Q1 2025 Beta Bionics Inc Earnings Call
Speaker Change: Good afternoon and welcome to the Beta Bionics first quarter, 2025 earnings conference call. At this time, all participants are in lesson only mode.
after the speaker's presentations.
Speaker Change: There will be a question and answer session. And instructions will follow at that time. As a reminder, please be advised that today's conference is being recorded. I would now like to hand the conference over to Blake Beber, Head Investors Relations. Please go ahead.
Speaker Change: Both the replay of this call and the press release discussing our first quarter 2025 results will be available on the Investor Relations section of the website. The replay will be available for approximately one year following the conclusion of this call.
Speaker Change: Information recorded on this call speaks only as it's today, May 6, 2025. Therefore, if you're listening to this reply, any time census information may no longer be accurate. Also, on our website is our supplemental First Order Church 2025 earnings presentation and updated corporate presentation.
Speaker Change: We encourage you to reference those documents for a summary of key metrics and business updates.
Speaker Change: Before we begin, we would like to remind you that today's discussion will include four looking statements within the meaning of the Private Security's Rotation Reform Act of 1995.
Speaker Change: These statements reflect management expectations of future events, our product pipeline, development and timeless financial performance and operating plans.
Speaker Change: Please refer to the cautionary statements in the press release we issued earlier today, as well as our SEC filings, including our Form 10 view filed today for detailed explanation of the implementation of such forward-looking statements.
Speaker Change: These documents contain and identify important factors that may cause actual results to different material from current expectations as term-ply to fire forward-looking statements.
Speaker Change: Please note that the formal statements made during this call speak only as of today's date and we undertake no obligations to update them to reflect subsequent events or circumstances except to the extent required by law.
Speaker Change: Today's discussion will also include references to non-GAAP financial matters with respect to our performance, namely adjusted either top.
Speaker Change: Any non-GAAP financial information presented should not be considered as a substitution independently or superior to results prepared in accordance with GAP.
Speaker Change: Please refer to our earnings press release and supplemental earnings presentation on the Investor Relations section of our website for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measure. With that, I'll now turn the call over to Sean.
Sean: Thank you. Good afternoon, everyone. And thank you for joining us for our first quarter 2025 earnings call. We're excited to discuss with you all today our results for the first quarter of 2025 and updates regarding our annual guidance for the full year.
Sean: As I highlighted in detail on our Q4 and full-year earnings call in March, 2024 was a tremendous momentum building near for Beta Bionics, where our efforts to expand the isle of the commercial reach while advancing our innovation pipeline set the company up for success of the short medium and long term.
Sean: We are building a highly differentiated company that is difficult to compare to traditional insulin pumps from the industry business models.
Sean: from our first of its kind, adaptive close to algorithm, which takes over a set of endosing.
Sean: to our pay-as-you-go pharmacy business model, which we pioneered for durable insulin pumps.
Sean: to our innovation pipeline, which includes a further differentiated cash pump and the bi-hormonal pump that we hope will transform the way people think about managing their diabetes. Plus, it could give us a second new business model based on our gluteus on license.
Sean: We appreciate our business as quite different from others in our industry and appreciate everyone's efforts towards learning about these differences. We firmly believe the business model and product evolution for pioneering are the right path forward for Beta Bionics and our customers.
Sean: and we are confident that you will see that play out in our performance over time.
Sean: The momentum that we saw in 2024 carried into the first quarter of 2025, driven by robust demands of the islet and our team's delivering commitment to delivering life-changing solutions that simplify and alleviate the burden of managing diabetes.
Sean: We want to thank our team for their efforts through which we generated a Q1 results that exceeded our expectations across the board, and that gives us a great deal of confidence in our ability to meet or potentially exceed our updated projections for the remainder
Speaker Change: Specifically, we've increased our 25 annual guidance for revenue, percentage patient starts to reimburse through Pharmacy Channel and Gross Margin, which Stephen will discuss in
Speaker Change: Starting with a brief overview of our Q1 2025 financial performance, I'm going to announce that we delivered 17.6 million dollars in net sales.
Sean Saint, Blake Beber
Speaker Change: I'll put 20% of those new patient scars were reimbursed to the pharmacy channel in Q1, which is meaningfully higher than the mid-single 10%, we saw in Q1 of 2024, and the low teens percentage we saw in Q4 of 2024.
Speaker Change: Notably, we've already achieved our previous guidance of greater than 20% of new patient stars through pharmacy.
Speaker Change: As a reminder, we believe the best metric to measure pharmacy coverage is the percentage of new patient starts that are reversed through pharmacy, as opposed to personalized covered, which only accounts for formulary arrangements with pharmacy benefit managers
Speaker Change: and Dustin's account for adoption by the underlying health plans or the underlying logistics required to utilize this channel.
Speaker Change: As I'll highlight in more detail shortly, this meaningful expansion of pharmacy adoption both as well for a medium, long-term outlook for gross margin expansion.
Speaker Change: I want to emphasize that our pharmacy model is a pay-as-you-o model, that eventually eliminates the revenue we generate to the aisle itself, but maximizes the reimbursement we get for our aisle supplies on a monthly basis.
Speaker Change: This model is starkly different from the DME channel or other pharmacy channel business models that focus more on collecting a large up front payment for the pump itself, but much less payment for monthly supplies.
Speaker Change: You can't have your cake and eat it too, meaning maximize both upfront payments for the pump itself as well as the monthly payments for supplies. That's a very difficult recipe for driving meaningful pharmacy adoption.
Speaker Change: As such, we've chosen the pay-as-you-go model that maximizes the supply revenue because we believe it generates the most lifetime customer value, while also being the most palatable pharmacy benefit model for health plans to adopt, as evidenced by our rapid growth and new patient starts being reimbursed through the pharmacy on recent quarters.
