Well, it looks like Matt is not here yet. Maybe what I can do is to start off by giving you kind of an update on how the business is doing, and if you guys have any questions, more than happy to field them right here. Oh, there he is. I'll start off by saying that last year was a challenging year for Tandem. We anticipated that we would see some challenges from COVID and from competition. We didn't really anticipate that we would see the macroeconomic factor. That was somewhat of a surprise to us. I think that if you go through the year, certainly in the back half of the year as the competition came to market, we did see our growth rate slow.
When you look at exactly how that happened, it was primarily from MDI conversions, people who are moving from pens and needles into pump therapy. Saw a slowing OUS there. Hey, Matt. As I think that, you know, we finished the year, we actually grew 15%. Rather than try to just evaluate all of these factors and how they're going to affect us this coming year in 2023, we took a relatively conservative approach, and we set a baseline at 10%-12% growth this year, which we think assumes all of the factors that we have seen in the latter half of 2022 persist, and they persist through the entire year. That's what our assumptions are.
I'd also say that the growth that we've highlighted in our guidance assumes no new product activity, even though we have quite a bit of new products that are coming to market in the year. We're quite excited about that. If you look back in our history, every single time we've introduced a new product, we have seen a significant impact on our growth. As we anticipate that happening this year, we expect it to continue.
All right. All right. Well, thanks again for joining us. I'll maybe continue along that sort of line of questions. If you'd maybe ask you to talk a little bit about the products that have come in or let's say, catalysts that have come into focus with Abbott's approval.
Yeah.
You know, G7, clearance and, you know, understanding both of those were not in your, in your kind of baseline guide.
Yeah, there's no new product activity at all assumed in the guidance.
Right. Thinking of those as, you know, integration with Abbott as a product or a catalyst and integration with G7 as a catalyst. Maybe talk about a little bit of the timing.
Sure.
Where those could start to add to the plan.
We have two great partners with Dexcom and Abbott, and we've been working with Dexcom now for quite a while. They have just a fantastic product on the market today, and G7's even better. G7 has a short warm-up period. It's got a very painless inserter, and it's ergonomically very friendly. We've been working with them now to implement that for the last year or two. This is our fourth generation of sensor technology that we've implemented from Dexcom. We anticipate that the product will be on the market in the second half or the latter part of the second quarter. I think that we're definitely gonna see a tailwind from that.
I think that as the product gets out in the market and people respond to it and Dexcom sees growth, we would anticipate that we'll also see growth as we get it to the market. We believe we'll be the first to market with Dexcom G7, and I think that even gives us, you know, a little bit more runway before some of the competitor devices also integrate with it. As you mentioned, this past week, we were excited to hear that Abbott got approved for FreeStyle Libre 2 and FreeStyle Libre 3 to be used in an AID system. I think there were some feelings that there was uncertainty about the timing of that. So to have them both approved relatively early in the year is a great thing.
The, I guess the thing that we still have to work our way through is the, in order to get this product to market, they have to modify their manufacturing process and make the changes that were approved by the FDA in the devices that will be shipped. Timing-wise, they indicated that would be in the latter half, in the second half. Sometime in the second half, they're going to come to market with a modified device, which is the one that's able to be used AID. We should be in that. We would anticipate that we would have a, you know, second-half introduction also. I think we wanna actually have more time to talk and meet with Abbott people to be more specific about what that timing might look like.
We'll probably announce it, more specific information on the first quarter call, which is latter part of April.
Okay.
Okay?
All right.
We think that's a big opportunity for us. There's quite a few people in the U.S. with Type 1, hundreds of thousands that use the Abbott Libre sensor, which is just, you know, it's greenfield for us. None of them use an AID system today. You know, we believe we have the best AID system on the market. It's immediate and sustained improvement, and I think that people who are using these sensors will substantially benefit from the therapeutic value the system provides. That's another opportunity in terms of new products. We also have the Mobi Pump. Mobi Pump is about half the size of the t:slim pump. It doesn't have a touchscreen. It's controlled entirely by a mobile app.
It's waterproof, it's wirelessly charged, and it has a bolus button on it. The importance of that is if you ever lose your phone or your phone dies, the system still has algorithms on it. The sensor is talking to the pump, and the pump has a bolus button. You can continue to operate and manage your diabetes without the cell phone. Certainly, the cell phone provides a lot of advantages. One of that is convenience. It's a very convenient system when you're out and about and you're with friends, for instance, having lunch and you need to give yourself a bolus for a meal you might have just eaten. You can do that with your cell phone. Nobody knows you're managing your diabetes.
