Q3 2024 Senseonics Holdings Inc Earnings Call
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Operator: Good day, everyone, and welcome to the Senseonics third quarter 2024 earnings call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing star and one on your telephone keypad. You may withdraw yourself from the queue by pressing star two. Please note this call may be recorded. I will be standing by if you should need any assistance.
Speaker Change: Good day, everyone and welcome to the <unk> since the Onyx third quarter 'twenty 'twenty four earnings call.
Speaker Change: At this time all participants are in a listen only mode. Later, you will have the opportunity to ask questions. During the question and answer session. You may have registered to ask a question at any time by pressing star one on your telephone keypad, you may withdraw yourself from the queue by pressing star two.
Speaker Change: Note. This call may be recorded I'll be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Jeremy Feffer Lifesize advisors.
Jeremy Feffer: It is now my pleasure to turn the conference over to Jeremy Feffer, LifeSci Advisor. Thank you. This is Jeremy Feffer from Lifesci Advisors.
Speaker Change: Thank you. This is Jeremy feffer from lifestyle advisors before we begin today, let me remind you that the company's remarks include forward looking statements.
Unknown Executive: 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-end of December 31, 2023, our quarterly report on Form 10-Q for the quarter-ended September 30, 2024, and our other reports filed with the SEC.
Speaker Change: These statements reflect management's expectations about future events operating plans regulatory matters product enhancements company performance and other matters.
Speaker Change: 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.
Speaker Change: The year ended December 31, 2023, our quarterly report on Form 10-Q for the quarter ended September 32024, and our other reports filed with the SEC. These documents are available in the Investor Relations section of our website at Www Dot <unk> Dot com.
Unknown Executive: These documents are available in the Investor Relations section of our website at www.senseonics.com.
Unknown Executive: We undertake no obligation to update publicly or revise these forward-looking statements for any reason except as required by law.
Speaker Change: We undertake no obligation to update publicly or revise these forward looking statements for any reason, except as required by law.
Timothy Goodnow: Joining me today from Senseonics are Tim Goodnow, President and Chief Executive Officer, and Rick Sullivan, Chief Financial Officer. Today, we also have Brian Hansen, President of CGM at Ascensia Diabetes Care, our global distribution partner for ever since joining us.
Speaker Change: Joining me today from <unk> are two good now president and Chief Executive Officer, and Rick <unk> Chief Financial Officer.
Speaker Change: We also have Bryan Hanson president of CGM, and a sense of your diabetes care, a global distribution partner for ever since joining us.
Timothy Goodnow: With that, I would like to turn the call over to Tim Goodnow, President and CEO. Tim? Thank you, Jeremy. And thank you all for joining us this afternoon.
Speaker Change: With that I would like to turn the call over to Tim Cook now President and CEO Tim.
Tim Cook: Thank you Jeremy and thank you all for joining us this afternoon.
Timothy Goodnow: During our call today, we'll begin with a recap of what an exciting and pivotal quarter it has been for Senseonics. We'll also hear from Brian, who is responsible for the rollout of a recently approved, ever since 365, the world's first and only one year continuous glucose monitor.
Tim Cook: During our call today will begin with a recap of what an exciting and pivotal quarter. It has been for Cynthia Onyx.
Tim Cook: We will also hear from Brian who is responsible for the rollout of our recently approved ever since $3 65, the world's first and only one year continuous glucose monitor.
Timothy Goodnow: Lastly, Rick will review our third quarter financials and then we'll take any questions you might have. On September 17th, we received FDA approval for the Eversense 365, marking a significant accomplishment many years in the making. When we designed our 90-day and 180-day CGM products, we were always working towards the goal of one CGM for one year, a goal that seemed imposing it. We did the market research and knew what patients and prescribers wanted, convenience, flexibility, and longevity, coupled with accuracy and reliability. We set out to deliver all of these things to help people overcome common frustrations and interruptions experienced with traditional short-term CGM.
Tim Cook: Lastly, Rick will review, our third quarter financials, and then we'll take any questions you might have.
Tim Cook: On September 17th we received FDA approval for the ever since 365, marking a significant accomplishment many years in the making.
Tim Cook: When we designed our 90 day and 180 day CGM products, we were always working towards the goal of one CGM for one year.
Tim Cook: Our goal that seemed imposing at a time.
Tim Cook: We did the market research and knew what patients and prescribers wanted convenience flexibility and longevity, coupled with accuracy and reliability.
Tim Cook: We set out to deliver all of these things to help people overcome common frustration and interruptions experience with traditional short term CGM.
Timothy Goodnow: Early feedback we've received from patients and clinicians is extremely positive, and the lead generation that we have seen in the first month of the launch has well exceeded expectations. In the first week alone, we saw the highest influx of leads in the company's history, indicating that the diabetes community is embracing ever since 365. And as you may have heard during our KOL call a couple of weeks ago, endocrinologists see the opportunity for Eversense 365 across type 1 and type 2 diabetes. Drs. Ahn and Ciaramida also agreed that for some people with diabetes, ever since 365 is the only CGM that makes sense.
