Morning. Why don't we get started? My name is Jeff Johnson. I'm the senior medical technology analyst at Baird, and our next presentation this morning is from Tandem Diabetes Care, the manufacturer of the t:slim Control-IQ insulin pump, that has gained 25%-30% share of the U.S. insulin pump market here in recent years. I think I'm right on that. My math anyway.
Maybe more.
Yeah. Yeah, maybe more. I knew you were gonna bristle at that point. With us today from Tandem, we're happy to have Chief Executive Officer John Sheridan and Chief Financial Officer Leigh Vosseller. John, I'll turn it over to you, and then we'll move into Q&A.
Well, thanks, Jeff. Good morning, everybody.
Yeah.
I'll just start off by saying that when you look at diabetes, and specifically type one diabetes in the U.S., it's a large and it's underpenetrated market. Today there's about 1.8 million people with type one in the U.S. About 35% use pump therapy. When you look at the OUS markets, it's significantly larger. 25 countries you're in today, there's about 4 million people that have type one, and the penetration rate's maybe 10% or 15%. So, a big opportunity there. Today, we have about 420 or 430 thousand people worldwide using our technology. If you talk to endos or if you talk to pe-...
We have the number one rated automated insulin delivery system on the market, and we also have, I think, the most exciting pipeline of new products in the works, four of which we'll be bringing to market here in the next few months, and then a steady stream and cadence of new products over the next couple of years. So we're excited about where we're at. It's definitely a competitive marketplace, and we've experienced pressure from the competition in the last year. But I would say that, as you look to this pipeline that we're bringing to market this year, in particular, we expect that we'll start to see that come back in our favor, as we bring these products to the market.
All right. Well, great. That's a good start. I'm tired of leading off with the GLP-1 questions. Can I, can I go to something else, and maybe we come back?
Yes, please do that.
Yeah.
They usually come to that.
Maybe we'll come back to... Exactly.
Sure.
We'll come back to it.
Yeah.
I'm just-
Sure
... I'm tired of talking about it.
Yeah.
Type one penetration. You know, it seems like we're probably right around 40% or so in pumps.
Yeah.
You know, I can remember a few years ago, that was moving maybe, at best, a point a year, and I was thinking, "Okay, maybe we get to 45%, 50% someday." You guys moved faster than I moved in kind of my expectations of where penetration would go, but it feels pretty convincing now that type one penetration of AID should go, what, 65%-70% over the next three to five years, or at least five years, something like that?
Yeah, that's what we believe. We think that in the U.S., it can get to 65%, OUS, maybe 25. I think that it really is AID technology that's driving that. We think that the therapeutic benefits people experience from these new systems and the quality of life that they improve, that they experience as well, have a big, it's a big factor in driving that.
Yeah. No, and I don't know that I've heard you use the 25% number before. It's rare that I'm more bullish than maybe you, but it feels... What do you think would limit it to 25- again, the health outcomes, even in international markets-
Mm-hmm
... or not even in, but you know, across the globe, the health markets of AIDs are so strong, and we hear even in international markets, KOLs there and that are just increasingly convinced that these T1s should be on AIDs. I mean, there's nothing else that pushes your Time in Range up into those, you know, mid-70s and beyond, at least at this point. So, what do you think that... Would it be just pure, are dollars the biggest impediment to the penetration above 25% in international markets?
I mean, I think it's possible to get there. I guess I was just thinking in the next couple of years-
Yeah.
It's a large number.
Yeah.
It's a large number. I mean, it's again, it's twice the size of what the U.S. market is. And so I think that, you know, getting to 25%, that's a, you know, in terms of just the absolute value of the new people-
Yeah
... making the argument there.
No, that's fair. Yeah.
So we certainly think it can get there. There's no reason why it can't be any different. It won't be any different than the U.S. And I think that when you look at the various health organizations in the various countries, like NICE, for instance, they're sponsoring and actually promoting-
Right
... the use of AID, and I think that as people see the sort of benefits to the healthcare system, as well as the benefits financially to the countries, that they will all do that.
Yeah. And when NICE comes out and says, "Cost-effective-
Yeah
... "for use of these,"-
It's a deal.