Speaker Change: Said differently, we're willing to weather the slight near-term headwinds that come with our pharmacy model, so that we can benefit much more from the medium to long-term tailwinds that we expected to generate relative to other models.
As I mentioned earlier, we're proud of our Q1 results.
Speaker Change: They are a reflection of the market's deepening appreciation for a highly differentiated adaptive close without them and recent product launches from Q3, Q4 of 2024, including Libre 3 Plus position, color eyelid, and our bounding circle remote monitoring app, all of which contributed meaningfully to our performance in Q1.
Speaker Change: Q1 tends to be seasonally weaker, appearing for diabetes technology adoption as patients deductibles reset. Yet our new patient starts only experiencing a slight sequential decline in Q1.
Speaker Change: That's certainly a credit to all those factors I just mentioned, but it's also important to highlight that our farmers increasing pharmacy mix enables people with diabetes to access our pump with minimal to no upfront out of pocket costs, which also certainly helped our ability to drive new patients where it's in the quarter.
Speaker Change: Regardless of which pharmacy business model the industry decides to pursue, I think we can all agree that decreased out-of-pocket costs are good for patients, and it's encouraging to see us all working toward that same goal.
Speaker Change: With that, I'll turn the call over to Steven to provide some additional color regarding our first quarter results and to discuss our increased full year guidance for 2025. Steven? Thanks, Sean.
Speaker Change: Prior to starting the eyelid.
Speaker Change: This metric reinforces our belief that the Iowa is addressing unmet need in the market and meaningfully expanding the market for insulin pumps.
Speaker Change: Q1 results felt traction from our product launches in Q3 and Q4 of 2024, including the Libre 3 plus integration, color eyelets, and bionics circle, as well as our growth and pharmacy mix, which makes it easier for patients to act as our pump.
Speaker Change: With these dynamics in play, we're able to partially offset some of the seasonal headwinds to new patient starts that the industry tends to see in Q1 relative to Q4.
Let's shift to pharmacy dynamics.
Speaker Change: In Q1, a low 20s percentage of our new patient starts were reimbursed to the pharmacy, which exceeded our expectations as we saw faster uptake by the underlying health plans that partner with Prime Therapeutics as their PBM, plus we continue to make progress in driving adoption by health plans within other existing PBM partnerships.
Speaker Change: The Pharmacy Channel is our preferred reimbursement channel, given it is meme secretive to our financials over a four-year period, relative to the DME channel, and that substantially lowers out-of-pocket costs for patients.
Turning now to Gross Margin.
Speaker Change: In Q1, our growth margin was 50.9%, down compared to 55.7% in the first quarter of 2024.
Speaker Change: The decline relative to the same quarter of the prior year can be attributed predominantly to our rapidly increasing pharmacy mix as a percentage of new patient starts, which we
Speaker Change: We're reflecting on our Q1 growth margin performance. We're pleased with the strong result we delivered, despite the substantial uptick and pharmacy adoption, because it's reflective of our continued cost discipline, which boasts well for our growth margin outlook for the remainder of 2025 and beyond.
Shitting out operating expenses.
Speaker Change: Total operating expenses in the first quarter were 27.6 million, an increase of 66% compared to the 16.7 million in the first quarter of 2024. This increase in operating expenses was primarily attributable to expansion of our field as well as a new cost related to operating as a public company.
Let's talk about Tash.
Speaker Change: As of March 31st, 2025, we ended the quarter with 295.5 million in cash, cash equivalence and short and long-term investments.
Speaker Change: We remain confident in our ability to generate positive free cash flow at an earlier stage relative to what historical precedence in our peer group may suggest. Here are a few reasons for
Speaker Change: We have designed our device to be manufactured efficiently and expect to see future reductions in the cost to produce an eyelet stemming predominantly from greater leverage on our fixed overhead costs as we scale.
Speaker Change: Number two is our pay-as-you-go pharmacy revenue model which we've now discussed extensively and are confident it is financially accretive, relative to DME in the medium and long term.
Our most powerful lever on profitability is priced.
Speaker Change: Number three is simply that this management team has a track record of operating efficiently. The Beta Bionics Management team and I appreciate the way to earn this efficient operator title and the public's trust is by delivering results and that's what we intend to do in the coming quarters and years.
Now, turning to our 2025 Annual Guidance
We are increasing guidance across the board.
Speaker Change: We now expect 22 to 25% of our new patient starts to be reimbursed through the pharmacy channel versus our prior guidance of greater than 20%.
Speaker Change: Allow me to remind you what the increase in pharmacy guidance means for revenue over the next four years.
Speaker Change: The raise from 20% to 23.5% new patient starts to pharmacy, which is the midpoint of our updated guidance. We'll likely generate a roughly $1 million headwind 2025 revenue. This roughly $1 million headwind is baked into our updated 2025 annual revenue guidance of 82 to 87.
Speaker Change: In terms of how to think about the revenue cadence for the remainder of the year, we still expect the relative weighting of new patient starts and revenue across each quarter to be similar to the relative weighting we saw across each quarter in 2024.
Speaker Change: We expect the percentage of new patient starts reimbursed to the pharmacy in Q2 will be at least as strong as Q1 with additional growth coming in the back half of the year.
Speaker Change: Our formula agreement with Prime Therapeutics went into effect on February 1st, and we saw faster than expected traction of eyelid and pharmacy within the health plans that's partner with Prime.
Speaker Change: While these efforts to expand pharmacy adoption will continue throughout the year, both with prime-partored health plans as well as health plans that partner with other PBMs we have agreements with. We don't expect the rate of pharmacy increase in any given quarter for the remainder of the year to be as pronounced as the rate of increase we saw on Q1.
Speaker Change: We are raising our outlook 50 to 53% gross margins for the fully year 2025 versus our prior guidance of at least 50%.
Speaker Change: And number three, we'll benefit from our growing pharmacy install base, where the bolus new pharmacy users we onboarded in Q1 should produce high margin pharmacy supply revenue for the bounce of the year.
