Q4 2021 Senseonics Holdings Inc Earnings Call
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I would now like to turn the conference over to Philip Taylor Investor Relations. Please go ahead.
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 the factors that could cause actual results to be materially different from those expressed or implied by any of these forward looking statements is detailed under risk factors and elsewhere in our annual report on Form 10-K for the year ended December .
31st 2021, our 10-Q for the quarter ended September 32021, 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 2022 outlook. Joining me from <unk> are Tim Goodnow, 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.
Yeah.
Thank you trip and thank you all for joining us this afternoon.
On the call today, we will provide an update on our launch plans in collaboration with a Cynthia for the recently approved ever since he III CGM system.
We'll discuss strategic updates in Europe , he will touch on our product pipeline.
Nick will discuss the fourth quarter financials in detail and then we'll open up the call for questions.
To start off last month, we announced a major milestone for Cynthia Onyx, achieving FDA approval of the ever since E. Three continuous glucose monitoring system.
This is the third generation product approved for Cynthia Onyx and speaks volumes about the leading scientific and technical pedigree of the company.
We are very proud to expand extend the duration of the longest lasting CGM system to six months in the United States not only is this the longest lasting CGM by over 12 fold, but it also offers patients top tier glucose measurement accuracy with a M. A R D of eight five.
Percent I'd like to thank our teams the promise study investigators and study participants and the diligent professionals at the FDA managing through the demands of the pandemic all of whom helped us achieve this milestone.
This is a major advancement for patients who continue to seek alternatives to the short term Transco taenia sensors and for the limited choices that exist in the market today.
Six months of where just to insertion procedures per year makes <unk>, even simpler more convenient and less expensive for patients.
From our market feedback it is clear that users have profound interest in the CGM that lasts for six months, we believe each sensor wear duration advancement represents a step wise market penetration and market expansion opportunity.
Later in the call, we'll touch on the commercial launch plans, we've been developing in collaboration with SNCF.
Before we look ahead I'd like to recap the successes that we had in 2020 one.
Through significant collaboration we have transition global commercial operations to a Cynthia diabetes care, both in the U S and in Europe .
For patients and providers, we continue to expand access to ever since through positive commercial and Medicare coverage policies awareness of ever since continues to grow through patient advocacy and direct to consumer digital marketing campaigns.
But since he is establishing its field sales and clinical teams marketing channels and the distribution network and has more recently been building dedicated CGM specific expertise in preparation for the E. Three launch.
They are re engaging health care professionals would ever since who we believe are.
We're excited to have another solution backed by robust clinical evidence to help patients better manage their diabetes on.
On the insurance coverage side, we were able to add a number of additional payers covering ever since including Medicare as previously reported and more recently over 8 million additional covered lives with positive coverage decisions from payers, such as Blue Cross Blue Shield of Michigan Medical mutual of Ohio.
Care source now all covering ever since.
On the financial front, we were able to raise capital to support our ongoing business initiatives with an emphasis on our product development programs.
All considered we have laid a solid foundation to reach the support for more patients and to advance our technology.
For revenue in the fourth quarter since the Onyx generated $4 million, which included 700000 from the U S and $3 3 million from outside the United States, we understand that our users.
From from our users that satisfaction with the ever since technology remains strong, but the user base was affected by our prior withdrawal from the U S sales and marketing efforts, the COVID-19 pandemic and by the transition of our distribution partner there.
Learnings from these factors have informed as Cynthia its commercial planning and they are working hard to be prepared to launch the <unk> system in the U S in the coming weeks.
As our commercialization partner safety is key focus in our collaboration is to increase the rate of patient adoption of ever since over the past year. They had been working to gain greater experience in the CGM market and optimize their sales strategy.
This has resulted in a newly dedicated CGM commercial organization.
Rather than sharing resources and focus with the PGM business Cynthia's now establishing dedicated marketing and sales functions for CGM.
His team is being designed to provide the infrastructure for high patient engagement.
Determined interaction and the experience required to deliver the full potential and value of <unk> to our users.
We are pleased to see this focus commitment to the ever since product in the coming quarters ADC will be primarily focused on transitioning current patients to the E. Three system.
As well as expanding the new patient and clinician adoption and ensuring continued patient access through the transition from 90 day to six month insurance coverage.
<unk> investments are being made across each category to support programs targeted in these initiatives.