... I mean, that's a big deal, right?
Yeah.
So, so that was encouraging. Good. All right, well, let's talk maybe about a couple of other things here. You refreshed your guidance on the second quarter call, that was in early August. We're now sitting kind of six weeks out. You know, we've seen Medtronic's Q1 numbers now. Maybe they're getting some improvement internationally, for sure, U.S., still a little questionable. Beta has raised now $100 million here recently. Anything with the passage of time that makes you kind of, you know, reassess, or you would add to kind of the guidance you issued just in August?
No. So I would say nothing from a competitive perspective is different than what we were anticipating as we came into the quarter. And really, the main basis behind the guidance change was thinking about the Mobi launch-
Yep
... and the timing of it. So it was anticipating that with approval in July and full availability after the turn of the year, this could cause some quite a disruption as people are considering what to do when they're meeting their deductibles around this time during the year-
Yeah
... and then they'll reset again January 1. So it was more about this, the murkiness in the environment, I guess, as we try to understand what, how our patients will behave in terms of the Mobi opportunity.
Yeah. No, fair enough. And, you know, what are you seeing, I guess, at this point, to your point? Mobi's been out there since July. Let's start with maybe MDI and new patient starts. Does it cause any pause in new patient starts? I think you've got the, you know, the potential that you could start on Control-IQ today and upgrade or move to, sorry, start on X2 and move to Mobi if you want, at, at a very low to no cost, right?
Yes.
Early next year. So, with that guarantee out there, with that financial backing out there from you, does that change new start dynamics in the near term? And then I have a question, similar kind of question on kind of the renewals?
Yes, I'll talk through each of those, because what we did when we looked at what we thought behaviours might be, we did break it down between what will someone who's never used a pump before-
Mm-hmm
-do versus someone who's already on a t:slim. And frankly, for someone on a t:slim pump, it's actually easier to go ahead and purchase their X2 today and switch for that low cost, that $200 switching fee. That's our promotional pricing right now for Q3 and Q4. For someone that's brand new to pump therapy, though, that's the population that I fear might be most inclined to wait until next year.
They're gonna go through the calculus of, "I have the economic piece of it with how my insurance plan behaves, but that also means I have to learn a one pump today and turn around and learn a different pump, you know, in a matter of months." And so I think that's the population that's most at risk, what I would say, for deferral, as we look forward in the next couple of quarters.
Okay, so you can, you can help them offset the fear of having to buy one thing and then spend a lot on the other thing six months later, but you can't offset the why learn one if I can just learn the other?
Precisely.
Okay, I gotcha. And then on renewal side, any way to help us conceptually think about how many of your Control-IQ users or really all, the vast majority of your users-
Yeah
... are Control-IQ, right?
Very true.
I know legacy others. Okay, so how many of those Control-IQ users might be sitting out there with, like, a 4.5- or 5-year-old pump? For whatever reason, they've just never upgraded, and now there's this chance that Mobi could pull them off the sidelines. Maybe it's more next year, but could still pull them off the sidelines when they otherwise might have just stuck with their, with their t:slim.
Sure. So I think first, a couple of important points here.
Yep.
What could pull them off the sidelines first really is the G7 integration.
Yep.
So thinking about that population, everyone's on G6 today, probably eager to move to G7. And with that launch underway here and full availability in the coming weeks, that could bring people off the sidelines already for an X2 purchase. And so that's one piece of it. But then, I think our customers, there will still be a high demand for t:slim X2, so it's not as if everyone's waiting for Mobi either. So there will be a population of people that prefer X2 over Mobi, and then the question is, those people who prefer Mobi, what will they do? And so, you know, we believe there's still a significant opportunity there. We think the Tandem Choice program will really help alleviate some of the pausing in that population more so than the other.
I think what's important, too, to point out is our renewal customers and our renewal trends have been the best that we've ever seen in the last, you know, 4-6 quarters. So-
Yeah
... you know, we're really excited about it. If people choose to wait, that's fine, too. We took that into consideration in our guidance change, but we're gonna do everything to help them through the process as they think about the economic piece of it.