Tim Cook: Early feedback we've received from patients and clinicians is extremely positive and the lead generation that we had seen in the first month of the launch as well exceeded expectations in.
Tim Cook: In the first week alone we saw the highest influx of leads in the company's history, indicating that the diabetes community is embracing ever since $3 65.
Tim Cook: And as you may have heard during our KOL call a couple of weeks ago endocrinologists see the opportunity for ever since 365 across type one and type two diabetes Dr.
Doctors on NCR meter also agreed that for some people with diabetes ever since 365 is the only CGM that makes sense.
Timothy Goodnow: For example, patients with difficulty hearing audible sensor alarms, patients with allergies to common adhesive materials used with short-term CGM, and patients who are physically active intend to lose sensors before the end of their stated expiration date.
Tim Cook: For example, patients with difficulty hearing audible sensor alarms patients with allergies to accommodate he said materials used with short term CGM.
Tim Cook: And patients who are physically active intend to lose sensors before the end of their stated expiration date.
Timothy Goodnow: During the KOL event, we also heard from Mercy, the first hospital system to adopt ever since 365 as part of a system-wide solution. Mercy, with over 30,000 patients who could benefit from the CGM, believes that Eversense will improve outcomes for patients as well as decrease overall costs related to diabetes care. We believe that the MERCI collaboration can bring a model for other health care systems to follow, and we hope to enter into additional similar collaborations with other health systems in the coming year. By offering Eversense 365 to its participants and arranging access to our remote patient monitoring program, health systems can offer patients more ongoing support than providing a CGM device alone.
Tim Cook: During the Kols event, we also heard from Mercy, the first hospital system to adopt ever since $3 65, as part of a system wide solution.
Tim Cook: Mercy with over 30000 patients who could benefit from a CGM believes that ever sense will improve outcomes for patients as well as decrease overall costs related to diabetes care.
Tim Cook: We believe that the mercy collaboration can bring a model for other health care systems to follow.
And we hope to enter into additional similar collaborations with other health systems in the coming year.
Tim Cook: By offering ever since 365 to its participants and arranging access to a remote patient monitoring program health systems can offer patients more ongoing support and providing a CGM device alone.
Timothy Goodnow: As RPM leverages personal data to inform diabetes counselors who can proactively advise patients on improving their diabetes management, these professionals are intended to provide coaching and insight into things impacting patients' glucose levels, such as medications, foods, exercise, and lifestyle. And that will allow patients to make better-informed decisions. And the program is designed to coach and interact with patients between physician visits. This is intended to shorten the feedback loop of information patients receive.
Tim Cook: As RPM leverages personal data to inform diabetes counselors, who can proactively advised patients on improving their diabetes management.
Tim Cook: These professionals are intended to provide coaching and insight into things impacting patient's glucose levels, such as medications foods exercise and lifestyle.
Tim Cook: And that will allow patients to make better informed decisions.
Tim Cook: And the program is designed to coaching interact with patients between physician visits. This is intended to shorten a feedback loop of informations patients receive.
Timothy Goodnow: Our goal is for the Eversense CGM and RPM offerings to help health systems improve diabetes management and reduce the cost of care. On the reimbursement side, ever since 365 is covered by nearly all US private insurers, as well as Medicare, covering over 300 million lives in aggregate. We have seen strong adoption by commercial payers and continue to work with a few smaller regional insurers to expand coverage as broadly as possible.
Tim Cook: Our goal is for the ever since CGM and RPM offerings to help health systems improve diabetes management and reduce the cost of care.
Tim Cook: On the reimbursement side ever since 365 is covered by nearly all U S private insurers as well as Medicare covering over 300 million lives in aggregate we.
Tim Cook: We have seen strong adoption by commercial payers and continue to work with a few smaller regional insurers to expand coverage as broadly as possible.
Timothy Goodnow: I'm so proud of the Senseonics team and all the hard work put into delivering the world's first and only one-year CGM, but our work doesn't stop here. Our pipeline includes the Gemini sensor, incorporating battery power for continuous 24-7 readings, as well as the Freedom sensor, which communicates directly with a patient's phone with no transmitter required. We're making progress in our development programs to integrate these exciting enhancements into the Eversense system, and we continue our mission to improve the patient experience and reduce life disruptions that glucose monitoring can cause. Lastly, ever since 365 has been granted the designation of an integrated continuous glucose monitoring system.
Tim Cook: I am so proud of this Cynthia on X team and all the hard work put into delivering the world's first and only one year CGM, but our work doesn't stop here are.
Tim Cook: Our pipeline includes the Gemini sensor incorporating battery power for continuous 24, seven readings as well as the freedom sensor, which communicates directly with the patient phone with no transmitter required.
Tim Cook: We're making progress in our development programs to integrate these exciting enhancements into the ever since system and we continue our mission to improve the patient experience and reduce life disruptions that glucose monitoring can cost.
Tim Cook: Lastly ever since 365 has been granted the designation of an integrated continuous glucose monitoring system, recognizing its accuracy and meaning that it can communicate with and be integrated into automated insulin delivery systems. We continue to work with insulin pump manufacturers towards developing the necessary interface to <unk>.
