Well, everybody, thanks for joining. This is our session with Beta Bionics. I'm Matt Blackman, for those of you that haven't met me. Again, pleased to have senior management from Beta Bionics join us. On my far left, Stephen Feider, CFO. On my immediate left, Blake Beber , IR extraordinaire. Thank you guys for joining. This is your 1st, I think, TD Cowen Healthcare Conference.
Indeed.
It is the 46th, I think, annual conference for the firm, but it's also my 1st.
I think I've done more of these types of events, though, with you as the moderator than I have any other moderator.
I'm very, very flattered.
This is my territory.
Yes. Yes.
Good to be back with you.
Likewise, and I appreciate it.
It's been a good conference.
Well, good.
Thanks.
I appreciate that, and I appreciate you making the trip out here. I thought I'd start big picture as I tend to do in these sessions. I think a lot of people are probably familiar with the technology. Maybe just take a moment, though, for those that are not, but I mean, iLet is definitely differentiated relative to other insulin delivery devices on the market, whether they're patches, pumps, or even smart pens. Maybe just the narrative here of why you believe iLet's positioned to win new patients in this market.
Sure. We, of course, make an insulin pump, the differentiating factor for our insulin pump, or what makes it better than other pumps, is the automation associated with the product. For patients, they turn on the pump, enter their body weight, click Go, the learning algorithm learns and adapts to the patient and gives them the right amount of insulin when they need it. Patients are supposed to call meals in the product. Many patients do not. Patients can engage with the product to the extent that they are willing to or that they are able to.
For healthcare providers, this also has a big benefit in that there is nothing for the healthcare provider to do, meaning they can prescribe it to patients without having familiarity with insulin pumps and the level of engagement that's required from the healthcare provider to both set up and then manage the actual insulin pump has been removed from their requirements. More time spending with the patient and less time dealing with the pump. That is the core product differentiation. In terms of the company, and this is not the product itself, but just saying something that I feel really good about regarding the company, I think we are the fastest to innovate new products. We pioneered pharmacy reimbursement, which is a differentiated business model for tube pumping.
I think in terms of the management team and our familiarity with this particular industry and the work that now our track record has demonstrated, it positions our company better for the evolution of insulin pumping. I also, as the finance guy, I also just have to say that I think our business model is really well-positioned to generate free cash at a much earlier stage than what we've seen. You know, some of the financial characteristics are really strong.
It was a good opening. I appreciate that. We sort of touched on this, but we'll just put a finer point on it. When you think about your competitors, the competitive landscapes, what do you think are the biggest shortcomings of other devices? We'll put form factor to the side and talk primarily about algorithms.
I wanna answer this. What I believe gives the company or an insulin pump company the right to win on the grandest scale. Like, my vision and our company's vision for what insulin pumping should look like, that again gives that company the, puts that company in the best position to win at the highest level. I do think that Beta Bionics is best positioned to win in this framework. This is the way that I'd answer it, is what do patients actually want out of an insulin pump? I believe that they want to engage with the product if they prefer to. They don't have to, but if they prefer to. That's the algorithm part. That's where we are advantaged today. Can our algorithm improve? Sure.
That's, that is the 1st thing, is an algorithm that's automated, and allows people to engage with it if they want. The 2nd thing is that they wanna wear a form factor of their choice, and that means that today, and this is, you said don't comment on form factor, but I do think that's a really important element-
Sure.
of the patient's sort of desire is many patients would prefer a patch pump form factor. This is well known. Our patch pump competitor wins most of the market share. A lot of it is because of this particular reason. Some patients will wanna wear a tubed pump. That's what we sell today. Some will wanna wear a patch pump. Give them the option for a pump that's at least as good as the incumbent's patch pump form factor and a tubed pump. They wanna wear whatever CGM they prefer to wear. You have to integrate, I believe, with every CGM on the market that patients would wanna wear. I think what's probably even an underappreciated element of the insulin pumping space is that everybody, all patients, all doctors want to prescribe and purchase their insulin pump in the pharmacy channel.
Again, algorithm that you don't have to engage with if you don't want to. A patch pump or that's as elegant, at least, as the current incumbent or a tubed pump integrated with every CGM, buy all that in pharmacy. Do all those 3, those things, and you'll win at the grandest level in this particular industry, which by the way, is still way under-penetrated, in terms of pump adoption, and I think Beta's best positioned to do that.
