 million interestingly hour metrics that we typically manager.
People that are coming from M.B.I. versus competitor conversions those of all stayed intact now through April even though we're seeing some pressure on orders overall.
Okay. That's helpful. And then just for this quarter went to understand thank you for the the impact of the supply stocking was there actually a revenue contribution from the new European territory's. This quarter was there stocking that went into the O.U.S. number here in one q.
Yes, we haven't quantify that but we did have our initial stocking orders for Germany, and France in particular, which contributed to the international sales Esquire.
Okay. Thanks.
Thank you are next question comes from Travis speak a bank of America.
Your line is open.
They can while and thanks for taking the question just on the $85 million into to how much the load.
Oh Boy original plan is about this kind of think true kind of what scenarios have to happen in about a cow in order to get your original expectations.
Sure as you think about how to look at look at the entire year. We obviously don't give any of our detailed modeling assumptions, but it really comes down to what sort of recovery curve, one might anticipate and you hear lots of conversation about a v. shaped you shape, even at W. shape I'm at this point or only that the go there, but we have in front of us right here.
The upcoming month, or so and so we're not factoring in actually going to teach or even thinking about two three any sort of seasonal uptake that we like ordinarily see.
Okay and then.
No you're suspending guidance for this year are you still reiterating the the five year plan 500000 patients and then also like I know you built in some conservatism originally for for competitive launches, but you got fortunate and how'd your product approved in your competitors haven't yet so it seemed like there's a chance that goes to get delayed just trying to think through what kind.
Incremental opportunity there could be on the margin from competitive want just getting delayed.
Travis how would you say that we have not we still intend to get numbers be put in place for our five year plan.
And I think that you know, we we have to wait and see what happens with the competitors obviously on their their own specific clinical studies and plans, but at this point in time, you know I think it just gives US runway we anticipated about you know six months to a year runway to build momentum odd control like you. We think that's still the case.
And operator is there but.
Next question.
Yes, Ma'am. Our next question comes from Alex in a way of Craig Harlem. Your line is open.
Great. Good afternoon, everyone. This is actually will send ski on for Alex here. Thanks for taking the questions. Just to start you know John how are you guys positioning the sales were selling the post cold at World, you know where it might be harder for <unk> access these medical clinics.
Well I'll, just say that you know our our team our team did a great job transitioning you know to virtual interactions with our positions we have excellent relationships with our decisions were in touch with them frequently both our our sales organization in our trainers. So the trend the transition was smooth.
Did a great job I'll I'll, let Brian <unk> Oh, it to that Johnny think we're going to take their lead we're going to see what and how they would like us to interface with them Thankfully. We had many of these tools in place Oh for the virtual training and also surely everyone else tools place for emails and calls on video conferencing now with the positions. So we've even doesn't really unique sales calls or the.
You know a virtual setting now and we'll see how that all played down I think it's going to vary account by account and what kind of follow their lead and.
<unk>.
You get a day at a time, but so far we've been in direct conversations and communication with all our accounts in their adjusting to the new norm as well.
No that's great to hear things for that and then you know second question is just stepping into the patients shoes, a little bit what is the end user diabetics seen about cold it and their willingness to switch device you know during a time when you might be tough for them to access the Doctor Hospital, turning patients off from upgrading all and.
Know what would what would what would that due to the end user demand through the end of the year. Thanks.
Yeah, I think we can always speaks through you know g. one in in April what we've seen so far in the calls into our team and our communications with our field team has been very robust. So you might actually look at this a little bit did they have time at all and they're doing the research. They are communicating steel <unk> help with their position and they're reaching out to us with that time.
You have the conversations with our inside an external sales team.
Actually found them to be very accessible right now and very open to those conversations so unlike the face to face visits we may have had before some of the walks or a gal is that we may participate in before our virtual sales calls it gone very well, we're actually finding a very captive audience right now so again, we're adjusting to the new norm, we only know what we know.
Four months into the year, but so far is gone very well in patients had been very open as you can tell from R.M.D.I. numbers to switching therapies and coming onto a pot so far.
You know these stress levels that come along with just dealing in an environment with Kobe 19 affect People's blood sugar control as well as Coby 19 itself has been shown to actually cause you know significant issues with hyperglycemia and blood sugar control. So we're hearing that people are actually up there appreciating the benefit of.
