Q2 2024 Senseonics Holdings Inc Earnings Call
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Operator: Good day, and welcome to the Senseonics second quarter 2024 earnings conference call. All participants will be in listen-only mode.
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Speaker Change: Good day and welcome to the Senseonics Second Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.
Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press the star key, then one on a touchtone phone.
Speaker Change: After today's presentation, there will be an opportunity to ask questions.
Operator: To withdraw your question, please press star, then two. Please note this event is being recorded. I would like now to turn the conference over to Trip Taylor, Investor Relations. Please go ahead. Thank you.
Speaker Change: To ask a question, you may press star then 1 on a touchtone phone. To withdraw your question, please press star then 2. Please note this event is being recorded. I would like now to turn the conference over to Tripp Taylor, Investor Relations.
Tripp Taylor: Thank you. This is Tripp Taylor from the Gilmartin Group.
Speaker Change: Please go ahead.
Tripp Taylor: 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 you are speaking on. 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 31, 2023, and the quarterly report on Form 10-Q for the quarter-ended June 30, 2024, and other reports filed with the SEC.
Speaker Change: Thank you. This is Trip Taylor from the Gilmartin Group. Before we begin today, let me remind you that the company's remarks include forward-looking statements.
Speaker Change: 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.
Speaker Change: 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 31, 2023,
Speaker Change: and the quarterly report on Form 10-Q for the quarter ended June 30, 2024, and other reports filed with the SEC. These documents are available in the Investor Relations section of our website at www.senseonics.com.
Tripp Taylor: These documents are available in the investor relations section of our website at www.senseonics.com. We undertake no obligation to update publicly or revise these forward-looking statements for any reason except as required by law. Joining me from Senseonics are Tim Goodnow, President and Chief Executive Officer, and Rick Sullivan, Chief Financial Officer. With that, I'd like to turn the call over to Tim.
Speaker Change: We undertake no obligation to update publicly or revise these forward-looking statements for any reason except as required by law.
Tim Goodnow: Joining me from Senseonics are Tim Goodnow, President and Chief Executive Officer, and Rick Sullivan, Chief Financial Officer. With that, I would like to turn the call over to Tim Goodnow, President and CEO . Tim?
Tim Goodnow: Thank you, Tripp. And thank you all for joining us this afternoon. During our call today, we'll begin with a review of our quarterly update, and then we'll turn to a discussion of the recent important developments in our strategic initiative. Then our Chief Financial Officer, Rick Sullivan, will discuss the second quarter financials in detail, and then we'll open up the call for questions. 2024 is a transformational year for Senseonics, and we are confident there is a significant growth runway ahead of us, which we are focused on capturing.
Tim Goodnow: Thank you, Tripp, and thank you all for joining us this afternoon. During our call today, we'll begin with a review of our quarterly update, and then we'll turn to a discussion of the recent important developments of our strategic initiatives.
Speaker Change: Then, our Chief Financial Officer, Rick Sullivan, will discuss the second quarter financials in detail, and then we'll open up the call for questions.
Speaker Change: 2024 is a transformational year for Senseonics, and we are confident there is a significant growth runway ahead of us, which we are focused on to capture.
Tim Goodnow: We've advanced each of our major objectives as we work towards driving increased awareness and access to our technology for people with diabetes. Our global commercial partner, Ascensia Diabetes Care, continues to strengthen their capabilities to bring Eversense to more people with diabetes. We have augmented our long-term CGM with a remote patient monitoring capability to support diabetes population health management initiatives, initially with a collaboration with Mercy Health.
Speaker Change: We have advanced each of our major objectives as we work towards driving increased awareness and access to our technology for people with diabetes.
Speaker Change: Our global commercial partner, Ascensia Diabetes Care, continues to strengthen their capabilities to bring Eversense to more people with diabetes.
Speaker Change: We have augmented our long-term CGM with a remote patient monitoring capability to support diabetes population health management initiatives, initially with our collaboration with Mercy Health Systems.
Tim Goodnow: And most recently, we established a Senseonics subsidiary to provide Eversense insertions and training to complement the partnership with a nurse practitioner group to further support access for people who want to use Eversense. Underpinning our commercial efforts is the foundational strength of our technology, and we continue to advance our product pipeline to further differentiate our offering from short-term CGM. Following a successful quarter, we are preparing for our next generation 365-day system launch in anticipation of FDA clearance.
Speaker Change: And most recently, we established a Senseonics subsidiary to provide Eversense insertions and trainings to complement the partnership with a nurse practitioner group to further support access for people who want to use Eversense.
Speaker Change: Underpinning our commercial efforts is the foundational strength of our technology, and we continue to advance our product pipeline to further differentiate our offering from short-term CGMs.
