Q1 2021 Senseonics Holdings Inc Earnings Call
[music].
Good day and welcome to the <unk> first quarter 2021 earnings release and conference call.
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Please note this event is being recorded.
I would now like to turn the conference over to Philip Taylor Investor Relations. Please go ahead Ed.
Thank you. This is Philip Taylor from the Gilmartin group before we begin today, let me remind you that the company's remarks include forward looking statements. These statements reflect management's expectations about future events operating plans regulatory matters product enhancements company performance and other matters and speak only.
As of the date hereof. These forward looking statements involve a number of risks and uncertainties. A list of these 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 2020.
Our 10-Q for the quarter ended March 31, 2021 and.
And other reports filed with the SEC.
These documents are available in the Investor Relations section of our website at Www Dot <unk> Dot com, we undertake no obligation to update publicly or revise these forward looking statements for any reason, except as required by law.
Also on this call we will be discussing our 2021 outlook joining.
Joining me from Cynthia Onyx or Tim Good now President and Chief Executive Officer, and Nick Tressler, Chief Financial Officer with that I'd like to turn the call over to Tim Goodnow, President and CEO Tim.
Thank you Trevor and good afternoon, and thank you all for joining us today on.
On the call, we'll discuss the implementation of our commercial collaboration with Cynthia diabetes care are promising upcoming clinical activities as well as pipeline and regulatory updates.
Nick will provide detailed first quarter financial results before I conclude and then we'll open up the call for the Q&A.
The first quarter of 2021 marks the beginning of <unk> operating as a strategically realigned business.
We're enthusiastic about the opportunity to advance the value of the ever since system through our commercial collaboration with leading diabetes technology company Cynthia.
To remind you our commercial collaboration of.
Established the transfer of marketing market access sales distribution reimbursement and customer service functions to a sense here for all of <unk> products over the next few years.
Cynthia driving commercialization of these products our focus within <unk> is now centered solely around the strength of our organization research development and manufacturing of our innovative long term implantable CGM systems.
And the associated clinical and regulatory activities.
We have a strong partner in a sense yet to drive the commercialization of <unk> products.
This agreement meets the needs of and benefits both organizations.
Cynthia.
Did they ever since and their portfolio of highly differentiated product participating in one of the fastest growing markets in medical technology, and Cynthia Onyx is able to have its ever since system globally commercialized within immediate size and scale of a more mature business.
Global diabetes later the.
The collaboration agreement aligns our incentives, providing asensio with a tiered share of revenue generated from ever sent sales as we have previously described.
In the first quarter of 2021, Cynthia Onyx generated revenue of $2 8 million, including approximately 310000 in the U S and over two and a half million dollars in Europe.
Cynthia has commercial efforts have been expanding since their initial sales support I've ever sent for late last year.
Early experience has played a valuable role in formulating the next phase of our collaboration the restart of full scale commercialization in the U S. On April <unk>, which complements the transfer of commercial activities that occurred in February.
Yeah.
With that let me describe some of our recent progress there are many proof points that demonstrate the strength of <unk> commitment to ever since this is evident.
Not only in the shared mission to improve and make the lives of patients with diabetes, better, but also through their investment and Cynthia Onyx.
Most important but not as visible externally is their collaborative and strategic approach to the commercial partnership.
Following the collaboration announcement, our integration plan called for initial activities in the U S through the first quarter to familiarize of Cynthia with the ever since product sales and clinical processes.
Our own experience in subsequent discussions with SNCF around optimizing the sales and marketing strategies and tactics for ever sense have formed the.
Design of our high touch comprehensive approach for.
For example, early learnings highlighted the skill set and experience required for sales professionals to be successful in the CGM space, which may differ from the long standing PGM market.
In late March Cynthia completed the hiring and training of the U S sales force increasing to 25.
Marketing and sales per.
Sales professionals and approximately an additional 25 team members in commercial support roles, including sales inside sales clinical training market access and customer care professionals.
This group was recruited to fit the specific skills that required to sell ever since and we anticipate that break ground with.
Office sales procedural training and the reimbursement process should ease their ramp up to proficiency with our product.
The team is strategically positioned across geographies based on an assessment of the diabetes patient population patient access and our ever since opportunity.
Currently the team is in the process of managing and setting up their territories, including calling on current <unk> providers and prescribers.