Timothy Goodnow: recognizing its accuracy and meaning that it can communicate with and be integrated into automated insulin delivery systems. We continue to work with insulin pump manufacturers towards developing the necessary interface to seamlessly pair the two systems, creating a closed loop for the ultimate diabetes care.
Tim Cook: Honestly pair the two systems, creating a closed loop for the ultimate diabetes care.
Timothy Goodnow: We look forward to providing updates on the developments of these pump interfaces in the coming quarter.
Tim Cook: We look forward to providing updates on the developments of these pump interfaces in the coming quarters.
Unknown Executive: Now, as we pivot to our U.S.
Tim Cook: Now as we pivot to our U S launch execution, and making ever since 365 available to as many patients as possible, we'd like you to hear from Bryan Hanson President of CGM at Cynthia diabetes care.
Timothy Goodnow: launch execution and making Eversense 365 available to as many patients as possible, we'd like you to hear from Brian Hansen, President of CGM at Essentia Diabetes Care. Brian is here with us today to provide additional information on the Eversense 365 launch strategy and the execution to date.
Tim Cook: Ryan is here with us today to provide additional information on the ever since $3 65 launch strategy and the execution to date.
Brian Hansen: Brian Thanks, Tim.
Tim Cook: Brian.
Brian: Thanks, Tim and thanks for asking me to participate in your call today.
Brian Hansen: And thanks for asking me to participate in your call today. At Essentia, we're equally excited to be offering the Eversense 365 product as part of our glucose monitoring portfolio. Since we began this partnership with Senseonics in 2020, they've continued to disrupt the landscape with novel, differentiated products. Eversense 365 is the most recent example, providing a significant breakthrough in diabetes technology and management.
Brian: At a Cynthia we are equally excited to be offering ever since $3 65 products as part of our glucose monitoring portfolio.
Brian: Since we began this partnership with <unk> in 2020, they've continued to disrupt the landscape with novel differentiated products ever since 365 is the most recent example, providing a significant breakthrough in diabetes technology and management.
Brian Hansen: For those of you unfamiliar with Ascensia Diabetes Care, we are a global company based in Basel, Switzerland of approximately 1,700 employees working in 31 countries, entirely dedicated to improving the health and lives of those with diabetes. Senseus products are sold in more than 125 countries worldwide, including through multiple channels here in the United States and Canada. We have helped people manage their diabetes for more than 80 years and are proud to be the global distribution partner for Senseonics. Our approach to building a successful Eversense 365 launch has been to utilize multiple marketing channels. We have a very experienced team here in the United States exclusively promoting only the Eversense 365 system.
Speaker Change: For those of you unfamiliar with essentially a diabetes care, we are a global company based in Basel, Switzerland of approximately 700 employees working in 31 countries entirely dedicated to improving the health and lives of those with diabetes.
Speaker Change: Since these products are sold in more than 125 countries worldwide, including through multiple channels here in the United States and Canada. We have help people manage their diabetes for more than 80 years and are proud to be the global distribution partner for <unk> X.
Speaker Change: Our approach to building a successful ever since $3 65 launch has been to utilize multiple marketing channels. We have a very experienced team here in the United States exclusively promoting only ever since $3 65 system.
Brian Hansen: This group that I lead has dedicated independent resources to drive Eversense expansion. Secondly, we have created a network of approximately 800 certified doctors and nurse practitioners to insert the center for U.S. patients with approximately 3,000 prescribers who can help patients start on Eversense 365. This network is in addition to Eon Care Services, which Senseonics created to support patient access with plans to build and grow the Inserter Network, the Nurse Practitioner Group established. This network currently provides in-home and clinic placement of sensors by nurse practitioners in approximately 35 US geographies with plans to expand access as we drive adoption.
Speaker Change: This group that I lead has dedicated independent resources to drive ever since expansion.
Speaker Change: Secondly, we have created a network of approximately 800 certified doctors and nurse practitioners to insert the sensor for U S patients with approximately 3000 prescribers, who can help patients start on ever since $3 65.
Speaker Change: This network is in addition to E on carrier services, which tend to be honest created to support patient access with plans to build and grow the in certain networks. The nurse practitioner group established.
Speaker Change: This network currently provides in home and clinic placement of sensors by nurse practitioners and approximately 35 U S geographies with plans to expand access as we drive adoption.
Brian Hansen: We are also employing traditional and digital marketing strategies with direct-to-consumer ad campaigns, as well as healthcare provider educational tools, and as Tim mentioned earlier, we are enhancing our resources for future hospital system integration. We believe this multi-pronged approach to building brand awareness will enable Essentia to reach a broader Eversense 365 potential customer base, driving sales while building a comprehensive catalog of patient experiences.
Speaker Change: We are also employing traditional and digital marketing strategies with direct to consumer AD campaigns as well as health care provider educational tools and as Tim mentioned earlier, we are enhancing our resources for future Hospital system integrations.
Speaker Change: We believe this multi pronged approach to building brand awareness will enable essentially to reach a broader EVAR centers $3 65 potential customer base driving sales while building our comprehensive catalog of patient experiences.
