Hi, everyone. Welcome to the 2nd Annual H.C. Wainwright BioConnect Investor Conference. With us today is Senseonics. For our fireside discussion, we have two individuals, the CEO of Senseonics, Tim Goodnow, and the CFO of Senseonics, Rick Sullivan. Thanks for coming and attending this conference. Now, I think at this point, there's quite a bit of our audience that is familiar with Senseonics. You've got some good coverage on the Street. Just wondering if you could give us a little bit of an idea what Senseonics is, and especially, what your main product is and does?
Sure. Well, thanks, Vern. I appreciate the opportunity to speak today. Senseonics is very much a healthcare technology company, for sure. We're absolutely focused on what one might call the implantable space, if you will, or wearable implantable. We are absolutely right now focused on diabetes. It is the largest population of in need for medical devices with our implantable technology for continuously monitoring glucose. So we're a technology company. We're oriented. It's very science and engineering based. We've been focused on miniaturization of an implantable sensor for people with diabetes, and are very excited to continue to advance that technology, most recently announcing really the pinnacle of our design and development, our one-year product, and we've now submitted to the agency for approval.
Yeah, definitely wanna get into that product. Currently, your product offering is mainly focused on the 180-day continuous glucose monitoring sensor. I was wondering if you could talk a little bit about how that is marketed. You have a partner, Ascensia Diabetes Care, and then a really exciting announcement recently in collaboration with Mercy in remote patient monitoring. Just wondering if you could walk us through how a 180-day is doing? Really good, I think it's 20+% year-over-year increase in sales versus the quarter last year, and 80% growth as far as patients concerned, really exciting.
What near-term efforts are going to perhaps get investors excited and lead you to the base of people that could eventually switch into the 365-day sensor?
Sure. So a lot there. Let me start with the 180 product. As you mentioned, it's a 6-month, the patient use would be that they will go to their doctor's office, and they'll have the very tiny, it's 3 millimeters by 16 millimeters, you know, about the size of an old cold capsule, if you remember. The doctor or the nurse will place that in the back of your arm, and it'll stay resident for the next 6 months. So really invisible to the patient. It's quite a bit of a contrast to the technologies that are out there today. The other 3 technologies are similar in the sense that they're all enzyme-based. They're in a form of what's called a transcutaneous sensor.
So there's a filament that goes through the skin, it sits in the interstitial fluid, and measures the glucose. But since it's enzyme-based, they don't have a super long duration, so the user will actually take it out 7, 10, or 14 days, depending on the manufacturer, and then you'll replace it at home. With the implanted product, you do it in the doctor's office, because it is placed by the medical professional, and done under the doctor's office environment. So the negative, of course, is that you have to go into the doctor to do it, but the positive is that you forget about it. You have no interaction with the sensor, right?
Our experiences has been, and I think technology advancements in the diabetes space have definitely shown, when you reduce the burden, the overhead, the complexity of managing your diabetes, and you do that in a quality form, people are gonna reward you with a purchase, right? So our objective as a technology company is to absolutely do that. Bring new innovation, new technology, so that they can frankly forget a little bit about the management of their diabetes-
Yeah, because the one thing about diabetes, it's an everyday thing that you have to think about.
It doesn't go away.
I mean, if you're insulin dependent, you can't get away from it. You're thinking about it.
Every meal, every exercise, every sleep, right, every sick day is another level of overhead, and when you can win is when you help them, right? If you can have them spend a little bit less time thinking about their diabetes. And if you look at any of the successes in the diabetes space, that's absolutely been the case. So we recognize with our technology that we wanna be a big part of that, and that's why we've been focused on the innovation. And from 180, the next generation will be the 365 . So, we have recently announced the partnership with the Mercy Hospital system.
Before we get into that, though, the 365-day by itself is exciting. It has a facet of it that is a little different. You're going through the 510(k) instead of a PMA route. Just talk a little bit about that.
Yeah, that's a ctually, it was very strategic on our part. We knew that we actually had submitted the 180-day product for what's called the iCGM designation, and the i- stands for interoperability. So it's a designation that's granted by the FDA, with an accuracy hurdle, that if you meet these accuracy requirements, they will then down-regulate the product from a Class III PMA to a Class II 510(k).
So we had submitted that for the 180-day product. We were in good conversation with them, we knew that the approval was coming, so we actually held up the 365 so that it would go through that down-regulation, which it did. Now, a couple of weeks later, we got that iCGM, and then I think just took us just 10 days to actually do the final submission, and submitted the 365 as a 510(k). So the FDA timelines for that are 90 days, as opposed to 180 days for a PMA supplement.
We're excited to have that, which means, you know, we're gonna do everything we can to drive to get this approval for the 365 later this summer, early fall.
I'm gonna have to highlight that in an upcoming investor note, because I think that announcement was actually lost, and, you know, by investors. Seemed like you announced it, it seemed exciting, but the investor reaction was underwhelming. So, let's move on to Mercy. Tell us a little bit about what Mercy is, what they do, and-
So Mercy-
What do you expect them to do?
Mercy is a very large hospital system. They, they've about 3 million covered lives. They're headquartered-
But it's only in four states?
