Welcome to the 2024 RBC Capital Markets Global Healthcare Conference. I'm Shagun Singh, senior medical device analyst at RBC, and I'm very pleased to have the next company presenting here today, Senseonics. Joining us from the company are Tim Goodnow, President and CEO, as well as Rick Sullivan, Chief Financial Officer. Just by way of background, Senseonics is a medical device company that sells glucose monitoring products to patients with diabetes, including CGM sensors, smart transmitters, and mobile applications. The Eversense Continuous Glucose Monitoring System is the world's first and only long-term CGM system. The company was founded in 2014 and is based in Maryland. With that, I will hand it over to you, Tim.
Great. Thank you, Shagun. Thank you for inviting us. As Shagun mentioned, Senseonics is a technology company in the diabetes space. We've been working on an innovative approach to continuous glucose monitoring for a number of years, and we are very much focused on the diabetes patient. Obviously, a large population, which has a proven track record of accepting and utilizing new technology when you can solve issues for them. Diabetes is, unfortunately, a long-term disease, whether it's Type 1 or Type 2, and anything that you can do to take some of that burden of management away, they'll embrace, and you can certainly see that in the rest of the diabetes technology management, that that's certainly been true.
So, a history of innovation with first FDA approval of a 90-day product that we received back in 2018, and we've continued to make innovations, generational improvement on that with approvals both in the United States and in Europe. We are currently commercializing a 180-day version of the product, but we did announce this week that we have submitted as a 510(k), our 365-day product. So the ultimate product that we have been working towards, we've now realized, with very strong clinical data, meeting the iCGM special controls for Class II designation. So we've actually down-regulated the product with a submission from a PMA to a 510(k) submission, and excitingly submitted that, actually just last week.
So we'd look for the 90-day approval later this summer, and then target launch in the Q4 . Obviously, I think everyone is well aware of the opportunity in continuous glucose monitoring. It's out past the old strip and meter business by now, almost a factor of two, and continues to grow at a 20% CAGR. Really driven by the clinical demonstration of the value of continuous glucose monitoring in the expanded diabetes markets. Originally, even just a few years ago, this was essentially, these primarily were Type 1 diabetes products, and you can see the penetration is today at about 55% in Type 1 diabetes in the United States.
A few years ago, the clinical demonstration and therefore the approval, payment reimbursement for Type 2 diabetes with multiple daily insulin, and there's you see relatively good penetration in that. And then most recently, one year ago, was what's called the basal insulin. So these are Type 2 diabetes that have first gone on one shot a day. And the clinical performance has been very strong in regards to clinical outcome improvements by putting people on continuous glucose monitoring. And what we've done in the last year is over double the size of the opportunity for CGM because of those expansions. And then, obviously, what's in front of us is those that are on oral agents, diet and exercise, and so forth. All of those can benefit from CGM, much like, you know, you've seen with the healthy living dynamic of CGM.
You certainly get the value of understanding where your glycemic levels are with any of these continuous monitors, but we do need to have the clinical demonstration of the support for that before you get the payers on board. At the end of the day, in the United States at least, there's approval for a little bit over 10 million patients, and there are about just under 25% penetration of CGM. So still a huge opportunity. It is a much bigger opportunity in the Type 2 diabetes, especially for those people that are looking for very simple implementations of technology to help them manage their diabetes.
When you ask them what they're looking for, there's a couple of things that are super important for them, whether you talk to patients that have not been on CGM, so part of that 77% that isn't using it, or those that are currently on it, and what are they looking for? Very consistently, they wanna have more duration, right? They don't want to go through the process of managing the technology. They'd like to spend as little time managing the disease as possible, never mind the on-body components in the technology. So longer sensor wear has been a primary focus, and then we'll talk about the next big opportunity is not to have anything on your body. They'd like it to be as invisible as possible. And obviously, as an implantable product, that is the only solution that can do that.