Brian Hansen: get a bit more granular for a moment. Our immediate priorities include increasing awareness through optimizing our creative efforts and targeting to cost effectively drive high quality prospects to the Ascensia website. Our website has been fully updated to allow easier navigation for better access to product information, education, training, and cost and insurance details. These improvements are designed to help increase lead capture for qualified, high-scoring prospects, nurturing and expanding outreach approaches to leads to better reach them, and optimizing end-to-end processes and training to improve customer experience and drive conversion. As a result of these efforts, we saw health care provider and our direct-to-consumer leads increase by more than 200% in the four weeks post-365 approval compared to the four weeks prior to approval.
Speaker Change: You get a bit more granular for a moment.
Speaker Change: Our immediate priorities include increasing awareness through optimizing our accretive efforts and targeting to cost effectively drive high quality prospects to the SMC a website.
Speaker Change: Our website has been fully updated to allow easier navigation for better access to product information education training and cost at insurance details.
Speaker Change: These improvements are designed to help increase lead capture for qualified high scoring prospects nurturing and expanding outreach approaches leads to better reach them and optimizing end to end processes and training to improve customer experience and drive conversion.
Speaker Change: As a result of these efforts, we saw health care provider and our direct to consumer leads increased by more than 200% in the four weeks post 365 approval compared to the four weeks prior to approval.
Brian Hansen: Speaking of customer experience, I want to share with you some of what we've been hearing in the field. First of all, the primary reaction we've seen and heard is enthusiasm. We believe we have the best product in the world and our reps are tremendously excited to carry Eversense 365 in their bag. Secondly, we are seeing real enthusiasm from our health care providers. As I mentioned earlier, the referrals of new patients have more than doubled, in addition to encouraging those using the 180-day sensor to transition to 365 when their six-month sensor has expired. This is opening doors to us where we've had little to no access.
Speaker Change: Speaking of customer experience I want to share with you some of what we've been hearing in the field.
Speaker Change: First of all their primary reaction, we've seen and heard his enthusiasm.
Speaker Change: We believe we have the best product in the world and our reps are tremendously excited to carry ever since $3 65 in their bag.
Speaker Change: Secondly, we are seeing real enthusiasm from our health care providers as I mentioned earlier, the referrals of new patients have more than doubled in addition to encouraging those using the 180 days sensor to transition to $3 65, when they are six months sensor has expired.
Speaker Change: This is opening doors to us where we've had little to no access.
Brian Hansen: Lastly, I've seen many successful as well as some not so successful launches in the diabetes space and the buzz and build up around this one certainly has me excited. There is one other aspect of Eversense 365 that I know will resonate extremely well with both patients and physicians, reduced calibration. Once weekly calibration is a marked improvement over previous ever since generations and now does not differ much from the transdermal insertion necessary with short term CGMs that are replaced every 10 to 14 days. I believe the reduced calibration requirement will make the Eversense 365 a much more competitive offering, and early feedback confirms our market research that once a week calibration should benefit Eversense adoption, particularly given the enormous convenience benefit of a year-long sensor.
Speaker Change: Lastly, I've seen many successful as well as some not so successful launches in the diabetes space and the buzzer buildup around this one certainly has me excited.
Speaker Change: There is one other aspect of ever since 365 that I know will resonate extremely well with both patients and physicians reduce calibrations.
Speaker Change: Once weekly calibration is a marked improvement over previous ever since generations and now does not differ much from the transdermal insertion necessary with short term CGM that are replaced every 10 to 14 days.
I believe the reduced calibration requirement will make the ever since $3 65, a much more competitive offerings and early feedback confirms our market research that once a week calibration should benefit ever since adoption, particularly given the enormous convenience benefit of a year long sensor.
Brian Hansen: As I mentioned, Asensio is proud to partner with Senseonics to make Eversense 365 available to patients globally. We believe in the product and its potential to improve both the experience and the outcomes for patients with diabetes.
Speaker Change: And as I mentioned essentially is proud to partner with <unk> to make ever since 365 available to patients globally.
Speaker Change: We believe in the product and its potential to improve both the experience and the outcomes for patients with diabetes.
Timothy Goodnow: With that, I'll hand it back over to Tim.
With that I'll hand, it back over to Tim.
Timothy Goodnow: Thank you, Brian. It's great to have you here. And thanks for your invaluable efforts to date. To follow on Brian's comments, in terms of the actual commercial launch, I want to remind everyone that the first commercial insertion of Eversense 365 took place in early October, and we are just beginning to ship 365 sensors into the channel more recently. As a result, third quarter revenue we are reporting today is all pre ever since 365. Fourth quarter U.S. revenue will be a mix of E3 sales from its final shipments and the initial shipments of $365, meaning we will not see the full impact of $365 revenue in the U.S.
Thank you, Brian it's great to have you here and thanks for your invaluable efforts to date to.
Tim Cook: To follow on Brian's comments in terms of the actual commercial launch I want to remind everyone that the first commercial insertion of ever since 365 took place in early October and we are just beginning to ship 365 sensors into the channel more recently.