They're currently in four states as Mercy. They are always looking to expand, but their current operation is in four states. And we actually partnered with Mercy now this last fall, as they were looking for a way for their diabetes patients to be better managed, better to monitor in the remote environment. As an actually quite progressive ACO, they actually take quite a bit of risk, right, under the Affordable Care Act. And as such, of course, they are highly motivated, not only for patient health, but also for their economics, to keep the high-risk patients out of the hospital, out of the emergency rooms, any way that they can.
Of course, we're all quite familiar with that being done in monitoring in the cardiovascular space, but really hasn't taken off in the diabetes space, and certainly now can with continuous glucose monitoring. So their early thought about it with the transcutaneous sensors is what they recognize in the populations: they didn't have long-term continual use. Because especially in a population that wants to think about it even less, right? People with Type 1 Diabetes, autoimmune disease, everything you do every day. The Type 2 Diabetes, especially those that haven't progressed to multiple daily insulin, they think about it even less, right? And they'd like less, you know, less-
Less intrusion, yeah.
Less intrusion. And that means that they may not be as willing to replace those at-home sensors as frequently. So, Mercy was actually looking for a long-term implantable product, which we provide, so that the doctors could put it in, they knew exactly which patients had it, and they can monitor them in real time. So we put that system together with them. They've identified about 30,000 patients, so a very large population, that are candidates to go on Eversense. We're gonna work with them and drive into that population in the coming quarters and years, to get as many of the patients on as we can. We will then monitor them in a remote patient monitoring that we put together.
We announced a partnership with a group called Rimidi, that has a very nice platform, very focused on diabetes management. So there will actually be nurses in place. We'll work with Mercy to put the patients on Eversense. Of course, once they go on Eversense, then their continuous glucose will go right to the cloud. Rimidi will help us, in the sense that we will put nurses in place to do monitoring of those patients, identifying those that are at risk. If you're running extremely hyper for a time period, you'll get flagged, information will go into Epic. From Epic, it'll go into the primary care physician that is treating these patients, with an indication that, hey, you know, some pretty quick follow-up should happen. Or if there's significant hypoglycemia, you get somebody that isn't adjusted correctly that way.
So, the goal is to do exactly that, keep them out of the emergency room, reduce the expense, and improve their healthcare by doing all of that. We're very excited about the partnership. We're gonna start just with the St. Louis area initially, and then expand into those other states and periphery, if you will, their entire network. Very excited about it, and we'll be starting here in July with the 180-day product, get some training done. We really expect that to grow significantly on October 1st, in the fourth quarter, when the 365 product is available.
Now, 30,000 seems definitely seems to be a good number. And four states with Mercy is also a good number. It sounds like it's only the beginning. It sounds like this is how you can get going very fast, your time to capture, because I think you had mentioned in the call, one out of 25 are not using the CGM when they could, and the doctors are recommending?
About three out of four are not today.
Right.
The people that are eligible, 3 out of 4-
Yeah.
75% of the patients that could get value out of a CGM don't use it today, and it's not because they're not aware of it, it's not because it's not reimbursed, it's just because there's complexity and overhead. That's where we think the implantable product can incorporate that invisibility into your life, right? Which gets better and better as we get longer and longer, is what we're focused on.
Now, remote patient monitoring, tell us a little bit what that is. And I know, especially with COVID, that came to the fore more as a way to monitor your patients, right? Because the direct contact was avoided, if you could. How is that going to. I know that's gonna be part of the Mercy collaboration. You established your own. I believe somebody mentioned during the call that doctors like to establish their own programs. How is that gonna help you? How is that integration going to be integrated with Mercy?
Yeah, so actually, this is one of the earlier requests from Mercy, is they even though they're a large organization, they actually didn't have the ability to do it. They were almost too large to manage it. So one of the things that they were looking for us to be implantable, and they were looking for us to partner on the stand-up of the RPM system, Remote Patient Monitoring. And again, what they're looking for is that real-time review so that they can act, identify and act on the highest risk patients. So that's where the partnership with Rimidi came. It was also a requirement, of course, that it's fed into their Epic system, right? The standard system that they're on.
Importantly, you know, we're really graduating and transitioning, if you will, from a space predominantly doing Type 1 Diabetes early on.
Yeah.
So now it's mostly Type 2 Diabetes, right? And what happens, Type 1 Diabetes tends to be treated more in the endocrinology offices, whereas Type 2 Diabetes tends to be treated in family practice, general practitioners, or internal medicine, right? So we're certainly see that transition in the population of folks that are using it. So us getting the information back out to them is really important as well, and of course, the RPM fully integrated system does all that.
So going back to it only being the beginning, is the collaboration with Mercy something that can be repeated with other groups?
Yeah, that's and actually, you know, great credit to Mercy because they're honestly looking to help us build this, if you will, and they are clearly recognized as one of the most innovative ACOs, and good economics as a result of their ability to be quite aggressive, yet get good results. So what they'd like to do is partner with us, quite frankly, so that we can replicate this, take this other out to others. So there's, you know, there's over 1,200-1,300 different hospital systems, that once we have the system in place, and quite frankly, once we get the clinical benefit that I am sure we're gonna get, right?