All right. Fair enough. John, I think you were at Morgan Stanley. Well, I think you both were, but at a couple days ago, yesterday or the day before, whenever that was, two days ago. What was my question gonna be about Mobi and the timeline there? Oh, no, you talked about the G7 integration-
Yeah
... and still expecting it in 3Q. Now we're down to a couple weeks and all that.
I mean, it's a-
So, so-
... we're a few weeks away really from meaningful numbers of people on the system. I would say that it's, since it's a software upgrade, and we have a great deal of experience-
Yeah
... working with Dexcom and sensors in general, it's gonna be a rapid move from early availability to general availability.
Yeah.
And we-
'Cause I think you have the letter out there to-
That's right
... to some on a trial basis.
Yeah, and we have a great deal of interest.
Yeah.
I mean, I would expect that general availability will... I mean, we'll have thousands of people using it in a few weeks, and general availability will be, you know, probably in the early part of Q4.
Yeah. Okay, okay.
That means, that means that the pumps that we ship will have the software on it for G7. It also means that all of our current customers who are in warranty will get access to software upgrades, so they can update their current pumps in the market.
Okay, fair enough. That's helpful. And then, I guess I think about your 2023 guidance and the kind of the back half implied there. You know, there's a few different ways we could get to your updated guidance numbers. You know, one thing we have in our model, I just wanted to cross-check with you, as we talk about this potential slowing of renewals now, as we get, then maybe it re-accelerates next year. Your renewals grew 40%, I think, year-over-year in the first half of this year. I've got that slowing all the way down to the low- to mid-teens in the back half.
Is that the dynamic of kind of pausing that you're talking about, and is that a reasonable way to think about new starts still being down a little bit year over year and, in renewals, that growth rate slowing, but then still growing year over year?
Yes. I'll start with, it is fair to assume that the growth rate could slow from first half to back half because of the pausing dynamic, not because of any other factor. We're not afraid of losing those patients, but just the timing-
On renewals, you're talking?
On renewals.
Yes. Yeah.
Yes, in particular. I would say the growth rate, for the first half on renewals is actually a little bit higher than that, so-
That was okay, yeah.
... that's probably on the softer side, so I would anticipate our growth rate in the back half will be a little bit higher than what you just came up with.
Yeah.
But relatively, I think that's fair.
Okay. So still to get to your full year number, and you, you've guided both U.S. and international, then I probably take that out in new starts to kind of offset and stay within your guidance range.
That's right.
Okay. Okay, and then, just, John, maybe on the timeline with Mobi, just remind me how that phases in next year from a first half, second half standpoint, and when you kind of fully commercialize versus step that through the year?
Yeah, we got approval in mid-July, and typically, after that happens, there's work you've got to do, sort of clean up after the FDA has actually had access to the data. You have to update your manuals and things like that. We're now in the process of training our own sales force and our customer support organizations, who will go out and start to train healthcare providers and their staff. In a matter of weeks, we'll have hundreds of people on Mobi, and these will be, you know, friends and family and people close to the company. And the intent, really, at this point in time is just to get it out there and actually have it. It's a brand-new pump platform. We wanna make sure it works the way we expect it to.
And so we wanna look for customer service issues, maybe potentially training issues, and things like that, and we'll do that for a few months. We wanna make sure that before we really step on the gas, there aren't any issues out there that could kinda cause dissatisfaction or irritation amongst the customer base. And so we will start to do an aggressive commercial launch in the early part of the first quarter of 2024, but we wanna get through this next phase here. I mean, as we gain confidence, we could move more aggressively, but I think from, you know, just a timing point of view, that's the plan on early part of the first quarter.
Okay. And I think you've confirmed this before, but just rechecking it, Mobi pricing probably gonna be about the same as Control-IQ-
It will be, yes.
From the payers. Yeah. And then maybe Lee, for you again, as Mobi drops the screen, manufacturing costs should come down, what? 10%-15%, I think, relative to t:slim. You know, how do those cost savings phase in? Because obviously you're not gonna have immediate full efficiencies on that as well. So how should we think about those 10%-15% cost savings phasing in?