We're excited about the <unk> commercial launch in the U S and it's now approaching is scheduled for the beginning of April which includes product availability and broader marketing efforts.
To prepare for launch since the Onyx is ramping manufacturing implementing product packaging. According to the received FDA labeling and preparing to ship product into the distribution channel.
Cynthia has been focused on distributor negotiations Salesforce training.
Two our new label and preliminary conversations with H C piece to coordinate formal product introductions.
They also continue to build their dedicated CGM team.
Right now in preparation for April we are leveraging.
The momentum created by the three announcement to prepare the market for launch.
A key element of the strategy is to increase ever since awareness by our direct to consumer digital advertising campaign, leveraging population algorithms targeting the diabetes community through Facebook and other social media platforms.
We believe that the leads that were generated in 2021 demonstrate the potential to make an even bigger impact in 2022 with the three product.
Cynthia has plans to ramp up the campaign meaningfully upon our April launch.
Diabetes professionals and health care providers are also a target audience for specialized marketing.
Investments are being made to increase engagements with this group of diabetes trade shows and medical meetings, we expect the patient pull from our DTC marketing will encourage increased engagement with existing providers and for those who are new to ever since.
ADC will initially prioritize resources to penetrate the market and geographies with the highest one prescription concentrations where coverage for ever since currently exist.
And where they were active in servers.
And the patient access front ADC is driving with the goal that every patient with coverage for ever since we'll receive E. Three when they are due for a new sensor starting in April .
We are planning for a rapid transition to the new longer life six month product with the launch of <unk>, We plan to bolster the patient assistance program to offer E treat any patient with commercial insurance coverage for a $99 out of pocket maximum for their first <unk> sensor.
That means six months of CGM for no more than $99.
We see this as an incredibly attractive program to try ever since this is a significant investment to drive adoption and initiated product familiarity.
It's our expectation that this program can drive increases in the user base as a result of putting both new patients on the product and converting users from other CGM systems.
Following a patient's first E. Three sensor program is designed to provide ongoing assistance capping of patients' out of pocket on a monthly basis.
Additionally, Cynthia plans to provide co pay smoothing options, allowing patients to pay their out of pocket.
On a monthly basis, rather than all up front.
And to further ease HCP access we have initiated a pilot consignment program. This program reduces the acquisition barriers or HCP offices by limiting their initial cost to carry systems prior to their Medicare reimbursement.
On the backend transitioning payer coverage policies from 90 days to six months is a process. We anticipate will run through the coming quarters, we expect the transition to be fairly seamless with some payers and be more intensive with others as they require updates to their systems.
Invitations have begun with commercial payers as well as with Medicare to expedite this transition where possible.
In Europe , <unk>, ADC is making important adjustments to optimize their CGM business. They are working on taking the learnings from 2021 to inform changes and updates in the European markets and drive growth in the patient installed base, particularly in our largest markets of Germany, and Italy, where they see potential for ever since as channel delivery and competitive.
Under preparations improve as a D C designates resource to provide a higher touch patient experience.
In Germany, and Cynthia is implementing this patient centric product delivery strategy, but ride users in hcp's with improved product experience. They are transitioning from an indirect distribution model and increasing their dedicated ever since resources. They have already implemented ever since internal sales specialists to support.
Patients from prescription to insertion and have begun to provide patient training.
This offers greater sales process control for Cynthia with our CGM.
Regarding the product pipeline, where we continue to make strides to advance CGM innovation. The <unk> system is currently under review by our notified body in the EU to achieve CE Mark.
This evaluation is progressing and we're hopeful to launch the system in Europe in the third quarter of this year.
We wouldn't enable the latest generation to be available globally, which would allow us to turn to greater realization that manufacturing and operational efficiencies and to bring our product with lower calibration requirements to the users in Europe .
And our research and development efforts, we have shifted our focus to the advancement of our one year sensor recent pilot studies have provided valuable information that we continue to incorporate into the technology design.
We look forward to sharing some of these results at the upcoming <unk> meeting in June .
And we are progressing with the sensor design and continue to plan to submit for approval from the FDA in the second quarter, which would enable the start of a pivotal trial in the second half of this year.
Our current plan is that once this one year sensor study is approved we will focus on submitting the IC G. M designation 43, we're excited about the potential for patients to be able to integrate our life long ever since with the wider variety of delivery devices that are available.