Speaker Change: Following a successful quarter, we are preparing for our next-generation, 365-day system launch in anticipation of FDA clearance.
Tim Goodnow: We expect this system to again redefine the long-term CGM category by doubling sensor duration and generating important future growth opportunities for the company. ADC has been driving important commercial initiatives and refocusing the organization with a view to supporting the expected approval. With their collaboration, we see a tremendous opportunity in front of us.
Speaker Change: We expect this system to, again, redefine the long-term CGM category by doubling sensor duration and generating important future growth opportunities for the company.
Speaker Change: ADC has been driving important commercial initiatives and refocused the organization with a view to supporting the expected approval.
Tim Goodnow: Diabetes Technologies remains one of the largest and fastest growing markets in mid-tech, and with the multiple drivers we have in place, we are well positioned. We plan to more than double our patients and our revenue next year and continue to grow from there into the future with further differentiation and innovation. On the financial front, in the second quarter, Senseonics generated total revenue of $4.9 million, representing more than 18% growth compared to the prior year period. In the U.S., second quarter sales totaled $3 million, and outside the United States, totaled $1.9 million.
Speaker Change: With their collaboration, we see a tremendous opportunity in front of us.
Speaker Change: diabetes technologies remains one of the largest and fastest growing markets in med tech
Speaker Change: And with the multiple drivers we have in place, we are well positioned.
Speaker Change: We plan to more than double our patients and our revenue next year and continue to grow from there into the future with further differentiation and innovation
Speaker Change: On the financial front, in the second quarter, Senseonics generated total revenue of $4.9 million, representing more than 18% growth compared to the prior year period.
Speaker Change: In the U.S., second quarters sales totaled $3 million and outside the United States totaled $1.9 million.
Tim Goodnow: Sensia continues to gain traction by increasing awareness and access for everyone. We're excited to report that the first half of 2024 new patient starts is more than double compared to the first half of 2023, and the number of patients based in the U.S. is now larger than that outside the U.S. Further, there have been organizational shifts to help spearhead commercial efforts. Brian Hansen is now leading the CGM Business ADC and has focused the commercial strategy to improve sales execution.
Speaker Change: Essentia continues to gain traction by increasing awareness and access forever since.
Speaker Change: We're excited to report that through the first half of 2024, new patient starts have more than doubled compared to the first half of 2023, and the patient base in the U.S. is now larger than that outside the U.S.
Speaker Change: Further, there have been organizational shifts to help spearhead commercial efforts.
Brian Hanson: Brian Hanson is now leading the CGM business at ADC and has focused the commercial strategy to improve sales execution.
Tim Goodnow: Based on Brian's initial assessment, EDC is reevaluated to build the foundation for commercial success. ADC has brought in a new head of marketing and a new head of inside sales, and both positions are driving positive influence on patient adoption. ADC is also focused on customer experience, targeting to improve the patient journey so that when it comes time to switch sensors, it is always the patient's choice. A benefit of our business model in technology is the inherent high level of compliance and utilization that result from an implantable form factor and long-term duration.
Speaker Change: Based on Bryan's initial assessment, ADC has re-evaluated its team and structure to build the foundation for commercial success.
Speaker Change: ADC has brought in a new head of marketing and a new head of inside sales, and both positions are driving positive influence on patient adoption.
Speaker Change: ADC is also focused on customer experience, targeting to improve the patient journey so that when it comes time to switch sensors, Eversense is the patient's choice.
Speaker Change: A benefit of our business model and technology is the inherent high level of compliance and utilization that result from an implantable form factor and long-term duration.
Tim Goodnow: This competitive advantage will be materially extended with a 365-day system. While ADC continues to facilitate new insertions of the 180-day ever since product today, they are working behind the scenes on the 365-day system launch ready.
Speaker Change: This competitive advantage will be materially extended with a 365-day system.
Speaker Change: While ADC continues to facilitate new insertions of the 180 Day Eversense product today, they are working behind the scenes on the 365 day system launch readiness.
Tim Goodnow: We are confident that we will have increased adoption and that ADC will help ensure that we are prepared to capitalize on this exciting new product. Strategically, we understand that it's critical to support providers and patients at every step of the journey, from awareness to insertion, and increasing conversion rates remain a top priority. Sensi is addressing each step in the sales process to improve patient funnel management.
Speaker Change: We are confident that we will have increased adoption and that ADC will help ensure that we are prepared to capitalize on this exciting new product.
Speaker Change: Strategically, we understand that it is critical to support providers and patients in every step of the journey, from awareness to insertion, and increasing conversion rates remain a top priority.