Speaker Change: So, the takeaway here is that while the Outer Performance and Pharmacy was an unexpected headwind during a great margin outlook for the year, we expect to be able to more than offset that headwind and we are raising guidance as a result of that.
Moving on to TIFFS.
Speaker Change: Custom components for the islet and its consumables are exempt from tariffs under the Nairobi Protocol. We do have some non-custom components that we source from China, such as our device chargers, but overall we expect the impact of tariffs on our business to be minimal, and their impact is contemplated in our updated Gross Margin guidance for the year.
Speaker Change: In terms of how to think about gross margin cadence for the remainder of the year, we expect gross margin increase slightly throughout the year as continued increases in new patients starts through the pharmacy are more than offset by the combination of number one, the leverage we gain on fixed overhead manufacturing costs from increased volumes, and number two are growing pharmacy install base.
Speaker Change: With that, I'll hand the call back to Sean to discuss our innovation pipeline.
Sean Feider: Thanks, Stephen. Before I jump into our innovation pipeline, I want to dive a little deeper into our algorithm and the advantaged position it holds in the market. Let's first acknowledge that an FDA-approved AID system in the market today, including the outlet, must first deliver great outcomes.
Sean Feider: Given this is table stakes, a core belief of ours is that ease of use is the metric that people with diabetes care about the most when they think about their approach to treating their diabetes.
Sean Feider: We saw the importance of no-fingeristic calibration, continuous glucose monitors, and the role that particular ease of use innovation played in accelerating CGM penetration. And we believe that the isle is simply, similarly, redefining the metrics that matter most.
Four-inch-one pumps
Sean Feider: We believe this because not only are we seeing tremendous traction for the island since launch, but now the pump industry at large is touting ease of use as the next frontier of innovation. Whether that's by trying...
Sean Feider: to simplify pump setup, meal announcements and carb counting, or trying to eliminate meal announcements altogether, which the industry would define as fully closed loop.
Sean Feider: In terms of where the industry is today, the easy use innovations that we've seen from traditional hybrid closed-loop systems are incremental steps in the right direction, but we still believe the islet is far ahead, and that's because the islet does something that we believe no other pump can do.
Adapts to each user and learns their insulin requirements.
Sean Feider: It's another thing entirely to do what the Iowa does, which is autonomously determined initial insulin dosing based on weight alone, and then the pump actually adapts to the user and continuously adjusts both doses over time based on what that specific user needs at that time.
Sean Feider: With other pumps, the burden of adjusting pump settings and finding the right doses is on the provider and the patient With the eyelet the burden is on the focus itself to do that
Sean Feider: With the island, the pump will learn and adapt to what a usual Neil is for you.
Sean Feider: That's the key to revolutionizing ease of use at a patient and learning.
Speaker Change: Important to note. The beta bionics has worked hard to bring easier product to use in the market, but as we said earlier outcomes can be sacrificed in the process. We're proud of our clinical and real world data and we have chosen to RMR salesforce with real time access to a real world patient outcomes using their ipads reps can select.
Speaker Change: Particular clinic as well as criteria like previous therapy and see how those identified users are doing in real time. They can do this on a population level or a clinic level, we RMR salesforce would that data because we're proud of it and we're penetrating deeper into new and existing clinics, because our data is resonating with.
Speaker Change: Fibers, we look forward to presenting a comprehensive update of our real world evidence to the islands first two years of launch at our <unk> Investor event in June.
Speaker Change: Now, let's dig into our innovation pipeline I am extremely excited by our pipeline and the ability. It may have to disrupt the industry and ourselves in Q1, we continued to make progress on our patch pump towards our goal of commercialization by the end of 2027, and we remain confident in that target.
Speaker Change: We believe our patch pumps, two part reusable and disposable design may make for a more seamless patch change process versus fully disposable patches and that plus the integration of our adaptive closed loop algorithm with the patch has the potential to transform the user experience for patch pumps.
Speaker Change: We're excited to show you all the demonstration of the patch at our <unk> Investor event in June where we will dive deeper into the product design and user experience advantages I mentioned.
Speaker Change: Shifting to our by hormonal pump program in Q1, we began enrolling what I would refer to as our bridging study for our glucagon candidate, which if successful would allow us to bridge all of our previous by hormonal clinical data, including three pre pivotal inpatient and six pre pivotal outpatient trials through our new formulation of glucagon.
Speaker Change: This study is designed to assess the pharmacokinetics and pharmacodynamics typically referred to as PK TEP of our glucagon candidate.
Speaker Change: Beyond the PK PD study, we're planning to conduct.
Speaker Change: Current pivotal trials to fulfill the requirements for a 505, two NDA with a chronic drug indication of glucagon and the Ace and IAG C 510, Ks for the pump and algorithm respectively.
Speaker Change: I wanted to remind everyone that if we're successful in getting the buy hormonal system. The market. We believe it could have not only the ability to transform clinical outcomes for people with diabetes, but more importantly, the ability to transform the way people think about managing their diabetes as well as produce a larger lifetime customer value to beta.
Speaker Change: Beyond the patch and by hormonal programs I want to provide a few other updates.
Speaker Change: Starting with our digital innovation, we recently launched a pilot of our updated health care provider portals, which allows clinics to see a full view of all the eyelet patients. They treat in the clinic to collaborate between providers in the clinic and simplify communication and connection between health care providers and I'll, let users during in between their visits to the clinic.
Speaker Change: Our mission is to simplify and alleviate the burden of managing diabetes and the vision for our new health care provider portals to do just that.
Speaker Change: Over time, we'll be adding features that we expect will empower providers to understand the outcomes at the idled is driving across their entire patient base and to quickly identify and triage patients that may need additional support.
Speaker Change: To briefly touch on the type two label expansion opportunity. We've shared that there is some health care providers that decided to prescribe <unk> for their type two patients off label.