Control I to you because it does have such improvements in their overall control and we accept you expect that to continue you know to drive didn't answer the device.
Oh, it's great to hear thinks everyone in best of luck moving forward.
Thank you. Thank you.
Thank you aren't next question comes from Brooks O'neill of late Street capital. Your question. Please.
Thank you good afternoon, and congratulations and continuing Playgroups guys.
I've broken my <unk> My My first question then.
Yeah.
<unk>, Oh building backlog I understand the normal seasonal patterns, you know I understand but.
It can that you made about Bobby <unk> do you see any indication that.
You don't get patient delayed purchasing palms.
But that with normal light <unk>, there might be a bowl, let's jump in in the band for the product.
You know Brooks first of all I would say that you know without covert 19, we would have done better in the first quarter and as as Brian indicated you know we anticipated weakness in March and April was people converted into virtual visit San virtual training and you know we were surprised obviously very pleased to see the strengthened.
Two months and is largely driven by by control I Q, it's interesting because right now it's approximately three months from the time, we started to actually ship control I.Q. back in January and you know and when we when we look at back and what happened with days like you know after the first three months people started to talk to their positions.
They began to actually see the benefit of based like you. The same thing is happening now with a control I.Q. So.
Mentioned growing though mentioned, we expect to see continue drawing the momentum for control I.Q. and as people you know just expressed the great results. There there were seeing to their positions. You know that's that's only going to underscore the value of the product. So you know I think that you know we do anticipate that there will be a bomb when we get through this and.
You know, we're well prepared to deal with that.
Yep.
Oh I understand in general what overwhelmingly positive customer feedback means but can you give us just a little polar.
Some of that sort of the anecdotal thing <unk> you don't really.
The Oh.
The elevated the bottom looks correction is really ready to begin with your patients.
Sure. The first thing I'll say is that it's our customers who are calling control. If you life changing it's not us they're doing that and if you. If you look at the blogs. If you look at the emails that we receive.
The the couldn't the timing range people are experiencing now is in the high eighties and nineties. It's just absolutely incredible no people love. The fact that they can go to sleep and they haven't got to worry about their diabetes, while they're sleeping and they have just you know amazing experiences at night, and just they're able to sleep through the night, which is just really positive so.
You know, it's you know everything that we're seeing right. Now is is it's it's strong it's great. It's easy to use you know the <unk> integrates with the the index calm g. six with doesn't require Fingersticks and it's also you know minimal alarm. So it's all been very very positive.
Great. Thank you very much.
They care.
Mm.
Thank you on next question comes from Ryan Blicker of Cohen. Your line is open.
I think for taking my questions, maybe starting with too quick pipeline ones for the remote Bola speech or can you remind me what are their clinical work was required besides human factor testing prior to submitting I don't believe you needed a clinical trial I just wanted to confirm that.
And then also that's right.
Go ahead sorry.
I was just could have had no also for that for the next generation algorithm you are planning to launch in 2021 with some really attractive features could could you give us an update on.
What type of clinical trial work, you think might be required to launch that product and should we expect that to launch one of that later and you know what's happening in in the world or do you still think you know without an angel incremental surprises, but that could launch in 21.
Yeah <unk> for the for the mobile those feature there is no additional clinical studies requires it's all about human factors and and human factors is very different than a clinical trial in that there's definitely work as a lot of work that goes into planning it the actual.
Human factors testing takes a day or two and then there's time that's required to to just analyzed the results bear the report so I'm I'm not trying to understates. The the challenge the complexity of doing all that but it's really it's much more contain and it happens in a much shorter period of time in a clinical study. So you know we think there's almost a one for one in.
Back to you know they delays between the the <unk>. The time, we had planned on doing the.
The human factor studies in the time that we'll actually get it done two submission.
Yeah. We are currently still were working aggressively on control like queue. Next generations. We are we are actually looking at it in a risk based manner. So the first improvements. We're we're looking at in control like you really are not going to require a great deal of clinical work.
And so that's what we're prioritising now, there's obviously going to be clinical work, that's required and we're going to be likely starting that work later this year and I think that you know it's difficult to say if Kobe 19, there's going to impact that are all right now, but it'll start off with a series of small studies just to confirm.
Safety and just confirmed the impact.
Oh those are those changes with a a pivotal study sometime in the 2021 time frame.
Got it very helpful and then.