Speaker Change: Ascensi is addressing each step in the sales process to improve patient funnel management.
Tim Goodnow: As a result, progress has been made over the past quarters in how ADC manages inbound leads, patient education, and the overall execution of insertions. Commercial and Operational Improvements are critical to setting the stage for success with the demand increase we will see upon the launch of the 365-day product. To that end, on the insertion front, in the second quarter, we established its subsidiary, which we call Ian Care Service, a wholly owned unit within Senseonics to support patient access to convenient insertion services for every patient.
Speaker Change: As a result, progress has been made over the past quarters in how ADC manages inbound leads, patient education, and the overall execution of insertions.
Speaker Change: The commercial and operational improvements are critical to setting the stage for success with the demand increase we will see upon the launch of the 365-day product.
Speaker Change: To that end, on the Inserter Front, in the second quarter, we established a subsidiary we call Aeon Care Services.
Speaker Change: a holding-own unit with incenseianics to support patient access to convenient insertion services for ever since.
Tim Goodnow: The strategic decision to bring the service in-house stems from our successful experience with the NPG partner, and PG continues to do a meaningful percentage of the assertions each quarter, and we see bringing these operations in-house as an opportunity to expand the success of that program. We anticipate that even further influence over the insertion process will drive efficiencies, increase insertion throughput, and ensure continued focus on an excellent patient experience. We believe the opportunity of the CPT code payments associated with the insertions enables a self-sustaining economic model for this initiative. This strategic move was assumed and is operating expensive for the year. Startup cars are reasonable priced.
Speaker Change: The strategic decision to bring the service in-house stems from our successful experience with the NPG partnership.
Speaker Change: NPG continues to do a meaningful percentage of the insertions each quarter, and we see bringing these operations in-house as an opportunity to expand the success of that program.
Speaker Change: We anticipate that even further influence over the insertion process will drive efficiencies, increase insertion throughput, and ensure continued focus for an excellent patient experience.
Speaker Change: We believe the opportunity of the CPT code payments associated with the insertions enables a self-sustaining economic model for this initiative.
Tim Goodnow: We're going to track every turn on in a bit. We see EonCare as further supporting ADC's efforts to grow and use the Eversense system, and we look forward to sharing more in the upcoming. In addition to the wording ADC is doing on the commercial front, Senseonics has been actively pursuing additional growth avenues for ever since. Further expand our Reef.
Speaker Change: This strategic move was assumed and are operating expensive for the year.
Speaker Change: And startup costs are reasonable with an attractive return on investment.
Speaker Change: We see E-N-Care as further supporting ADC's efforts to grow and use the Eversense system, and we look forward to sharing more in the upcoming periods.
Speaker Change: In addition to the work ADC is doing on the commercial front, Senseonics has been actively pursuing additional growth avenues forever since to further expand our reach.
Tim Goodnow: We believe that our product is uniquely positioned to make a difference for patients with diabetes, and as described, we are implementing a population health management solution that leverages the unique features and capabilities of Earth. Health systems are under pressure to improve patient outcomes and drive down costs. Strong Clinical and Health Economic Benefits have been demonstrated by people using CGM, and we understand that ever since can help systems further achieve these benefits. The critical piece of the value that Ever since can bring to health systems is in our remote patient monitoring program, which provides cloud-based and EMR integrated data analysis for patients, providers, and health care systems.
Speaker Change: We believe that our product is uniquely positioned to make a difference for patients with diabetes and, as described, are implementing a population health management solution that leverages the unique features and capabilities of Eversense.
Speaker Change: Health systems are under pressure to improve patient outcomes and drive down costs. Strong clinical and health economic benefits have been demonstrated by people using CGM, and we understand that Eversense can help systems further achieve these benefits.
Speaker Change: A critical piece of the value Eversense can bring to health systems is in our remote patient monitoring program, which provides cloud-based and EMR-integrated data analysis for patients, providers, and the healthcare system.
Tim Goodnow: This program offers patients more ongoing support than providing a CGM device alone, as it leverages personalized data to inform diabetes counselors who can proactively help patients improve their diabetes management. Diabetes counselors are intended to provide coaching and insight to things impacting patients' glucose levels, such as medications, foods, and exercise.
Speaker Change: This program offers patients more ongoing support than providing a CGM device alone, as it leverages personalized data to inform diabetes counselors who can proactively help patients improve their diabetes manager.
Speaker Change: The diabetes counselors are intended to provide coaching and insight into things impacting patients' glucose levels, such as medications, foods, and exercise, that will allow the patients to make better informed decisions.
Speaker Change: The program is designed to reach patients with coaching in between physician visits where we can provide higher and more frequent touch.