Speaker Change: Continue to see this one and estimate that approximately 20% to 25% of our new patient starts in the quarter were type two.
Speaker Change: We look forward to pursuing the type two labels for the FDA, but we also recognize the importance that ease of use and pharmacy reimbursement can have and driving type two adoption by patients and the providers, who manage them most of which are primary care providers.
Speaker Change: Now to touch on CGM integrations, we will support the 15 days XCOM <unk> sensor at launch we're currently integrated with <unk>, <unk>, and <unk> and Abbott freestyle Libre, III, plus making us the most advantage pump for CGM integrations in the U S. Today, and we intend to retain that advantage from the 15 day G seven launches.
Speaker Change: Yes.
Speaker Change: To summarize what we hope you will take away from the call today, we are seeing positive momentum across our business, both commercially and in our pipeline.
Speaker Change: We've updated our annual guidance accordingly, and are confident in our ability to meet or potentially exceed those increased targets across the board we.
Speaker Change: We have a number of compelling short medium and long term initiatives that we expect will ultimately deliver life changing solutions to a much larger group of people with diabetes, we're committed to building a business that delivers durable value to the diabetes community and in doing so to our shareholders as well.
Speaker Change: And we're excited to continue sharing updates with you all each quarter as we progressed in our journey.
Speaker Change: With that operator, please open the call for Q&A.
Speaker Change: At this time I would like to remind everyone.
Speaker Change: Ask the question Gray Star then the number one on your telephone keypad you, we'll pause for just a moment to compile the Q&A roster.
Speaker Change: Your first question comes from the line of Matthew O'brien with Piper Sandler. Please go ahead.
Matthew O'brien: Good afternoon, and thanks for taking the questions.
Matthew O'brien: Would love to start on the pharmacy side, because that number was pretty eye popping as far as what we saw here in Q1.
Matthew O'brien: Just between the new access that you received new Salesforce you received.
Matthew O'brien: <unk> gotten recently, just maybe talk a little bit about.
Matthew O'brien: Just thinking about the Salesforce I'm not sure that was that big of a contributor, but but just what we're seeing on the underlying side in terms of the dynamics of the pharmacy channel on your business in that.
Matthew O'brien: This is an increase the outlet there specifically here in Q1.
Matt: Yes, Matt Thanks for the question.
Matt: I think that what we're seeing there is we're just having greater success with in effect, what we're selling to the plans themselves as.
Matt: As we shared in our prepared remarks step one is get the contracts of the PVM.
Matt: Traditionally more difficult step is to convince the underlying plans to adopt your the plan that you've laid out where the contracted blade up with the PVM.
And frankly, we're just seeing that happened faster than we expected and I think Thats a testament to.
Matt: Signing those contracts in a way that makes it advantaged for the plans to want to do this and that.
Matt: That happened pretty aggressively in the first quarter, primarily based on the prime contract specifically.
Matt: But that obviously gives us excuse me increased confidence going into the back half of the year.
Matt: There is nothing there is nothing one time about the success that we had in pharmacy in the first quarter. So again, there was a low twenties percentage of our new patient starts are reimbursed through the pharmacy in Q1, and we increased the guidance to 22% to 25% for the year.
Matt: And so there is no just pointing out that like what we saw in Q1, we expect to sustain through the rest of the year with some slight uptick.
Speaker Change: Got it and then Stephen you did a really nice job of running through the financial benefit that youre going to get from that upside here in Q1 can you talk about.
Speaker Change: Again, the patient adds I mean that was way higher than what.
Speaker Change: What we had been modeling here, especially in a seasonally soft quarter.
Speaker Change: Just some of the successes that you're having in terms of adding new patients and then and then the contribution from these new reps and potentially even even layering on in terms of.
Speaker Change: Adoption you guys are still fairly new in the.
Speaker Change: Rollout of the product. Thanks, Yeah. Thanks, Yeah, good questions, Matt and thanks for the compliment there. So yes, we saw a 4% reduction in our new patient starts from Q4 to Q1, and I think thats, what youre alluding to so again Q4 to Q1, 4% reduction, but seasonally you would expect in diabetes the decrease to be quite more quite a bit similar.
Speaker Change: Significant than that and so I think it's really just a product of two things that are resonating with our products.
Speaker Change: Number one.
Speaker Change: We had some new product launches that went into.
Speaker Change: And to affect in Q3, and Q4, notably color islet Libre three integration antibiotic circles. So those certainly create some.
Speaker Change: Some benefit for us that we are selling better things now and we had we were able to do that for the entire quarter and then the second is we have a maturing sales force so.
Speaker Change: We have.
Speaker Change: Our sales force and now we exited Q1 with 63 sales territories, but a lot of those 2020 of those 63 are brand new in the first quarter, but even if the 43 that existed prior to that they were maturing.
Speaker Change: They are more mature and we're developing traction across the entire country.
Speaker Change: So again all of those 20 that those 20, new territories that we added in.
Speaker Change: In the first quarter really there was no contribution to new patient starts from those incremental 20. So it's again, but most of the results that we saw in Q1 or from the existing 43, we already had.
Speaker Change: Got it thank you.
Speaker Change: Yes.
Speaker Change: Your next question comes from the line of Mike Kratzke Leerink partners. Please go ahead.
Speaker Change: Hi, everyone. Thanks for taking our questions. Stephen maybe just wanted to start on the guidance can you help frame to what extent your new guidance assume that raised some new starts for the year relative to your prior expectations any color on the magnitude of that would be helpful. And then one follow up.
Speaker Change: Can you say that again Mike.
Speaker Change: Yes.
Speaker Change: Might've missed I think you said in your comments that your new guidance in terms of revenue. It seems a raise in your new starts overall.
Speaker Change: And just curious on the magnitude of that and.
Speaker Change: Maybe just to ask a follow up upfront.
Speaker Change: How does that assume any new shifts in competition, either between new players or new combos that could come to market.