We are encouraged to see that as the quarter progressed. Some clinic access restrictions implemented throughout COVID-19 were being removed or eased, allowing them to return to being able to work in person with health care providers at.
At the same time, they have been pursuing virtual introductions.
As Cynthia Onyx had step back last year from pursuing new sales of ever since.
<unk> is now.
Pursuing the immediate opportunity to restart growth in the patient base with clinicians who are the early ever since adopters when.
When these introductions to existing accounts are complete the team will then prioritize outreach to new accounts with initial focus on the top insulin CGM and pumps prescribing physicians.
Given the unique nature of our implantable product the current awareness of the technology and growing patient access their team has identified several strategic opportunities, where we anticipate focus and investment can drive further adoption of ever since.
Patients play a key role in choosing their CGM system and continuing to raise awareness for ever since it's an important factor for adoption.
Our sensor is prioritizing expanding awareness among both patients and clinicians.
To address this opportunity most effectively and efficiently they have launched a comprehensive direct to consumer advertising campaign.
Not only is expected to create impressions among the target patient audience, but is also to be a strong supplement to the direct healthcare provider outreach.
The systems necessary for lead capture in management are now in place our.
Our share goal is to deliver the benefits of ever since to more patients with diabetes and this program represents a proven avenue to introduce patients to the technology.
As of April one we are now moving to the next phase of our integration plan. This means that the full commercial strength of one of the leaders in diabetes technology now markets ever sense as a key product focus providing patient health care provider distribution and payer support.
Many commercial health plans and Medicare have recognized the value of our implantable CGM and have implemented formal coverage policies that provide reimbursement for the product and for the implant procedure.
We have completed much of the heavy lift of earning coverage for ever since with a strong established coverage base.
We're also excited to announce that Centene Corporation, a top 10 U S Health care insurance company is now covering ever since.
This coverage provides <unk> with a strong foundation to increase hcp's confidence.
And more and more of their patients will be covered.
In addition, and as we announce the 2021 physician fee schedule includes coverage for the ever sent system and the implant procedures offering the benefits of our CGM system to the entire qualifying Medicare population with diabetes.
That and we are pleased to announce that the university hospitals accountable care organization or ACO in Cleveland, Ohio is the first accountable care organization to adopt ever sent in their practice.
<unk>, our integrated health care provider networks that offer superior care to Medicare beneficiaries at a lower cost.
And there are shared savings program with the government if acos can prove to CMS that they can reduce the cost of care.
Prove quality and improved patient experience they are entitled to keep 50%.
Moving that they've created.
To date, the general ACO program as we considered a clinical and economic success with nearly 500 participating acos saving $1 5 billion managing approximately 10 million patients.
We believe ever sense has the potential to be another avenue of savings for such programs.
One specific metric of success that is used in the valuation the acos performance.
As in the HBA, one seeking control of their diabetes population.
We feel strongly as we have demonstrated with EVAR centers ability to drive a <unk> reduction in patient combined with its unique features ever sense can be a particular benefit to the Medicare population with continuous three months glucose monitoring that doesn't require the biweekly hassle of inserting and removing.
Moving a sensor.
The insertions are done by providers that can address any dexterity challenges.
On body vibration alerts and can address any visual or auditory issues and the high sensor accuracy, especially at the important low glucose.
All of which we believe supports greater adherence to CGM and therapy optimization.
We believe that the benefits of ever sent gave it the potential to be the preferred CGM for this population and will directly eight acos like University hospital at meeting their <unk> and outcomes objectives.
He is also launching additional efforts to wind coverage from the remaining payers not yet covering ever sent in the meantime, and in line with industry conventions in order to support those patients who do not currently have coverage for ever since <unk> <unk>.
High deductibles cynthia's implementing new ever since access programs for.
First for patients with commercial coverage for ever since the patient assistance program is.
Designed to reduce the patient out of pocket costs, such as Copays coinsurance deductibles that are associated with starting ever since.
This program will help accelerate growth and has a positive economic contribution for the partnership.
Second for patients' insurers, who have insurance that are not yet covering ever since the prior authorization program is designed to help patients submit claims petitioning to receive coverage for their system.
Case by case basis.
If there is no formal coverage policy in place with their health insurance plan.