Can you provide any update on your conversations with with major payers over the last month and changed since since this is emerged as coby 19 sold any progress you may have been making with United healthcare. Thank you.
Well, we don't comment specifically on any of our our pair interactions in activities you know as we've talked about to pass our priorities really are to get as many agreements in place as possible and then worked with our pairs to get additional reimbursement for some of our a complex features that are definitely benefiting our our patients <unk>.
<unk> and also looking to streamline you know the the process of Onboarding or Asian, so that there's a lot of activity going on in that direction. You know the control I.Q. pivotal data in the international market impact has been very positive positively received we're working with all the pair organizations right now and we are we're seeing great progress.
But you know it takes time to do this and I you know I think that we'll see these things happened overtime.
Thank you. My next question comes from Matthew Black Minnow Stiefel. Your line is open.
Oh good afternoon, everybody. Thanks for the questions I got a couple of fat Lee.
Okay. So I'm curious about what you're seeing in April and I don't expect that you'll you'll tell us the magnitude of that had a way, but no feel free if you'd like to keep at least say that they had when <unk>.
Or bottoms.
Thanks for the question.
I think I can't predict whether they haven like our bottomed at this point I'll I can say is that April and may are seeing pressure compared to what we would ordinarily see which is why the guidance sequentially down at this point that really in our minds at least that that June is that the big question Mark of how it precedes friend there so that's where we.
That's not less.
Okay Fair enough and it gets my my follow up question, then <unk> New territory for all of US. So let's think through what metrics. You guys are looking after you try to project that was just potential recovery trajectory. Obviously, you have water numbers, but how are you thinking about the importance in in impact of more macro indicators like consumer confidence or unemployment just just.
Help us understand how you guys you're thinking about all of those that cross currents. Thanks, so much.
Sure and I mean, and and be on cue to anyone's guesses as good as mine about what happens, but you're right. It's really the macro factors that we would have to consider more that would be driving impact you. The business. So for instance, as they come out of the how do they phase it out how when our social isn't thing requirements relaxed winter stay at home Rolls relieved.
And how quickly things term returned to what is more of a normalized environment. We believe that will happen in ages are phases over time, they won't be a quick turn around which is why at this point, we went through the annual guidance because no. One can really guess how that that quite a play out.
We get.
Well that was so like you.
<unk> Alright thanking me.
Thank you are next question comes to Matthew O'brien up Piper Sandler Your line is open.
Okay. So much afternoon. Thanks for taking that question just for starters I guess Lee you know thinking about your comment and I know, you're you're not reiterating full year guidance or not that you're saying, it's not off the table either.
Given what you've done in Q1, and and your expectations for a cute to the back have ramp can be pretty significant to get there. So clearly.
You're rolling out control I.Q., you're seeing extremely strong demand.
You know for that technology. So can you just talk a little bit about what you are seeing to to give you. The competence, even say something that you get potentially could hit Tibet hit that game given the big ran from the back half of the year.
Yeah, you know I think I don't even not even nothing <unk> upside or down side to that it's just that it's a possibility. If you look at the variety of scenario that occur you have the macro factors, which we can't control, but what we are very enthusiastic about the role of control like Q. in that we couldn't have gotten there like I said, a better time and with with the extreme.
People are having and and the thinks that's we're having with this transition to a Helen Keller healthy environment, we feel like that will help us through that but again anyone's guesses as good as mine about how this plays out in the in the overall you know market.
Okay and then the follow up question I guess, there it's kind of two in one button gross margin into quarter was a little bit later than I would have expected just given you know all the the up front revenue that you generated plus the bigger disposable component as well I think a big chunk with that was was Oh U.S. models right, but you know why wasn't gross margin a little bit better and then.
Payment plans that you guys keep keep talking about that you have available how're you factoring that in to to the business. You know maybe later this year as we come out of their recovery.
Sure from a gross margin perspective, and we were flat when you look at this year versus last year and there are a couple of factors that really play into the gross margin when its product next thing south and so the percentage <unk> sales. We saw in Q1 this year versus Q. wind up last year with low work for upon which is the biggest driver everquest margin also.
Add to that that it's the first time, we have a royalty component associated with control like you, which was about in in this quarter nothing about one marching points. So really there and number of factors playing into that we did see improvement across all product margins notice quarter versus last year. So we're still very excited about the progress that we've made him where we expect margins to go still bleeding.
We will be 60% are better in our in our long term model.
