• Net Revenue: $4.3 million in Q3 2024, compared to $6.1 million in Q3 2023.
• US Revenue: $2.4 million in Q3 2024.
• Revenue Outside the US: $1.9 million in Q3 2024.
• Gross Loss: $4.1 million in Q3 2024, down from a gross profit of $1.2 million in Q3 2023.
• Research and Development Expenses: $10.5 million in Q3 2024, a decrease from $12.8 million in Q3 2023.
• Selling, General and Administrative Expenses: $8.3 million in Q3 2024, up from $7.4 million in Q3 2023.
• Operating Loss: $22.8 million for the nine months ended September 2024.
• Total Net Loss: $24 million or $0.04 loss per share in Q3 2024.
• Cash and Investments: $74.8 million as of September 30, 2024.
• Debt and Accrued Interest: $55.9 million as of September 30, 2024.
• 2024 Revenue Guidance: Full year global net revenue expected to be approximately $22 million.
• Gross Margin Outlook: Expected to be in the range of 10% to 15% for 2024, excluding one-time charges.
• Operating Expenses Outlook: Expected to be between $77.5 million and $82.5 million for 2024.

• Warning! GuruFocus has detected 5 Warning Signs with SENS.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Senseonics Holdings Inc (SENS) received FDA approval for the Eversense 365, the world's first and only one-year continuous glucose monitor, marking a significant milestone.
• Early feedback from patients and clinicians on the Eversense 365 has been extremely positive, with lead generation exceeding expectations.
• The Eversense 365 is covered by nearly all US private insurers and Medicare, covering over 300 million lives in aggregate.
• The company has entered into a collaboration with Mercy, a large hospital system, which could serve as a model for other healthcare systems.
• Senseonics Holdings Inc (SENS) has a strong pipeline, including the Gemini sensor and the Freedom sensor, which are expected to enhance the Eversense system further.

Negative Points

• Net revenue for the third quarter of 2024 was $4.3 million, a decrease from $6.1 million in the prior year period.
• The company reported a gross loss of $4.1 million in Q3 2024, down from a gross profit of $1.2 million in the prior year period.
• There were one-time charges associated with the transition from the Eversense E3 to the Eversense 365, impacting financial results.
• Operating loss for the nine months ended September 2024 was $22.8 million, compared to $19 million in the third quarter of 2023.
• The transition to the Eversense 365 product is expected to impact inventory levels and revenue visibility in the short term.

Q & A Highlights

Q: My question is, do you have an idea what the potential market is in the United States and also in Europe? A: Timothy Goodnow, President and CEO: Thanks, Brian. The market for CGM is huge and growing, estimated at $11-$12 billion this year with a CAGR of 20-22%. Eversense can be a participant in the majority of that market, especially in the underpenetrated segment of type two diabetes patients using basal insulin. We see it as an alternative for those on CGM today and expect meaningful participation as product generations roll out.

Q: Could you remind us what you had said your gross margin would get to in 2025 and how that might change after 2025? A: Frederick Sullivan, CFO: In 2025, with improved unit economics of the 365-day product, we expect gross profit margins to approach 30% by year-end and continue to increase thereafter. With the current partnership, gross profit margins could reach 50% after revenue sharing with Ascensia.

Q: Regarding the switches to 365, do you anticipate that a majority of those will occur quickly, or will it be gradual? A: Timothy Goodnow, President and CEO: In the US, the transition is happening quickly, almost like a light switch. New patients and those coming off the 180-day sensor will move to the 365 immediately. In Europe, it will take longer as we seek approval to commercialize there.

Q: Can you provide more details on the financial results and restructuring efforts? A: Frederick Sullivan, CFO: In Q3 2024, net revenue was $4.3 million, down from $6.1 million due to inventory dynamics with the 365-day product launch. We raised over $20 million in gross proceeds recently, improving our balance sheet and extending our cash runway into late 2025. We also executed a restructuring, reducing force by nearly 20% and targeting over $10 million in cash operating expense reductions for 2025.

Q: What are your expectations for the 2024 full-year financial outlook and 2025 revenue growth? A: Frederick Sullivan, CFO: We expect full-year 2024 global net revenue to be approximately $22 million, with sales accelerating in Q4 due to the 365-day product demand and the Mercy collaboration. While not providing 2025 guidance yet, we anticipate revenue growth to accelerate further in 2025 with the 365-day product being the only one sold in the US.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.