U.S. Markets closed
  • S&P 500

    3,638.35
    +8.70 (+0.24%)
     
  • Dow 30

    29,910.37
    +37.90 (+0.13%)
     
  • Nasdaq

    12,205.85
    +111.44 (+0.92%)
     
  • Russell 2000

    1,855.27
    +10.25 (+0.56%)
     
  • Crude Oil

    45.53
    -0.18 (-0.39%)
     
  • Gold

    1,788.10
    -23.10 (-1.28%)
     
  • Silver

    22.55
    -0.81 (-3.46%)
     
  • EUR/USD

    1.1970
    +0.0057 (+0.4788%)
     
  • 10-Yr Bond

    0.8420
    -0.0360 (-4.10%)
     
  • Vix

    20.84
    -0.41 (-1.93%)
     
  • GBP/USD

    1.3314
    -0.0042 (-0.3169%)
     
  • USD/JPY

    104.0850
    -0.1650 (-0.1583%)
     
  • BTC-USD

    17,138.75
    +39.25 (+0.23%)
     
  • CMC Crypto 200

    333.27
    -4.23 (-1.25%)
     
  • FTSE 100

    6,367.58
    +4.65 (+0.07%)
     
  • Nikkei 225

    26,644.71
    +107.40 (+0.40%)
     

Edited Transcript of SENS.A earnings conference call or presentation 9-Nov-20 9:30pm GMT