And then when it comes to payment plans that something that it's hard to say, we'd had payment plans out there pretty much at the beginning of our business are distributors offer them as well, we really seen a very small percentage of people that take advantage of them, but will continue to evaluate them and see if there are ways, where we can enhance them, particularly in this environment, where maybe we can help people you might be struggling and I need to.
More financial assistance. So at this point I went and anticipate any trajectory change because the payment plans, but we do are we looking to hear the customer white, there and seeing what we can't do to help.
Yeah, well thank you.
Thank you. My next question comes from Matt Taylor view B.S. Your line is open.
I think some taking the question. So I wanted to focus on on tell it helps a little bit you talked a lot about your your capabilities, which I I would say or or you know relatively advanced for for my Tech company. It seems like you're having some success. So just wanted you to talk about your experience with that in the U.S. and parlay that into a quest.
And about Oh, U.S., because you said O.U.S. it'd be more impacted by this destruction because those folks are usually seen in hospital. So I guess, you're not seeing as much use a tele healthcare why can't they they pivot you appear to have done in the U.S.
Yeah. This is Brian I'll start with the U.S. first as I said, we are fortunate to have done several remote trainings back in late 2018 2019. So we could count you know in the <unk> 2000 range those that we'd already done and get pretty good at it and we've got kind of occasions of homework, we send out diverge one training.
Some follow a survey and in some additional things that we do to help that Asian, along so we got pretty good at it we were able to pivot pretty quickly.
When I didn't see happening as much is the virtual meetings with the physicians and the.
You know certified diabetes educator isn't really are a couch like we have so they've kind of embrace that and we're all learning together and it really develop so a unique bonds that I think will last for a while it training has it been.
Very well received at well it's not for every patient and then we worry about the health care provider on those patients who can't be trained remotely you know for some alternative right now before we can get face to face, it's gone surprisingly well and Super proud of my team and how they reacted to this and I do think it will be somewhat of a new norm going forward in a bit of a silver lining to.
And tighter U.S. healthcare.
What we're doing now in Europe is helping trade or distributors on some of the best practices, we've seen here, but unfortunately in that hospital setting those pages just aren't seen as much because those hospitals. It really limited access at an earlier period and shifted to acute care you know addressing the pandemic more so there's just a little bit different.
Dynamic, but that's not the same for all of 'em. It varies by region by country, how it varies by state here in the U.S. and so we're still seeing sales internationally, we're still seeing as we've talked about solid sales here you know at home and I think there's tell L.D.S. is is a good silver lining up you know of the process.
Met I'd say that you know it really underscores the importance of our investments that are mobile health initiatives Ya you know, we're well position now to really improve the experience for both people using the bombs and the positions you know in this new virtual world and the mobile App is really kind of our first foray into this but you know as a company we're really looking at building in a robust ecosystem.
Data driven products and services that really form around upon you know to just increase the communications the guidance and you know just see access to data to help the you know both the the people using the pump as well as a physician's, you'll make better decisions and basically managed to diabetes better.
<unk>.
Maybe just one one follow up you know you mentioned that you're seeing reports of people achieving very high timing range, Yes, I'm loving you could talk about that given you know there was some quote unquote controversy about the mid seventies number from the trial you know maybe talk about why you think that's playing out so well.
Real World.
Sure I think as we just talked about in the past when you look at the trial.
<unk> was very representative you know the I think the state of diabetes in the United States, where there are people, who I'd, let very good control and then there are people who you know just didn't really.
To control their diabetes at all and so you know the you know the pump in in many cases. There was there was no mobile there's excuse me there was no boluses done during the trial in a significant percentage of people that had high 1881 sees and so they you know they typically brought to the sort of the timing.
Ranged down for the overall population of that group, but it was represented but I think now if you look at people who are using that.
They are there are serious about managing their diabetes, they do care about it and and I think when you look at that population you know get we have seen just many many reports of people who have had great experiences and they're seeing very high time in range and it's it's it's really it's great to see if it's something we anticipated and of course, we're working.
Looking at post market data right now we were planning to collected and we're looking to present. It you know as we have the opportunity at shows and conferences here in the near future.
Right <unk>.
Present take care.
Take your next question comes from Steven <unk>.
Oppenheimer Your line is open.
Thank you guys.
I use force is willing to talk a little bit more about how the remote treating works.
Something where you train the offices on how to do that.