Speaker Change: Our goal is for the Everton CGM plus RPM offering to help health systems improve diabetes management and reduce the cost of care.
Speaker Change: Still today, most of the patients with diabetes who are eligible to be on a CGM are not on one, and this portion is even greater in the Medicare population.
Tim Goodnow: With the many moving pieces of the system, it can be challenging to get patients to come in one at a time and ask for a CGM. Eversense can help directly drive change here, and we can collaborate with the health systems towards seamless integration into the system workflow to support adoption and compliance. In our first implementation, last quarter, we announced our collaboration with Mercy Health, a Top 20 Healthcare System and Accountable Care Organization based in St. Louis, Missouri.
Speaker Change: With the many moving pieces of the system, it can be challenging to get the patient to come in one at a time and ask for a CGM.
Speaker Change: Eversense can help directly drive change here and we can collaborate with the health systems towards seamless integration into the system workflow to support adoption and compliance.
Speaker Change: In our first implementation, last quarter, we announced our collaboration with Mercy Health System, a top 20 healthcare system and accountable care organization based in St. Louis, Missouri.
Tim Goodnow: Mercy has invested in innovation and believes it can drive quality improvements, clinical outcomes, and cost reduction. They are excited about Eversense because of the value our technology can bring to the diabetes population. And we're excited about this initiative's potential to increase access and adoption, driving growth. We see this partnership having a significant potential to increase the number of users ever since. As Mercy estimates, roughly 30,000 patients across their system could benefit from CGM and collaboration with Mercy.
Speaker Change: Mercy has invested in innovation and believes that Eversense can drive quality improvements, clinical outcomes, and a cost reduction for the system.
Speaker Change: They are excited about Eversense because of the value our technology can bring to the diabetes population, and we are excited about this initiative's potential to increase access and adoption, driving growth.
Speaker Change: We see this partnership having a significant potential to increase the Eversense user base.
Speaker Change: As Mercy estimates roughly 30,000 patients across their system could benefit from CGM.
Tim Goodnow: We view this as a long-term scalable strategy, which when demonstrated to be successful, will be rolled out across multiple systems. With an estimated 1,300 healthcare systems in the U.S. alone, we look forward to working with Mercy to demonstrate the clinical and economic impact that our combined CGM and RPM solution can bring, setting the stage for expanding Emerson's impact to other health systems throughout the U.S. In this recent quarter, we made significant progress on advancing the Mercy Initiative. Since our last update, we have been successfully preparing the organization's providers and collaborating closely with Mercy's operational and IT teams to implement. Systemic Workflow Designed to Efficiently Scale Patient Immigration
Speaker Change: In collaboration with Mercy, we view this as a long-term, scalable strategy, which when demonstrated to be successful, will be rolled out across multiple systems.
Speaker Change: With an estimated 1,300 health care systems in the U.S. alone, we look forward to working with mercy to demonstrate the clinical and economic impact that our combined CGM, RPMs, solution can bring, setting the stage for expanding ever since impact to other health systems throughout the U.S.
Speaker Change: In this recent quarter, we made significant progress on advancing the mercy initiative.
Speaker Change: Since our last update, we have been successfully preparing the organization's providers and collaborating closely with Mercy's operational and IT teams to establish.
Speaker Change: Systemic Workflow Designed to Efficiently Scale Patient Immigration.
Tim Goodnow: As planned, the first insertion is scheduled to be in the third quarter, marking a significant milestone in the partnership. With the first half of the year behind us, and with the progress to date on the important opportunity expected to continue in the second half of the year, we are reiterating the full year financial outlook which we announced in June at the ADA. As for the full year 2024, we continue to expect global net revenue for Senseonics to be in the range of $22 to $24 million.
Speaker Change: As planned, the first insertion is scheduled to be in the third quarter, marking a significant milestone in a partnership.
Speaker Change: With the first half of the year behind us, and with the progress to date on the important opportunities expected to continue in the second half of the year, we are reiterating the full year financial outlook which we announced in June at the ADA.
Speaker Change: As for the full year of 2024, we continued to expect global net revenue for $10,000 to be in the range of $22 to $24,000,000.
Tim Goodnow: The full year outlook assumes more than doubling the U.S. new patient starts and increasing the global installed base by approximately 50% in 2024 compared to 2023. Now I'd like to speak to our customers. We are constantly driving our advanced CGM technology to bring more compelling offerings to patients and providers, and our portfolio currently fits in a very exciting position. Let's begin with our 365-day product and the expected FDA clearance. Given that this product can be worn for a full year, the 365-day system will represent a groundbreaking development for patients with diabetes and marks a breakthrough milestone for CGM.