·30 min read

Q3 2020 Senseonics Holdings Inc Earnings Call GERMANTOWN Nov 10, 2020 (Thomson StreetEvents) -- Edited Transcript of Senseonics Holdings Inc earnings conference call or presentation Monday, November 9, 2020 at 9:30:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Mirasol G. Panlilio Senseonics Holdings, Inc. - VP & GM of Global Commercial Operations * Nick B. Tressler Senseonics Holdings, Inc. - CFO, Secretary & Treasurer * Timothy T. Goodnow Senseonics Holdings, Inc. - President, CEO & Director ================================================================================ Conference Call Participants ================================================================================ * Christopher Thomas Pasquale Guggenheim Securities, LLC, Research Division - Director and Senior Analyst * Danielle Joy Antalffy SVB Leerink LLC, Research Division - MD of Medical Supplies & Devices and Senior Analyst * Jayson Tyler Bedford Raymond James & Associates, Inc., Research Division - Senior Medical Supplies and Devices Analyst * Melanie Jane Nunez Stifel, Nicolaus & Company, Incorporated, Research Division - Associate * Lynn Pieper Lewis Gilmartin Group LLC - Founder & CEO ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Good day and welcome to the Senseonics Third Quarter 2020 Earnings Conference Call. (Operator Instructions) Please note, today's event is being recorded. I would now like to turn the conference over to Lynn Lewis with Investor Relations. Please go ahead. -------------------------------------------------------------------------------- Lynn Pieper Lewis, Gilmartin Group LLC - Founder & CEO [2] -------------------------------------------------------------------------------- Thank you very much and welcome to the Senseonics Third Quarter 2020 Earnings Call. This is Lynn Lewis from the Gilmartin Group. Before we begin today, let me remind you that the company's remarks include forward-looking statements. These statements reflect management's expectations about future events, operating plans, regulatory matters, product enhancements, company performance and other matters and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. A list of the factors that could cause actual results to be materially different from those expressed or implied by any of these forward-looking statements is detailed under risk factors and elsewhere in our annual report on Form 10-K for the year ended December 31, 2019, our 10-Q for the quarter ended September 30, 2020, and other reports filed with the SEC. These documents are available on the Investor Relations section of our website at www.senseonics.com. We undertake no obligation to update publicly or revise these forward-looking statements for any reason, except as required by law. Also on this call, we will be discussing our 2020 outlook. In light of the COVID-19 pandemic, 2020 financial guidance was suspended on March 26, 2020. On this call, we will be providing investors with U.S. GAAP net revenue and gross revenue measures to provide meaningful supplemental information regarding our performance and to provide better transparency on the impact of reimbursement in the Eversense Bridge Program. In accordance with U.S. GAAP, Senseonics reports revenue and its financial statements on a net basis, which includes gross to net reductions primarily related to the Eversense Bridge Program. Gross revenue measures do not reflect the gross to net reductions and accordingly, may be considered to be non-GAAP financial measures. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for or superior to the financial information prepared and presented in accordance with U.S. GAAP, and Senseonics non-GAAP measures may be different from non-GAAP measures used by other companies. For more information on these non-GAAP financial measures, please see the reconciliation of these non-GAAP financial measures to their nearest comparable GAAP measures in this afternoon's earnings release, which is available on our corporate website at senseonics.com. Joining me from Senseonics are Tim Goodnow, President and Chief Executive Officer; and Nick Tressler, Chief Financial Officer. With that, I'd like to turn the call over to Tim Goodnow, President and CEO. Tim? -------------------------------------------------------------------------------- Timothy T. Goodnow, Senseonics Holdings, Inc. - President, CEO & Director [3] -------------------------------------------------------------------------------- Thank you, Lynn, and thank you all for joining us. On the call today, I will discuss our partnership launch efforts, our third quarter U.S. and European performance and the pipeline and regulatory developments. Nick will then detail the financial results, and then we'll open up the call for questions. In August, we announced a strategic transition of our business by entering into a collaboration with Ascensia Diabetes Care. Ascensia is a global diabetes care company and a leader in the blood glucose monitoring market, with nearly $1 million in global revenue. They offer products in over 125 countries to approximately 10 million people with diabetes. The Switzerland-based company is owned by PHC Holdings Corporation, a KKR portfolio company. The formation of this partnership affords our organizations the opportunity to build on our core competencies and to provide the Eversense CGM system to more people with diabetes around the world. Built on a foundation of innovation, leading technology, excellence and deep market experience, the global -- positions Senseonics and Ascensia for growth and long-term success. At Senseonics, we will continue to focus our resources where they have proved most effective, developing, manufacturing and leveraging industry-changing products to the diabetes market. Ascensia will market, sell, distribute and manage reimbursement and customer service for our products globally. Given this division of responsibilities, we expect the resulting business model to allow Senseonics to reduce sales and marketing expenses by