By definition, a transcutaneous sensor is not gonna have the ability to have nothing on the skin. So that's our, our competitive opportunity. That's where we're headed with the technology, and we'll talk about it, but it's also the greatest, the greatest point of differentiation that we can provide as well. So what is the product today that's commercialized? It is currently our, our six-month version of the sensor. We call it our third generation. It is very accurate and 8.5% MARD, which is, you know, very consistent. In fact, best in class, certainly in the hypoglycemia range. It does come today with a transmitter, which provides two things, really. It's the powering through near-field energy of the sensor, so no through-skin component, but it also has a Bluetooth communication to the phone. So pretty standard, components.
If you look at the transcutaneous sensors, those tend to be combined together, so the sensor and the transmitter, and that's replaced on a 7-, 10-, 14-day cycle, depending on the manufacturer. What we've done is actually built everything into the transmitter, so it is standalone. And because of the opportunity to have it on body, we do also have on-body vibrations, which is an important differentiating attribute, especially for people that want some discretion and ability to to not stand out. The other thing that you get with a true implantable as opposed to a through-skin is you're not subject to the you know, the unfortunate realities of the on-skin component. You're not trying we don't have to have an aggressive adhesive because it's actually meant to be replaced every day.
So the transmitter comes off, you'll shower, and then when you get out, you can put a fresh adhesive on, which is silicone-based. It's not acrylic-based, which has really essentially eliminated any skin reactions that we had to the to the on-body transmitter. And of course, the big positive, especially as we look at some of the new older adults that are coming into CGM from the Medicare population, is there is a lot of value they actually see in doing the doctors to do the insertion for them. They feel that it, it's done more appropriately. They don't have to do any of the, you know, assembly and insertion at home, which can be problematic if sometimes you have dexterity issues. So that's our product. The sensor itself is very tiny. It's about 3 millimeters by 16.
It goes in the back of the arm. It's done in the doctor's office, procedure under lidocaine. It's a very quick procedure. The actual insertion's just about two minutes. Removals are about four minutes. They take a little bit longer because you do need to locate where it is. The entire office procedure is done in 25 minutes. It's reimbursed in commercial pay at about $250-$300 to do the insertion. In Medicare, there's actually a premium to the commercial pay. It's reimbursed somewhere between $400-$600 for the visit to do it. So, you know, unlike the at-home products, there is a professional component to it as well, so there's remuneration for that piece of the process. And then we are just introducing the RPM solution.
So this is remote patient monitoring, and in a partnership that we've announced with the Mercy health system in St. Louis, so middle of the country, top 20 hospital system. They have selected Eversense as their technology that they'll be using to monitor at-risk patients. They've got a population of about 30,000 people with diabetes that are their highest risk, that they'd frankly like to keep out of the hospital. They'd like to reduce their costs with it. So the way that we're doing it is they'll be implanting Eversense. We'll be monitoring these patients via the cloud push that you get with, obviously, with the cellular technology.
Then a nurse panel will be monitoring those patients, identifying the highest-risk patients based on criteria that Mercy sets up back to their primary care physician through their Epic system, and providing information and guidance and so forth. That's... This is the first implementation of a holistic system on CGM and is done in partnership with Mercy as an opportunity for them as an ACO to reduce costs. So we're excited about this. We will obviously offer this RPM for all Eversense users going forward, but we're gonna start with the Mercy program. It is a reimbursed. It's reimbursed at about $100 a month. About half of that comes...
You do need to be able to upload at least 16 days' worth of clinical data, which is trivial, with a, with an implanted product, that actually comes with it. And then you also do need to have for the other half of it, you have to, have to have about a 20-minute conversation with the patient. So the nurses will be providing that coaching and counseling and feedback based on their personal performance over the last month of their glycemic profile. And, we and, and Mercy do well know that when you put patients on a CGM, you will get a population reduction in, in HbA1c, which is one of their measures for their performance, one of their 12 measures as an ACO, as they get graded, by the government each year for their, their economic splits. So who are the users today?