Speaker Change: Yeah got you Okay. So we increased our revenue guidance.
Speaker Change: By $2 million at the bottom end high end of the range.
Speaker Change: But we also dramatically increased our pharmacy guidance, which means that in 2025.
Speaker Change: Increased our new patient starts expectations by above.
Speaker Change: What what our revenue guidance implies because we have to sell more new patient starts in order to make up for that revenue Delta that has now created in the short run from from pharmacy. So.
Mike: Yes, maybe just to confirm your point Mike.
Speaker Change: Yes.
Speaker Change: We call it we increased our revenue guidance, but the actual implied.
Speaker Change: Increase in new patient starts guidance is higher than what again, what I've what.
Speaker Change: What we're communicating in terms of revenue.
Speaker Change: In terms of competitive pressure I don't know Sean do you want to you want to comment on that part.
Speaker Change: Sure.
Speaker Change: I don't think that the way, we do our guidance generally doesn't.
Consider relative share between the different players, but what I will say.
Speaker Change: We're obviously quite cognizant of competitive launches within the space and we did allude to that in the call.
Speaker Change: And at this point, we don't see anything on the horizon that we're particularly concerned about.
Speaker Change: Everybody is doing well.
Speaker Change: Good products out there now and getting better but for the moment, we believe that the island remains a differentiated algorithm that does what.
Speaker Change: It doesn't fairly unique thing and Thats exactly why we've been leaning into sharing our real world results of the eyelet and how it's working in the field as broadly as we possibly can and I would add to what Steven said earlier.
Speaker Change: About a tailwind in Q1 is as we mentioned our sales reps are now in a position to be sharing how well. The island is doing from baseline <unk> to follow of GMI and that message is very much resonating.
Speaker Change: We just don't see anything on the market or excuse me on the horizon that theyre really risks that in any way.
Understood. Thanks, very much and maybe if I can just sneak one more in in terms of the Turkey side.
Speaker Change: Very helpful color.
Speaker Change: Can you talk about what type of traction you are seeing among <unk> versus PCP is for those patients.
Speaker Change: Mike I think I'd, probably prefer not to comment on that at this time specifically.
Speaker Change: What we will say is that.
Speaker Change: A significant number of the type two population is managed on the primary care space and we do believe that being applicable in the primary care space is a very different.
Speaker Change: Challenge than in the endocrinology space, primarily based on the fact that primary care providers are somewhat less familiar with the setup and management of a traditional insulin pump and that we believe positions us uniquely in the primary care space, specifically, having nothing to do with the type two opportunity specifically because again.
Speaker Change: We don't have that.
Speaker Change: We have an indication at this point.
Speaker Change: Got it thanks very much.
Speaker Change: Thanks, Larry next question comes from the line.
Matthew Blackman: Matthew Blackman.
Speaker Change: Please go ahead.
Speaker Change: Hi, good afternoon, everybody. Thanks for taking our questions I've got two.
Speaker Change: Maybe to start Shawn just given that you both I think echoing what Matt said tackled that pharmacy mix impact well, so I appreciate that color.
Speaker Change: The one question I have still is why are you confident in this now explicit 22% to 25% range, what kind of visibility do you have on that mix and how much control you have over whether a pharmacy script goes through <unk> or through pharmacy, and then I've got one follow up on the sales force.
Speaker Change: Yes.
Speaker Change: <unk>.
Speaker Change: We have pretty good visibility.
Speaker Change: We signed I think I'll just to remind you of kind of the framework of how this works for us for you to ultimately get coverage turned on for a patient to be able to be reimbursed through the pharmacy channel first you have to sign PGM contracts and then theres some selling that gets done at the plant level and all of those decisions get made at a future date. So there's really like three stages to turning on pharmacy coverage and <unk>.
Speaker Change: Cause.
Speaker Change: We are in discussions like with plant with Pbms with plans.
Speaker Change: Involving both of those elements of the process, we actually do have some pretty good visibility now that said there can be slight deviations.
Speaker Change: From quarter to quarter, because our sample size is relatively small, but the reason that we see or we're forecasting some upward.
Speaker Change: Momentum in the pharmacy adoption through the rest of the year is because we are aware of some information for like when do we expect certain plans to turn on the island as a pharmacy benefit and so.
Speaker Change: I would say our visibility is actually reasonably strong.
Speaker Change: I really appreciate your question there was how do we control, which channel the script goes through yes, yes, yes.
Speaker Change: Every single prescription for the eyelet ends up getting sent to beta bionics and at which time beta Bionics, then checks to see if a patient is covered in the pharmacy benefit and if so we have a tool that allows us to do that if they are covered in the pharmacy benefit we send the patient to get reimbursed through pharmacy and that prescription is filled through a mail order.
Speaker Change: If the patient is not covered in pharmacy, we then send them to <unk> such as reiterate the points that we've now said on the call and it's a good question, but this is why when we say that the pharmacy is our preferred channel and we send every patient that we can through the pharmacy, we actually do control all of those that patient volume and so every and every patient Bennett, who is covered and pharmacy benefits.
Speaker Change: From it so again, we check all the patients for pharmacy, if theyre covered we send them there.
Speaker Change: Got it thank you for that and the question I have on the Salesforce you sort of touched on it a little bit but up to 63 from <unk> 43 at the end of 'twenty four just to be clear are all those 20 incremental territories now up and running in the second quarter.
Speaker Change: Couple of follow ups I don't think so but okay. So thank you on the yes.
Speaker Change: Doubt there was any but was there any <unk> dislocation with the expansion of the sales force with maybe the existing territories and the final question is how are you thinking about layering in these new territories as those reps ramp to productivity are they layered in the back half of 'twenty five or is it really in 2026.
Speaker Change: Nine to 12 months productivity curve that we should start to visibly see them contribute to the top line. Thanks, so much.
Speaker Change: Yes.