Speaker Change: The full year outlook assumes more than doubling the U.S. new patient starts, increasing the global installed base by approximately 50% 2024 compared to 2023.
Speaker Change: Now I'd like to speak to our pipeline. We're constantly driving our advanced CGM technology to bring more compelling offerings to patients and providers and our portfolio currently fit in a very exciting position.
Speaker Change: Let's begin with our 365-day product and the expected FDA clearance.
Speaker Change: Given that this product can be worn for a full year, the Eversense 365 Day System will represent a groundbreaking development for patients with diabetes and marks a breakthrough milestone for CGMs.
Tim Goodnow: Diabetes Management looks different for each patient, and we have continued to evolve our technology to ease the burden on patients and simplify the solution. With Ever since 365, we will double the current long-lasting CGM live to become the world's first one-year CGM. In addition, we have significantly reduced the requirements for patient managers.
Speaker Change: Diabetes management looks different for each patient and we have continued to evolve our technology to ease the burden to patients and simplify solution options.
Speaker Change: With Eversense 365, we will double the current long-lasting CGM life to become the world's first one-year CGM system.
Tim Goodnow: Calibration is now only required once per week, all while maintaining extremely high levels of accuracy required for the ICGM designation. We see these differentiators as highly compelling, and pending approval, we expect Ever since 365 to have a positive impact on diabetes patients in the US, fueling important growth in Eversense Adoption. We're executing on this transition with the plan launch in the fourth quarter, and we have positioned the business to capitalize on the growth we anticipate ahead of.
Speaker Change: In addition, we have significantly reduced the requirements for patient management, with calibration now only required once per week, all while maintaining extremely high levels of accuracy required for the ICGM designation.
Speaker Change: We see these differentiators as highly compelling, and pending approval, we expect ever since 365 to have a positive impact for diabetes patients in the U.S.
Speaker Change: and Fuel Important Growth in Eversense Adoption.
Speaker Change: We are executing on this transition with the plan launch in the fourth quarter and we have positioned the business to capitalize on the growth we anticipate ahead of us.
Tim Goodnow: In addition, we continue to progress other areas of our pipeline with the goal of making the longest-lasting CGM even more convenient and more compelling to patients. We're excited to announce that we recently initiated the first in-human clinical testing for our Gemini. Gemini is the first of the next two-generation products that utilize a fully implantable self-powering system. Inhuman testing is a critical step on the path to regulatory approval and commercialization, and during this time, we'll be finalizing the product.
Speaker Change: In addition, we continue to progress other areas of our pipeline with the goal of making the longest lasting CGM even more convenient and more compelling to patients.
Speaker Change: We're excited to announce that we've recently initiated the first in-human clinical testing for our Gemini system.
Speaker Change: M&I is the first of the next two generation products that utilize a fully implantable self-powering system.
Speaker Change: Inhuman testing is a critical step on the path to regulatory approval and commercialization. During this time, we will be finalizing the product attributes.
Tim Goodnow: Importantly, we are utilizing the 365-day sensor, and the clinical regulatory work will be focused on demonstrating the battery integration and functionality rather than sensor life, which we will have already established. Given the unique benefits and differentiation of our technology, and the regulatory foundation we have established with our submissions, we're excited to see the positive result as we move forward through an overall less burdensome improvement. With this exciting news, I'll now turn the call over to Rick for a view of our friend.
Speaker Change: Importantly, we are utilizing the 365-day sensor, and the clinical regulatory work will be focused on demonstrating the battery integration and functionality rather than sensor life, which we will have already established.
Speaker Change: Given the unique benefits and differentiation of our technology, and of the regulatory foundation we have established with our submissions, we're excited to see the positive results as we move forward through an overall less burdensome approval process.
Speaker Change: For this exciting news, I'll now turn the call over to Rick for a view of our financials.
Rick Sullivan: Thank you, Tim, and good afternoon everyone. We appreciate the opportunity today to update you on our business. In the second quarter of 2024, net revenue was $4.9 million compared to $4.1 million in the prior year period. U.S. revenue for the second quarter was $3 million, and revenue outside the U.S. was $1.9 million. As a reminder, our collaboration agreement with the sentience is for revenue sharing, with the percentage of revenue to a sentience increasing based on the duration of the contract at the annual revenue level. We recognize our portion of revenue when shipments are delivered to Essentia, and they take title and ownership of the inventory. This begins the multi-step distribution to patients via Essentia and their distributors.
Rick: Thank you, Tim, and good afternoon, everyone. We appreciate the opportunity today to update you on our business.