Indeed.
And do all your customer offices hobby capability and then.
Talked about alternatives.
We are brutal training doesn't work you can you stand on what some of those are.
Sure. So to the first question yeah. Some of our accounts have been utilizing remote training as well they have been trained by Austin.
Zero more teams or skype or something to be able to do that so they are training their patients remotely and their educators are doing that sometimes with our help but many on their own.
Cord, which is great for us because you know we've got our team out there schedule multiple trainings a day with the Asians directly. So it's really worked out well on that front and you know specifically, there's some pre work a virtual training is typically done through Microsoft teams for us that whereas the zoom as many of our kids are.
Using for school today, so everyone's getting pretty used to this.
Virtual World, we're living in and then after that training is done through some follow up there is typically a call in any of video or two we've done a lot of online resources now so things we've been working on you know throughout the last year and those resources. It really helped us during this time and allowed us to pivot quickly and as I said earlier.
The feedback has been very positive so if a patient chance there doesn't qualify for a remote trainers a variety of reasons for that where there's technology or just simply comfort or their new chip technology and it really liked to have some type of face to face we've done remote trainings with the patient in the physician's office and they'd been.
To help in that way, so we're still socially distance from that perspective, but we've aided by calling into that position office and there's a health care provider that is working with them there and that has worked out extremely well in those cases, where we've had challenges doing it so.
Good at this we're doing it the thousands now and it's working out incredibly well. So I think it's gonna be fun going forward, yeah, Steve we've done thousands of a remote training just in the first quarter and we expect to see that number grow through the year.
Kind of great and it just just secondly, another problem right you spoke up you know about the upfront payment flexibility.
Can you talk a little bit more about what those programs look like you mentioned a month to month that sort of the up front advertise over the full four years is it over different periods of time to me just any more color on that would be would be helpful.
Yeah, you get very so what we're really looking at doing is delaying are spreading out the payments for folks we've typically not be any company to spread out payments for that long a period of time over the warranty of A.A. pomp and if there is a strong demand for that maybe one of our partners might be willing to offer that but you know as we hear more.
We get asked for more whether it's pumps or supplies were certainly open to working with our patients to ensure that they're just not facing a hardship right now but to leave comments earlier surprisingly low as far as a request that we're getting today and it certainly has been historically low. So we continue to monitor it we're definitely willing and certainly people at this point to be.
Well with our patients and help them.
Thanks, guys.
<unk>.
Thank you. My next question comes from July and watch of City. Your line is open.
Oh, Yes, hi, this is <unk> for Joanne.
First question is with regards to second quarter and your commentary on pressure on orders based off kind of your anecdotal observations or channel checks, what's the bigger driver here as it kinda delays from patients having to go through the tell that help setting or is it more delays given.
Kind of just unemployment or other economic factors.
Yeah, just trying to get I actually if it gets too early to tell.
The honest with you we certainly haven't felt the pressures of the unemployment or lack of insurance yet in the interactions we'd have with their patients, but again, what that 30, D. lags somebody discussion started beforehand, and we haven't seen people necessarily fall out of a funnel due to that so I think we'll figure that out as we go forward ears, you had that starts to manifest itself.
In a different way, we any thoughts from your end on that I think a lot of it right now the best we can help people adjusting to this new environment Teletext, Brian White, it's too early head you know determining what <unk>, what they keep factors are that might be impacting yesterday.
Okay now that that's helpful. And then second as we kind of <unk> look at the you're up acts and you're spending what levers do you guys have the pool and somebody that you're more variable costs, if you need to.
Right. So this year I'll go back a couple of months, we talking about 2020 really being a year of investment for us it's about laying the foundation for some of our long term initiatives to further the pipeline to meet our market me your ship going five years and to invest in technologies in order to find beverage for our profit.
Already perspective at this point, we still anticipate that we're going to get to do those investments, even though they don't drive necessarily this year sale. So those are some of the investments that we could slow down if we needed to conserve cash we actually need to continue hiring people to support our installed base has her growing and we need to invest in the manufacturing capacity, but I'm, we're definitely looking at everything.
On the fringes and seeing if there's anything that we can delay just to be pretty baffled about what we're spending today.
That's helpful. Thank you very much.
Thank you.
Thank you are next question <unk>.
Berenberg capital market. Your line is open.