Yes. So what I've told people to think about it is, think about getting to that over the course of 2024. So almost a year from initial launch to get to scale-
Mm.
To start realizing the real benefit. Having said that, as we think about gross margin overall next year, I don't think it will be a significant headwind by any means. We have other efficiency opportunities, even on t:slim, we saw reimbursement opportunities to help offset some of that pressure we may see just from the higher cost, but it will simply be because we're manufacturing at smaller volumes to begin with. In 2025, though, is when you'll start to see it really start to show itself in our gross margins, and it starts with the pump piece, to your point, with that lower manufacturing cost, but then the consumables as well. The cartridge for Mobi has a greater than 20% reduction compared to t:slim.
As that becomes a bigger piece of supply sales in the future, you'll see that it continued benefit over time.
Okay. Should all those numbers be about ballpark the same for Sigi as well as Mobi once Sigi, if that comes out-
Yeah
... 18 months later or something?
Think about it similarly. Yes.
Okay. And I think you've talked about Mobi as helping contribute potentially as much as 500 basis points of the 10 points of expansion you expect over-
Yes, that's correct.
... the next few years. Is there a percentage mix in there we should think about, like, Mobi has to get to 20%, 40% of your pump mix to kind of get that 500 basis points fully embedded?
Sure. So we haven't specifically shared the mix, but I think what I can highlight is we still have always assumed that t:slim will have meaningful share as well as Mobi. So you don't. I guess the important thing is you don't have to assume Mobi is 75%-80+% in order to achieve those margins. So even at a modest level of sales, we can still see significant margin improvement.
Okay. All right, and then if we look at the other kind of lever, so there's new starts, there's renewals, and I guess embedded within new starts, there were competitive conversions. So, you know, I think through the timeline of. You know, you guys hit this fantastic window in 2020, 2021, when Control-IQ had just come out. That was, like, four years removed from when 670 had launched, so you had a ton of these Medtronic turnover, unhappy patients coming out and all that. But we're now kind of deeper past where 670 came out, and we're kind of more into a timeline where you guys have been taking massive share from Medtronic for a few years now.
On that turnover piece, or not turnover, but on the piece of patients, on the number of patients coming out from competitors, does that number shrink over the next few years just on who's left on the competitive front for you guys to convert? And obviously, then you're battling maybe a little more aggressively than you had to a year ago against Omnipod 5 for those turnover patients. But does just the size of that bucket narrow down?
It does, and we've always assumed that in our modeling, that that would come to fruition. And really, our growth is predicated on our continued retention of our own customers, which is now a very sizable base, and also the expansion of the MDI opportunity. And if you think about the new products we have coming out, you know, we have three new products coming out that are gonna drive that MDI opportunity for us. That's what's really gonna make the difference going forward.
Okay, fair enough. And then, yeah, so, it's probably been, what? three years straight, four years straight, that you guys have talked about 50% of your new U.S. patients are from MDI, 50% from competitive converts, and that has been a, I don't know, every quarter for-
Incredibly consistent
... for a long time. Yeah, it has been.
As one has been growing, the other's been growing at pace.
Yeah. And so do we think that shifts then? Obviously-
Yes
It seems like the math, but when do we start to see that go 60/40 MDI, 70/30? And how much of that could be driven by MDI numbers going up? It seems like the market's expanding faster than it has in the past for just total market size. So how much of that could be driven by MDI number going up versus that competitive number, just the opportunity is shrinking?
Yes. So, it will begin to happen in 2024 is our expectation, but... And, for both reasons, I think the opportunity going down on one side and us improving on the other side, but I don't wanna underestimate what Mobi can draw. While we believe it attracts a new segment of the market, I think it will be very appealing to people on other pumps today when they look at why they chose the pump they're on and what features it offers that are different, whether it's the size, the lack of a touch screen, lack of a screen on it. So I think Mobi will still help us on that competitive conversion front.
All right. Fair enough. And then, let's see. Let's, I guess, continue with the Mobi questions then. So, I think at its peak, you guys were probably winning 50, 60%, 50, 55% of all MDI patients coming into the market. I think in the last few quarters, maybe that's slipped to 30-ish% by our math, and, and, you know, we don't have everybody's numbers, but seems like about that. Where do you think, where do you think the, the MDI win rate, does it go back up towards 50? Can it get back to 50 with Mobi? Just where, where would you expect that MDI win rate to go?