In addition to the advances in the sensor longevity, we're making improvements in the interoperability and remote patient monitoring for ever since we are working with several partners in the diabetes space to provide real time CGM data to the connected apps through both the ever since cloud and directly from our transmitter.
And we'll also be providing you with CGM data through Apple and Samsung House.
I'll now turn the call over to Nick to go over the details of our fourth quarter financials.
Thank you Tim and good afternoon, everyone in the fourth quarter of 2021 total net revenue was $4 million compared to $3 9 million in the prior year period U S revenue for the fourth quarter was 700000 in revenue outside the U S was $3 3 million.
Gross loss in Q4, 2021 was <unk> 5 million a decrease of $3 1 million from a gross profit of $2 6 million in the prior year period. The decrease in gross profit was predominantly related to the increase in cost of goods sold due to the sale of previously written off.
Cereal in 2020.
Fourth quarter 2021, selling general and administrative expenses were $5 8 million a decrease of $2 4 million compared to $8 2 million in the prior year period. The decrease was primarily the result of a decline in salary and personnel costs from our reduction in sales support do you too.
The transition to SNCF for the commercialization of ever since.
Research and development expenses in Q4, 2021 were $7 7 million, an increase of $3 million compared to $4 7 million in the prior year period. The increase was primarily due to the expansion of our R&D head count an increase in clinical studies lab supplies and an increase in outside.
Fences to further advance our product pipeline for the three months ended December 31, 2021 operating loss was $13 9 million compared to $10 3 million loss in the fourth quarter of 2020.
The decline in the company's share price at the end of the fourth quarter as compared to the company's share price at the end of the third quarter of 2021 led to a significant noncash gains in Q4.
As a result total other income increased by $189 7 million compared to the prior year period, primarily related to noncash charges, resulting from the accounting for embedded derivatives and fair value adjustments related to the company's financings, including the 2023 and $20.
25 notes along with a P. H C 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 instruments to market for each reporting period and the change in these values are recorded as noncash charges to the income statement.
Each quarter the value of these noncash gains or losses or vary based on the volatility in the company's share price. So generally I share price increases, we incur a noncash loss and as share price increases we recognized a noncash gain.
For the three months ended December 31, 2021, total net income was $84 4 million or <unk> 19 per share compared to a net loss of $101 6 million or <unk> 41 per share.
In the fourth quarter of 2020.
Net income increased by $186 1 million due to the accounting for embedded derivatives and fair value adjustments previously mentioned, partially offset by a $3 7 million increase in loss from operations.
For full year 2021 our net cash used in operating activities was approximately $56 1 million below our full year 2021 guidance provided at the beginning of the year.
Cash flow from financing activities for the year with $220 1 million of which $5 3 million of cash outflow was related to employee tax liabilities for restricted stock units or our issues in 2022 or issues that have vested thus far have been transitioned to a sell to cover.
Her for employee tax liabilities.
The company the related cash outflow.
The executed sell to cover taxes transactions, where prearrange and automatically executed two and cover employee tax obligations that arise upon the vesting of grants, which are generally tied to tenure or other milestones such as the FDA approval of the product in the U S as a.
December 31, 2021 cash cash equivalents short and long term investments totaled $181 8 million.
Considering our current patient installed base the E. Three launch timing current product inventory forecast it to meet our Q1 demand and the transition that with payer coverage policies to accommodate six month reimbursement in the U S. We expect our full year 2022 global net revenue to be in the range of $14 million.
$18 million.
As Tim mentioned, the first quarter will be a transition period in the U S.
We shift entirely to the ever since 83 system, which is expected to launch in the second quarter.
Current inventory in the channel, we expect first quarter 2022 revenue to be well below fourth quarter 2021 revenue. Additionally, full year 2022 revenue is expected to be significantly weighted towards the back half of year with the second half accounting for approximately 75% of total revenue and for the.
Full year O U S revenue is expected to be greater than U S revenue with O U S revenue accounting for approximately 55% of total revenue in the year.
As transition of payer coverage policies occur from the 90 day two the six month product, we expect gross margins to approach breakeven in the fourth quarter.
For full year 2022, net cash used in operations is projected to be in the range of $65 million to $70 million.
We expect the majority of expenses in 2022 to be for research and development for ongoing feasibility and pivotal clinical trials for additional products in our pipeline, including the start of the one year pivotal trial subject to approval.
Approval.
With that I will turn the call back to Tim.
Thank you Nick.