I think you exited 25. You're roughly 10% new patient market share. Is there a common thread on who that patient is? Is it a certain demographic? Is it in a certain channel? Just any sort of commonality across the.
Mm.
the recent adopters.
T here's really 2 types of patients that we're winning today. There's people that are the earliest adopters of tech and want to drive the self-driving car or want the self-driving car. That's our automated product caters very well to those people. We win that patient cohort. Actually where we win the most particular patients, by the way, I do think iLet is broadly applicable for the entire category, but acknowledging that we're sort of new to the market, we can get into that. The 2nd category of patients are people who would not do well or do not do well on other competitive pumps.
I think a good piece of evidence for why we're winning so many of those people is we're like, to just prove to you guys that that's a patient population that we're having a lot of success with. The average A1c of all patients who come to us and start on the iLet is about 9. That's a lot of patients that come to us with really high starting points from competitive pump systems. Most of our patients, about 70%, come to us from injections, meaning we're expanding the market. That, again, the average is roughly 9 A1c. We're getting a lot of these people who other pump systems are not applicable for because of the engagement that's required.
Either these, you know, these iLet users are either unwilling or undesire to engage with products, call meals, set up, manage, calibrate settings. Our product, you know, gives them a great outcome. You can get into that if you'd like.
Yep.
That those are the main 2 areas again that we take patients from.
Look, there is a narrative out there, you sort of touched on it, that iLet is a niche type product for those very challenging to.
Mm-hmm.
To manage patients. We hear it from clinicians sometimes. It's largely endocrinologists.
Yeah.
Tell us why that's wrong. Why is this a workhorse product for everybody?
O f course, I hate that narrative.
Sure.
I mean, we think of iLet as uniquely applicable for the entire population. Look, what makes it better and different, I've now said, I've said it, you know, a few different times, but it gets dramatically better or at least as good or better outcomes with dramatically less work for the healthcare provider and the patient. We think that is a winning argument, even for patients today who are getting good control on other pump systems, but are doing a lot of work to get there. We think it's uniquely applicable. Look, this is like, maybe this is the Stephen sort of candid take on like maybe another way to answer your question would be, why today do we lose?
Yeah.
What are, you know, what are reasons like, this is like what we work, of course, tirelessly to try to address is like, what are reasons why the pump, the other pump companies beat us? There's really 3. First one is that some patients prefer a patch. Omnipod wins, or, you know, the 2, the patch pump competitor wins probably 70% of all new patient starts in the country. It's depending on the model, it's hard to really peel that out, but it's somewhere around there. Some patients just prefer to wear a patch.
Un-underappreciated element of the patch, too, is that it's reimbursed in the pharmacy channel, exclusively, which we do have reimbursement of the pharmacy channel to some extent that we're proud of, but that product is always reimbursed in pharmacy, and that gives them a huge advantage. Some patients prefer to wear a patch, okay, fine. The 2nd is there are patients who don't want a self-driving car, that prefer to actually manage their insulin pump and have the control that they actually are the ones turning the dials on. Okay, that's the 2nd category. The 3rd one is the most important one, I think, to understand. It's the hardest to appreciate, but it's the most important one to understand. It's that we're asking the industry to change behavior. This is an entirely different way of thinking about insulin pumping.
There are deep-rooted healthcare practices within endocrinology that have built, like, you know, have built practices around setting up managing insulin pumps. We're telling them, "Hey, look, there is a, there is an automated way or there's an automation-forward way of doing this." Here's why the outcomes from this particular automated system are so great. Here's why your patients are gonna like it more. Here's why it's easier for you and your practice. I am so confident that that is the future of insulin pumping, but that is going to take time.
I don't think there's probably countless examples that people in this room that you could think of where there's been stark changes in terms of evolution of product or automation that gets introduced to the world of healthcare. Doctors just don't change behavior overnight. If you're looking for validation to my point here in terms of the other pump companies sort of validating what I just said, that automation absolutely is the future and that behavior change is gonna take some time. To a company, they've all now been talking about automated learning-based algorithmic systems.
Weight-based inputs.
That are coming to the market that are similar to iLet. That framework I laid out about how you win at a grand I don't think that's that controversial.
Yeah.
It is taking some time, you know, to change healthcare practice behaviors. Those are, again, the 3 reasons why we may lose patch. Who really desires to engage, change management.