approximately $50 million per year going forward compared to historical levels. A minimum 5-year agreement is backed by strong commitments from both sides. Ascensia has committed to invest $50 million is Senseonics. $35 million was invested following the initial agreement, strengthening our balance sheet. An additional $15 million can be invested following FDA approval of the recently submitted 180-day sensor. A tiered split of the generated revenue will benefit both companies. Ascensia has already begun and has initiated commercial activities with Eversense. This commenced in the U.S. on October 1, which I will detail shortly. Leading up to this initiation of the collaboration, we serviced our installed base of patients in the U.S. throughout the third quarter. We observed continued sensor reinsertions in many patients as clinics became more comfortable with COVID management protocols. Patient retention actions led to U.S. revenues of $500,000, which was beyond the depletion of inventory held at our distributors. Likewise, OUS revenue was $250,000, which was also beyond the inventory held by Roche. Combined, the total third quarter revenue was approximately $750,000. This is all in support of the current installed base of Eversense users that is over 5,000 patients, comprised of approximately 80% European patients. This is following the impact of COVID and the previously paused commercialization activities in the U.S. during the last 2 quarters. At the beginning of October, we reinitiated commercial activities targeting new patients in the U.S. with a team of 10 Ascensia sales professionals. Through this, we offer a great start transferring knowledge and experience in commercializing Eversense to our partner. Ascensia has organized their teams to address our most active accounts. An intensive training program completed in September oriented sales reps and sales support with our technology, product, the insertion procedures, billing and reimbursement and the distribution processes as it pertains to selling Eversense. This team has significant experience in selling some of the most accurate glucose monitoring devices in the channel and has the tools and skills necessary to be successful with Eversense. We are very pleased with the level of engagement from the Ascensia team. They are excited to be in the field with Eversense, a new product for a more complete glucose monitoring portfolio. The reps are currently organized by geography and are covering the existing key Eversense accounts. Ascensia's commitment to our collaboration was highlighted by their decision to add a rep in Texas, where we have a high concentration of accounts and by adding a former Senseonics employee for this position. The entire team is now actively calling on accounts, and in the first month has already connected with the majority of high-volume Eversense accounts. In addition to making introductions, they have begun working with clinics towards starting new patients on Eversense, and also on reiterating the major updates on payer coverage, including following up on previous leads for Medicare patients that are now covered by LCDs. For people on Medicare, all of the MACs have now published favorable local coverage determinations for implantable CGM. In addition, the national physician fee scheduled to be implemented on January 1, as published, fully supports coverage for Eversense and includes payments for the sensor insertion and removal expenses to the clinicians. Medicare will cover Eversense as a medical benefit, which provides a more streamlined process for patients and providers. We believe that Eversense is a great fit for the Medicare population, and Ascensia will create efforts to raise awareness in this population and drive future growth. In the coming quarters, Ascensia reps are focused to target new accounts and gain experience onboarding new practices. Both organizations agreed that providing the highest level of service to clinician training and practice support is crucial for optimizing patient experience. The shared value is key to creating long-term partnerships with providers and patients. During the start-up phase with the 90-day product, Ascensia has set the goal of adding 400 to 500 new Eversense patients in the U.S. We are, of course, excited to be back on the market, delivering Eversense to new patients in the U.S. after being paused for the last 2 quarters. The Ascensia commercialization plan includes growing from the current 10 territories to 25, supported by an additional 37 field staff in 2021. The approval of the 180-day product will further accelerate the ramp-up of sales, marketing, reimbursement, distribution and customer support activities by Ascensia. Continuously improving the effectiveness of the collaboration is a shared top priority and maintaining an open strategic dialogue will help ensure we maximize the value of Eversense in the market. Outside the U.S., Ascensia will be taking the same commercial role following the expiration of our agreements with Roche and Rubin Medical. These current partners continue to serve our patient base in Europe today and are expected to continue through the termination of their agreements. As both distributors have been working through existing inventory during the COVID impact, they did not order historical levels in the third quarter. We have had constructive discussions with Roche, which we expect to finalize very shortly to outline a detailed and orderly transition process for the Eversense users and the prescribers in Europe. Both organizations are committed to prioritizing patient needs and ensuring a high level of service is provided throughout the handoff. We are designing this transition process to be as effortless as possible for patients and HCPs. We are planning on upcoming joint communication to HCPs, patients and payers to detail the distributorship transfer. Patients will maintain access through their HCPs for reinsertions and supplies, while Ascensia team will work with practices and patients with a goal