Tim Cook: As a result third quarter revenue, we are reporting today is all pre ever since $3 65.
Tim Cook: Fourth quarter U S revenue will be a mix of <unk> sales from its final shipments and the initial shipments of $3 65.
Tim Cook: Meaning we will not see the full impact of $3 65 revenue in the U S until Q1 'twenty 'twenty five.
Timothy Goodnow: until Q1 2025. We continue to serve the European market with Eversense B3 and expect in the first quarter to submit 365 for its CE mark in Europe. While we will not be providing 2025 revenue guidance until our next earnings call, I can tell you that we are ecstatic with the early response to 365 that we've received from patients and physicians this far.
Tim Cook: We continue to serve the European market with ever since <unk> and expect in the first quarter to submit $3 65 for CE Mark in Europe.
Tim Cook: While we will not be providing 2025 revenue guidance until our next earnings call I can tell you that we are ecstatic with the early response to $3 65 that we've received from patients and physicians this far.
Timothy Goodnow: And we are looking forward to an exciting and successful year ahead.
Tim Cook: And then we are looking forward to an exciting and successful year ahead.
Frederick Sullivan: With that, I'll now turn it over to our CFO Rick Sullivan, who will provide more details on our financial results, recent financing activities, and our restructuring efforts. Rick. Thank you, Tim, and good afternoon, everyone. We appreciate the opportunity today to update you on our. In the third quarter of 2024, net revenue was $4.3 million compared to $6.1 million in the prior year period due to the inventory dynamics associated with the 365-day product launch, where we've sought to reduce U.S. E3 inventories in anticipation of the transition to the 365-day product. U.S. revenues for the third quarter was $2.4 million and revenue outside the U.S.
Speaker Change: With that I'll now turn it over to our CFO, Rick Sullivan, who will provide more details on our financial results recent financing activities and our restructuring efforts Rick.
Rick Sullivan: Thank you Tim and good afternoon, everyone. We appreciate the opportunity today to update you on our business.
Rick Sullivan: In the third quarter of 2024, net revenue was $4 3 million compared to $6 1 million in the prior year period due to the inventory dynamics associated with the $3 65 to eight product launch where.
Rick Sullivan: When we start to reduce U S E three inventories in anticipation of the transition to the 365 day product.
Rick Sullivan: U S revenues for the third quarter was $2 4 million and revenue outside the U S is $1 9 million.
Frederick Sullivan: was $1.9 million. 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. 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. 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 Ascensia during the quarter are largely intended to support future demand for Everson.
Rick Sullivan: As a reminder.
Rick Sullivan: Collaborations agreement, what's the sense, yet as for revenue sharing with the percentage of revenue to a sense, yet increasing based on duration of the contract and annual revenue levels.
Rick Sullivan: We recognize our portion of revenue when shipments are delivered to a sense, yes, and they take title and ownership of the inventory.
Rick Sullivan: This begins the multi step distribution to patients via Cynthia and their distributors.
Rick Sullivan: We managed 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 <unk> during the quarter are largely intended to support future demand for ever since.
Frederick Sullivan: Third quarter shipments were intended to support the final demand for the U.S. 180 day systems. We began the planned transition to the 365 day product launch in the fourth quarter. We do not expect to reach target inventory levels for 365 day product in the fourth quarter and will gradually increase inventory to target levels through the first half of 2025.
Rick Sullivan: Third quarter shipments were intended to support the file demand for the U S. 180 day systems. We began the planned transition to the 365 day product launch in the fourth quarter, we do not expect to reach target inventory levels for 365 day product in the fourth quarter and will gradually increase inventory to targa.
Rick Sullivan: Levels through the first half of 2025.
Frederick Sullivan: Gross loss in Q3 2024 was $4.1 million, a decrease from a gross profit of $1.2 million in the prior year period. This decline was primarily driven by one-time charges associated with the transition of Eversense E3 to Eversense 365. Research and development expenses in Q3 2024 were $10.5 million, a decrease of $2.3 million compared to $12.8 million in the prior year period. The decrease was primarily due to the completion of the enhanced clinical trial, which drove a $2.6 million reduction in clinical study costs over the prior year period. Third quarter 2024 selling general and administrative expenses were $8.3 million, an increase of $0.9 million compared to $7.4 million in the prior year period, primarily driven by increased personnel and consulting costs related to EonCare and other commercial efforts to support Essentia.
Rick Sullivan: Gross loss in Q3, 2024 was $4 1 million or <unk>.
Rick Sullivan: Decrease from a gross profit of $1 2 million in the prior year period.
Rick Sullivan: This decline was primarily driven by one time charges associated with the transition of ever since <unk> III to ever since $3 65.
Rick Sullivan: Research and development expenses in Q3, 2024 were $10 5 million a decrease of $2 3 million compared to $12 8 million in the prior year period.
Rick Sullivan: The decrease was primarily due to the completion of the enhanced clinical trial, which drove a $2 6 million reduction in clinical study costs over the prior year period.
Rick Sullivan: Third quarter 2020 for selling general and administrative expenses were $8 3 million, an increase of <unk> 9 million compared to $7 4 million in the prior year period, primarily driven by increased personnel and consulting costs related to E on care and other commercial efforts to support our sense.