I think, you know, we're also focusing here on the primarily view from the endocrinology community, which is clearly very important and drives a lot of growth. The primary care setting is going to be increasingly more important, not only for Type 2 growth, but for Type 1 as well. I think it's an underappreciated, I think you guys talk about it as well. We've been talking about it for a long time, that there is. When I say non-0, it could be 50% number of Type 1 patients that use primary care to manage their diabetes. Maybe talk about sort of it's almost bifurcated, you know, maybe some resistance in endocrinology practices 'cause they like to turn dials. What has been the sort of receptiveness of the product in the primary care channel?
Have you talked about the mix of physicians that are prescribing today?
We do have primary care prescriptions and primary care doctors who prescribe iLet regularly. Most of the time, though, when that's the case, it's with primary care practices that are highly familiar with insulin pumps-
They're already prescribing. Okay.
because they have a significant number of people with diabetes in their panel. Where we don't have strong adoption of the iLet, frankly, I don't think the insulin pump industry at large has strong adoption within primary care, is with the large center or institutional primary care practices where you're right, there are a lot of people with Type 1, particularly in non-affluent areas where that's, where that's like the primary way or place where people with Type 1 see a doctor. Then with insulin-intensive Type 2's, most people in that category, who by the way are very good pump candidates, are seeing primary care doctors.
Here's what I would say about primary care and what makes a particular product applicable to that market, which by the way, I don't think any product, including ours, is uniquely applicable to that market yet. I think we'll get there first. That's my belief. I think you have to understand like what it actually is going to take as the unlocking mechanism. This is before you get to like the commercial strategy, which we could talk about, but you're not really asking about. You need to have a product that's low friction. Low friction in this case would include, is it easy for the doctor to prescribe? The answer is, if you're not a pharmacy-prescribed product is roundly no, it's not. You have a lot of paperwork that's required.
It's not intuitive as to like how you go about actually like getting that prescription. The only product that's only reimbursed in pharmacy is the patch pump competitor. The other equally or more important element of a frictionless process is that most of these primary care doctors don't know how to set up and manage pumps. They don't have certified diabetes educators on their staff. What does that mean? It means that they need a product that is a turn-it-on, set-it, and forget-it product that will give the patient the outcome they're looking for, but with no work associated with it. That is a characteristic of our product that is that we're well suited for, but the rest of the industry that I think it roundly you could say is not.
In order for a primary care to be unlocked, you need a system which includes pharmacy reimbursement and ease of prescription and ease of setup and management. I do not think there's a product on the market today that allows that. I do think iLet and our Beta Bionics will, you know, is well positioned to win in that particular area. That's before talking about how you actually sell into those channels. Today, I just don't think we have a system that's really a round winner there, which is part of the reason that CGMs, for example, have much higher penetration in Type 1 and Type 2 in the US than pumps do, way, you know, well more than double, of course.
I think that's an underappreciated element of, you know, the market opportunity here.
We're not there yet, but the, you know, the path is pretty clear, and you think you're leading the pack, towards that point.
Just remembering that it's not like those patients need pumps less than the ones who are seeing endos.
Right. M aybe let's transition and, you know, we'll talk about the sales force and scaling of that footprint. you'll correct me if I'm wrong, you're at sort of low 60s right now. How does that ramp? I know you're adding this year. You're probably adding over the next several years. How should we think about that ramping over the next several years? I'm going to use the phrase, when are you full fighting weight, sort of so that you can compete more fully with your competitors?
We added, or we had 63 territories, you're right, to end Q4 2025. We are adding sales territories now. We will add at least 20 new territories in 2026. I don't want to be specific as to what the number is or the cadence, but most of those incremental new territories will be front-loaded to the H1 of 2026. I would say 120-180 is roughly the number of territories that I think is appropriate to cover the United States for the high-prescribing primary care plus endocrinology general footprint that's required to compete. We're far less than, you know, the competitors who are at, who are roughly at those numbers. I reserve the right to change my mind.
I mean, I think there's always different innovative ways to commercialize these products and sell. I'm, you know, that hence why I'm giving a really wide range there. I think.
You're at half, I think is sort of a fair-.
Sure
maybe a little bit less than half in terms of geography.
I think like 25% to half of our competitors in terms of our size.
Again, it's probably just dumb math, but if you're only in a quarter to a half of the territories and you're getting 10% share, that would mean that in those particular centers, you have significantly higher than 10% share. Is that?
Yeah
Is that a fair way to think about it?
Yes. Directionally, I agree, that's a fair way to think about it.