Discretion is a huge benefit you get from using Mobi and also obviously the convenience. We think it's going to be a great product. We think it's going to definitely drive increased sales, and we also think it's going to be an interesting product for the Type 2 market once we get the Type 2 indication. Timing-wise, we submitted the filing to the FDA last year. We are now in the process of working through questions with the FDA. We are responding to questions. We are also seeking clarification, you know, on some of the questions they did ask us. As I mentioned just in this past week or so, when you look at the questions that they have asked us, I would say there's nothing that keeps us awake at night.
I would also say that there does not appear to be any need to do additional clinical testing or human factors testing, which could significantly extend the timeline of the filing. The FDA is, you know, things are sort of returning to normal, I'd say. We've got a good group of people who are supporting us at the FDA on this product, but it's difficult to predict the actual clearance timing. I think that if you look at some of the other diabetes products that have come to market recently, they've all been delayed a bit. Rather than us try to predict exactly when we're going to get clearance, what we're going to do is we're going to plan to have a product be ready to introduce the product in the second half of this year.
It'll take us approximately a quarter to get the product on the market after we receive the approval. That's, you know, hopefully a second-half device as well.
Okay.
One thing we haven't talked about is a new data platform that we call Tandem Source. Tandem Source is going to be rolled out starting in the middle of the year. It's a completely updated data management platform that really is targeted to support the physicians. It gives the physicians the opportunity to customize the reports that they look at. It also helps them manage their patient populations a lot more effectively and still provides the great data to the people who have diabetes that are using the system. This is something that we haven't really spoken about, but we think it's going to be meaningful for physicians, and it's gonna...
When you consider that physicians are actually the number one influencer of people when it comes to selecting a pump, we think that providing products and services in their ways that improves their practice is another way to continue to get Tandem recognized in these offices.
Okay. Is that something that you would sort of call out as a, as a catalyst for growth that's not in your plan, or is it sort of a different sort of infrastructure ecosystem kind of support addition?
Part of the latter.
Yeah.
I think we don't see this driving revenue in a substantial way. It's very important, though, to provide easy access to data in a manner and, and have it in a design that the physician wants to see. That's really what this is about, actually to provide ease of use to the physician.
Okay. like maintaining that service level.
Yeah. Exactly.
-with clinics and accounts, which is important. To be clear on Mobi, you've received questions, but I don't think you've disclosed that you have responded to those yet, right?
It's a process.
Okay.
It's not all at once.
Okay.
you know, we're responding to some, seeking clarification on some others.
Okay.
Yeah.
I guess any historical events that you'd point to in terms of G7 integration, G6 integration or something that could give indication of what that's done to pump growth or adoption or business development?
Yeah. I It's interesting because when we introduced G6, it was on Basal-IQ back in 2018. It was a new algorithm combined with the sensor. Basal-IQ did extremely well on the market. It just really was a point in time when we saw a significant change in the trajectory of our growth. It really started to go up rapidly. The next time we introduced the product was Control-IQ, and it was also G6. This is the first time we'll have introduced just a sensor. No, I shouldn't say that. I'm not trying to say it's just a sensor.
Sure. Just a sensor.
A sensor by itself with no change to the product. It'll be really interesting to see, you know. We anticipate it'll be a strong growth in demand because of this.
One of the things that I think we talked about, you know, late last year and early this year was this, you know, in the search for some sense of stabilization in terms of, you know, new patient flows, particularly after the Omnipod 5 launch last year. In the search for that, you know, signs of stabilization was this idea that you talked about where clinicians, having received more experience with Omnipod 5, would now be able to kind of discuss with patients in a more even-handed, here's the pros, here's the cons, kind of basis. Have we reached anything like that yet in the clinical community? Are you starting to get that feedback up from the sales folks yet? Are we on the, you know, expect that this coming quarter?
Where are we in terms of timing on that phenomenon?
You know, it's, Because of COVID, there's been staffing challenges within the endo offices. People aren't, I mean, I think prior to COVID, people were seeing their endo about once a quarter. Today, it's probably maybe three, maybe two times a year. It's slowed down a bit, and I think that's certainly affecting this dynamic you're talking about. I think we've seen stabilization in the last several months, and I would say that means things have gotten no better, and they've gotten no worse. We have seen stabilization. My sense is it's probably gonna take us the rest of this quarter and maybe into the second quarter to really see, things return to a steady state.