Rick: In the second quarter of 2024, net revenue was $4.9 million compared to $4.1 million in the prior year period.
Rick: U.S. revenue for the second quarter was $3 million, and revenue outside the U.S. was $1.9 million.
Rick: As a reminder, our collaboration agreement with Essentia is for revenue sharing, with the percentage of revenue to Essentia increasing based on duration of the contract and annual revenue levels.
Rick: We recognize our portion of revenue when shipments are delivered to Essentia, and they take title and ownership of the inventory. This begins the multi-step distribution to patients via Essentia and their distributors.
Rick Sullivan: We manage our manufacturing based on patient demand generated from commercial activities, targeting 60 to 90 days of inventory across the various channels. Therefore, our shipments to Sentia during the quarter are largely intended to support future demand of 4% Second-quarter shipments are intended to support third-quarter demand for 180-day systems, taking into consideration the planned transition to the 365-day product when lost in the fourth quarter. Gross profit in Q2 2024 was $0.3 million, a decrease of $0.1 million from a gross profit of $0.4 million in the prior year period. The decrease in gross margin was primarily driven by higher fixed manufacturing costs.
Rick: We manage our manufacturing based on patient demand generated from commercial activities, targeting 60 to 90 days of inventory across the various channels.
Rick: Therefore, our shipments to Ascensia during the quarter are largely intended to support future demand of ForeverSense.
Rick: Second quarter shipments are intended to support third quarter demand for 180 day systems and take into consideration the planned transition to the 365 day product when launched in the fourth quarter.
Rick: Gross profit in Q2 2024 was 0.3 million, a decrease of 0.1 million from a gross profit of 0.4 million in the prior year period. The decrease in gross margin was primarily driven by higher fixed manufacturing costs.
Rick Sullivan: Research and development expenses in Q2 2024 were $10.8 million, a decrease of $2 million compared to $12.8 million in the prior year period. The decrease was primarily due to reductions in clinical trial expenses mainly associated with the completion of the 365-day sensor pivotal trial. These decreases were slightly offset by planned continued investments in our product pipeline for the development of next generation technology.
Rick: Research and development expenses in Q2 2024 were $10.8 million, a decrease of $2 million compared to $12.8 million in the prior year period.
Rick: The decrease was primarily due to reductions in clinical trial expenses, mainly associated with the completion of the 365-day Census Pivotal trial.
Rick: These decreases were slightly offset by plans to continue to invest in our product pipeline for development of next generation technologies.
Rick Sullivan: Second quarter 2024 selling general and administrative expenses were $9 million, an increase of $1.5 million compared to $7.5 million in the prior year period, primarily driven by increases in personnel costs and legal and other administrative expenses to expand commercial initiatives such as Eon Care Services and the Mercy Collaboration. In second quarter 2024, selling general and administrative expenses were $9 million, an increase of $1.5 million compared to $7.5 million in the prior year period, primarily driven by increases in personnel costs and legal and other administrative expenses to expand commercial initiatives, such as Eon Care Services and the Mercy Collaboration.
Speaker Change: Second Quarter 2024 Selling, General, and Administrative Expenses were $9,000,000.
Speaker Change: an increase of $1.5 million compared to $7.5 million in the prior year period.
Speaker Change: primarily driven by increases of personnel costs and legal and other administrative expenses to expand commercial initiatives such as Eon Care Services and the Mercy Collaboration.
Speaker Change: Second quarter 2024, selling general and administrative expenses were $9 million, an increase of $1.5 million compared to $7.5 million in the prior year period, primarily driven by increases of personnel costs,
Speaker Change: and Legal and Other Administrative Expenses to Expand Commercial Initiatives, such as E on Care Services and the Mercy Collaboration.
Rick Sullivan: For the three months and in June 2024, operating last was 19.5 million compared to 19.9 million in the second quarter of 2023 due to decreases in R&D spending. For the three months ended June 2024, total net loss was $20.3 million, or a three-cent loss per share compared to a net loss of $20.4 million, or a four-cent loss per share in the second quarter of 2023. Net income increased by 0.1 million due to a reduction in R&D expenses.
Speaker Change: For the three months ended June 2024, operating loss was $19.5 million compared to $19.9 million in the second quarter of 2023 due to decreases in R&D expenses.
Speaker Change: For the three months ended June 2024, total net loss was $20.3 million, or a three-cent loss per share compared to a net loss of $20.4 million, or a four-cent loss per share in the second quarter of 2023.
Speaker Change: Net income increased by 0.1 million due to the reduction in R&D expenses.