How much of a rate limiter has it been? I mean, you still posted strong growth in the Q4 . You know, maybe the pump ship number was not as robust as people had hoped. Are you seeing, existing territories, and so maybe sort of the phrasing is, so same-store sales growth sorta plateau out and that you need to have this sort of new account openings to growth or, you know, what's going on and how much of an issue has it been, you know, you're more limited reach than peers?
We definitely don't need to grow the number of the field sales force in order to grow adoption. Like, I don't think the same-store sales is at all capped in terms of its productivity for the company. I mean, that's not the case at all.
Sure.
There are elements of our business that are going to continue to take time, which going back to my comment about automation being a new concept, that just even nationally, we need to continue to improve our messaging around why automation is a real advantage for the patient, for the healthcare provider, building confidence from the endo community, from patients that are and, you know, having great patient experiences, that's required in order to build productivity from our existing team, meaning growing same-store sales. You didn't really ask this, but like the rate limiting kind of question you alluded to.
There's a management style that I believe is the right way to operate when you're talking about expanding field sales forces, and it's more calculated and deliberate than what we've seen other diabetes companies, the rate with which they've expanded. I prefer that we have our best people in the commercial organization to recruit because I believe there's a stark difference between a high-performing salesperson and an average one, and then there's a stark difference between an average one and an okay one. Or sorry, and an inferior one or a low performer. In order to recruit high-performing people, you do have a capacity constraint on how much that team can recruit and to put like, you know, very capable people in the field.
We're a little bit more calculated and deliberate than other companies. The last thing is. This may sound a little irrationally confident, but I do believe that Well, right now, Beta Bionics is absolutely an employer of choice when it comes to hiring salespeople. It's still the new cutting-edge product, cutting-edge company that people believe in management. People like our transparency as a company. It has a great culture. Most of our employees come from referrals. It absolutely is that place to work. I think what's the confident thing is, I'm fairly certain that we will be able to hire who we want in the industry when there is a near-term commercial launch date for the Mint product.
I think that that's an important dynamic of, in, you know, sort of our sales expansion and recruiting strategy, is that we want to sort of reserve sort of like the right to sort of expand, you know, for when that day comes, because that is a very anticipated, already a very anticipated launch, even though it's commercial by the end of 2027 within the diabetes community, because there's simply a lot of folks who are excited for an alternative.
And that's-
for a patch pump.
That's gonna be a good segue, in just 1 second, to talk about the pipeline. Just sort of to wrap up on the sales floor. Let's say you add 20 territories, it's front half loaded. What's a typical ramp, in terms of productivity for those new territories, those new reps to get up to speed? Is it sort of 6 months, 9 months, you know, 3 months? When do you see sort of typical contribution from new territories being added?
In terms of when they actually start generating incremental revenue for the company, it takes about a quarter from the date they're hired. The ramp and the exact slope to that progression of productivity, of course, I know, and that's really important. That's a critically important KPI for us as a company, and it's critical in, you know, setting expectations and the like. I'm not gonna answer that.
You're not gonna share it? Okay.
I won't share that. It's too important in developing, you know, models and.
I think-
I think you get it.
The important piece is you're gonna have, you know, onboarded new territories. I guess the other piece too here is that the existing, obviously, I would think field sales force has much more room from a productivity standpoint to also grow.
I believe so.
We should get the takeaway on that one.
Definitely.
I said segue. Here's the segue into the pipeline. Maybe talk about Mint, the patch pump. You already gave us the late 2027 commercialization timeline. Maybe take a step back and there are gonna be multiple different patch or tubeless formats on the market. How is Mint different from a format standpoint? We can follow up with other questions.
Mint, critically important project. Going back to the framework I laid out at the start of our conversation here that a patch pump is an important element of a, of a insulin pump company if you want to win, you know, win broadly in the market. Clearly, you know, the patch pump competitor of ours is, I believe, is winning most market share because of their form factor, which also enables pharmacy reimbursement. Critically important R&D project for the company. We have been and will continue to be cagey about specific developments that are happening, like in terms of like, you know, conversations with FDA, what's actually going on behind the scenes in order to get ready for this commercialization that we're, that we're communicating by the end of 2027.
What is the actual product itself? Mint is a patch pump. Okay, obviously. It's a similar size, same weight, same capacity, waterproofing, all. Like, the look of it is very similar to the incumbent. The stark difference of it and what creates a advantage user experience that I will share why or I communicate why, is that it has 2 parts to it. I would invite you to go look at any of our presentations on our website if you're intrigued at looking at, like, what the actual design looks like. The design is where it has a reusable portion that the user takes off every time that they change out their patch from typically after a 3-day period.