I. Thank you for taking the question I Hope you can hear me, Okay, and I hope everyone is a their families doing okay.
So I I want to return to the to the to to guidance and then kind of this aspiration hope of maybe 2020 original guidance not being off the table.
Can you help us think about how the two Q.U.S. number I guess include some people that you might have been working on in March April that that are coming in or if you could give us a little bit better color on the Kate into that and then how do you expect those trends to continue into the second half the year, I mean, where we.
Sitting kind of one q. with with a large backlog of people and that's getting was hauled into q. and what trends are you seeing kind of going towards to the end of this the end of this quarter.
And then I have one on just tell how after that thanks.
Okay, great. Thank you nice to hear from you when it comes to the trend beyond that for the current month or cheat, there's really nothing I can give color too I'm. It's anyone's guess as to what can happen from here I wouldn't necessarily say there was a backlog coming into the corner. What we were what we're happy to see if we're seeing consistency in terms of <unk>.
She has of R.M.D. iverson competitor conversions, when one might think and might still happen that M.B. I might be more pressure gasoline move forward. Then we'll have to continue to watch the patterns ourselves, but at this point I don't have any other I don't have anything to tell you about clarity beyond really that quarter or and really the next month or so.
That's great and then just around tell it helped just to to kind of filled on some of the questions that were saying just hope, let's say you know what are the steps that it's actually helping with I mean is there are you seeing kind of more support in new patient onboarding or is it kind of helping you with existing.
Manage man or with new drop Dr training, or making herself force more fish and I'm, just curious and kind of where you see the strength right now and and is this all built in house I know you talked about some kind of video vendors that you are you're using but I'm just curious as to kind of what where the infrastructure is coming from thank you.
I'd say the technology is certainly technology to everybody is using a some sort today to connect to universal your face to face in this way.
Through a an application, but all the other pieces, yes, I've been developed in house by your team and again, we had a had started on that so that's certainly help but I think physicians are having to do it as well. So they are helping we're helping with them we train them on some of it they helped.
Make sure the right patients are being put into that channels. So that we can get the right on the other line to be successful in the tell a health initiative forward training, our folks were already comfortable with it. So it really is nothing different then we were on a call and we were going through something in a more technical fashion.
It is a change you have to be comfortable with it we have to be comfortable with it clearly we'd rather be face to face. That's why we have a fuel sales fours or we would do everything in sight, but because the physician's that had to pay the the patients have had to pivot there's still a demand there and our folks were already ready to do it it's gone very well and quite frankly worst surprising where industry.
Really proud of it right now and we'll see how all this plays out but I think we're doing the best we can in the environment, where in the feedback has been positive and it's about the done all we can do right now and I think that's going to continue for a while going forward here. So we continue to try to improve but really nothing more than putting the right little videos together on you to would you can go.
The right now and how to fill a cartridge or do a variety of different things on our part of the application. We have on the I phone, where you can go play with it is also very helpful people recognize our technology through the tandem device update her now with John talked about the mobile out it all kind of feeds into the ability to do this and I think it's a positive as I said earlier.
I'd also just say that the mobile apps really important in that we were we were Brian and I run a conference call last week with about 150 endocrinologist round, the world and one or the endocrinologist actually been said that over the last month, he's actually had to bring on 10 additional people to download pump information into his system. So that you could actually provide.
You know therapy management for them.
Population. So that's that was a huge burden on him and as I mentioned when the mobile App comes out in a few weeks. It it will basically automatically upload data from the pump the cloud and so that will eliminate that that burden on the health care practice. So we see that as a big deal they going to assist we've got a number of things that are.
Are happening in this digital Hill area and I think they're all going to go towards improving the efficiency of the health care provider and also improving the experience of the person that's actually using the.
[noise] operator clean go to the next question.
So there maybe another delay in our bridge and so I'm Gonna go ahead, and just supplementing with one that I received here via email and so this question is really focusing on if we're doing more digital to prospects who are stuck at home.
That's basically what the question is and so basically is it working so people who are prospective customers and I think Brian you'd probably be best to answer that people, who are prospective customers who are at home are we doing digital conversations in order to to really talk to them about the benefits pumped therapy.
Yeah. It's a great question right marketing in a pandemic is quite interesting in something I think we're all learning about right now our first messaging. The patience is really torn existing patients reassuring them that were here and we're taking care of their needs as far as applies in any kind of questions or technical support. They may need we continue to you know stay active in the social.
