Senseonics Holdings, Inc. Q3 FY2025 earnings call

• Third quarter revenue grew by 90% from Q3 last year, driven by 160% increase in new patient shipments. 60% of new patients in Q3 originated from DTC advertising.
• Executed memorandum of understanding with Ascensia Diabetes Care to reassume control of Eversense commercialization, with Brian Hansen appointed Chief Commercial Officer.
• On track to double the number of patients on Eversense in 2025. DTC investments led to 300% year-over-year and 85% sequential increase in patient leads.
• Eon Care delivered a standout quarter, representing approximately 1/4 of all insertions nationwide and continuing to expand capacity.
• CE mark application for Eversense 365 in Europe submitted in February, on track to be approved before end of 2025, with planned launch in first half of 2026 using own European sales force.
• Partnering with Sequel to expand twiist insulin delivery system compatibility with Eversense 365 as a top line growth driver in 2026.
• R&D team progressing Gemini and Freedom products, with IDE for Gemini expected in fourth quarter 2025 and IDE for Freedom in second half of 2026, Freedom targeted for commercial launch early 2028.

In the third quarter of 2025, net revenue grew 90% to $8.1 million compared to $4.3 million in the prior-year period. U.S. revenue for the third quarter was $6.4 million and revenue outside the U.S. was $1.7 million. Gross profit was $3.5 million, an increase of $7.5 million from the prior-year period. Research and development expenses decreased by $2.7 million. Selling, general and administrative expenses increased by $7 million. Net loss was $19.5 million or a $0.43 loss per share, a decrease from the prior-year period. Gross profit margins are improving, with full year 2025 gross profit margins expected to be between 35% and 40%, and expecting gross profit margins north of 50% in 2026 and growing to approximately 70% or more with scale.

• Expect full year 2025 global net revenue to be approximately $35 million.
• Full year 2025 gross profit margins expected to be between 35% and 40%.
• Anticipate gross profit margins north of 50% in 2026 and growing to approximately 70% or more with scale.
• Intend to provide initial 2026 guidance in early January 2026.
• Expect cash utilization in 2025 to be approximately $60 million.

The company's remarks include forward-looking statements which involve a number of risks and uncertainties. A list of factors that could cause actual results to be materially different from those expressed or implied by forward-looking statements is detailed under Risk Factors and elsewhere in the annual report on Form 10-K for the year ended December 31, 2024, and 10-Qs and other reports filed with the SEC. The company undertakes no obligation to update publicly or revise these forward-looking statements for any reason, except as required by law.

Q: Congrats on all the great progress. I wanted to follow up on some of the growth opportunities that you've shown in DTC. And then I have one other quick follow-up. So just on the new patient implants, which made up the majority here in Q3, can you talk a little bit about what you're learning, if at all, about where these folks are coming from in terms of new, in terms of tired of externally worn sensors. Just color would be super interesting and helpful to understand where the demand is coming from. And then as I mentioned, I have one quick follow-up.

A: Sure, Matt. I appreciate the time as well. So overall, geographically, it's a very nice distribution as we are certainly focused on, obviously, the highest prescribing, best reimbursement, highest insulin utilization. So no one locale, I would say, is driving it. But we are definitely seeing, and we gave a hint to it is we are seeing a significant growth in the number of switchers. So as you may recall, we typically saw about 75% were folks that were coming from existing CGM. And now with this increased DTC, we're seeing that right around 90%. So we clearly are reaching out to the folks that are currently on CGM I would say of those switchers, it's probably 60%, 65% coming from Dexcom and 35%, 40% coming from Libre. So good distribution there. Typical demographics, we're still seeing a nice utilization and interest in the Medicare space with probably 2/3 of it still coming from commercial pay. So I hope that helps.

Q: Congrats on the continued progress with the Eversense 365 launch. One of the objectives you've called out, Tim, has been just enhancing access to Eversense 365 and you've detailed the Eon Care build-out. I was hoping to get a better understanding of just how you envision the inserter network evolving from here outside of Eon and just how providers are, especially with the Medicare reimbursement that's in place and some private payers following with bundled payment reimbursement coverage being attractive potential financial incentive for providers to be implanters? Where do we stand today? And how do you see that evolving as we move forward?

A: Yes. So Josh, as we've spoken, the Eon is an important part because it really helps fulfill the need for our expansion really in a lot of the primary care focus. When we go out and offer the opportunity to train on doing the insertion, of course, that's driven by the clinician's perspective. Many have an interest in doing it themselves, and they'll institutionalize it. We'll do the training on them, and we saw growth certainly in the quarter in that population of folks. For those that don't have an interest in bringing it in, and we're seeing that in some cases, in primary care, where we're getting some of our new Medicare patients from, they don't yet have the installed base to go through the procedure. That's where the Eon Care works extremely well. So we'll have a nurse in the area that they can refer to somebody that have a nice connection with the patients and with the clinical staff, and we can work hand-in-hand to get that all coordinated to really help with a white glove type handoff and treatment. There are some folks that have recognized the attractiveness from the CPT code and some of our largest prescribers and utilizers come from those as well. So they're more than willing and more than happy to institutionalize that insertion process, and that certainly continues to grow for us as well. We've got a number of very large accounts that are concentrated on it because they see the benefit of Eversense for the patients, but also being able to control that whole insertion process and be appropriately remunerated for it from the CPT codes is attractive for them as well.

Q: Just wondering on the DTC marketing spend, as you kind of look at the data there and slice and dice it by demographics, geographies, what have you, do you see that X dollars in equals Y patients? Do you see any sort of saturation or inflections as you spend more over time? Or how does that kind of track in various subsegments of the folks you're targeting the geographies you're targeting?

A: Yes. Thanks, Ben. Yes, there's a number of observations. But clearly, as you increase the spend on DTC, there absolutely is a direct increase on the number of patients come to Eversense, which is good news. It is, however, obviously a conversion process you need to go through. There is quite a bit of education. And obviously, we've been continuing to optimize the algorithms of who we reach. Obviously, the reimbursement for folks that are on insulin is one of the key things that we look for. We did run some pilot work where we were doing some linear television. And in that recognize that we got a much, much broader audience. Many of those folks were actually not on insulin or were looking for starter material in the sense of something that they could try for free, perhaps Medicaid patients where there isn't good reimbursement yet. So we certainly recognize that as you go very broad in the advertisement, you do get less and less in the center of the bull's eye. So therefore, your -- the effectiveness of the investment can drop off in that. So we've tried to stay pretty pointed, pretty geo targeted, as you know, what we can do with the investment these days. But we also, of course, tie that to where we make sure that we have good depth of insertion capability. Eon gives us an opportunity as well. We're approaching 50 Eon nurses, and we're excited. One of the reasons we're going to double that to 100 next year is just because of that breadth that we can get with it and then further expand the DTC investment from that.