Yeah, it definitely will reverse course, and the question is, how high will it go? And I wouldn't just tie that to Mobi. To your point, I mean, the three new products. So we've got people picking G7 for the first time, so we expect Dexcom to continue to penetrate the market. That provides an opportunity for us as well. We have Mobi, which will attract a new segment of the market, as we were just discussing, but we also have the Libre integration opportunity, which is almost greenfield territory for us when you think about estimates we've heard of 300,000-400,000 people with Type one already using that product. So with that integration in hand, that can also be a significant driver on the MDI side.
So there's a lot of great things lining up, to really push the needle for us. So I definitely think we can reverse course, get back to where we were, and ideally, move beyond that.
Yeah. All right. Fair enough. And then, let me switch over to the international markets. I think most of our focus here has been on the U.S., but on the international side, I guess the question goes U.S. as well, but, you know, we've been hearing from a lot of our non-diabetes companies at this conference and others in the last couple weeks about just summer seasonality, and this was obviously-
Yeah
... a summer of revenge travel and patients taking bigger and longer vacations, doctors doing the same. Anything to call out from a seasonality standpoint? You know, we tend to think of summer vacations more of a European-type headwind to med tech, but anything to call out on a summer seasonality point?
We're not seeing anything out of the norm. I would say, to your point, in Europe, everyone tends to go quiet, and you usually see orders come in before or after, as the distributors kind of manage their inventory levels. I mean, it's not to say we also see seasonality in the U.S. in the summer. It's a little bit softer around this timeframe, but again, nothing different from what we've seen in years past.
Okay, that's helpful. And then you guys just recently got positive reimbursement decision in France. What does that exactly mean for your business there? Is it simply just an increase in the ASP or, or the reimbursement, I guess, that you get for Control-IQ in that market? Does it open up any additional segment of the T1 patient base? France is, along with a couple markets over there, are always hard for me to understand their different reimbursement tiers and levels.
Yes, very convoluted in many cases, but I'll say first, what it does is it does increase the reimbursement for Control-IQ, but I think the most important point of it is considering you know, France is not a significant piece of our total worldwide business, but it's a sign that this can happen. So it's our initiative to continue to improve price worldwide, whether it's in the U.S. markets, using the value of our data. So when we talk to payers here, when we go to the social systems, we talked about inroads we're, we're making with in the U.K. with the NICE organization.
Yeah.
I think the most important point of this is, it's a symbol that it can happen and that we're working hard to get it done.
Okay. I think this is in 2024, it's gonna be probably the first year that you're really moving into that four-year turnover period in the international market, where you have a decent number. Now, I think a lot of those were back-end loaded in 2019 or 2018 or 2019.
'19.
I'd have to... Yeah, 2019. So maybe it's more of a second half 2024, but should we start to see a bigger contribution from renewals in your international number, especially as we work deeper into next year?
Yeah, it will start to become something more material. So the thing I caution about how to think about the renewal cycle outside the U.S., it's still a four-year cycle, and we're just beginning, but in the U.S., I've always said, "Take the warranty expiration and think about getting to a 70% retention rate in 12-18 months from that timeframe." Outside the U.S., the pumps have sat on shelves longer before they got put on patients.
Yeah.
I would add three to six months to that-
Okay
... just because of that timing, and so, yes, it will, we're lapping the four-year mark, and it will begin next year, but I don't think it will be as meaningful as you maybe have, the way people are modeling the U.S. today.
Okay. I just conceptually think about the way we track our international numbers. So when we take kind of a blend over 12 months, getting towards that 70%, like you said, but I should probably do that on my... Yeah, I know conceptually what I'm thinking, even though it's not coming through in the question. Basically, I should wait six to nine months before I start picking up those patients.
Yep, I think that's fair.
Still do the 12-month blend towards 70, but wait-
With a little lag, gotcha.
... two or three quarters.
Yep.
Yeah, yeah, yeah.
Yep.