As you'll see, about 30% of our patients are actually new to CGM, so they actually select it based on the attributes. Most of the folks that are either on MDI, certainly all the folks that are on MDI, are on Type 1 diabetes, are well aware of CGM, and they've made the decision to go to Eversense because of one of these attributes. About 70% are switching, and they're coming, of course, from the other 3 transcutaneous systems that are available and on the market today. We do get questions about who is the patient that selects an implantable, but frankly, it's pretty diverse. Early on, it tended to be a younger subset of patients. And why was that?
Because if you're active, if you're out running and exercising and so forth, that replaceable adhesive, that transmitter that can come on and off, was really attractive to that population. But we're actually now seeing, especially as the Medicare population is coming on, we are becoming, much like all of the rest of CGM, a much more Type 2 based, right? And you see our population age increasing as a result of that as well. And we currently are about 65-35 in regards to our distribution between Type 1 and Type 2 populations, whereas we started out at, of course, 90-10. The product is very good and strong reimbursement, as I already indicated. All CGMs in commercial pay are reimbursed at about $10 a day. So, you know, 14-day product is reimbursed at $140.
A 180-day product is reimbursed at $1,800, and it'll be about, just about $4,000 a year in commercial pay. In CMS, we actually got premium reimbursement for the implantable product, and the reason that they chose to do that was really twofold. One, CMS is not big fans of the DME products. They don't like having that intermediary of a public company or private company that's responsible for pushing product to their patients. They'd much rather have the doctor in charge of making that decision, and you do get that with a medical benefit product as opposed to a DME product. So they gave us reimbursement that is actually notably higher, as I mentioned, also for the insertion and removal, but also for the product itself.
It comes out to about $16 a day, reimbursement through Medicare, whereas the commercial pay is about $10 a day. Broad coverage, over 300 million lives. There are, you know, few select regional payers that we continue to work on, but overall, we're in, very good shape for, for reimbursement with the implantable product. We do, we do commercialize this in partnership with a, with Ascensia Diabetes Care. Some of you may recognize Ascensia. This is the former Bayer Diagnostics, so this is a strip and meter business. They're currently doing about $700 million a year in, in strip and meters globally. And they're very long history. They've been around for a long, long time, but much like the rest of the strip and meter business, they're seeing pretty significant declines.
Increase actually in volume, but a very significant decrease in pricing as they go around the world. Certainly in the more mature markets, the strip volume is being replaced by CGM. It's very important that they have a CGM alternative, and they've chosen Eversense to be that partnership with them. They have responsibility for all of the commercial activities and all the commercial expenses with it, so they'll spend between $50 and $60 million a year, this year, and that will grow to as much as $80 million over the horizon of the current contract. So it's been a strong partnership. We're excited about the focus. They have recently reorganized and have a fully dedicated CGM team that is headed by an industry veteran, a fellow by the name of Brian Hansen, recently joined.
He was a previous CCO for Tandem Diabetes Care, and he's come over to lead and run the commercial activities for Ascensia on Eversense. The commercial strategy, as I said, really does focus on the partnership with ADC. So they have this unit. Brian has the responsibility. It is all dedicated resources for CGM. It's a dedicated sales force in the United States. They use shared resources outside the United States. In the US, we currently have about 800 certified inserters, so these are folks that typically go through the required certification process, which is different depending on the type of discipline. If you're an endocrinologist, it's typically a three-insertion process you go through. If you're a surgeon or you're a, you know, practicing cardiologist that's doing procedures, certification only is done after your actually very first insertion.
And then we have about 3,000 prescribers that are currently prescribing the Eversense product. So very broad base. We continue to work on it. It is, of course, a bifurcated sales strategy. You sell through the professional channel, which is sales reps that ADC handles by calling on the doctor's offices, almost exclusively, endocrinology at this point. But as we expand more and more to primary care, we depend on the other half of it, which is a DTC, direct-to-consumer strategy, and the investments there to actually bring folks into the website and into the internal sales organization. And then we have a partnership with the nurse practitioner group that currently today has about 35 nurses that we've selected in varying geographies that have responsibility for doing the insertions and the removals.