of providing uninterrupted insurance coverage and technical support. We are working to transfer the payer contracts and tenders where possible. Through the distribution agreement termination on January 31, Roche is expected to continue to fill patient requests and has placed orders for additional product to serve this demand to the end of January. Roche is not expected to purchase or sell any further product after their contract termination at the end of January. To support all global demand, we expect to recognize total revenue at approximately $2.5 million in the fourth quarter. Furthermore, with the current installed patient base and with the anticipated growth in Europe and in the U.S. with the launch of the 180-day product, we continue to expect global net revenue to Senseonics to be in the range of $12 million to $15 million in 2021. In addition, I would also like to highlight that we just announced a private financing with current large shareholder, Energy Capital, for up to an additional $12 million. In combination with the previous announced financing with PHC, the Ascensia parent company, and Masters Capital, the total amount of funding expected to be raised through the approval of the 180-day product is $54 million. These capital sources, if accessed, are expected to provide ample capital to fund the ramp-up of manufacturing for the 180-day product, to support further development of our next-generation sensor and to fully cover expected liquidity requirements through 2021. Now in reference to our product development and clinical pipeline efforts. As you are aware, we have submitted our PMA supplement for the 180-day product in the U.S., and we are now focused on preparing a similar regulatory submission for the same 180-day product to our notified body in Europe for CE marking. If approved, this would bring the newest generation of the product with reduced calibration to both the U.S. and European markets. Simultaneously, development efforts are centered on optimizing configurations for the next-generation sensor, with a wearable life of up to 365 days with just one calibration per week. Our development focus is to seek and to secure IDE approval for the sensor late in the first half of 2021 toward the goal of enrolling a pivotal trial in the second half of 2021. Importantly, with this next-generation sensor, it is designed to provide both continuous and on-demand glucose readings from a swipe command. We believe that this will provide even more convenience and flexibility to Eversense users who have the option to use the system as a real-time continuous glucose monitor with a transmitter and as a point-in-time reading without a transmitter, all with the same sensor technology. As you've heard, we plan to continue to push the boundaries of what is possible in continuous glucose monitoring. Our current business focus places an even greater emphasis on product development and innovation, and we look forward to providing updates on these projects. For details on the third quarter financials, I'll now turn the call over to Nick. -------------------------------------------------------------------------------- Nick B. Tressler, Senseonics Holdings, Inc. - CFO, Secretary & Treasurer [4] -------------------------------------------------------------------------------- Thank you, Tim, and good afternoon, everyone. In the third quarter of 2020, total net revenue was $767,000 compared to $4.3 million in the third quarter of 2019. U.S. net revenue for the third quarter was $509,000 and net revenue outside the U.S. was $258,000. As we mentioned previously, we did not expect Roche to make a material order in the third quarter. Gross profit in Q3 2020 increased by $4.2 million year-over-year to $835,000. The increase in gross profit was predominantly related to the ability to fill resupply orders with the existing written-off inventory as reinsertion rates were above the expectations established at the onset of the pandemic. Third quarter 2020 sales and marketing expenses decreased by $8.3 million year-over-year to $3.2 million compared to $11.6 million in the prior year period. The decrease was primarily due to recent changes in our commercial activities. Research and development expenses in Q3 2020 decreased by $6.5 million year-over-year to $4.6 million compared to $11.1 million in the prior year period. The decrease was primarily driven by lower PROMISE clinical study costs and personnel-related expenses. General and administrative expense in Q3 2020 was $5.5 million, an increase of $0.1 million compared to the prior year period, mostly due to personnel costs related to stock-based compensation. Other expenses included increases to losses on the extinguishment and issuance of debt, offset by reductions in debt issuance costs and gains in fair value adjustments as compared to the prior year period due to the company's financings. For the 3 months ended September 30, 2020, total net loss was $23.4 million or $0.10 per share compared to $19.5 million or $0.10 per share in the third quarter of 2019. Net loss increased by $3.9 million due to a $23.4 million increase to other expenses primarily related to the accounting of the company's financings, including charges to the embedded derivatives, partially offset by $19.5 million decrease in loss from operations. Now turning to the balance sheet. As of September 30, 2020, cash, cash equivalents and restricted cash totaled $26.4 million. To further strengthen the balance sheet, as Tim mentioned, we have financing spending with Masters Capital, Energy Capital and PHC for a total of up to $54 million, if all are successfully concluded and used. In October, we conducted a special meeting of stockholders and received approval as required by the NYSE American Listing Rules to expand the number of issuable shares in order to be able to execute on the Masters and PHC financings. The time to close an additional up to $27 million in convertible preferred equity with Masters has been extended with Ascensia's parent company, PHC