Speaker Change: So dislocation, Matt sorry to clarify, but what do you mean by the dislocation point I just want to make sure I don't Miss answer that yes, so sometimes when you expand the sales force there is.
Speaker Change: Eyes get taken off the balls.
Speaker Change: Things slipped over assay.
Speaker Change: Typically that's when you're slicing up territories, which youre not doing here, but.
Speaker Change: Anytime I think in Med Tech, we hear Salesforce expansion.
Speaker Change: We think the worst.
Speaker Change: So no no dislocation I look on an on balance what you said is true about the net 20, new territories are on.
Speaker Change: Are being added to areas, where there wasn't already an existing sales rep, but sometimes they are certainly places where we did cut a territory, let's say in.
Speaker Change: And so that's it's not always that statement isn't always true.
Speaker Change: In terms of like the time to productivity, we will start seeing or this new 20 sales territories start.
Speaker Change: Generating revenue immediately in the second quarter so.
Speaker Change: Now the time to productivity I've never formally answer that question in terms of like when we expect the territory to become fully productive and I wont answer that here.
Speaker Change: But but.
Speaker Change: It doesn't take quarters for a territory due to kind of get up and running so that they Chris start creating any demand at all.
Speaker Change: Now these territories are now in place, they're trained and they're actually selling for us in the second quarter great. Thank.
Speaker Change: Thank you, Steve and I will get back yes.
Matt: Good questions, Matt Thanks, Matt.
Matt: Your next question comes from the line of Steve.
Speaker Change: Bank of America. Please go ahead.
Steve: Hey, Thanks for taking the questions and congrats on the good quarter.
Speaker Change: I guess the first question I had is now.
Speaker Change: Now that you are kind of 63 territories the awareness of <unk> as it is getting out there any change in kind of what youre seeing.
Speaker Change: And then your doctors and prescribers.
Speaker Change: And the uptake of violent how they're using it.
Speaker Change: And also like seeing penetration move like within within your own doctors, and then and also kind of adding new prescribers just kind of curious.
Speaker Change: The awareness of the products.
Speaker Change: Playing out and the amount of follow up.
Speaker Change: Yes, Great question, Travis I think what we're seeing evolve is that.
When you first launch a product you are necessarily going to get niche in some level right nobody ever launched a product in this industry and somebody just looked at and said, yes, im going to use that on absolutely everybody.
Hasn't happened, one time that I'm aware of and I've been in the industry a while.
Speaker Change: So they're going to find that area, where they need to try it out.
Speaker Change: And I think <unk> was no different right.
Speaker Change: Know that at some level, we get used on some of the harder patients.
Speaker Change: Patients previously been unable to be successful in other therapies.
Speaker Change: But what we've been able to do and we've alluded to this several times now is share of that success.
Speaker Change: The average even see drop from X to Y I think on the last call. We shared what we considered are fully closed loop experience in the shocking a reductions in GMI that we saw on that and when we can share that on a clinic by clinic basis or a doctor by Doctor basis, Let's say Dr. These are this is George experience with the island say Holy Smokes that's.
Speaker Change: Really working well and Theres no real reason that if it's working well on the harder patients it really shouldnt work at least as well on my easier ones.
Speaker Change: So I think there is an understanding of that going on but.
Speaker Change: At the same time as we increase our sales force size, we increased the accounts that were calling on we're going to see that also start the other direction in those new accounts right. So we said okay well now it's my first time using the eyelet I understand thats out there, but I haven't tried it before and then they try it on some of the harder patients and then we have to get that position or accounts to move.
Speaker Change: <unk>.
Speaker Change: Spectrum or what have you and get <unk> to be more broadly accepted but I think we're clearly seeing that at some level and again the clinical data that we're able to share. It does indicated and as we mentioned we are.
Speaker Change: We're excited to share that that real world evidence data more broadly at our analyst day in June at <unk>, and I will remind everybody that the majority of people in the United States roughly 80% of an 80, they wouldn't see over 7% so not meeting <unk> goal.
Speaker Change: And historically these are the people that we've considered to be the harder patients.
Speaker Change: So frankly being niche to new and 80% group is something that we're very happy to start with and if we.
Speaker Change: Into the entire population or that's just even better.
Speaker Change: Okay, great. Thanks for that and then.
Speaker Change: Sean I guess the follow up would be on the patch pump I'm not sure. If theres any milestones you can share on progress you're making there just wanted to make sure. There was nothing else on that and then Steven a modeling question, we're putting on the <unk> revenue.
Speaker Change: Inpatient revenue the models and it looks like there was a tick down in revenue per patient and the DMV side this quarter versus the prior few quarters I'm not sure. If there was something to call out there.
Speaker Change: We can follow up offline, if there's something that we're missing.
Speaker Change: Yes, let's take those one at a time.
Speaker Change: That's fast work on that second one thats good first math I like that I'm, let Steven take that one on the patch pump I know I'm, sorry, we won't share any additional color on that project. We did reiterate our prior guidance of commercial launch by the end of 2027.
Speaker Change: And then as I mentioned, we look forward to sharing that product in more detail at the analyst day in June So we can get a little hands on with it and see how it works.
Speaker Change: What the intent is and provide some more color around my statements today, which is that we do expect it to on balance be an easier user experienced as compared to a fully dispose fully disposable form factor. So yes, we're looking forward to that one Steven Yeah, and then just to be clear that that Ada event that Sean just referenced where we'll do a full demonstration of it. So it's not just some slides.
Speaker Change: With like some updated visuals.
Speaker Change: And to show you exactly kind of what the merits of it are.
Speaker Change: So in terms of.
Travis: Why you are seeing that trend Travis so.
Travis: The distributors ended Q4 with more inventory <unk> inventory on their shelf than they did in Q1. So said another way there was lumpy a little bit of Lumpiness, which theres nothing to read into here, but.
Travis: But it's just so it kind of happens the nature of the industry that we're in.