These programs are yet. Another example of our joint commitment to ensure we provide the necessary support to get this innovative solution to patients who choose our need to be on long term CGM therapy.
Outside of the United States, we've talked about before and we're happy to report that as Cynthia the initial European commercial transition in February was executed according to plan.
We were able to provide patients with sustained access to ever since and customer service.
The priority here is for the successful transfer of existing payer contracts and tenders.
<unk> is now active in Germany, Italy, Switzerland, Spain, the Netherlands and Poland.
Given their international presence as Cynthia has a large sales force of more than 250 sales professionals, who are very excited to have a next generation glucose monitoring system added to their portfolio.
Additionally, recently, we signed an agreement to accelerate the transition of Scandinavian distribution rights from Rubin medical.
This transition is now planned to happen towards the end of this second quarter.
Following the successful execution of the commercial transition planned in the U S and Europe, we remain on track and continue to expect <unk> Global net revenue for 2021 to be in the range of $12 million to $15 million.
Another positive aspect of the commercial collaboration agreement is our ability to focus on advancing our implantable sensor platform.
Market research of CGM patients has consistently indicated two most desired features in our CGM system, our sensor accuracy and longer sensor duration.
Studies have continually demonstrated our positive accuracy throughout our sensor life.
And we have achieved a substantial lead in sensor where compared to the other available technologies offering 180 day sensor life compared to the next closest competitor of just 14 days.
We believe each sensor wear duration extension for our product represents a step wise market penetration and market expansion opportunity for us.
Our loyal patient base continues to highlight the lifestyle benefits provided by ever since and we are confident we can offer additional advancements with future generation products.
Next I'll speak to our promise pivotal study and the publication of the study results we're excited.
Good to announce that next month, we will be presenting two of the.
At two of the key diabetes conferences.
The data from the large promise study that supports the 180 day ever sent PMA supplement.
First up will be the ATV meeting followed quickly by the annual Ada meeting both in June.
Dr. <unk> of the University of Colorado, and the Barbara Davis Diabetes Center is presenting the clinical data on behalf of all of the promise study investigators.
Doctor Guard will describe the accuracy and safety results from the 181 subjects, who participated across eight clinical research sites in the United States.
We're excited to report these results and as we've previously shared data demonstrated performance matching that of the current 90 day product and achieved it with reduced calibration.
Yet with the useful life extend all the way out to 180 days.
Dover, though these are virtual meetings there are two key diabetes conferences of the year and represented an important forum to showcase the clinical benefits of ever since.
At the Ada meeting SNCF is also sponsoring a product theater. It will feature prominent kols and patient to discuss the advantages of the ever since technology.
On the regulatory front, we are pleased to share then in mid April in line with the previous communicated expectations amid continued emergency use authorizations relating to the COVID-19 pandemic. The FDA has now assigned a lead reviewer to our PMA supplement application for the submitted 180 day ever since product.
Yeah.
We believe the data to be published at the upcoming meetings and has submitted in our application demonstrate a favorable safety and accuracy profile for the product and we are hopeful the agency and an efficient review cycle.
While we are pleased with the strength of the submission there is potential for standard review timelines based on recent public comments by agency officials on the continued residual general impact of COVID-19 and emergency use authorization application.
It's always difficult to precisely predict timelines for agency reviews, especially amid the current unprecedented environment for <unk>.
We are hopeful for a straightforward review process.
And progress on our next generation technology platform.
This is a sensor that will last for up to a year and it continues well.
Is a top priority on the development from the.
The team is in the process of working to lock down a chemical and technical configuration for this sensor.
Sensor that last for a year, requiring just one calibration for week will be a game changer for people with diabetes.
Following a technical optimization.
We expect to file the submission with the FDA for approval to initiate the pivotal clinical testing and we are pleased with the progress that we're making to date and continue to plan to file the submission in the fourth quarter of this year.
I will now turn the call over to Nick to go over the calls the details of our first quarter financial results.
Thank you Tim our Q1 results demonstrate the advantages of our new business model following the strategic transition into a commercial partnership with SNCF, our new business model creates a meaningful change to our financial profile by leveraging the partnership with ascension to commercialize ever since.
In both the U S and Europe, enabling significant reductions to our operating expenses and cash burn rate by significantly reducing our sales and marketing expenses in.
In the first quarter of 2021 total net revenue was $2 8 million compared to 36000 in the first quarter of 2020.