Holdings Corporation. Senseonics maintains the option to sell and issue convertible preferred equity in the amount of up to $50 million, following receipt of FDA approval for the 180-day Eversense product in the U.S. If we close on the sale of all $42 million of additional preferred stock to PHC and Masters, we project our available financial resources would fund operations through 2021. To provide additional liquidity and operational flexibility in the future, we entered an equity line of credit agreement with a significant shareholder, Energy Capital. Under terms of the agreement after January 21, 2021, we will have access to up to $12 million at our discretion through draws of up to $4 million, which could be accessed monthly in exchange for the issuance of preferred stock and warrants to Energy. Looking ahead, we expect global net revenues of approximately $2.5 million for Q4 2020. As disclosed in our Analyst Day on September 15, we are anticipating global net revenues between $12 million to $15 million for 2021. Monthly operational cash burn is expected to be between $3.5 million and $4.5 million on average per month for the remainder of 2020. For full year 2021, cash used in operations is projected to be below $60 million. With that, I will turn the call back to Tim. -------------------------------------------------------------------------------- Timothy T. Goodnow, Senseonics Holdings, Inc. - President, CEO & Director [5] -------------------------------------------------------------------------------- Thank you, Nick. Before concluding, I'd like to take a step back and describe what we have achieved to date in establishing the implantable CGM market. As the first product of its kind, launching the Eversense system in the U.S. required creating new reimbursement channels to provide access for patients and remuneration for endocrinologists to perform the medical procedures. These were not small undertakings, but we've been successful in a relatively short period of time. We have earned positive coverage decisions from a majority of large national and regional health insurance providers. Now over 80% of covered lives, including Medicare patients, have access to Eversense. Today, there are over 550 health care providers trained to perform sensor insertions and over 2,000 prescribers of Eversense. To leverage this improved reimbursement environment, we undertook a strategic transformation in the third quarter to accelerate growth and the expansion of our platform in the most efficient way by entering into a global commercial distribution agreement with Ascensia Diabetes Care. The resulting collaboration enables our continued focus on innovation while our partner provides an expanded commercial footprint to drive the adoption of our technology. Together, we will maximize the value of Eversense in the market. Our initial interactions with Ascensia have been highly productive. From this early experience, Ascensia has demonstrated expertise and the deep commitment required for the success over the long term. Our opportunity is only growing through increased patient access, provider adoption and market expansion. We are very confident we have found the right partner to execute the right strategy to grow and take share in the CGM market. Finally, I'd like to say thank you to all of our employees who have shown great resilience and commitment adjusting to the challenging circumstances in the current environment. We look forward to providing you with updates in the future. Joining us for questions are Mukul Jain, our Chief Operating Officer; and Mirasol Panlilio, Vice President and General Manager of Global Commercial Operations. Operator, let's open up the call for questions. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) Today's first question comes from Chris Pasquale with Guggenheim. -------------------------------------------------------------------------------- Christopher Thomas Pasquale, Guggenheim Securities, LLC, Research Division - Director and Senior Analyst [2] -------------------------------------------------------------------------------- Tim, couple of questions here. So first, just hoping you could go over some of the early learnings from Ascensia's first month as your U.S. distributor. And then just to -- give us an update on where things stand on the ground from a reimbursement perspective. You've got broad coverage now. I'm just curious the experience patients are having, who are coming back and maybe requesting their second or third sensors. Is that process going smoothly? How much pushback is there? How easy is it as a patient to maintain therapy now that you've made some progress on the reimbursement front? -------------------------------------------------------------------------------- Timothy T. Goodnow, Senseonics Holdings, Inc. - President, CEO & Director [3] -------------------------------------------------------------------------------- Sure. So on the early launch with the Ascensia, we do feel very good about how it's progressed. It was a significant investment, as you can imagine, in training, education, technology transfer, if you will, to their commercial organization. I think it's paid off extremely well. There's an excitement in talking with the 10 reps that are in place right now, mostly because they've heard from the biggest prescribers for Eversense, which naturally have a strong interest, and are just very excited to hear that it's back, so -- and that they're able to fully support it. We've got some docs that are telling us they've got 10 patients that they'd like to put on Eversense immediately. From a reimbursement perspective, we continue to see success. We really haven't had issues outside of those where we don't have coverage. So in that 20% that doesn't have coverage yet, we are just kicking off the actions with Medicare. We have done our very first earliest insertions and done the billing for the Medicare under the medical benefit. So we anticipate that, that is running through the process. Medicare typically