Okay, that makes sense. John, maybe bigger strategic question for you. I, you know, you're in 25 markets around the globe, Medtronic's in over 100. Are there any new market entries that would be, you know, worthwhile, to consider here in the short run? Is it really head down, focusing on your current 25 and obviously, the full pipeline like you're talking about? For now, just how to think about maybe geographic expansion.
Yeah, I think, I think right now, you're right. Our focus is to get these new technologies into the OUS markets for sure. When you look at it, of the markets that we're in, Germany, France, and the UK really do represent the largest opportunity for us. We're just getting started on all those markets, and so I think that in the short term, our priority really will be to really penetrate those particular markets. We're certainly evaluating others. Most of them are smaller, I'd say.
We don't have the same infrastructure that some of the competitors have, and so I think that the other thing to consider as well is at some point, we may want to be looking at some of the Asian markets as opportunities, although there's some challenges, I think, from regulatory and timing point of view. But certainly, in the short term, we'll be really focused on those three markets I just mentioned.
Okay. If you were to expand into Asia, is that a two to three, three to five year?
It's probably two to three, I'd say, before we were ready. I think that having the product now controlled by a mobile phone gives us a little bit more of an advantage 'cause it's-
Yeah
... it's easier to get the characters and language addressed-
Oh, yeah
... in that manner-
Okay
... than it would be on the t:slim
Yeah. All right, and then I know between Mobi and Sigi, there's a number of algo improvements, there's Toby, there's some other things in there. But I think Sigi is your next big after Mobi, at least my view, and maybe that's the wrong way to think about it. But you're supposed to go to first in human, I think, fourth quarter of this year. Is that still the plan for Sigi? And then what happens after that human pilot or that first pilot in man? If everything goes as planned, how many more studies beyond that, how many more trials, and kind of think about—help us think about the timeline to getting-
Yeah
... to a full pivotal?
Well, first, it's a new pump platform, so we wanna test it, and so this will be first in human for the system.
Yep.
It's a small study that'll be run in Europe in the fourth quarter. You know, I think that's just it just is sort of the cautious, safe approach to make sure the system's working correctly. We are just now engaging with the team. We really only acquired the company six months ago, so we're in the process of really working, helping them build out the organization and develop the detailed plans that are predictable to get this product to market. You know, when it comes to any other studies beyond that, it's gonna be submitted as an AID pump. As an AID pump, you know, it's gonna be interoperable. And so we intend to load Control-IQ on it and integrate it with other iCGMs.
There's no regulatory requirement for us to do any additional clinical studies, although we probably will. You know, that'll be smaller scale just for us to test things out. At this point in time, there's a few technical issues that we are just working to confirm with the organization there. These are things that we believe that, you know, it's this. We want them to show us that we can get these things done. We feel very confident that they can. In parallel, we're just, you know, putting our head down, getting the schedules in place. I think that the, you know, the big lift for us is to integrate the algorithm and the sensor compatibility with that system.
we think it's gonna be a very, a very differentiated and competitive device when it does come to market in several years.
Okay. And then if there's not a major pivotal, and I can't do what I usually do, which is think about how much, you know, you wear it for three months-
Yeah.
It takes six months.
Yeah
... to get everybody enrolled-
Yeah
... then yet it sits at the FDA for six months. So if I can't go to that kind of historical timeline that used to always do a pretty good job of predicting timelines, in this industry, is mid 2027 still kind of the right timeline to be thinking about?
I think we're looking at 26, 27.
Twenty-twenty-six.
Twenty-
Could you pull it... What would have to happen to pull it into 2026 as opposed to 2027?
I mean, I think it's, it's a little bit early for us to say-
Yeah
... since we're just kind of getting things started. But I can tell you that, you know, when you look at the priorities in the organization today, Mobi tubeless, we think that it's an important product. We think that the ability to go tubed and tubeless in the same small form factor is important, so that's a huge priority for us, as well as Sigi. So I think that the organization really has heads down, getting those things going. And then we also have, you know, work that we're doing to enhance and improve the algorithms.