U S revenue for the first quarter was 310000 and revenue outside of the United States was $2 5 million first quarter revenue in the U S was reflective of a census initial sales support prior to their April 2021 full commercialization.
Gross profit in Q1, 2021 increased by $22 million year over year to 526000.
Positive gross margin in the quarter was primarily due to the ability to fill resupply orders with existing written off inventory as existing patient reinsertion rates were above the expectations established in the first quarter of 2020 amid the onset of the COVID-19 pandemic.
First quarter, 2021 sales and marketing expenses decreased by $9 $5 million year over year to $1 6 million compared to $11 1 million in the prior year period.
The decrease was primarily due to the strategic changes in our market commercialization approach with essentially a collaborative partnership.
Research and development expenses in Q1, 2021 decreased by $2 1 million year over year to $5 3 million compared to seven 4 million in the prior year period the.
The decrease was primarily driven by lower clinical study costs and personnel related expenses.
General and administrative expenses in Q1, 2021 for $5 million, a decrease of 716000 year over year compared to $5 7 million in the prior year period, mostly due to a decrease in personnel related costs.
For the three months ended March 31, 2021 operating losses.
It was $11 $3 million compared to $43 8 million in the first quarter of 2020. This represents a $32 $5 million decrease in operating loss from one year ago.
The increase in the company's share price at the end of the first quarter as compared to the company's share price at the end of the fourth quarter of 2020 led to significant non cash charges in Q1.
As a result, other expenses increased by $239 4 million compared to the prior year period, primarily related to non cash charges, resulting from the accounting for embedded derivatives and fair value adjustments related to the company's financings, including the 2023 and 2025 notes.
Along with the PHP 2024 notes and energy capital equity line of credit.
As required by U S generally accepted accounting principles or GAAP, we mark the value of these interest instruments to market for each reporting period and the change in these values are recorded as non cash charges to the income statement.
Each quarter the value of these noncash gains or losses will vary based on the volatility in the company's share price. So generally share price increases we incur a non cash loss and its share price decreases we recognized a noncash gain for.
For the first quarter the cash portion of the other expenses was $4 1 million of interest expenses out of the total $238 2 million.
For the three months ended March 31, 2021, total net loss was $249 5 million or 68 cents per share compared to $42 6 million or <unk> 21 per share in the first quarter of 2020.
Net loss increased by $206 9 million due to a $239 4 million increase to other expenses.
Primarily related to the noncash accounting charges from the accounting of the Companys company financing as previously mentioned, partially offset by $32 5 million decrease in loss from operations.
I'd also like to.
We reiterate that in January we completed a series of financing transactions that raised over $175 million of proceeds for the company.
With our new business model. This capital is currently expected to be sufficient to fund the business through cash flow breakeven from operations.
Q1, our net cash used in operating activities was approximately $16 3 million as of March 31, 2021, cash and cash equivalents totaled $178 6 million low.
Looking at the remainder of the year, we are reiterating reiterating our 2021 guidance, we expect global revenues of <unk> of between 12 and $15 million for 2021.
The annual rate revenue cadence is expected to be split roughly 40% in the first half and 60% in the second half as a function of the current patient install base sizes and relative growth U S. Revenue is expected to be approximately one third of total revenue for the year.
For full year 2021, net cash used in operations is projected to be in the range of $60 million to $65 million.
With that I will turn it back over to Tim.
Great. Thank you Nick.
Before we conclude I would like to announce and extend our gratitude and thanks to Dr for adjusting Klein, our longstanding Cynthia Onyx Board member for.
For over five years, just in this guidance and leadership has been very valuable across the development regulatory approval and commercial launches of our ever since products.
Just in transition from EMEA the venture capital firm, we previously participated in the private investments and since <unk> two recently, starting his own fund.
And we are excited for him and this opportunity.
With his term coming to an end Justin will not stand for reelection to the <unk> Board at this year's annual meeting, which will enable him to focus on the next chapter and concentrate on future investments.
We wish him the best of luck in his future endeavors and thank him for his continuing support and lasting impact. He has made on the business.
In the first quarter, we worked hard with our partner as Cynthia to transition ever since and the commercial responsibilities for both Europe and the U S.