pays in about 30 days. So we hope to be seeing that here in the next few coming weeks. -------------------------------------------------------------------------------- Christopher Thomas Pasquale, Guggenheim Securities, LLC, Research Division - Director and Senior Analyst [4] -------------------------------------------------------------------------------- And then last one for me. Just give us an update, if you could, on where things stand on the iCGM front. I know the focus here is on getting the XL approved in the U.S. But how much work have you been able to do with your pump partners over the last 18 months, paving the way for integration of the sensor? Or is that still really going to have to start down the road here? Has that been kind of pushed to the back by everything else you guys have been going through? Just want to get a sense of how far out we should expect you guys to be able to participate in the integrated piece of the market. -------------------------------------------------------------------------------- Timothy T. Goodnow, Senseonics Holdings, Inc. - President, CEO & Director [5] -------------------------------------------------------------------------------- Sure. So the iCGM medicine suggests -- we really are focused on getting the 180-day product approved first. We don't want to run into any regulatory hiccups. We do know that there have been instances with very significant delays in iCGM. And of course, we don't want to put that in front of the primary 180-day approval. So in regards to integration, as you know, it varies by partner. We've done significant amount of work and co-testing with the folks at Beta Bionics. In fact, we have already done a pretty significant amount of clinical testing. Over 20 patients have been actively on the combined system, and we have been using Eversense to drive their autonomous insulin infusion. So we're certainly excited about that and the results that we got from it. In regards to some of the other partnerships, it really is about having the iCGM designation first. The integration is pretty straightforward, and the communication protocol that we've worked on is easily open and easily accessible. So we expect that, that could go pretty quick. -------------------------------------------------------------------------------- Operator [6] -------------------------------------------------------------------------------- Our next question today comes from Jayson Bedford of Raymond James. -------------------------------------------------------------------------------- Jayson Tyler Bedford, Raymond James & Associates, Inc., Research Division - Senior Medical Supplies and Devices Analyst [7] -------------------------------------------------------------------------------- I have a few. So I guess just to calibrate folks, you have just over 1,000 users today in the U.S. I think you mentioned that Ascensia is hoping to get 400 to 500 new users onboard. I assume that was in reference to the fourth quarter. So exiting the year in and around 1,500 as the installed user base, is that a fair proxy? -------------------------------------------------------------------------------- Timothy T. Goodnow, Senseonics Holdings, Inc. - President, CEO & Director [8] -------------------------------------------------------------------------------- Jayson, we're looking to do that 400 to 500 with Ascensia over the next 2 quarters. So I don't think we'll get all of those in here in the next 60 days. But over the next -- our Q4 and Q1 is the joint plan there. -------------------------------------------------------------------------------- Jayson Tyler Bedford, Raymond James & Associates, Inc., Research Division - Senior Medical Supplies and Devices Analyst [9] -------------------------------------------------------------------------------- And that was in reference to the U.S. or global? -------------------------------------------------------------------------------- Timothy T. Goodnow, Senseonics Holdings, Inc. - President, CEO & Director [10] -------------------------------------------------------------------------------- Yes, that's just in reference to the U.S., correct. We've got... -------------------------------------------------------------------------------- Jayson Tyler Bedford, Raymond James & Associates, Inc., Research Division - Senior Medical Supplies and Devices Analyst [11] -------------------------------------------------------------------------------- Do you -- sorry. Go ahead, Tim. -------------------------------------------------------------------------------- Timothy T. Goodnow, Senseonics Holdings, Inc. - President, CEO & Director [12] -------------------------------------------------------------------------------- No. I was just going to say those are the commercial activities that we've already started with them. As you know, we haven't started in Europe yet, but we certainly will on February 1. -------------------------------------------------------------------------------- Jayson Tyler Bedford, Raymond James & Associates, Inc., Research Division - Senior Medical Supplies and Devices Analyst [13] -------------------------------------------------------------------------------- Okay. And they have 10 reps today, and that grows to 25 next year. Is that correct? -------------------------------------------------------------------------------- Timothy T. Goodnow, Senseonics Holdings, Inc. - President, CEO & Director [14] -------------------------------------------------------------------------------- Correct. And then as a significant amount of investment is another 37 positions that are anticipated. Internal sales as an example. So they're closely affiliated and supportive of commercial activities. So it's a big investment. -------------------------------------------------------------------------------- Jayson Tyler Bedford, Raymond James & Associates, Inc., Research Division - Senior Medical Supplies and Devices Analyst [15] -------------------------------------------------------------------------------- Okay. And