Rick Sullivan: As of June 30, 2024, cash, cash equivalents, restricted cash, and short-term investments totaled $84.9 million, and debt and accrued interest was $56.2 million. Now, turning to our outlook for 2024. Senseonics continues to expect full year 2024 global net revenue to be in the range of $22 million to $24 million. This represents 67.5% to 72.5% of girls ever since revenue after accounting for the revenue share with the sense, yeah. The full year 2024 financial outlook assumes more than doubling the US new patient starts and increasing the global installed base by approximately 50% in 2024 compared to 2023.
Speaker Change: As of June 30, 2024, cash, cash equivalents, restricted cash, and short-term investments totaled $84.9 million and debt and accrued interest was $56.2 million.
Speaker Change: Turning to our outlook for 2024.
Tensianics: Tensianics continues to expect four-year 2024 global net revenue to be in the range of 22 million to 24 million.
Speaker Change: This represents 67.5% to 72.5% of gross Eversense revenue after accounting for the revenue share with Essentia.
Tensianics: The full year 2024 financial outlook assumes more than doubling the US new patient starts and increasing the global installed base by approximately 50% in 2024 compared to 2023.
Rick Sullivan: Inventory dynamics, as a result of the transition from the 180-day product to the 365-day product, are expected to impact third-quarter product sales. Revenue in the third quarter is expected to decrease, followed by an increase in acceleration in the fourth quarter based on sales from the 365-day product and the Mercy collaboration. We expect revenue generated in the second half of 2024 to be split approximately one-third in the third quarter and two-thirds in the fourth quarter.
Tensianics: Inventory dynamics as a result of the transition from the 180-day product to the 365-day product are expected to impact third quarter product sales.
Speaker Change: Revenue in the third quarter is expected to decrease, followed by an increase in acceleration in the fourth quarter based on sales from the 365-day product and the Mercy collaboration.
Tensianics: We expect revenue generated in the second half of 2024 to be split approximately one-third in the third quarter and two-thirds in the fourth quarter.
Tensianics: We also continue to expect full-year gross margins to range from 10% to 15%, excluding anticipated one-time charges associated with the transition to the 365-day product.
Tim Goodnow: Our operating expenses are expected to range from $77.5 to $82.5 million. With that, I'll turn it back to Tim.
Tim Goodnow: As I mentioned at the start of the call, we feel we are well positioned as we head into the second half of the year with a solid foundation for enabling further advancements in the progress of our strategic initiatives. We believe we are set to deliver higher growth and greater shareholder value, and as we look at the near-term horizon, the expected clearance and launch of our 365-day product represents one of the most significant catalysts in the company's history.
Speaker Change: Thank you, Eric.
Tim Goodnow: As I mentioned at the start of the call, we feel we are well positioned as we head into the second half of the year, with the solid foundation and enabling further advancements of the progress of our strategic initiatives.
Speaker Change: We believe we are set to deliver higher growth and greater shareholder value.
Speaker Change: And as we look at the near-term horizon, the expected clearance and launch of our 365-day product represents one of the most significant catalysts in the company's history.
Tim Goodnow: We are executing our development and operational initiatives while Essentia continues to enhance its commercial capabilities. Further, we are supported by our differentiated technology and a pipeline that is continuously advanced for the next generation product. There is a large opportunity in front of us as we make inroads with new patients and continue to advance our core product. And we are excited to continue to simplify the lives of more people with diabetes, building on our
Speaker Change: We are executing our development and operational initiatives, while our sense of continues to enhance its commercial capabilities.
Speaker Change: Further, we are supported by our differentiated technology and a pipeline that has continuously advanced next generation products.
Speaker Change: There is a large opportunity in front of us as we make inroads with new patients and continue to advance our core products.
Speaker Change: and we are excited to continue to simplify the lives of more people with diabetes and build on our momentum.
Tim Goodnow: Thank you for your time today. Also joining us for questions is Mukul Jain, our chief operating officer. Operator, let's open up the call for questions. We will now begin the question and answer session. To ask a question, you may press star and then one on your touch-tone phone. If you're using a speaker phone,
mucle Jane: Thank you for your time today. Also joining us for questions is mucle Jane, our chief operating officer.
Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been answered and you would like to withdraw it, please press star then two. At this time, we will pause momentarily to assemble our rock. Our first question comes from Marie Thibault from BTIG. Please go ahead.
Speaker Change: Operator, let's open up the call for questions.
Speaker Change: We will now begin the question and answer session.
Speaker Change: To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw it, please press star then 2. At this time, we will pause momentarily to assemble our roster.
Speaker Change: [inaudible]
Speaker Change: Our first question comes from Marie Thibault from BTIG.