The team at <unk> has proven that they are committed to driving adoption of ever since as demonstrated by the best investments that they have made in our collaborative endeavor and then building a comprehensive U S commercial organization to support the ever since product.
We spent years developing earning regulatory approval and payer coverage for our revolutionary long term implantable continuous glucose monitoring system.
<unk> is positioned to leverage the size and scale of their organization to raise awareness and drive patient adoption of ever since.
We are very confident in our ability to maximize the value of ever since in the market over the long term.
We look forward to providing updates in the future.
We thank you for your time, joining us on the call for questions are <unk> Jain, our chief operating officer, and Mirasol, <unk>, Vice President and general manager of global commercial operations Op.
Operator, let's now open up the call for questions.
We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.
You are using a speakerphone please pick up your handset before pressing the keys.
Is that any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
The first question comes from Chris Pasquale with Guggenheim.
Guggenheim. Please go ahead.
Thanks, I have a few questions I wanted to start with the revenue builds can you give us an update on what you think your installed base was in the U S and international markets as of the end of <unk> and then as we think about the better than expected international results. This quarter was that drew.
Even by essentially bringing new patients on.
Or was it a was there a catch up in terms of restocking of distributor inventory or something like that that may have contributed to the results.
Thanks, Chris.
For the patient account.
To an annual update Youll recall, the most recent information we put out.
At the at the end of last year beginning of this year. There were about 4000 patients in in Europe. There were on the technology and about 1000 in the U S. So I don't have a quarter update for you. We'll go ahead and stick to the annual cadence of putting the information out.
In regards to the.
The performance in Europe that is that is in line generally with our expectation do recall that that also includes.
Purchases that Roche made to complete their responsibility for a portion of Q1. They went through the end of January.
Really is.
Pretty representative of patient demand there is not material space.
Stocking.
Thats occurring.
But it is the servicing of the existing patients that are on the product.
Thanks, Tim and then Nick and I was just hoping on gross margin you can give us a little bit of a better sense of what to expect from here on out have you now work your way through the written off inventory.
So going forward should we see something thats, a little bit more.
Normalized.
I think back to September you talked about a negative 30% gross margin for this year and it seems unlikely it's going to be that low after the start so just updated thoughts on what the full year is going to look like thanks.
Sure Yeah happy to take that so.
We've worked for through the majority of the material that we have written off a year ago and in terms of gross margin for the year recall that we still expect a back half of the year to be greater so as we move into Q2 and through the back half and so we still continue to maintain the <unk>.
<unk> that we provided of negative 25 to negative 35% for the full year.
Okay.
Was there a follow up Mr. Pasquale.
That's helpful. Thank you.
Thank you. The next question comes from Mathew Blackman with Stifel. Please go ahead.
Good afternoon, everybody. Thanks for taking my questions and then just start Ken I, just wanted to get a better feel for that.
The U S relaunch and how sort of phases over the next several quarters.
It sounds like phase one is going after CBS high volume ever sent from planters and then moving to just high volume insulin prescribers, who may be new debt ever since so how does that play out over the next few quarters as <unk> focused on existing accounts and then the second half of the year is when you start going after new accounts just any help.
With the cadence of how the U S. Relaunch will play out and then I've got a few follow ups sure Matt Directionally I don't think that that sounds unreasonable, although the timing is going to be gated by by success and of course.
This is appropriately under under our sense is.
Timing and direction, but.
The focus for sure, especially with the new reps and the dynamics of not being able to to get to see them for some time.
To get to reestablish the relationships with the existing prescribers and in service. So thats current.
The.
The areas get comfortable the territories are comfortable then expansion too to the bigger prescribers and opportunities will happen in the future. It's not currently in place right now it really is.
About getting a new rep getting established in their territory and working with there.
Prior Conservatives and prescribers recall that it's been just about a year that we took our sales force out of the field. So.
Those docs and those patients have been out without a sales rep for quite some time. So I do expect it will take us a little while to to build that back up again and hence the the cadence that we've guided to on the U S.
In the.
Back half of the year versus the first half.
Okay makes sense and then can you mentioned.
Some clinics are now starting to lift the restrictions in the U S. I'm just curious how much of a headwind that's still represents today, whether it's access for SMT reps or an implant specialists is that is that still a big Hill.
I just got one more follow up.
Certainly see an improving I would say that.
