Memorandum
Executive Highlights
- FDA approval for the Eversense implantable CGM, on-body transmitter, and mobile app is expected in October, roughly 12 months following submission. The current submission is for adjunctive use, but Senseonics has partnered with UVA to generate simulation data and hopes to apply for a non-adjunctive label claim soon after approval.
- There are ~110 patients using Eversense in Germany (11 clinics, ~10 patients per clinic), the first update ever. Notably, the number of clinics in Sweden initiating patients on the CGM has doubled in the last quarter. Feedback continues to be “exceptional,” particularly related to the insertion procedure. Nearly half of the current Eversense users are new to CGM, a good early sign that the company’s novel approach to CGM could expand the market.
- Revenue for 4Q16 (and the full year 2016) totaled ~$300,000, at the high end of guidance from last quarter’s call ($250,000-$300,000). Revenue for 1Q17 is expected to be “roughly double” that of 4Q16 (~$600,000), with full year 2017 revenue expected in the range of $6-$7 million. That’s quite a ramp.
- ~$20 million in cash remained at Q4’s end, down from ~$27 million in 3Q16.
- On the pipeline front, a 55% smaller, water resistant next-gen transmitter received a CE Mark during the quarter. A CE Mark for a 180-day indication is also expected in the next few months (submitted in 2Q16).
Senseonics reported its full 4Q16 results in a call lead by CEO Dr. Tim Goodnow. See below for our top highlights from the call, as well as summary of the company’s pipeline.
1. FDA approval for Eversense is expected in October, according to COO Mr. Mukul Jain. Dr. Goodnow confirmed that the current submission is for adjunctive use, but the company intends to follow-up with a non-adjunctive claim submission following initial approval. Senseonics has partnered and contracted with UVA to generate simulated data, which should be complete in the next few months (similar data helped Dexcom). Notably, Senseonics has worked with AMA and AACE to establish category III CPT codes for Eversense reimbursement insertion, reinsertion, and removal. The company is seriously prepping for a US market entry on its own, projecting that it will eventually enlist a significant ~120 sales reps once broad US reimbursement is in place.
2. The initial commercial rollout of Eversense in Sweden, Germany, and Norway has been encouraging: There are ~110 patients using Eversense in Germany (11 clinics, ~10 patients per clinic) and the number of Swedish clinics initiating patients has doubled since early November. There was no mention of planned launches in Italy, the Netherlands, or Denmark. Feedback from clinicians has been “exceptional,” particularly related to the insertion process. Patients have reportedly commented that they forget they have the sensor after insertion (one German patient even ran a marathon in Dubai monitoring his blood glucose with Eversense). Dr. Goodnow said that “nearly half” of patients are completely new to CGM, and Ms. Mirasol Panlilio, Global Head of Commercial Activities, commented in Q&A that there are “quite a number of FreeStyle Libre users” and that nearly all are type 1.
3. Revenue for 4Q16 (and the full year 2016) totaled ~$300,000, on par with guidance from last quarter’s call (~$250,000-$300,000). Revenue for 1Q17 is expected to be “roughly double” that of 4Q16 (~$600,000), with full year 2017 revenue expected in the range of $6-$7 million.
4. Senseonics reported a cash balance of ~$20 million at quarter’s end, reflecting a burn of ~$7 million from 3Q16. The company anticipates drawing its next tranche of $5 million from its Oxford SVB line by April, taking total outstanding debt to $25 million. Cash and the remaining facility are expected to provide runway through September, though management alluded to a “potential equity arrangement” last quarter that would take the company to the end of 2017. To commercialize in the US on its own, Senseonics will obviously need a very significant raise.
5. Senseonics received a CE Mark for the 55% smaller, water resistant, next-gen transmitter after a speedy review (submitted in November). We learned at ATTD that patients already using Eversense will receive a free upgrade to this transmitter – nice! Meanwhile, a CE Mark for the 180-day Eversense indication, previously slated for 1Q17, is now expected in the “next few months.” This would be a major upgrade for the product – a twice-yearly vs. four-times-yearly implant is a big difference.
6. 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. Enrollment is “halfway there” and will wrap up in mid-2017. Data from this trial will be “instrumental” in defining the US pediatric trial and the strategy for EU label expansion.
7. A second-gen sensor, with the ultimate goal of eliminating fingerstick calibrations, is in human feasibility trials. The sensor has redundant glucose-sensing capabilities, facilitating improved accuracy, longevity, and functionality. These trials are designed to define the glucose sensing algorithm for the parallel sensing elements.
8. Distribution partner Roche remains in negotiation with the top 20 German payers (~93% of covered lives). Ms. Panlilio commented that they have done a “good job” and that their goal is to “get to many more payers.” It will be interesting to see how Roche moves ahead with this partnership, since it also has its own just-launched Accu-Chek Insight CGM.
9. There were no other pipeline updates, including timing for the on-demand “swipe” that could eliminate the transmitter entirely (though a January Management Presentation did have a few slides dedicated to the technology, the first we have heard of it in a while). We see that as very compelling for providing a truly implantable (nothing on the body) user experience.
Pipeline Summary
|
Pipeline Project |
Timing |
|
FDA PMA submission of 90-day Eversense implantable CGM, on-body transmitter, mobile app |
Approval expected in October 2017, enabling a late 2017 launch (submitted in October 2016) |
|
FDA supplemental submission for non-adjunctive (insulin-dosing) label claim |
Quickly following adjunctive approval. |
|
180-day sensor wear indication |
Submitted in EU in 2Q16; approval expected in “next few months.” All sensors expected to last 180 days in “12-15 months” |
|
Reducing transmitter size by 55%, “more ergonomically attractive” |
CE Mark announced on 4Q16 call. Launch timing not shared. |
|
Pediatric indication |
Pilot clinical trial in Toronto began enrolling and inserting patients; enrollment likely to continue until mid-2017 |
|
No fingerstick calibration required |
Initial results for in vivo trial of second-gen sensor “very encouraging.” Human feasibility testing to define glucose sensing algorithm underway |
|
Integrating with insulin pumps |
No update on call. As of March 2016, 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 – previously intended 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 – previously intended to initiate clinical trial in 2018 |
-- by Brian Levine, Adam Brown, and Kelly Close