just with respect to the fourth quarter $2.5 million in revenue, is there a way you can kind of give us the expectation for U.S. -- OUS? And I'm a little less interested in that. But I'm curious, Roche is still taking product in the fourth quarter, but will not sell products to come -- post January 31? -------------------------------------------------------------------------------- Timothy T. Goodnow, Senseonics Holdings, Inc. - President, CEO & Director [16] -------------------------------------------------------------------------------- That's correct. So we're working with Roche such that they're able to meet all of their needs. They essentially have exhausted all existing inventory -- available inventory in the third quarter. They purchased a small amount, and then they will purchase the balance of what they need to get through January 31 in the fourth quarter. -------------------------------------------------------------------------------- Jayson Tyler Bedford, Raymond James & Associates, Inc., Research Division - Senior Medical Supplies and Devices Analyst [17] -------------------------------------------------------------------------------- Okay. Okay. And then on the 180-day, for some reason, I was expecting kind of first quarter, and I realize that in the release when you submitted the PMA, it's first half. But just in terms of -- again, early '21 versus first half '21, any insight you can give us there as to why -- what I would consider a tiny bit of a delay? -------------------------------------------------------------------------------- Timothy T. Goodnow, Senseonics Holdings, Inc. - President, CEO & Director [18] -------------------------------------------------------------------------------- I think, Jayson, we're just -- we did send it in. We are anticipating a typical PMA supplement 6 months review, and it went in right at the end of September. So that would be a Q4 and a Q1 approval process. So I don't think we've changed at all. We're just recognizing the reality of end of Q3 submission. -------------------------------------------------------------------------------- Jayson Tyler Bedford, Raymond James & Associates, Inc., Research Division - Senior Medical Supplies and Devices Analyst [19] -------------------------------------------------------------------------------- Okay. And just last one, I guess, maybe for Nick. When do you recognize revenue in the U.S.? Is it sales to Ascensia? Or is it when the product is used? -------------------------------------------------------------------------------- Nick B. Tressler, Senseonics Holdings, Inc. - CFO, Secretary & Treasurer [20] -------------------------------------------------------------------------------- Yes, it will be -- we will recognize a transfer price at the sale to Ascensia. Then there'll be a true-up process based on the end market sales. Obviously, for Q4, we will still operate under our current agreements with our distributors. That will continue as has been in the past. -------------------------------------------------------------------------------- Operator [21] -------------------------------------------------------------------------------- And our next question today comes from Danielle Antalffy with SVB Leerink. -------------------------------------------------------------------------------- Danielle Joy Antalffy, SVB Leerink LLC, Research Division - MD of Medical Supplies & Devices and Senior Analyst [22] -------------------------------------------------------------------------------- And sorry if I missed this, but just on Q4, the $2.5 million Q4 guide, Tim or Nick, could you guys talk about how much of that is -- is that almost entirely ex U.S.? And I'm just trying to get a sense of what you're expecting from those 10 Ascensia reps in Q4, if you can give any color. -------------------------------------------------------------------------------- Timothy T. Goodnow, Senseonics Holdings, Inc. - President, CEO & Director [23] -------------------------------------------------------------------------------- Thanks, Danielle. That's likely -- I would estimate that, that will likely distribute based on the population. So we've got 80% of our patients in Europe. We'll probably have 80% of the revenue in this quarter come from Europe. -------------------------------------------------------------------------------- Danielle Joy Antalffy, SVB Leerink LLC, Research Division - MD of Medical Supplies & Devices and Senior Analyst [24] -------------------------------------------------------------------------------- Okay. Got it. That's helpful. And then, Tim, I was wondering how close are you to -- so now you've got 10 reps on the ground. I know it's early -- Ascensia does -- how close are you to the sort of sales message that Ascensia is putting out there? And how -- maybe give us some color on what the messaging is. That's the first part of the question. The second part of the question, how to think about new center adds and training as we are sort of still in this COVID environment? -------------------------------------------------------------------------------- Timothy T. Goodnow, Senseonics Holdings, Inc. - President, CEO & Director [25] -------------------------------------------------------------------------------- Sure. So on the latter, and then I'll let Mirasol speak to the messaging. On the latter, we are right now focused on the existing accounts. As you know, we've been somewhat dark with our commercial activities. So we want to make sure that those that are -- have the most patients and have the most interest in immediately doing insertions are serviced first. So we will focus on those clinics with the -- and then expand beyond that in the coming months and quarters. So Mirasol, if you wouldn't mind speaking to the messaging, we have been very close and worked very tightly with our partners at Ascensia. And Mirasol, I'll let you speak to that. -------------------------------------------------------------------------------- Mirasol G. Panlilio, Senseonics Holdings, Inc. - VP & GM of Global Commercial Operations [26] -------------------------------------------------------------------------------- Yes. Sure. Danielle, it's -- we're still early, certainly in our return to commercial activity. A lot of what the Ascensia team is doing is really reintroducing ourselves to the accounts and answering the questions that they may have held on for some time because we paused the activities. So a lot of what the team is doing is answering those questions, but at the same time, also providing responses to coverage decisions, a lot on Medicare. So we're clearly providing a lot more focus in terms of who is covered, what the MACs are doing from an LCD standpoint. And so the 10 reps are really focused on ensuring that the accounts at the Eversense clinics are aware that we're back up and that patients can get the product, not only those who are existing users but really getting new patients onboard. Down the line, we'll create and put together marketing awareness campaign. But for the time being in this early phase, it's really -- let's get acquainted with our accounts. -------------------------------------------------------------------------------- Operator [27] -------------------------------------------------------------------------------- (Operator Instructions) Our next question today comes from Mathew Blackman with Stifel. -------------------------------------------------------------------------------- Melanie Jane Nunez, Stifel, Nicolaus & Company, Incorporated, Research Division - Associate [28] -------------------------------------------------------------------------------- This is actually Melanie on for Mathew. I know you touched on this in the prepared remarks, but I'd like to drill down a little further on the training of the sales force and health care professionals. So what would you think are some of the key gating factors to your continued reengagement into the market and achieving this goal of adding the 400 to 500 new patients over the next 2 quarters? And then more generally, could you touch upon how the commercialization strategy may evolve with Ascensia over the next a couple of quarters as well. Is there anything you can point to that's different between your prior strategies, emphasizing or deemphasizing any aspects as you reengage? -------------------------------------------------------------------------------- Timothy T. Goodnow, Senseonics Holdings, Inc. - President, CEO & Director [29] -------------------------------------------------------------------------------- Thanks, Melanie. -------------------------------------------------------------------------------- Mirasol G. Panlilio, Senseonics Holdings, Inc. - VP & GM of Global Commercial Operations [30] -------------------------------------------------------------------------------- Why don't I take that? Again, the focus is on our independent accounts. A lot of this -- can you guys hear me, okay? There was a little... -------------------------------------------------------------------------------- Melanie Jane Nunez, Stifel, Nicolaus & Company, Incorporated, Research Division - Associate [31] -------------------------------------------------------------------------------- Yes. -------------------------------------------------------------------------------- Timothy T. Goodnow, Senseonics Holdings, Inc. - President, CEO & Director [32] -------------------------------------------------------------------------------- Sounds good. -------------------------------------------------------------------------------- Mirasol G. Panlilio, Senseonics Holdings, Inc. - VP & GM of Global Commercial Operations [33] -------------------------------------------------------------------------------- Okay. So the training that's being provided is really to ensure that the accounts know the patient profile type, for example. Some of the reps are still unable to get to the accounts, for example. So we're using a lot of virtual callings and training with the accounts. And the same goes with patients. We've been able to take full advantage, however, remote training and remote monitoring for -- in that respect with the providers. So I think over time, as more clinics open up and travel restrictions are mitigated, I think the reps will be able to actually go in for in-person visits. So we all look forward to that. And over time, I think we're very focused on the current accounts and our reps doing a lot of the heavy lifting. But at some point, also, we're going to initiate those marketing campaigns to support what the sales team, the field team is doing with digital marketing campaigns and whatnot. But we'll probably hold off on that, probably until early part of next year. Melanie, I hope that answers your question. -------------------------------------------------------------------------------- Melanie Jane Nunez, Stifel, Nicolaus & Company, Incorporated, Research Division - Associate [34] -------------------------------------------------------------------------------- Got it. Yes. -------------------------------------------------------------------------------- Operator [35] -------------------------------------------------------------------------------- And ladies and gentlemen, this concludes the question-and-answer session. I'd like to turn the conference back over to the management team for any final remarks. -------------------------------------------------------------------------------- Timothy T. Goodnow, Senseonics Holdings, Inc. - President, CEO & Director [36] -------------------------------------------------------------------------------- Great. Well, I'd like to thank everybody for their time today. We appreciate everyone's attention, and we look forward to updating you here as the quarters progress. Thank you. -------------------------------------------------------------------------------- Operator [37] -------------------------------------------------------------------------------- This concludes today's conference. We thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day.