February was better than January and March was better than February. So certainly believe it's in the right direction I think we all tend to feel in the U S debt, we're making good headway with the vaccine penetration there's always more to do.
But it does feel like there, we're starting to get back to normal and we would hope that certainly by.
Later in Q2, certainly by Q3 that we'd be pretty good shape to have.
In office visits and training and so forth back on the docket for everyone.
Okay and then the last one I appreciate the comments on the promise study is there anything we should pay particular attention to would be sensitive to when the data comes out anything interesting that you think are.
And you don't have to be too specific but just curious if there's any.
Any part of the day that you think we should pay close attention to it. Thanks.
Yes, yes, I think obviously one of the key metrics of course that the agency is going to look at is just how how accurate the devices and we've always felt it's always been a number one focus for us the ever since technology is quite frankly, very accurate and very competitively positioned against the other devices that are out there.
So we feel quite good about that and I think when you get a chance to see the full data set.
You will you will as well so obviously safety is another.
Element and we feel pretty encouraged that we didnt certainly see anything new we didn't see anything of note are materially more and more complicated.
And then you would see with the 90 day product. So overall, we feel pretty good about it and look forward to get any published and having people take a look at it.
Alright, I appreciate it Tim Thanks, so much.
Okay.
The next question comes from Danielle unhealthy with SBB Leerink. Please go ahead.
Oh good afternoon, everyone. Thanks, so much for taking the question Ken.
Can I follow up on that the ACO partnership and that that sounds really interesting for me and I'm. Just curious about how that came about and does that potentially represent a more meaningful opportunity in an underappreciated opportunity for for <unk>.
Overtime.
Well Daniela as you know, we're pretty excited about the opportunity of having Medicare because of the alignment of the capabilities that features and benefits of ever since for for that population. So the ACO.
Is the group that part of the group that we've reached out to in this.
Particular group.
It was pretty active in getting back to us in regards to their interest as well as I said, they've got to just over 20 specific metrics that they are definitively specifically measured on and one of them is there <unk> reduction so.
It's pretty well known them pretty well documented that debt when you put people.
People on ever since then we will reduce their agencies.
And.
That's the intent for the evaluation that we're going to we're going to do with this group and I do think we're pretty excited about the opportunity in all of Medicare The focus that you get in an ACO and the additional attention around the economic return, we're pretty excited about as well.
Yeah that'd be.
Okay, and perhaps you could leverage whatever outcomes you see with this ACO to drive adoption in other or drive a similar partnership in other Etfs is that sort of like the overarching strategy.
Absolutely and Dr. Fran Kaufman and staying very close to this.
He is well familiar with the group, it's a it's a high quality group and she will certainly be partnering with them and we look forward to to results and experienced publication out of that as well.
Got it and then just one follow up Nick This is probably for you, but just around the readiness.
For the 180 day from a manufacturing perspective.
How quickly can you ramp up if in fact that does prove to be an inflection point, which I sort of feel like it from an adoption perspective. Thanks so much.
Okay.
Yes, I guess I'll jump in Danielle I would say that obviously, we're doing a lot of planning right now in anticipation for that.
We are reading the tea leaves in regards to the timing on it we've we've begun the investment preparatory investment for the process building the capacity. So we feel pretty good about the ability to ramp we have a strong partnership with strong capability, where we've invested wrecked.
Capital within previously so we feel pretty confident that we're going to be we're going to be able to support the growth and excited about what it's going to grow as well because it is it is going to be certainly an improvement in the liabilities of the product and we know that adoption is going to go up as well.
Thank you.
Yes.
Again, if you have a question. Please press Star then one on a touchtone phone.
The next question comes from Jason Bedford with Raymond James. Please go ahead.
Good afternoon, I hope everyone's doing well.
Just on the 180 day, Tim you talked about timelines I realize it's difficult, but just in terms of your expectation as to when you'll get.
Approval for the 180 day.
Yes.
So as you know a review such as this is a PMA supplement its not a primary review PMA supplements typically would be.
180 day review.
So we don't have a reason to believe that.
Should vary from that other than the dynamics of COVID-19 and what it might take particular review or.
Review teams time to clear off their desk from some of the prior work that we're doing so that's what we really don't know and probably why we're trying to.
Be a little bit oblique on the timing.