I mean, prior to the introduction of Omnipod 5, I would say that on the MDI conversions, Tandem and Insulet would basically split at 50/50. I say now that the Omnipod 5 is on the market, we're probably seeing that skew towards Insulet. It could be 55% or maybe even 60% in favor of them. The thing that's important to recognize is even with that transition, the market's growing. I think as it grows, there's still more opportunity for Tandem to grow from the MDI conversion. We're also seeing really strong growth in our renewals, which increasingly is a more important part of our revenue growth. When you look back, four years ago in 2023, we went from 30,000 people in 2022.
Excuse me, 30,000 in 18,000-50,000 people who started Tandem in 2019. They are now candidates for renewals this year. As I said, we've been seeing very strong growth in renewals. Many more people are renewing faster, which is a really good sign, particularly in light of the fact that there's a new product on the market this year.
Okay. Then in terms of, you know, the kinds of patients maybe that, you know, enter this market or have entered this market, you know, via Libre versus, you know, folks who had, you know, you're integrating with now, for example, on the G6 side, soon to be G7. Does, does Libre open up any... You know, is that demographic different? Is the, you know, the sort of payer mix different? You know, Is there anything different about those, say, few 100,000 patients that are now on Libre and could be on a pump and aren't?
It's a good question, and I don't think I have a solid answer for it at this point in time. I think it's a bit early. We have heard of a number of physician panels where people have been asked that question, and they would anticipate that 10% or 20% of their Libre users would likely be candidates for pump therapy, which is a good number to start with when you that's roughly 60,000 people. That's a data point that we've heard recently. I think that, you know, when I look at the benefits that Control-IQ provides to people, there's a substantial reduction in the burden of managing your diabetes, as well as you see great therapy, great therapeutic outcomes.
I think it's an opportunity for us to sell to, like I said, a green field with a large group of people who I think, in my mind, why wouldn't it be 35% penetration, the same as it is with Type 1 generally? I think that would be a good target for us to endeavor to achieve.
Okay. Any questions from the audience? Oh, yeah, go ahead.
When we compare you to your primary competitor, they have maybe a different ratio of disposable value versus sort of durable value components in their device. How does that work for you guys? Because obviously, you've got one part that's effectively very costly and very durable. How do we think about that transition to pharmacy and making that work?
Sure. It's a great question. We often get asked about our progress in the pharmacy channels. If you had asked a year ago, we would have said that with the type of product we have and with the payer mindset that we fit more squarely in the DME channel. What we're doing with Mobi is we're taking a different approach at it. We're a much bigger organization now, and we're accessing people at different levels of the payer chain had before. People who have the ability to think from an innovation perspective, to think structurally different about how they manage their product offerings.
We're taking Mobi in as an opportunity to talk about the value of the system with the technology that it offers, the clinical benefit that is realized by the patients and the cost reductions that they could see in their system. We're trying to change that conversation and that mindset. Down the road, Mobi might not be the one that gives us the broadest access in the pharmacy channel, but it certainly can help pave the way for building the relationship, building a baseline structure so that we can ensure that Sigi can go right into the pharmacy channel down the road. I would say that I'm more encouraged every time I hear feedback from our market access team when they have these conversations that this ambition with Mobi is possible.
I look forward to down the road being able to talk more about it. At this point, it's too early to share any real news on progress, but I'd say as we continue to go in and have these conversations, we'll share what we learn along the way.
I'd also point out that you said it's more expensive. It's more expensive to access the pump initially. If you look at over the life of the system, it's less expensive to have the product through the DME versus the pharmacy.
Any other questions from the audience?
One thing that I'd like to point out is that we believe that diabetes is a very segmented market. You really don't. There's no one-size-fits-all solution to address the needs of people with diabetes. I think that just having one pump on the market, you're, you can be successful, but you're gonna limit the segments that show interest in that product. At Tandem, we really believe in having a portfolio approach. We think we need a tubed pump. We need a, we need the t:slim on the market. Mobi is coming to market, as we've just discussed. It initially will come to market with a tubed option, but we're working on a tubeless option as well. Once that is available, Mobi wants to use tubes or tubeless options on the exact pump.
It's really just a matter of buying different disposables. That's. Then we have recently acquired a company called Sigi, or AMF Medical, which produces a patch pump called Sigi, which we think is highly differentiated. It has. It's a rechargeable system, so there's a significant environmental benefit of having this device in the market. It also uses the pre-filled insulin cartridge that has a substantial improvement in sort of the convenience and simplicity of making changes to the amount of insulin you use.
We think with these three devices, when you look and consider the fact that we'll also have multiple sensor integrations, we'll have algorithms that have different capability, and we're targeting Type 1 and Type 2. You know, that portfolio approach, we think will do a much better job of driving the penetration rate in the U.S., for instance, with Type 1 from 35%- 65%. In the OUS, where the market's twice the size of it is in the U.S., but much less penetrated. It'll be going from, you know, 10% or 15% up to 25% in the next 3-5 years. When you look at those numbers, those are big numbers, as I said.
