Memorandum

Senseonics 3Q16 – Submitted to FDA; controlled launch in Sweden, Germany, Norway at about a dozen clinics; sales of $37,000; 12 months of cash – November 3, 2016

Executive Highlights

  • The highlight from the quarter was the October FDA PMA submission of the implantable 90-day Eversense CGM sensor, on-body transmitter, and mobile app. Assuming a 12-month review (previous guidance), US launch could occur in late 2017. The company and FDA will discuss requirements to obtain an insulin-dosing claim.
  • Controlled launch of Eversense has commenced in “about a dozen” clinics in three EU markets: Sweden, Germany, and Norway. Launches in the Netherlands and Italy will follow by the end of 2016.
  • Revenue for the quarter totaled $37,000, and management lowered full-year revenue guidance to “$250,000-$300,000.” Senseonics reported a cash balance of ~$27 million, expected to sustain operations for 12 months (3Q17).
  • On the pipeline front, CE Marks are expected in 1Q17 for both (i) a 180-day Eversense indication (submitted in 2Q16) and (ii) a 55% smaller next-gen transmitter (to be submitted later this month).

This afternoon, Senseonics CEO Mr. Tim Goodnow led the company’s 3Q16 financial update. See our top highlights from the call below. 

1. Senseonics announced FDA PMA submission of its implantable 90-day Eversense CGM sensor, on-body transmitter, and mobile app in late October. Assuming a 12-month review (previous guidance), launch could occur in late 2017.  Today, Mr. Goodnow said FDA discussions will also focus on requirements to obtain an insulin-dosing claim (given the 8.8% MARD in the pivotal trial). We’ll hear more details on the US pivotal data next week at DTM.  

2. The controlled launch of Eversense has commenced in “about a dozen” clinics in three EU markets: Sweden (launched in late June with Rubin Medical), Germany (launched late September with Roche), and Norway (earlier this week with Rubin). July and August were slow months in Sweden, but new starts “have begun to ramp” – no specific numbers were shared. Patient and provider feedback has reportedly been very positive on the accuracy, wear, and insertion fronts. Notably, Mr. Goodnow said “a majority of our patients have either been on or currently are on CGM or Libre.”

3. Revenue totaled $37,000 in 3Q16, but were not a focus of the call. Full-year revenue guidance for 2016 was dropped to “$250,000-$300,000,” down from the previous “less than $1 million.” Net loss was $11 million in 3Q16, a slight increase from $8.6 million in 3Q15.

4. Senseonics reported a cash balance of ~$27 million, expected to sustain operations through 3Q17. The company anticipates drawing $5 million from its Oxford SVB line in November, bringing outstanding indebtedness to just $20 million. “A potential equity arrangement” would provide additional runway to the end of 2017, taking the company past PMA approval.

5. Controlled launches of Eversense are expected in the Netherlands and Italy (both with Roche Diabetes Care) by the end of 2016. The planned 4Q16 Denmark launch was not mentioned.

6. In Germany, Senseonics and Roche have kicked off negotiations with 20 primary payers (representing 90% of the covered lives) to ensure reimbursement for Eversense. Management noted that with June’s decision, Germany now has the broadest CGM reimbursement globally.

7. CE Marks are expected in 1Q17 for both (i) a 180-day Eversense indication (submitted in 2Q16) and (ii) a 55% smaller next-gen transmitter (to be submitted later this month). A 180-day indication could further drive interest in the product, but Mr. Goodnow noted that people are already pretty excited about the 90-day duration (relative to current 7-14 day sensors from Abbott, Dexcom, and Medtronic). The transmitter submission was originally expected in 3Q16, so it is a month behind schedule. We see this as a critical form factor update.

8. Mr. Goodnow said initial in vivo data is “very encouraging” for a second-gen sensor, which has “a key design goal” to eliminate fingerstick calibration. The redundant sensing capability will enhance accuracy, longevity, and functionality. Further clinical testing is expected in 1Q17.

9. Senseonics has initiated its first pediatric clinical trial of Eversense in Canada, having enrolled and inserted patients ages 12-18 in a 180-day study. Management anticipates that enrollment will continue into next year. The data from this trial will be “instrumental in defining the US pediatric trial and also a label extension in Europe.”

10. There were no other pipeline updates, including timing for the on-demand “swipe” that could eliminate the transmitter entirely. We see that as very compelling for the user experience.  

Pipeline Summary

Pipeline Project

Timing

FDA PMA submission of 90-day Eversense implantable CGM, on-body transmitter, mobile app

October 2016; Assuming 12-month review, late 2017 launch

Extending the approved sensor life up to 180 days

Submitted in EU in 2Q16; approval optimistically expected in 1Q17. All sensors expected to last 180 days in “12-15 months”

Reducing transmitter size by 55%, “more ergonomically attractive”

CE Mark amendment filing expected in November; approval optimistically expected in 1Q17.

Pediatric indication

Pilot clinical trial in Toronto began enrolling and inserting patients; enrollment likely to continue into 2017

No fingerstick calibration required

Initial results for in vivo trial of second-gen sensor “very encouraging.” More clinical testing in 1Q17.

Integrating with insulin pumps

No update on call. As of March, intended to identify insulin pump partners in 2016

On-demand, swipe measurement technology for type 1 diabetes (real-time, single glucose readings by swiping smartphone over sensor)

No update on call. In development – intend to initiate clinical trial in 2017

On demand monitoring (smartphone “swipe” technology) without separate required transmitter for people with Type 2 diabetes

No update on call. In development – intend to initiate clinical trial in 2018

 

-- by Brian Levine, Adam Brown, and Kelly Close