Rick Sullivan: Yeah.
Frederick Sullivan: For the nine months ended September 2024, operating loss was $22.8 million, compared to $19 million in the third quarter of 2023, due to inventory write-offs associated with the transition to the 365-day product, offset by a reduction in clinical trial costs. For the three months ended September 2024 total net loss was 24 million or a 4 cent loss per share compared to a net loss of 24.1 million or a 4 cent loss per share in the third quarter of 2023 net income increased by 0.1 million due to the reduction in R&D expenses. As of September 30, 2024, cash, restricted cash, cash equivalents and short term investments totaled $74.8 million and debt and accrued interest was $55.9 million.
Rick Sullivan: For the nine months ended September 2020 for operating loss was $22 8 million compared to $19 million in the third quarter of 2023 due to inventory write offs associated with the transition to the $3 65 day product.
Rick Sullivan: Set by a reduction in clinical trial costs.
Rick Sullivan: For the three months ended September 2024, total net loss was $24 million or <unk> <unk> loss per share compared to a net loss of $24 1 million or <unk> <unk> loss per share in the third quarter of 2023.
Rick Sullivan: Net income increased by <unk> 1 million due to the reduction in R&D expenses.
Rick Sullivan: As of September 30th 2024, cash restricted cash cash equivalents and short term investments totaled $74 8 million and debt and accrued interest was $55 9 million.
Frederick Sullivan: In Q3 and in early Q4, we raised gross proceeds of more than $20 million, including the $16 million offering announced in October. These financings improve our current balance sheet and provide us the flexibility to repay the 2025 notes due early next year, significantly reducing our outstanding debt.
Rick Sullivan: In Q3 and in early Q4, we raised gross proceeds of more than $20 million, including the $16 million offering announced in October.
Rick Sullivan: These financings improve our current balance sheet and provide us the flexibility to repay the 2025 notes due early next year significantly reducing our outstanding debt.
Frederick Sullivan: In October, we also executed a restructuring that included a reduction in force of nearly 20% and a planned reduction in operating expenses with a target of reducing cash operating expenses by more than $10 million in 2025. These efforts combined extend our cash runway for over a year into late 2025. We also recently acquired the Eversense Insertion Network assets of the Nurse Practitioner Group and have begun the transition to our Eon Care subsidiaries. As we work to grow this network, we believe the opportunity of the CPT code payments associated with the insertions will enable a self-sustaining economic model for this initiative.
Rick Sullivan: In October we also executed a restructuring that included a reduction in force of nearly 20% and a planned reduction in operating expenses with a target of reducing cash operating expenses by more than $10 million in 2025.
Rick Sullivan: These efforts combined extend our cash runway for over a year into late 2025.
Rick Sullivan: We also recently acquired the ever since insertion network assets of the nurse practitioner groups and have begun the transition to our <unk> subsidiaries as.
Rick Sullivan: As we work to grow this network, we believe the opportunity of the CPT code payments associated with the insertions will enable a self sustaining economic model for this initiative.
Frederick Sullivan: We anticipate that having further influence over the insertion process through this strategic move will drive efficiencies, increase insertion throughput, and ensure continued focus for an excellent patient experience. The acquisition will have a minimal cash impact to our Q4 financials.
Rick Sullivan: We anticipate that having further influence over the insertion process through this strategic move will drive efficiencies increase insertion throughput and ensure continued focus for an excellent patient experience. The acquisition will have a minimal cash impact to our Q4 financials.
Frederick Sullivan: Turning to our outlook for the remainder of 2024, Senseonics expects full year 2024 global net revenue to be approximately 22 million as we begin to transition our US products to ever since 365 following its approval in late Q3. 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. Inventory dynamics associated with the 365-day product launch impacted product sales in the third quarter as we began reducing E3 inventory in anticipation of the transition to ever since 365. Sales are expected to accelerate in the fourth quarter based on anticipated initial 365-day product demand and the initial ramp of the Mercy collaboration.
Rick Sullivan: Turning to our outlook for the remainder of 2024, <unk> expects full year 2024, global net revenue to be approximately $22 million as we begin to transition our U S products to ever since 365. Following its approval in late Q3, the full year 2024 financial outlook.
Rick Sullivan: <unk> assumes more than doubling the U S new patient starts and increasing the global installed base by approximately 50% in 2024 compared to 2023.
Rick Sullivan: The inventory dynamics associated with the 365 day product launch impacted product sales in the third quarter as we began reducing E. Three inventory in anticipation of the transition to ever since 365 sale.
Rick Sullivan: Sales are expected to accelerate in the fourth quarter based on anticipated initial 365 date product demand and the initial ramp of the mercy collaboration.
Frederick Sullivan: While we're not yet providing guidance for 2025, we're confident that, based on early lead generation, ever since 365 revenue growth should accelerate further in 2025 when it will be the only product sold in the U.S. We also continue to expect gross margins for 2024 to be in the range of 10% to 15%, excluding the $4.8 million of one-time charges associated with the transition to the 365-day product. We're really excited about the unit economics of Eversense 365 and expect our gross profit margins to meaningfully improve almost immediately, approaching 30% next year. We expect our operating expenses for 2024 to continue to be in the range from $77.5 to $82.5 million.