So that economic payment under those CPT codes is advantageous because then through a partnership such as this, if an endocrinology practice or a primary care practice does not want to take the time to do the insertions, the nurses will actually do that, and they'll come to your house to do the insertion procedure as well. So it's been a great partnership for us. They're doing about 25% of all our insertions right now. So this is a great way, and it'll be a big focus for us moving forward. And then, as I said, we just announced the Mercy partnership. They are a top 20 organization. They have about 3 million covered lives in the Midwest. They're headquartered in St. Louis, and they have a four-state region that they cover.
As I've said, they've got about 30,000 patients that we'd like to work with them on the next couple of years to put on, to put on Eversense. And the intention really is to use this as a demonstration, which they're very motivated to do, as being an innovation leader in healthcare management, to show that you can actually protect this population and reduce costs. So that's the, that's the partnership we're with. The patients are identified out of their Epic system as being candidates for it based on, based on the disease. Most, they've gone to a primary care model a number of years ago, and one of the reasons they've been successful. So of course, they have specialists, but by far, most of their, their, their patients are seen by primary care.
So the Epic system will notify them that they're a candidate for it. It'll go to the primary care physician who will prescribe it, and then they have a complete panel of inserters that they've set up, which is outside of endocrinology, because these patients typically are not at all treated in endocrinology, where they'll actually do the insertion and then bill for the insertion and send them back to the primary care. In the meantime, they'll be monitored in the Eversense cloud via a group of nursing with an Epic, or with a Rimidi partnership that we just announced last week as well.... that'll do the monthly monitoring and review that we talked about. Those patients will be submitted for reimbursement by Mercy, so there'll be an economic opportunity to cover this cost.
And then, as we said, we'll identify in Epic the patients of interest and the ones that they should focus on and communicate that back to the primary care, as well as any adjustments that may be done. If somebody's got a significant hypoglycemia frequency, that'll be identified, or like hyperglycemia, all of that can absolutely occur now with the continuous monitoring data that will exist. And as I said, here's the DTC campaign that's used by Ascensia. They cover both linear television and select markets. So these are typical commercial televisions that you'll see. A lot more actually on connected television. Obviously, it's a little bit more economic. You can get to a broader base, and then, of course, quite a bit on paid social media.
A lot of success on, on Instagram and, of course, Facebook and the like. So, we've really shown good success at generating a lot more interest, and we expect that to very much continue and expand with the access to the 1-year product here later this year. So where are we headed? Obviously, the vision of a 1-year sensor has been at the center of everything we've been focused on. Because of the in vivo environment and the technical challenges, we've worked on that. Very exciting to report that we now have achieved that full 1-year life and have extremely strong clinical data that we've submitted. Eliminated the need for daily calibration, and as I said, the next big quantum step for us is to eliminate that on-body transmitter.
We know that that'll be a major step in the, in the advancement of the competitiveness of, of Eversense and the implanted products. It is the remaining number one request for people with diabetes for their CGM. So, where are we currently here in 2024? We have, within the last month, received the iCGM designation, so that's for the integration with insulin pumps, insulin delivery devices, and we'll be announcing some of those partnerships over the, over the coming quarters for, for integration with those technology. The 365-day sensor, as I said, has now been down-regulated because of that iCGM designation to a 510(k) or Class II device. That's been submitted to the agency, and that should come out in the August, September time period.
As I said, we will, we will transition to that product as soon as it is available. And then in addition, we have two platforms next, Gemini and Freedom. We anticipate getting first in human data on Gemini this year, and then the moving to the pivotal clinical trial next year in 2025, with Freedom right behind that. So what is, what is Gemini? As I pointed out, the market really is bifurcating at this point. We're becoming much more Type 2 . It's a much larger disease, and in a Type 2 patient, you tend to have more management of hyperglycemia with not as much frequency of hypoglycemia.