Media channels, a lot of positive feedback on control I.Q. and if somebody does want to reach out via one of the no more but digital message. We are certainly here both to interact that way or work during inside sales channel based on them, reaching out and expressing an interest through a variety of channels you know that we participated.
So as I said earlier it is nice up there captive at home.
Yeah, but at home into conversations and accessibility to patients have been much greater during the last two months and I think that does benefited but we're not specifically trying to market or target any different right now until we learned a little bit more we're more concerned about taking care of those that are.
Are part of the tandem family first and then not trying to be overly opportunistic in this unique environment if that makes sense.
Thanks, and are we able to bridge in just for the next question.
Yes, Ma'am, Jeff Johnson, a bad your line is open.
Thank you.
Guys.
<unk> follow ups here in the interest time I'll just ask them. Both one we supplies in the U.S. perspective anyway. We're 37, 38% revenues. This quarter's you guys already mentioned that they had been 32, 33% and the past few quarters or should we expect him to to that they remain up in that upper 30 range. My God is that people.
There's still kind of hoarding supplies are trying to load up on supplies, but would love to hear your answer there and then if you do go to some payment plans, maybe a me, 10% or wherever we end up with unemployment in in some of that patient base.
If that payment plan, let's say was over two years just to use it as as an example would you spread that revenue out on the P.N.L. over the two years do you recognize it up front I just want understand <unk> on that kind of payment plan. Thanks.
Thing. Thanks for the question chef starting with the supply question, a surprise actually pretty easy to predict these days I mean at the function of our in South Bay and so it was one of the elements as we thought about that you two guidance and what we thought we could predict pretty pretty easily I mentioned dining Q1, we saw sound like you want a concept.
Went to the first quarter supplies.
3 million that we're thinking when people backing up right now my best guesses at the full forward from Q. too, but otherwise supply tend to pick up across the year, because the seasonality a little bit more so just because of broken the installed base.
Into your second question when it comes to the payment plans in the accounting treatment and there are a lot of different accounting rules about it but for the most part if you can S.S. collected already up front and you book that revenue on Dateline based on your best estimate of that Collectability and because we have some history with payment plan, we're able to make some estimates so while we expected.
Well recognized the that amount of their avenue on Dateline.
Thank you.
Thank you. My next question comes from Danielle No fee of S.D.B. live rink. Your line is open.
Hey, good afternoon, I think too much for for taking a question I'm not sorry, simple labor, but the tele help point, but it sounds like you guys have been doing a pretty good job here with <unk>. So far in Q1, and I guess I was just curious when.
You think about two to where you know you have different revenue streams here in the U.S. as it relates to.
Patient switching from M.T.I. patient switching from competitive Thompson and existing tandem patients upgrading and I I was hoping to get a little bit of color if you'd be willing to give it on which sort of patient subset is is sort of the most at risk that we should be thinking about flowing significantly in Q.T. it'll.
And then hopefully that would be that patients have sent them recovers on the back end of cold, but just any clarity on on that.
I'll comment to the the source that patients if you want to call it that or the next to patients that come to I frankly, we were surprised as we came in through April that we're still seeing roughly the same balance that patients coming from M.B.I.M. patients coming from competitor conversion because he had asked me a month ago. When this all began I would've thought.
The M.D. and D.I. population would've been more impacted just because moving to can pump therapy is such a significant change from what they do and maybe the theory of other remotes training that goes with it but like I said, so far we haven't really seen a deviation from our norm not to say that that won't occur, but it would only be speculation at this point.
Yeah.
Okay got it. Thank you and then the other question I have on tell a healthy is around so I I got that he sent you've trained a lot of patient you know doing some position tax I'm hearing some position caution around treating patients on palm sin clinician caution there how do you get position.
Ends or clinicians comfortable with a tele helpouts active training, a patient getting especially a pump naive. So specifically an M.D. I I think it's less relevant for a switch, but getting the physician's comfortable thanks to much.
I think it'd berries, and certainly varies account to account for the ways that we can do it Daniels simply showing them. The method that we use and there's a lot of rigor to it and there's a lot of pre word and other tools that people can use an access versus the time that they're on a virtual a training session with us and our traders are.
<unk> all tandem employees, they're available to follow up with them as well and we obviously have our tech support center here that can answer questions. You know 24, seven. So I think is just if there is a physician that is a little bit concerned about the you know again the regular involved we simply show them and share them and train them on exactly what we're using with their patients.
