Memorandum

Senseonics 2Q17 – $0.8M in revenue up 33% from Q1; ~50% of users from FreeStyle Libre; pivotal for AID with Roche+TypeZero to begin early 2018, complete in 2018; $34M in cash – August 10, 2017

Senseonics reported 4Q17 financial results this afternoon in a call led by CEO Mr. Tim Goodnow. Revenue of $800,000 grew 33% sequentially from $600,000 in 1Q17 as commercialization of the implantable Eversense CGM system expanded to full launch in many territories and availability in four to seven European countries (most recently Belgium and Austria). This marks two straight quarters of sequential gains, following $300,000 in 4Q16, the first quarter when revenue was reported. Management expects availability in 14 countries by the end of the year and reiterated guidance for $6-$7 million in revenue for the year, implying a substantial increase in sales in 2H17 ($4-$6 million). As of June 30, Senseonics reported ~$34 million in cash, up from $14 million at last quarter’s end, following a $41 million raise led by Roche Finance in June. The call had many pipeline updates: (i) A CE mark for the 180-day Eversense XL is expected in the coming weeks, enabling a 4Q17 launch in the UK, followed by the rest of the EU in 1Q18 (delayed from the 3Q17 launch timing shared last quarter); (ii) The Senseonics/Roche/TypeZero closed loop system iDCL pivotal trial should begin enrolling in early 2018 and wrap up later in 2018 to support a CE mark; (iii) A pivotal trial for the TypeZero-partnered decision support system will be announced soon; (iv) Eversense Now, a remote monitoring app for caregivers will be available in the EU in 4Q17 (nice!); and (v) Eversense data integration with Glooko/Diasend as well as Roche’s Accu-Chek Smart Pix software is progressing. In the US, active discussions with FDA continue – management still expects there will be an advisory committee panel in late fall with approval hopefully soon after (the last update projected a 4Q17 approval). It is still early for the company, but it’s great to see the continued sequential improvement and the pipeline seems to be moving ahead nicely. Will sales ramp significantly in 2H17?

  • Notably, 80% of patients who have gone on Eversense are experienced CGM/Libre users – ~50% are “experienced [Abbott FreeStyle] Libre users” and 30% were previously on Dexcom or Medtronic. The other 20% are CGM naïve. Previous sensor users reported a desire to move to Eversense because of the freedom, convenience, extended wear, and alarms. This will be a critical metric to watch for Senseonics and the ecosystem – will the company mostly steal share or expand the market? It will take time to see what happens, since most early users are likely to be in the know and on CGM already. 
  • Early analysis suggests that patients on Eversense see improved time-in-range, as well as decreased hypoglycemia and hyperglycemia. No specific stats were broken out, though it’s a definite advantage that all Eversense users are presumably streaming data to the cloud via the phone app (i.e., Eversense has no standalone receiver).

 

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