As we transition into 2022, we are excited for the E. Three commercial rollout in the U S. During the second quarter and and the expected later launch in Europe later this year.
This next generation of product is an exciting advancement in diabetes management, our patients and providers have been waiting for such a product and we're eager now to bring them the benefits of the world's longest lasting CGM system.
Since it is steadfast in their commitment to CGM and he ever since product investing millions to drive awareness and access for the product. This year, along with launching a new dedicated CGM commercial organization and building a dedicated sales force in the U S.
This investment is ramping meaningfully and demonstrates their continued support to our partnership and the product.
Before we open up the call for questions I'd like to take this opportunity to thank Mirasol <unk>, our vice President and general manager of global commercial operations for her over seven years of establishing and leading the growth of ever since and their commitment throughout her career of improving the lives of people with diabetes.
I and the whole Cynthia on X team wish you the best in her retirement.
Thank you for your time today also joining us for questions as Mikkel Jain our chief operating officer.
Operator, let's open up the call for questions.
Thank you.
We will now begin the question and answer session.
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At this time, we will pause momentarily to assemble IRA Sir.
Our first question comes from Chris Pasquale with Guggenheim. Please go ahead.
Thanks.
So you know the revenue guidance you know what you guys laid out at the time of the approval announcement, we're starting a little bit surprising relative to where consensus was but you guys just walk through a lot of the moving pieces.
So you're dealing with this year between the transition to 180 sensor inventory draw down the patient assistance program. So it would be helpful to understand some of the underlying assumptions behind the guidance and if you can give us a sense for where do you.
To be at the end of the year in terms of the number of patients who are on a sensor.
What percentage of patients in the U S. Do you expect you're going to need to take advantage of that patient assistance programs or just anything around those assumptions would be helpful.
Sure. Thanks, Chris well, we're certainly we're certainly excited to be where we are on the cusp of launching this great new product for us, it's very exciting times with that said.
We certainly would like to be further we recognize that the impact that COVID-19 had on the organization.
As well as the delay from the U S approval also related to Covid with the with the FDA certainly has impacted.
You know the rollout and the progression here in the United States.
But we do believe that we have all the pieces in place with a cynthia their commitment to the space and the programs that we've talked about we think I'm going to be a very very meaningful.
Not going to speak to patient count is there still do continues to be a lot of moving pieces associated with it.
But as we have you've heard we do.
We do start with the basis of about a little bit over 2500 patients in Europe that are continue to be on the product and are live at over 600 here in the United States.
You will recall that the previous efforts.
We put about 4000 patients on the product in a in a full year I don't anticipate in this partial year, we'd be able to approach that but we certainly are looking to to drive as many new folks on the product is obviously, we can get access to and have our industry.
We do expect there to be reasonable use of the assistance program.
As is typical especially early in the year when deductibles haven't been met but at the same time.
The attractive thing about having a 180 day product is once the patients do come on even with some financial support upfront.
We're able to make to them and they are able to make to us a pretty significant commitment so six months of using the product.
Without without turnover opportunity. So we believe that theyre going to get they're going to get a lot of value out of that so.
As Nick said, we do expect it a little bit more than half will still be coming from from Europe , but it does that does indicate that theres pretty good U S growth behind it which of course is a very important market for us and also as Nick said the majority of the revenue is coming later in the year really driven by this transition in Q1.
<unk>, where we essentially draw down.
All of the 90 day inventory in the U S and really start clean here on April <unk> was 180 day products. So I hope that helps.
Yeah that is helpful and I just wanted to follow up on that last point, you made because the back half waiting and waiting towards international.
Is there any risk of disruption internationally, let's say you do get the CE, Mark and you're in a position to launch that product.
In the third quarter is there the potential that you could see a drawdown of inventory of the old sensor where they need to.
Book Contra revenue for inventory, that's no longer going to be sold.
That could end up actually hurting the international business later in the year the same way the U S business is being held back early in the year.
Yeah, we're going to work to very much minimize that the timing is being monitored very closely.
As Youll note.
Especially here in the first quarter.
We are being very judicious with the amount of product that we put into the channel.
To really minimize the likelihood that that should happen.
In Europe . They are on the 180 day, two time of day calibration product, we'll transition them to the one time, a day calibration and its our expectation we can manage that.
Quite tightly and it's certainly a shared objective between the two organizations.
Great. Thanks.
Our next question comes from Marie Thibault with <unk>. Please go ahead.