So far the feedback has been very positive and hopefully the patients are coming back with positive feedback and it makes them more comfortable to prescribe another patients that might be in a similar situation. So it really has not been a barrier so far and nearly the positions are having to use tell what health as well. So they were getting more and more comfortable with it if they weren't a month or two ago, Yeah, I think it's a matter.
Building confidence.
No we look at the surveys afterwards, but the trainings for complete and if we need to amend a little bit or do something different than we certainly tried to do that but it gives us great insight into the training satisfaction and so far again that feedback has been very positive. It's real time, we send that out as soon as a trendy to simply.
God. Thank you so much.
They can't you.
Thank you. My next question comes from Jason Bedford of Raymond James Your line is open.
Hey, this is not with me in a on for Jason Beckert that you're taking the questions.
So so my name's again on telling medicine what percent of your Endo based you think has successfully move to tell the medicine at this stage and you know I I guess set of differently. If you don't have that number is what eating do you think we're in in that conversion and then would you expect this to be sort of near 100 per cent by the end of two q., which most.
It was kind of being fully on board with me 10 minutes, and then kind of tech not to that it's cold medicine becomes more permanent aspect of endocrinology in general are there any positive or negative impacts we should think about in that sense. Thanks.
Yeah. It's a question on the front end because I don't think we really know or that I didn't see any numbers published out there as to how many ever how many habit.
I would probably lean toward towards most cats, because they have to and you know they're always seeing most most physicians right now that I have spoken to our wraps. It reported back on her seemed more critical or emergency patients end of delaying the visits for doing tell health, but those that are more you're you're quarterly checking visits.
But they're still needs to be face to face for your type one diabetic there's a lot of things that they can't do from a virtual perspective, so there's gonna be some mix of that going forward I don't know that it's 100%, but I certainly believe it's nor did 50 per cent right now and I think it continues to grow as we continue to go week to week and folks get more and more comfortable isn't as John said the call.
We were on last week, certainly suggests around the world physicians are embracing this and helping each other with it that was the whole nature of this call was sharing best practices and how things were working across the globe Tele Medicine right now and initiative that was started before the pandemic, but now really is front and center and again very positive feedback.
So that group certainly represented it very well and and they're embracing it we will have to as well we are today and we're going to refine it going forward. So that it's part of our offering not only in our normal hopefully back to normal day to day activities, but if something like this occurs again or even better prepared to you know to service the needs of our positions in.
Our patients, but we're all learning to be honest with you and I really have not seen any statistics on you know what the the adoption rate is so far but it does feel like it's high in growing.
Alright, great. So I guess my second one you know going into the country like you launch I think there was some concern about the impact that the ring setting up deductibles would have with the with the launch in in January as opposed to a in four q.. So I guess I'm looking back at the launch at least through mid March or do you think this.
No need dynamic had any impact on the control that you launch in are there any neither learnings in that regard would be helpful. Thanks.
Yeah, you know it I guess I weighed if I, if anything like normal our traditional I would say that she was living in a traditional way where we only see impacted sees now he doesn't matter. If we want your product up don't mind your product and we've we've just seen lower purchases and when you think about personality for US we talk about it across the U.
In terms of quarters it happens within the quarters in the weeks and the month as well. So we were moving go on a normal patterns I would say with January being the lowest scaling up the into March but so I would say there was nothing different because of control like you.
Oh, great interested in the questions.
Great. Thank you.
Okay, I think that does it so thanks everybody.
Before we wrap up I wanted to share a piece of customer feedback that I heard recently during this Kobe at 19 pandemic, we've had customers who have been personally diagnosed and who have had family members who were diagnosed reach out to us and say that they were able to <unk> focus more of their attention on taking care of themselves and their loved ones unless I'm engineer diabetes.
Because of control I.Q. and they were very thankful for that I just want to see that's why we're here.
I'd like to think that people, who use our pump their health care providers and particularly our boys.
Thanks for everything.
And the upcoming weeks, we are planning to participate in a number virtual conferences hosted by Bank of America Securities Berenberg, U.B.S. <unk> and Raymond James.
I hope everyone here is staying safe and well thanks for us joining us today, and we will all talked to you soon stay safe.
Ladies and gentlemen is concludes today's conference call. Thank you for participating you may now disconnect.
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