So they're really looking for a device that may not have the need for the on-body alarms and alerts that you need with a Type 1 disease or somebody that's on an aggressive MDI therapy. So for those product, we'll actually implant a self-powered sensor, so a battery that we're doing in partnership with a company called Integer, they're the world's largest supplier of implanted batteries for pacemakers and stimulation devices. And in that case, there will be nothing on the skin for that first generation. So for the Type 2 patient, you'll just interrogate it with the NFC in your phone, just like an Apple Pay, and download the last eight hours worth of data, right? So you get that full information, you can manage it just from those swipes.
If, however, you're still in the Type 1, you want those on-body alerts and vibrations, we'll continue to offer that with the transmitter, with the on-body vibration and the ability to do the real-time alerts and alarms, both in the on-body as well as in the phone as well. So it'll be a traditional standalone CGM as you know it today. And that's done by the incorporation of this implant-grade battery that's in the sensor itself. And then ultimately the Freedom System, named obviously, not only does it have the same self-powering battery, which lasts the entire year, the same length as the sensor, but we've also directly included the Bluetooth communication, which is currently in the transmitter, right in that sensor itself.
So that is all three of the technologies, sensing capability, which we now have with the 365-day product, the battery which we'll be showing the human validation of here over the next year, and then ultimately, the Bluetooth technology for the all-in-one full implant directly to the phone and phone to the cloud, Freedom product. So that's our pipeline. Those are the steps we're going through. Battery technology is actually quite risk-reduced, but focusing on the Bluetooth at this point and then the clinical program to get it validated. And importantly, approval on all of those as a Class II device, 510(k), no longer under the Class III PMA pathway. So we're excited about that regulatory reduction and speed enhancement that we can get in the approval process.
With that, I'd like to thank everybody for the opportunity to speak today, tell the story, and if there is any questions in the one minute remaining, I'd be happy to answer those.
I guess, I can ask a question just with respect to your outlook. I think you provided first half outlook, you know, Q2, similar to Q1, but not the back half. Can you provide some context there? And then at ADA, which is coming up next month, you know, what can we expect? I think you said guidance as well, but just can you elaborate?
Yes. So one of the reasons that we didn't do the full year guidance, quite frankly, was due to the timing of the 365 product as it was coming out and the transition. Although we couldn't communicate it, we knew where we were in the review process, and this opportunity to down-regulate it meant that we can actually accelerate it in the year, but we wanted to be conscious of that. The other dynamic, quite frankly, which will be very material, is the Mercy partnership, right? And we are working that out, and we expect to have that, you know, more fully characterized over the next month. So we'll be actually filling in on the second half of the year at the ADA.
We have an analyst day that hopefully you have some time to come join us with, and we'll be able to go through all of that there. Yeah. Mercy, it's 30,000 potential patients. Is that right? How many does the company serve right now? Right now, it's a relatively small amount. It's hundreds of patients, so it's a huge opportunity for us. Right. So the company has, what, 4,000 or 5,000 patients on the system? Correct. That's right. So this is like a 6x opportunity? That's right. It's extremely large, right.
Great. I guess just last one from me. Can you just elaborate on your health system strategy? It seems like that's something new, and there are about 1,300 health systems in the U.S., so, you know, how are you looking to tap similar opportunities as well?
Yeah, and actually, that's a great question because Mercy actually came to us with this. They actually identified Eversense as being an opportunity for them to do this management. And what they'd like to do is demonstrate it in their organization and show that it works. As I said, we're all extremely confident that putting you on any CGM is gonna take your A1Cs down. But if you add this remote patient monitoring on top of it and have the assurance that you're gonna get that 16 days worth of data, which you get with an implanted product, just by definition, that's really the model that Mercy has identified, and they're very happy to help us implement that with them and then actually go out and share it with other ACOs. So they're actually gonna be one of our largest advocates.
We'll, of course, be publishing on it, the clinical data. You do need to show continued reduction in HbA1c in your diabetes patients for that, for the ACO standardization every year. So they'll anticipate they'll get that as well. So we'll take the same model with a remote patient monitoring to the other systems.
I know we are out of time. Tim and Rick, thank you so much for being here.
Great. Thank you. Thank you.