Hi, good evening and thanks for taking my questions I wanted to follow up here on the question around kind of patient volumes I understand you you cant give us you know sort of what youre thinking.
Thinking of expectations to end the year, but I don't want to try to understand the recent fall off a little bit better understand obviously COVID-19 and some of the transitions have been an overhang but.
Recently, some of that fall off and I'm, just kind of trying to get at the question of how easily won back some of these patients and prescribers might be.
Sure.
No in all candor the biggest impact to the organization was when.
When we pulled.
The ability to fund the commercial organization at at Cynthia Onyx, So much of that loss really happened in the.
In the late 2020 time period, and certainly built into the start of 2021.
The continued dynamics with Covid certainly contributed to that so there was a pretty significant contribution to that pullback in.
In all of 2021.
Okay Fair enough. Thank you for that and I did want to also understand you know you called out the 8 million additional lives covered lives are that when where are we in terms of total covered lives I guess for the 90 day product just trying to understand what kind of a <unk>.
Carrying basis as we head into this type of transition for the 180 day.
Sure we're still.
We're we're still counting about 210 million covered lives.
You know obviously the 365 day product is important for us in the IDE approval will include the pediatric population in the and the clinical testing. So that's obviously a big piece and then in addition, we still continue to work with the anthem.
Anthem and United debt.
Still hold the Eni on ever since and we're certainly hopeful that the 180 product will help move that forward with them.
Okay last very brief one and thank you for that Tim.
On the MPR process in Europe is that adding any extra complexity. What are you hearing from your not a notified body or what gives you confidence in the three Q timeline and thanks again for taking the questions. Yeah. It is a it is a very good question. Yes, there absolutely has impacted the transition to M. D. R. We have been in quite some time.
There had been much more extensive reviews than.
And then would have been typical without this this new regulation.
We are in pretty constant conversation with the.
With our notified body.
And just given where we are in the amount of material that was submitted in the review cycles, we do feel that where we're at the point that we can forecast. This Q3 time period for us to to be running with it.
Thank you again.
Our next question comes from Mathew Blackman with Stifel. Please go ahead.
Hi, This is Colin on for Matt Congratulations on the recently three approval I just had a question around.
The reimbursement progress you've made you mentioned Blue Cross Blue Shield and in a couple of other payers and expanding to 8 million covered lives.
I was wondering how is the progress gone really with the main hold outs at this at this time and what what kind of timeframe are you thinking for reaching the higher number of covered lives whatever that may be.
Well certainly you know certainly the biggest one that's frankly in our control and right in front of US is the pediatric indication. So we will begin that testing here in the in the second half of the year.
Of course, a an important constituency for for people with diabetes. So it's high on our priority list and one of your product is a great time for us to do that too.
Two remaining are two of the largest unfortunately, but as has been typical especially in this space with diabetes technology.
They tend to be much later in the approval process because of their size. So.
We certainly would have hoped that we would have gotten coverage I don't know if.
Covid has impacted that but I do think with a more.
Longer duration more compelling product that you.
There's going to be a lot more push from there from their users to push for it. So you know I certainly hope that in.
Later this year and next year, we'd be looking at a point, where they'd be strongly considering coverage of the product.
Thanks, and I have a couple on the pilot at home insertion program. How was the reception then so far for that pilot and.
What should we be expecting in 2022.
The expansion beyond.
The initial limited geographies and will it have a visible in fact on the reimbursement profile would be three this year. We're certainly excited about it I'm not ready to speak to a larger rollout at this point because it still is.
Still in a test configuration, if you will in the Houston area, but it's a it's a compelling opportunity and one that we have certainly talked about.
And micro sites pushing out to a larger geographies the way that it works is there is a.
Theres a mobile.
Typically it's a nurse.
And N P that will that will come to visit people at their house and actually do the do the insertion and removal. So it's got a great.
Great user benefit, but obviously, we want to make sure that we keep it.
We learn everything from the early start up and make sure that the.
The process is going swimmingly for everybody before we expand it so a little bit too early for us to make broad conclusions, but we're excited is it's one more opportunity to look at for new insertion approaches.
Thanks, I appreciate the questions.
Our next question comes from Alex Nowak with Craig Hallum Capital Group. Please go ahead.
Hi, everyone. This is Trent on for Alex I wanted to dive a little deeper into the guidance here.