That reusable portion lasts 2 years. It is where all the expensive components of the product live, the user then reapplies that reusable portion to the consumable portion when they're changing their patch. The consumable or the disposable part that the user refills with insulin every 3 days and puts on their body, that contains actually relatively simple parts or there's not a ton in it. It has the batteries, cannula, a syringe, and the adhesive. T he user's experience is simply they're wearing the Mint that has, again, both of those pieces.
After their 3-day period or whenever the insulin runs out, they would take it off, they would remove the reusable portion, put it on the table, throw away the disposable, refill the, a new disposable with insulin, slide the reusable portion back on, put it on their body, insert the cannula, done. There's no phone pairing associated or phone unpairing or repairing associated with the device, no recharging of the reusable portion because all the batteries are in the disposable. It's the same, again, the same size, same weight, same capacity, same wear time as the incumbent's product, but with the algorithm that the iLet currently has, which we believe is starkly advantaged relative to the rest of the industry for the automated characteristics that I mentioned.
In summary, again, advantage user experience in terms of just the overall sort of change-out process and the wearability of the product relative to the incumbent with, what I believe is the, you know, is the greatest algorithm and the most cutting edge algorithm on the market, and, we're just, you know, we're super excited about it.
Bi-hormonal. We got 3 minutes left, but that, another exciting product in the pipeline and how bi-hormonal may or may not mesh with Mint.
The, well, the bi-hormonal. Look, if you know anybody that lives with this disease, you know that even if they're doing a really good job of getting a great outcome that's eliminating any health out complications that they may have long term, they have a constant fear, that's my word, not necessarily theirs, of hypoglycemia. They are living, even if they're treating hypoglycemia with carbs periodically, that might be 1 element of their experience that they don't like, but they're also likely always checking their blood sugar to see if they are going low or if they are low. The idea behind bi-hormonal is absolutely to get a great clinical outcome and get people to the desired level of Time in Range, the desired A1C outcome.
You can ramp up the aggressiveness of the algorithm because you have glucagon to catch you. It also gives people the freedom that, like, you know, I live with, which is I don't think about my blood sugar because they will always have glucagon on board to catch them when they're going low.
Gas and brakes.
Gas and brakes. Just like how an, a pancreas works for someone who doesn't live with diabetes works, that's the idea. I think that that product is world-changing. I believe that not every patient sure will wear it. It'll come at an incremental cost. It'll come at an incremental device or a larger profile of a device on your body. It will be 1 more drug for a patient to manage. I'm not suggesting it doesn't come without cost. I'm not saying that. It does, I think, give people the freedom to live their life like it, like diabetes is just this disease they simply have rather than a disease that they have to think about constantly.
World-changing product and then, we own the exclusive rights to the drug, so a very lucrative product for the company. Where does this exist? We haven't stated timelines on it, but we're doing a 2 phase II trial this year. We'll end up needing to do a, you know, the phase III pivotal trial to get a year's, at least a year's worth of exposure for the drug. You'll hear more updates, kinda like we're operating like a drug company, just like you guys do when you're covering drug companies on exactly how this is going. Generally, right now, this is an execution-based problem.
I hate to end on a question about your competitor, just what impact, if anything, does Tandem announcing that they're gonna pay-as-you-go? Is it just simply validation of what the sort of tracks you've already laid, or is there something different about what they're doing relative to what you've already done?
There's nothing different about their strategy than the pay-as-you-go model that we laid out. This is an obvious strategy, meaning a pay as you go in pharmacy. It's clearly advantage for the user, the HCP. Payers like it. Revenue model for the business is better. It was a strategy that I think was hiding in plain sight that Beta Bionics pioneered, and it does not hurt us that there are other 2 pump companies following this. Like, I believe that in the long term, insulin pumps generally will be reimbursed in pharmacy, and that is a good thing for the industry. I could comment specifically on their exact strategy and some of the some of the goals that they have set, but I would prefer maybe not to in this public forum.
Thank you.
I appreciate you asking. This is generally a good thing for the industry.
Good. All right. Well, let's leave it there. We could keep going, obviously, but-
Thanks, Matt
thank you so much, Stephen.
I appreciate it.
Really appreciate it. Blake, didn't come up with any questions for you, but you did a good job sitting there.
Thank you.
Thank you for everybody in the audience, and have a great rest of the conference.
All right. Take care.