Yeah. Okay. And then on SteadiSet, that's the 7-day infusion set. I know, Leigh, I think that also plays a role in your 55%-65% kind of gross margin progression here over the next few years. If the pivotal for that is later this year, is that correct?
Yeah. We're gonna start the pivotal in the fourth quarter. It'll probably take us nine months to get through it.
Yeah, which is-
And then on top of that, the filing. So we're probably looking at an available device in the early part of 2025. We haven't said specifically, but I'd say that's probably not too far off.
Yeah. And, you know, Medtronic, I think, got their seven-day approval in Europe. I don't remember in the U.S. if they have it now. I should know that. But we haven't heard them talk a whole lot about it. Obviously, they've got a lot of noise around their diabetes business. Maybe it just hasn't filtered up to that discussion. But still think seven-day infusion can be a competitive advantage relative to others?
You know, I don't think it drives pump decision-making.
Okay
... but it certainly is a customer satisfaction improvement, and I think it—people, people really are asking for it. It's also... I mean, the technology that we've got in Capillary Biomedical can be applied to other—it can be applied to Mobi tubeless, for instance, and Sigi as well, so that we can look at that set that's gonna be attached to the body as being an extended wear set as well. So I think that, you know, there's, there's a lot of things we can do with it. As you just said, we definitely expect to see some gross margin benefits from it, but primarily, we're, we're doing this because of the customer experience improvement.
Okay. And then in the last two minutes we have, I think, you know, Tandem Source, it seemed like there was a lot of excitement from your own people at ADA, I think from some of the docs we talked to as well. Help me understand how Tandem Source relative to, like, Dexcom's Clarity. Do doctors, would they use both Tandem Source and Clarity as they're kind of evaluating patients during those follow-up visits? Or would the expectation be that Tandem Source could replace Clarity? That, that was the one thing I still was a little confused on when I left ADA.
Yeah. I think the difference is that Tandem Source has all of the data on it. We have the insulin data, we have the blood sugar data, we have just how often you use it, how often it delivers boluses. So all of the information that's there is available on Tandem Source. And so we'd anticipate that if a physician was managing, you know, the diabetes for their patient population, that they'd be able to do that effectively through Source. But Source also brings a number of other benefits to the company. It allows us to have a one-stop shop, not only for physicians, but for patients. And I think that what we're looking at really with Source is to develop more of a consumer-like experience when people interact with the company.
So that, you know, you can purchase supplies online, you can basically find out exactly where they are, not unlike what you get from Amazon-
Yeah
... you know, and or just, you know, those sorts of experiences. I think that it could be a source of training, it could be a source of customer service, you know, and all of the issues that you currently need to interact with a company can be available in this one site.
Okay, so more about, or not necessarily more, but definitely a patient angle when they're not in the doctor's office-
That's exactly right.
- with Tandem Source.
As well as-
Sort of ahead that-
As well as with the physician.
... Okay.
I mean, this is really... I think it's important to say that, like, you know, the physician is viewed as a very important customer of ours.
Yeah.
This product really is intended to meet the needs that they've got.
Okay, and last one, 15 seconds, so I'll just throw it out there as just Libre 2 integration, I think you said in the U.S. later this year, in the fourth quarter. What takes you from Libre 2 to Libre three? What has to happen to go from Libre 2 to Libre 3?
It's a big lift. It's another, it's an entirely different sensor.
Yeah.
And so I think we were surprised by the approval of both two and three at the same time.
Yep, yep.
We've been working on two, obviously. So we're gonna get two to market here in the fourth quarter. Again, we, we will be moving as quickly as we can. It'll be available in the fourth quarter, and it, and it won't be, it'll be sometime in 2024, really, before I think it's available as Libre three. And when we go to, when we bring the Libre products to the European some countries or to the OUS countries, it'll be Libre three to start.
It will be.
Yeah.
Just timeline on the international-
We haven't said specifically, but I would anticipate sometime in 2024.
In 2024. Okay. Well, with that, I think our time is up, so, thank you so much for your time.
Thanks, Jeff
... John and Leigh, both.
Yep. Thank you.
As a reminder, next presentation is set to begin at 12:15 P.M. Eastern Time, include Biohaven, American Well, and Nyxoah.