How does the change in guidance for 2020 to modify the ramp into 2023 in 2024 that was provided on the sense you call our partnership call in 2020.
Yeah.
We're in a position to answer that that here Trent that was done you know coming up on two years ago. At this point, we did anticipate that we would have had to review with you know with the agency last April .
Would anticipate it's our expectation obviously that you know much of the focus is going to be in the in the U S and the commercial activities will focus on that.
It continues to be a very exciting space that we're in and there is a lot of interest in the in the 100 Navy product. So we're encouraged by by the ramp future, but I don't want to rely on something that was done.
Pre COVID-19 at this point and pre the Covid impact on the FDA approval to look in the future here on this call.
Got it that makes sense if I could.
Ask another one here with Libre, three and decks com G seven coming to market, how do you see ever since being positioned and how we'll adoption be different this time than when 180 day in Europe was spud in the G. Six.
So as I'm sure you're fully aware the market dynamics are different and that's predominantly libre and much more predominantly libre in Europe .
Obviously, when the full function CGM comes that's going to have an impact I expect it will.
More noise and activity in the trans cutaneous sensors as they compete for a position.
At the end of the day, it's a it's the patients that win.
As the technology is getting more mature and more flexibility and more capability and what that does is it brings more and more people to to the CGM testing family, which is a big opportunity for ever since we still continue to be the only implantable, obviously not only the only implantable that's a that is commercial.
But certainly with the with a U S approval. So we feel that we have a pretty good pretty good lead in that segment and that is our duration expands as I said earlier that really.
Drives.
Greater and greater interest in participation. So at the end of the day more interest as a bigger pool and we certainly are going to continue to drive for for our fair share of that increase pool size with the implantable sensor.
Okay I appreciate the questions.
Our next question comes from Jason Bedford with Raymond James. Please go ahead.
Good afternoon.
Thanks for taking the questions.
I wanted to ask about the patient assistant program. So I guess early on you mentioned E. Three is less expensive for patients.
You're referring directly to the patient assistance program there.
No I mean, the biggest outside of that is really the any insertion expense rate just got cut in half from four year to two a year.
That's of course, the biggest driver.
Right.
Okay.
Reimbursement is.
Your expectation is no change to reimbursement.
We haven't seen reimbursement as you know we continue to see in the range of about $17 excuse me $10 per day in commercial pay although there is some variance from from payer to payer and.
Medicare is a little bit higher than that.
Okay.
And then just on the $99 patient assistant program can you just put some context around it meaning kind of what does the average user pay out of pocket.
And in 'twenty, one what do we compare that 99 two.
Yes. So there's you know there's a pretty good a pretty good variation in one of the key differences with this we are going to restrict this to people that have coverage. So in our prior bridge program.
We did get a lot of utilization for people on United and anthem that didn't have they didn't have coverage. So that drove I think our average utilization was around $600 I think without those that have no coverage.
This will be quite a bit less so.
A couple of hundred dollars perhaps.
Okay.
Yes.
I haven't thought through this but.
Maybe can you explain how this program impacts your revenue.
Okay.
But I'm just kind of curious as to the impact of this program on your sensors revenue.
Yeah. So.
It is you know.
Any any revenue that you know that is.
He's not collected as part of this obviously is an offset so.
We will continue to report as we have been net revenue.
And although there is some expected it is an investment that we are jointly making with a sense of in the space to bring people to try the 180 any product, but at the end of the day it.
It is a net revenue reduction, which is which is part of the basis for the guidance that we've built.
Okay, and just the basis for the guidance of 14 to 18 that assumes that the patient assistance program.
Last month is that right.
Well it could last for the first sensor when someone comes on Jason So right got it could even go into next year for the second half starts.
Gotcha, Okay. That's helpful.
And then just on the <unk> submission.
I may have missed this but perhaps.
After you start the 365 day trial.
We want to get to 365 approved Jason right.
Given the size the you know the obvious opportunity for that one of your product and the pediatrics, that's our regulatory focus at this point so not after we start the trial per se, but certainly after we get the approval for the <unk>.
Okay, and then maybe just for Nick Nick do you broke up for me at least a little bit on the cash burn a copy.
Brand of 70, what was the lower end.
$65 million to $70 million for the year.
Okay. Okay.
Okay. Thank you.
Youre welcome.
This concludes our question and answer session as well as our call for today. Thank you for attending today's presentation. You may now disconnect.