Travis: But there was a larger spread between new patient starts and number of islands sold to distributors in Q4 than what there was in Q1.
Travis: So thats really the reason.
Travis: Okay. Thanks for that.
Travis: Aspects of orders timing.
Travis: Timing aspect of orders and there is nothing.
Travis: I Wouldnt call like a prediction of what we'll see in the next quarters, either I think we'll just sort of experienced little lumpiness like that that will get minimized as the revenue for our but cup business grows.
Travis: <unk> has over time, but for the time being yes. It did make an impact in the comparative periods is there a likelihood catch up next quarter. So it's like if it's under this quarter. It goes higher next quarter or is that too simplistic not always true I mean, there is a world where distributors and.
Travis: In Q2 at the same level of inventory that they did at the end of Q1 in which case, we wouldn't see any.
Travis: Any difference there for the confer comparing the two periods, but if then if it.
End of Q2 distributors and.
Travis: The quarter with a similar inventory level. They did with from Q4. Then then yes. There is some tailwind in Q2.
Travis: Okay. Thank you.
Travis: Yes.
Speaker Change: Your next question comes from the line of Jonathan Jeff <unk> with Baird. Please go ahead.
Speaker Change: Thank you. Good afternoon, guys. Just a couple of quick follow up questions. If I could first one just.
Speaker Change: On the <unk>.
Speaker Change: I'm sorry.
Speaker Change: Feel like I'm, losing my train of thought here just I'm sitting in the airport.
Speaker Change: And there was no I'm trying to remember what I was hoping to ask here hold on.
Speaker Change: Yes.
Speaker Change: Oh I know what it was just on the gross margin line you came in a little bit below obviously, that's the move to pharmacy.
Speaker Change: So much of the value of your patients in your two three and four.
Speaker Change: Do you have any on the 19000 pumps placed so far any early indication on attrition rates. So far your pumps supply revenue seems to be coming in a little bit better than we had expected. It would suggest to me maybe the attrition rates a little lower than I had been modeling, but just any early indication on the attrition rate would be helpful. Thanks, Yes.
Speaker Change: Yes sure.
Speaker Change: Okay.
Speaker Change: Not going to love my answer here, so just disclaimer, but we won't be sharing.
Speaker Change: The actual attrition rate in pharma in the pharmacy channel or in the <unk> channel for that matter.
Speaker Change: For a few reasons, including that the competition doesn't but I guess just embedded in the statement we have perfect access to that information. So I know what our attrition rate is every month of course in both channels <unk> pharmacy and embedded in my statements of the pharmacy being our preferred.
Speaker Change: Revenue channel is my understanding of the attrition rate and my confidence that it's accretive to beta bionics financially in the medium and long term because of that and so I guess I'll just have to leave it there that yes, we are seeing strong attrition at the moment, our strong retention rate.
Speaker Change: Yes.
Speaker Change: Alright fair enough and there was some noise in the background. So I'll drop there. Thanks so much.
Jeff: Alright, Thanks, Jeff.
Jeffrey Cohen: Your next question comes from the line of Jeffrey Cohen with Ladenburg Thalmann. Please go ahead.
Speaker Change: So high shareholder Stephen Thanks for taking our questions I guess, we wanted to focus on.
Jeffrey Cohen: Clinical work for our two questions. Firstly on the bridging study can you talk about.
Jeffrey Cohen: What we May see this year you did mention.
Jeffrey Cohen: Inpatient and outpatient visits for the study is ongoing and then secondly could you talk about the.
Jeffrey Cohen: The timeline and expected size on this label expansion trials for type two.
Jeffrey Cohen: Alright.
Jeffrey Cohen: Couple of questions embedded in that Geoff let me start with the bridging study. The bridging study is primarily a pharmacokinetic pharmacodynamic study or PK PD.
Jeffrey Cohen: So as such we won't have device outcomes from that because what we're looking at is the way that our glucagon candidate impacts blood sugar over time as compared to historical glucagon. So the DIY, it's considered bridging.
Jeffrey Cohen: Is that if this glucagon candidate reacts or causes the body to react in the same way as previous glucagon that we used in our formative trials that we can expect the device to work in the same way as well.
Jeffrey Cohen: That basically says all the data to date can be bridged to the new the new glucagon.
Jeffrey Cohen: That being said that trial has begun we didnt state anything beyond that and I won't at this time.
Jeffrey Cohen: But I will say that historically, we've shared that the the cadence here is going to be bridging study followed by pivotal trials and there is more than one but there anyway.
Jeffrey Cohen: Anyway, similar followed by the NDA and 510 case on that product.
Jeffrey Cohen: So this gives us an idea of where we're at.
Jeffrey Cohen: At that point, and then timeline on any type two label expansion I think we're going to continue to not comment on that one.
Jeffrey Cohen: For any number of reasons.
Jeffrey Cohen: But primarily we're well, yes, maybe just leave it at that.
Jeffrey Cohen: Okay perfect.
Jeffrey Cohen: More of a requirement for us as far as.
Jeffrey Cohen: The commercial organization can you update us quarterly are you planning on more assets throughout our Q2 to Q4 for this year or has to say.
Jeffrey Cohen: Annualized decision when you talk about <unk> 20 in the first quarter.
Jeffrey Cohen: Im going to not share an expectation or communicated an expectation on whether we will expand the size of the field team through the remainder of the year, but we'll continue to share at the end of each quarter.
Jeffrey Cohen: Many territories we have.
Speaker Change: Super Okay got it thanks for taking our questions, yes, Jeff as always.
Speaker Change: Again, if you would like to ask a question press star one on your telephone keypad.
Speaker Change: It looks like we have one more from Brooks right.
Speaker Change: Yes. Your final question comes from the line of Brooks O'neil with Lake Street Capital markets. Please go ahead.