Rick Sullivan: While we're not yet providing guidance for 2025, we're confident that based on early lead generation ever since 365 revenue growth should accelerate further in 2025, when it will be the only product sold in the U S.
Rick Sullivan: We also continue to expect gross margins for 2020 for it to be in the range of 10% to 15%, excluding the $4 8 million of one time charges associated with the transition to the 365 day product.
Rick Sullivan: We're really excited about the unit economics of ever since $3 65, and expect our gross profit margins to meaningfully improve almost immediately approaching 30% next year, we expect our operating expenses for 2024 to continue to be in the range from $77 five to $82 5 million.
Frederick Sullivan: For 2025, we expect to see cash operating expenses decrease by $10 million compared to 2024 as a result of the recent restructuring efforts. With Eversense 365 on the market and the expected positive margin contribution, we'll work to ensure that the organization is right-sized and staying disciplined in our use of capital, while remaining positioned to support both our commercial partner in driving adoption of Eversense and our important work progressing our product pipeline.
Rick Sullivan: For 2025, we expect to see cash operating expenses decreased by $10 million compared to 2024 as a result of the recent restructuring efforts with ever since 365 on the market and the expected positive margin contribution we will work to ensure that the organization is right sized and staying disciplined.
Rick Sullivan: And in our use of capital while remaining position to support both our commercial partner in driving adoption of it ever since and our important worth progressing our product pipeline.
Timothy Goodnow: With that, I'll turn it back to Tim. Thanks, Rick. And as I mentioned at the start of the call, we feel confident in Senseonics' future trajectory. We are well positioned as we head into the final quarter of the year with a solid foundation of new approvals, launch momentum, and a strengthened balance sheet. We see the opportunity to drive growth through the delivery of our strategic initiatives. We're executing our development and operational initiatives while Essentia continues to enhance its commercial capability. Further, we are building from the strong foundation of our differentiated technology in a pipeline that has continuously advanced next-generation products.
Speaker Change: With that I'll turn it back to Tim.
Tim Cook: Thanks, Rick.
Tim Cook: And as I mentioned at the start of the call we feel confident in <unk> future trajectory where.
Tim Cook: We are well positioned as we head into the final quarter of the year with a solid foundation of new approvals launch momentum and a strengthened balance sheet.
Tim Cook: We see the opportunity to drive growth through the delivery of our strategic initiatives, we are executing our development and operational initiatives, while our Cynthia continues to enhance its commercial capabilities.
Tim Cook: Further we are building from the strong foundation of our differentiated technology and a pipeline that is continuously advanced next generation products.
Timothy Goodnow: The successful clearance, and now the launch of our 365-day product, represents one of the most significant catalysts in the company's history, and we are looking for 2025 to be a transformational year for the company. There is a large opportunity in front of us, and as we work to continue to simplify the lives of more people with diabetes and build higher growth and shareholder value.
Tim Cook: The successful clearance and now the launch of our 365 day product represents one of the most significant catalyst in the company's history and we are looking for 2025 to be a transformational year for the company.
Tim Cook: There is a large opportunity in front of us and as we work to continue to simplify the lives of more people with diabetes and build higher growth and shareholder value.
Timothy Goodnow: In addition to Rick, Brian and myself, joining us for questions today is Mukul Jain, our Chief Operating Officer. Thank you for all your time today.
Tim Cook: In addition to Rick Brian and myself, joining us for questions today as Mikkel Jain our chief operating officer.
Speaker Change: Thank you for all your time today, operator, let's now open up the call for questions.
Operator: Operator, let's now open up the call for questions. At this time, if you would like to ask a question, please press star 1 now on your telephone keypad. Once again, to ask a question, that is star 1. One moment while we queue. And once again, that is star one to ask a question.
Speaker Change: At this time, if you would like to ask a question. Please press star one now on your telephone keypad. Once again to ask a question that is star one one moment, while we queue.
Speaker Change: And once again that is star one to ask a question, we'll take a question from Brian Lincoln Morgan Stanley. Your line is open.
Brian Langan: We'll take a question from Brian Langan, Oregon Stanley. Your line is open.
Timothy Goodnow: My question is, do you have an idea what the potential market is in the United States and also in Europe? Thanks, Brian. Sure. Obviously, the market for CGM is... huge and growing. What do we have? Something like $11-12 billion this year. We calculate the CAGR to be in the 20-22% range. Eversense can absolutely be a participant in the majority of that market. We are, as you may be aware, we are seeing most of our patients are coming from type 2s, with the indication for insulin, insulin, and that segment of the market is even significantly under-penetrated, so that's even a larger opportunity for us.
My question is.
Speaker Change: Do you have an idea of what the potential market is in the United States and also in in Europe.
Speaker Change: Thanks, Brian sure obviously the market for CGM.
Speaker Change: Huge and growing.
Speaker Change: What are we at something like.