You know, we really do believe that, the portfolio approach is the right one, and that by doing that, we do drive people to pump therapy who wouldn't consider it before, and we grow the market.
Okay. Yeah. question.
I have a question on.
Yeah.
I was just wondering kind of how it's going, when you guys expect to have your own infusion set on the market? What does that mean for margins and maybe, you know, are you still gonna use outsourced infusion sets, how do you envision that working?
Yeah. That's all a bunch of good questions. First of all, we did acquire Capillary Biomedical in the summer of last year. It's a company that's a smart company that's making an extended wear infusion set. It's gonna go from three days today to seven days. I think that's a substantial improvement to the quality of life for somebody living with diabetes. I mean, it's less for you to do. You can keep the sensor, the infusion set on for twice the amount of time. From a margin point of view, it's essentially the same cost to build that device, and you bill on a per day basis. There's a substantial margin improvement when we bring the Capillary Biomedical device to market.
In terms of timing, you know, that we've been working with them over the last, you know, seven or eight months just to go through some additional testing and just make sure that we feel like we're in a great place to do a pivotal study. We intend to start the pivotal study in the second half of this year. That study will allow us to submit the data to the FDA and get approval probably sometime in late 2024 or early 2025, would be our guess. With regards to, I mean, we have a partner we've been working with now for, geez, 10+ years . They, for the most part, provide most of the infusion sets that are used by diabetes in the world. I mean, they're the primary supplier.
I would say that our relationship has evolved with them from one that was we were treating them as a supplier as opposed to a partner. I think it's changed recently, and we now view them as a strategic partner. I think that we're always going to continue to work with the company. They have a great management team, a very capable organization. I think, you know, as opposed to just purchasing products from them, I see us co-developing products and co-developing allowing us to seek, you know, better financial terms on the products that we are developing together. Also just use the capabilities and skills that their organizations have to develop exciting new products for diabetes. It's a good relationship.
I don't think We're always gonna be important partners to each other.
Any other questions from the audience? One follow-up on the last couple of minutes. You know, I think last year, one of the things that was an early sort of hot topic of conversation as Omnipod launch sort of lifted off and you were getting more and more questions about your growth rate versus their growth rate, was this idea that is cheaper. You know, like for $50 a month. You know, particularly in June, we were heading into fear over recession. You know, I think one of the early sort of calls between the two stocks was, well, they're going to be better in the recession because it's cheaper or something like that, and patients are gonna have to decide.
You, you came back with, you know, a plan and an offer to sort of, you know, level the playing field with. You know, you can Yes, there's a copay, but you can pay it over 48 months for $50 a month. In fact, then you can stop paying, I guess, at month 48 and not have to keep paying for your pump. I'd love to get a sense of how, you know. They obviously made a lot of traction and were on that marketing message early. Wondering how you feel like the traction in that offer is going and if you feel like in the marketplace that's starting to normalize as you communicate to endos about the out-of-pocket facing patients.
Sure. We launched that payment plan offering in late September. I would say from the perspective of the field, it's been a very useful tool in having that conversation, to your point, sort of equalize the playing field. Our sell all along has always been very product-oriented, clinical-oriented, the benefits that you get. They didn't really have a tool for the objections of people who would bring up the cost piece of it. Now the sales reps can bring that up front and center and help the physicians understand that that shouldn't even be part of the conversation because we do have this ability to give people that offering.
In the fourth quarter, I would say the actual uptake of it did not significantly change. That's not unexpected considering in that quarter is when most people have met their deductibles and don't have as large of a pocket. I think it's an important tool that we got rolled out to get the conversation started because at the beginning of the year, when deductibles reset, it may have a higher utilization as we look ahead. The most important part is that it helps with the conversation piece. What we did notice in the usage of it, though, was that it wasn't patients who were renewing it or who were taking advantage of it. It was more so patients who were new to Tandem. I think that speaks a lot to Control-IQ, the strength that it has.
People going through the renewal cycle have the opportunity to plan and prepare, they know it's worth the spend. They're ready to make that out-of-pocket commitment. From the MDI population, there's still that convincing piece of it to get people to understand how beneficial the product can be and that we can help them as we consider the economic piece of it.
That's super helpful. With that, we are at time. Thank you again for coming.
Thanks for having us, Dan.
Very much appreciate it.
Always good to be here.
Yeah. Same.