Sam Eiber: Hi, good afternoon, Tim Rick, Mukul, this Sam one from Marie, thanks for taking the questions. Maybe I can start here on any more details you have on the dialogue you're having with the FDA and what's giving you that confidence about launching the 365-day Center in Q4.
Speaker Change: Please, go ahead.
Sam Montgomery: Hi, good afternoon, Tim Rick, mucle, this Sam Montgomery, thanks for taking the questions. Maybe I can start here on any more details you have on the dialogue you're having with the FDA, and what's giving you that confidence in launching the 365-day Center in Q4.
Tim Goodnow: and thanks for the question. We won't go into the gory details of the conversations. We are actively in the middle of them, but I'll let Mukul update you on where we are.
Speaker Change: And...
Speaker Change: Sam, thanks for the question. We won't go into the gory details of the conversations. We are actively in the middle of it, but I'll let Mukul update where we are.
Mukul Jain: If I'm, yeah, so it's as we have previously stated, 510K, so there is a certain timeline that FDA moves with, and the confidence comes from past interactions and the relationship we have with the agency and the data, the quality of the data that we have submitted. So everything put together, we pretty much see where the trajectory is, and that's what's giving us the confidence.
Mukul: If I'm yeah so it's as we had previously stated 510k so there is a certain timeline that FDA moves with and the confidence comes from a past
Mukul: interactions and the relationship we have with the agency and the data, the quality of the data that we have submitted. So everything put together we pretty much see where the trajectory is and that's what's giving us the confidence.
Sam Eiber: Okay, good to hear. And then maybe I can use my follow-up here on some of the comments you made about Sentia working behind the scenes on the 365 day readiness. I would just love to know any more details on what exactly that means, more feed on the street. And then, on your end, how you're thinking about the investments needed to support that launch, whether it's marketing initiatives, more direct-to-consumer type of campaigns, just general thoughts on getting ready for the launch. Thanks, thank you very much. Sure, Sam, and as
Speaker Change: Okay, good to hear. And then maybe I can use my follow-up here on some of the comments you made about a sentia working but behind the scenes on the 365 day readiness.
Speaker Change: I would just love to know any more details on what exactly that means. Is it more feet on the street?
Speaker Change: And then on your end, how you're thinking about the investments needed.
Speaker Change: to support that launch, whether it's marketing initiatives, more direct-to-consumer type of campaigns, just general thoughts on getting ready for the launch. Thanks for taking the questions.
Tim Goodnow: Sure, Sam, and as you surmised, obviously, launching a new product is an exciting time for us. It is a big step forward from six months to a year, so yes, there'll be a new marketing campaign that Essentia is driving. We've had an opportunity to see some of the preliminary work, and we're quite excited about it. So, a lot of consumer marketing, and a lot of professional marketing as well. We also have efforts and focus in the St. Louis area with our new Mercy partnership. So there's quite a bit going on as we launch this new generation product, and, you know, Senseonics is doing a great job in getting this part for that and getting ready to go here in October.
Speaker Change: Sure, Sam. And as you surmised, obviously launching a new product, it's an exciting time for us. It is a big step forward from six months to a year. So yes, there'll be a new marketing campaign.
Speaker Change: And as Cynthia is driving, we've had an opportunity to see some of the early work where we're quite excited about it.
Essenti: And, you know, Essenti is doing a great job of getting us prepped for that and getting ready to go here in October .
Tim Goodnow: This concludes our question and answer session. I would like to turn the conference back over to Mr. Tim Goodnow for any closing remarks.
Speaker Change: [inaudible]
Speaker Change: This concludes our question and answer session. I would like to turn the conference back over to Mr. Tim Goodnow for any closing remarks.
Tim Goodnow: Well, great, thank you, I appreciate everybody's opportunity to spend time on this for the afternoon, and we're looking forward to updating you on the next quarter of the call. Good day.
Tim Goodnow: Well great, thank you. I appreciate everybody's opportunity to spend time with us in the afternoon and we look forward to updating you on the next recorded call. Good day.
Operator: The conference is now concluded. Thank you for attending today's presentation.
Rick Sullivan: We also continue to expect full-year gross margins to range from 10 to 15 percent, excluding anticipated one-time charges associated with the transition to the 365-day product. Our operating expenses are expected to range from 77.5 to 82.5 million. With that, I'll turn it back to 10.
Tim Goodnow: This will allow patients to make better informed decisions. The program is designed to reach patients with coaching in-between physician visits where we can provide higher and more frequent touch. Our goal is for the Everton CGM plus RPM offering to help health systems improve diabetes management and reduce the cost of care. Still today, most of the patients with diabetes who are eligible to be on a CGM are not on one, and this portion is even greater in the Medicare population.