Speaker Change: 11 $12 billion. This year, we calculate the CAGR to be in the 20% 22% range.
Speaker Change: Ever since can absolutely be.
Speaker Change: A participant in the majority of that market.
Speaker Change: We are maybe where we are seeing most of our patients are coming from type twos.
Speaker Change: With your indication for insulin basal insulin.
Speaker Change: That segment of the market is even significantly underpenetrated. So that's even a larger larger opportunity for us. So we see it as an alternative for the folks that are on CGM today.
Timothy Goodnow: So we see it as an alternative for the folks that are on CGM today, and know we'll participate meaningfully as the product generations roll out. Okay. All right.
Speaker Change: And now we will participate meaningfully as the as the product generations roll out here.
Speaker Change: Okay.
Operator: Thank you.
Speaker Change: Thank you.
Operator: And once again, that is star one to ask a question.
Speaker Change: And once again that is star one to ask a question, we'll move next to Vernon Bernardino of HC Wainwright.
Vernon Bernardino: We'll move next to Vernon Bernardino of HC Rainwright. Hi, good afternoon, everyone. Thanks for taking my question.
Vernon Bernardino: Hi, good afternoon, everyone and thanks for taking my question.
Vernon Bernardino: Question I have is.
Frederick Sullivan: The question I have is, I think it was you, Rick, who mentioned your gross margin would improve to, if you could just remind us what you had said your gross margin would get to in 2025, and how that might change after 2025. Hey, Vernon, great to hear from you. Thanks for the question. So in 2025, with the, you know, improved unit economics, a 365 day product, we expect that the gross profit margins will increase approaching 30% by year end, and then continue to increase thereafter. With the partnership as we have it today, we think that the gross profit margins could get to 50%.
Vernon Bernardino: I think.
Vernon Bernardino: I think Rick mentioned your gross margin.
Vernon Bernardino: Improve too.
Vernon Bernardino: If you could just remind us what you.
Speaker Change: You said your gross margin will get to in 2025, and how that might change after 2025.
Speaker Change: Hey, Brian good to hear from you. Thanks for the question so in 2025 with the.
Improved unit economics at 365 day product, we expect that the gross profit margins will increase approaching 30% by year end and then continuing to increase thereafter with the partnership as we have it today, we think that the gross profit margins could get to 50%.
Frederick Sullivan: And that's after the revenue sharing with the Accenture partnership.
Speaker Change: The revenue sharing with the Ascension partnership.
Frederick Sullivan: And regarding the switches to 365, do you anticipate that a majority of those will occur quickly, or do you think that'll be kind of a slow, so that we can look at how patients who went on 180, the six months ever since, as a rate of switch going into 2024? Yeah, Vernon, so we are transitioning the market very quickly in the US. pretty much a light switch, right? We're you're up next for a sensor, you're going to go to the 365.
Speaker Change: And.
Speaker Change: Regarding our us.
Speaker Change: The switches two or $3 65.
Speaker Change: Do you anticipate.
Speaker Change: That a majority of those to occur quickly or do you think that'll be kind of a slow.
Speaker Change: So that we can look at how.
Speaker Change: Patients who went on 180.
Speaker Change: The six month ever.
Speaker Change: Ever since.
Speaker Change: As of greatest switch going into 2025.
Speaker Change: Yes, Brian So we are transitioning to market very quickly in the U S.
Speaker Change: Pretty much a light switch right.
Speaker Change: Up next for a sensor youre going to go to the $3 65.
Frederick Sullivan: Europe, of course, is going to take a little bit longer because we are seeking the approval to commercialize over there, but it's essentially immediate for obviously all new patients. Anybody that's coming off a 180, their next sensor will be 360. Okay, thank you. That's very helpful.
Speaker Change: Europe of course is going to take a little bit longer because we are seeking the approval to commercialize over there but.
Speaker Change: It's essentially immediate for obviously, all new patients, but anybody that's coming off of 180. Their next sensor will be $3 65.
Speaker Change: Okay. Thank you that's very helpful. Thanks for taking my question and congrats on the results looking forward to.
Unknown Executive: Thanks for taking my question and congrats on the results. Looking forward to meeting this third quarter, I mean the fourth quarter. Thank you.
Speaker Change: Maybe in the third quarter.
Speaker Change: The fourth quarter.
Speaker Change: Okay.
Operator: This does conclude our question and answer session.
Speaker Change: Thank you. This does conclude our question and answer session I'd be happy to return the call to Tim Good now for closing comments.
Timothy Goodnow: I'd be happy to return the call to Tim Goodnow for closing comments. Great, well, thank you for the opportunity to speak. We appreciate it and we look forward to updating you at our next quarterly call. in Q1. Thank you.
Tim Good: Great well, thank you for the opportunity to speak we appreciate it and we look forward to updating you on our next quarterly call.
Tim Good: In Q1, thank you.
Operator: This does conclude the Senseonics third quarter 2024 earnings call. You may now disconnect your lines and everyone have a great day.
Speaker Change: This does conclude the <unk> third quarter 2024 earnings call. You May now disconnect your lines and everyone have a great day.
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