We know that if you put a population of patients just on CGM, you provide them no training, you do no monitoring, you will reduce the hemoglobin A1C by half a point, just by putting them on a continuous glucose monitor. That's been well documented many times. When you put them on a CGM, plus you provide the coaching and counseling that you get with a remote patient monitoring, the requirement to get reimbursed for doing that procedure under the Medicare today, is that you monitor those patients, you get at least 16 days' worth of glucose results, and that you have at least a 20-minute interaction with the patient. And if you do that, the reimbursement is about $90 for that, for that procedure. So of course, you're gonna get that information with an implant sensor. You're gonna get the CGM.
Now, you know, can you create an environment where you can have that coaching and counseling session so that you can give them the information, so they can better manage and reduce the A1C even more than that half a point? So, I'm sure that's gonna work. We're gonna put it together with Mercy, and then we're gonna take it with Mercy to other hospital systems and get it implemented from there.
Now, with that, initiative, and their, I guess, the synergistic relationship, where they can benefit by, your Eversense, RPM, program, because doctors also have their own RPM, is it something that can just be bolt-on in their, attempts to expand, or how does it work?
Yeah, that's a good point. Once we have this set up, what we'd like to be able to do is first and foremost, as you said, the continuous data is there, and it's in the cloud. So we make that available today. If a doctor's office has a Remote Patient Monitoring, we'll do the integration, get the APIs. You can easily feed that right into your system. Surprisingly few actually do it, and I think that's just because of the complexity, maybe the expense to set it up, and so forth. So in those cases where they don't have the ability and they don't want to do it, we can provide that service to them as well, and basically bolt on to the Mercy infrastructure that we've created with this initiative.
Now, I'm an academic at heart, and some would call me a geek instead, but so I like data, also myself. Is that something in which the results are going to need to be perhaps put together and then someplace like, you know, obviously too late for ADA, but the one later in the year, in Europe, in which a publication, as far as the results of this program need to be, put out there and scrutinized by the-
What you're gonna see is the, you know, peer-reviewed clinical demonstrations, so these population improvements is clearly important as well, as well as the other publications are on the health economics, right? 'Cause not only do you need to improve people's diabetes lives, but you also need to reduce costs to the system, right? So we're motivated to show both of those, and that's really what I mean about taking that information, those publications to the other, the other sources, and the other potential ACOs, hospital systems that we can work with. And then, that's really the big point of validation that I'm excited about.
So currently, the offering is the 90-day. Hopefully, the end of this year, we're looking at the 365. How does the transition get managed? Is it similar to 90-day? Because, a lot of investors may realize there was a 90-day, now it's the 180-day sensor, now we're going to a 360, one-year sensor. A little different, and perhaps, a population that is also differently targetable, because like you said, you're not gonna get into the, the patient populations that, Type 1, 2.
Yeah. So there's really two things that you go through when you do a product generational transition like that. One is the operational aspect of it, so inventory, right? Make sure your channel is ready to go. The distributors that our partner, Senseonics, uses, of course, that transition needs to happen. So there's a whole lot of logistics and coordination of planning and assumption that's going on right now about the timing, is obviously, you know, everybody would like to use up all of their existing inventory and transition to the, to the 365. So spending a lot of time on that with our partners. The other big thing that has to go on is the transition with the payers.
So we were literally on the phone call today with CMS, because instead of reimbursing for 180, we're gonna want them to reimburse for the, for the 365, and whether that's, you know, United or Cigna or many of the other folks that are covering us. So all of those conversations need to happen as well, that you're making that, you know, that transition with them. And as you said, we did go through it from 90 to 180, and now we're gonna do it again from 80 to 365.
So in the minute or so we have left, after 365, what, what's next?
So duration has been the big focus that's been on. The next big attempt for us from a technology is we're going to eliminate the on-body, right? The number one request that we get now, people, is make it sensor longer. We've now achieved that with the 365 approval. The next question is, do you, do I have to have something hanging off my body, right? So we are eliminating, we're incorporating first the battery power; we call it our Gemini product that we talked about. It's the next generation where it'll be self-powered and you won't need to wear the transmitter if you just wanna swipe it for a very Type 2 device, right? Interrogation on demand. And then finally, the last step for us is to incorporate the Bluetooth.
So you go directly from the implanted sensor via Bluetooth to the cell phone, and there'll be nothing on the skin for even all the Type 1 patients at that point. We're super excited about that product. We know it's exactly what the patient's gonna want. We're excited to bring it to them.
When are we gonna see this?
I would say we're probably looking at 2025, don't hold me to that quite yet, for Gemini, and probably 2026 for the Freedom product.
But any testing results?
We're working on that right now. We're looking to do the first enrollment of the Gemini product here in the next couple quarters.
Terrific. Well, I wanna thank, CEO Tim Goodnow and Rick Sullivan from Senseonics for joining us for our discussion today. Hopefully, you learned a lot about Senseonics and got interested in the story. I am excited about it myself and, looking forward to covering up further and helping them grow. Thank you for attending. Thanks, Rick.
Great, appreciate it. Thank you.