Brooks O'neil: Thank you very much and congratulations on a terrific first quarter I just have a couple to finish up here. First is you guys are the only ones integrated with Abbott Libre three I'm just curious if you could comment on whether you see any any meaningful impact on new patient starts.
Brooks O'neil: That's tied to the Abbott Libre three device.
It's a great question Brooks.
Brooks O'neil: Now I'll take a page from Stephens playbook can sell probably frustrate you with my answer.
Brooks O'neil: Given that we are partnered with multiple CGM players I think it is our policy to not discuss the relative weighting of our CGM adoptions between those players.
Brooks O'neil: Said another way, we're going to let the CGM guys battle it out and we're going to be very happy to support all of them with.
Brooks O'neil: With that being said we're extremely.
Brooks O'neil: Thankful to Abbott for partnering with us on the Libre three certainly.
Certainly one great sensor as is the <unk> com and it certainly matters to our business as does the <unk> sensor. So if that was a middle of the road answer that I got it right and just to reiterate what I said earlier I mean Q1 was a strong quarter, partially because we had some new product launches and one of those new product launches with Libre III in the fourth quarter, so that did contribute to.
Brooks O'neil: Strong quarter.
Brooks O'neil: Sure. That's helpful. Thanks, a lot last question I had was.
Brooks O'neil: You talked quite a bit about the pharmacy and the economics and dynamics.
Brooks O'neil: I'm just curious when you say is that for you guys. You are highly confident that it's going to be meaningfully accretive in the medium and long term and you comment that the patient out of pocket is meaningfully lower.
Speaker Change: On one level I assume that means that the payers are paying more.
Speaker Change: And yet your comment that they are very enthusiastic about adoption and I'm just I would love to get any color you can offer in terms of how that dynamic works out kids in my experience the payers are pretty sensitive to their out of pocket costs.
Speaker Change: Yes understood.
Speaker Change: So yes, it is meaningfully accretive debated biotics in the medium and long term and at month 11, we actually generate in the aggregate a larger amount of revenue in the pharmacy channel than the DIY channel I guess, if you just compare again cumulative revenue from a patient would start in dnb versus pharmacy. So what does that mean, yes that means that.
Speaker Change: Our payer over the course of a four year period would pay more for the island.
Speaker Change: And pharmacy than they would in Dnb, however, here's why the payers like it number one there's two primary reasons number one and dnb.
Speaker Change: Patients do find wait at times to switch from pump to pump and it's led to the distributors and the D are not the Jimmy distributors, but the Payors to police. This four year warranty element of their business, meaning preventing patients from getting another pump if <unk> if they've gotten wondering within the last four years, so thats actually.
Speaker Change: Just kind of a challenging system for payers to police and so they found ways to do it but patients also find different ways sort of around that mechanism. So that's the first reason is it's it's avoid sort of this the system that I think is may be frustrating for the payers to catch a police themselves.
Speaker Change: The second is is that look I think it's well known that having patients on insulin pumps.
Speaker Change: In particular, AIB automated insulin delivery pumps does great things for patient outcomes for patient health outcomes, and so payers actually believed that having more patients on <unk> and this.
Speaker Change: This is true I think in the data that having more patients on insulin pumping reduces a patient's overall cost of the system for someone that has diabetes and so payers again, a lot more patients on insulin pumping and they see a path to more patients using them if.
Speaker Change: These products can be made at a lower cost and an easier system to access which is the pharmacy reimbursement system. So for those two reasons.
Speaker Change: We found that payers are are certainly welcoming.
Speaker Change: Pay as you go business model in the pharmacy channel relative to <unk>.
Speaker Change: Great.
Speaker Change: Good explanation Stephen I appreciate it and it's good to hear that the payers are actually doing the right thing in this case.
Brooks O'neil: Yes, yes, great partners Brooks.
Speaker Change: Good question Brooks thank.
Brooks O'neil: Thank you very much.
Brooks O'neil: It looks like we have one more.
Your last question comes from the line of Kelly close close concerns. Please go ahead.
Speaker Change: Thank you.
Speaker Change: Wondering as you think about the type two market.
Speaker Change: More opportunity.
Speaker Change: The number of patients who are already on basal and maybe their own DLP, one, but they still really.
Speaker Change: As more and more help with their glycemic management or the ones, who maybe are actually on MDI, but that's such a challenging thing for clinicians to manage and they would benefit so much more from pump therapy, especially in pump therapy that's easier.
Speaker Change: And so much more I can be more.
So much.
Speaker Change: Great question, Kelly definitely a perspective, and we'll see how this plays out over the long run.
Speaker Change: I think first of all I'm not a physician.
Speaker Change: But if I were I think I would be looking at potential users who most closely matched.
Speaker Change: The current users of a particular technology.
Speaker Change: Because it is closer to what I am familiar with meaning I'll translate that.
Speaker Change: Obviously, there is a huge percentage of type two users today, who are on intensive insulin therapy and those patients are really being managed just the way type ones are as we know.
So thats a natural entry of pumps into the type two space what they can additionally, due in the basal only or in the the GOP one way or what have you.
Speaker Change: At least at some level remains to be seen and I think we're interested to see that but the intensive insulin therapy market in type two is quite large today and I think certainly would benefit by entry of a product that is effectively a specifically designed for users like that for the reasons you mentioned Kelly that it is a very difficult therapy.
Speaker Change: <unk>.
Speaker Change: To follow MDI is so.
Speaker Change: I would probably start on that end, but.
Speaker Change: We shall see what what ends up happening.
Speaker Change: And thanks for the question Kevin.
Speaker Change: Yes.
That concludes our Q&A session I will now turn the call back over to Shannon for closing remarks. Please go ahead.
Speaker Change: Well, thanks to everybody today, we really appreciate your time on our Q1 2025 earnings call and we hope we put up some good numbers this quarter and we look forward to keeping that going forward. So thank you. Thanks everybody.
Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.
Speaker Change: Please wait the conference will begin shortly.
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