I, certainly hope that it wouldn't be much much longer than the traditional review time periods, but I do know it was a group that was notably impacted by the.
The diagnostics responsibilities with the COVID-19 diagnostic so.
Our feeling is and it'll be in.
And probably that that time period.
And just to be clear.
So the 100 and the <unk>.
Clock started in mid April.
Correct, correct and the review of rate per viewer picked it up.
Okay.
Also just for clarity on our Cynthia and revenue recognition.
I think you mentioned the international revenue pretty much matched underlying demand is that correct.
Correct.
And is there going to be a quarter, where cimzia it takes.
A bit of a bolus of inventory.
We're certainly going to be working together to always be driving the inventory up but we are.
The relationship we have with the prior distributor where there was a dire desire for them to hold a bolus for a long time period.
That's not the same.
Distribution partnership that we have with <unk>. So I would not expect that saying I would imagine that we'll continue to do is close to just in time manufacturing is.
As we can support while keeping the channel appropriately fill in all of the market. So.
Okay.
And then I guess, just lastly on the U S revenue I realize things are just starting up again, but is there any way you can break out.
Of the U S revenue what came from new users versus those that were getting re implanted.
In the first quarter recall that we had pretty limited coverage. So the predominance of that I don't have the full breakout Jason but the predominance of that is as ranch existing of existing patients right.
Okay. Thank you.
Okay.
The next question comes from Alex Nowak with Craig Hallum Capital Group.
Please go ahead.
Hey, guys. This is trend Mccarthy on for Alex just a quick question on essentially.
For the sense of selling the product compared to the internal team are you finding the reception.
Be different.
Do they have certain call points that are helping and if you could just speak to the initial response youre seeing for the DTC campaigns for through the first part of Q2.
It's it's quite early.
In Q T Q2 for us to have the feedback on it.
The reception, we believe is quite positive because recall the predominance of the folks that they are calling on R. R.
Our existing prescribers so.
There are certainly encouraged to have us.
As a partnership back in a more formal commercial.
<unk> shipped with the clinicians because that actually helps them.
We now have sales reps that can speak with patients and help them handle issues in transition and so forth that we were not able to fund for the for the previous year. So I would say as we expected it's pretty positive, but we're back in with.
The most interested users at this point as we grow we'll will expand beyond that.
The early DTC the impressions that we're getting I know that as Cynthia field feels really good about.
But we will continue to work to push those through the funnel and it does it does take some time, but the insurance adjudication that needs to occur and so forth.
We will through new start so that's.
The active work that's going on today.
Okay got it that's helpful. And then just one follow up.
Diabetes care is definitely seen a significant jump from competition as of late.
What is your game plan to address this and I mean do you think <unk>.
Ever since sensors have enough to effectively compete with products like Libre and.
<unk> seven.
I guess, just what do you think is key in making for a highly competitive.
Continuous glucose monitor well certainly in the CGM space. It is it is very attractive because the recognition is that.
Essentially if you are on insulin you should you should be on CGM and I think youre seeing that in the in the market growth that everyone has experienced we're very excited about our differentiation. Our key point is of course, the duration right, where the one group that can go for.
For long time, but a very very long time, so expansion for us.
The $1 80 in the U S, bringing that along bringing it up to where the Europe already is and as I described we are actively working on the on the 365. So we know the excitement level for those longer duration sensors increases significantly with People's desire to go into the off.
Office and have the have the insertion procedure done. So we are very confident that our long term sensors are going to be highly competitive with the with the trans continuous sensors that are getting smaller transmitters are getting smaller so on and so forth.
But it's still creating a small open wound that you need to keep paying the entire life of the sensor and there are issues with adhesives and so forth. So.
Duration is important for us as we've talked about.
We're going to have a fully implanted system. So no on body transmitter that gets people very very excited so.
We're very confident in our technology platform and what we can do and how we can compete in the future and whats.
Very meaningful and pretty exciting market.
Okay.
This concludes our question and answer session I would like to turn the conference back over to Tim Goodnow for any closing remarks.
Great well I would like to thank everybody for their time and participation as you've heard we're very excited about the opportunities that we have in the emerging work that we're doing with the Cynthia both here in the U S and in Europe. So we appreciate everyone's time and look forward to future updates in the coming quarters.
Thank you and good day.
Yeah.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.
Yeah.
Okay.
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