Senseonics Holdings, Inc. (NYSE:SENS) is a medical technology company that has been at the forefront of developing and manufacturing long-term, implantable continuous glucose monitoring (CGM) systems for people with diabetes. The company's flagship product, Eversense, has undergone a transformative journey, culminating in the approval and launch of the groundbreaking Eversense 365 system – the world's first and only once-yearly CGM.

Business Overview

Senseonics Holdings, Inc. was originally incorporated as ASN Technologies, Inc. in Nevada on June 26, 2014. In 2015, the company acquired Senseonics, Incorporated, a medical technology company focused on the design, development, and commercialization of glucose monitoring systems. Following this acquisition, Senseonics Holdings, Inc. reincorporated in Delaware and changed its name to its current form.

The company's roots trace back to 1996 when Senseonics, Incorporated was founded. From its inception until 2010, the company devoted substantial resources to researching various sensor technologies and platforms. In 2010, Senseonics narrowed its focus to designing, developing, and refining a commercially viable glucose monitoring system, which eventually led to the creation of the Eversense CGM system.

Senseonics' journey has been marked by significant milestones and challenges. In 2016, the company completed its PRECISE II pivotal clinical trial in the United States for its 90-day Eversense CGM system. This trial was crucial in demonstrating the accuracy and safety of the system, paving the way for future regulatory approvals.

A major breakthrough came in June 2018 when Senseonics received PMA approval from the FDA for the 90-day Eversense system. This approval allowed the company to begin distributing the system directly in the United States through its own sales and marketing organization in July 2018, marking a significant step in its commercialization efforts.

In September 2017, Senseonics achieved another important milestone by affixing the CE mark for its Eversense XL CGM system. This certification permitted the product to be sold freely in any part of the European Economic Area. The Eversense XL system was indicated for a sensor life of up to 180 days and began commercialization in the EEA in the fourth quarter of 2017, further expanding the company's global presence.

Throughout its history, Senseonics has faced various challenges, including conducting clinical trials, obtaining regulatory approvals, and establishing its commercial operations. Despite these obstacles, the company has made significant progress in advancing its CGM technology and expanding its market reach.

The Eversense CGM System

Senseonics' Eversense CGM system is designed to continuously and accurately measure glucose levels in people with diabetes for extended periods of time. The system consists of three main components: a small sensor inserted under the skin, typically in the upper arm, by a healthcare provider; a removable and rechargeable smart transmitter worn over the sensor; and a mobile app that displays real-time glucose readings, trends, and alerts.

The sensor uses an optical system to measure glucose levels in the interstitial fluid and wirelessly transmits this data to the smart transmitter. The transmitter powers the sensor, collects the glucose data, and relays it to the mobile app for easy monitoring by the user.

In September 2024, Senseonics received FDA approval for the Eversense 365 CGM system, which can measure glucose levels for up to one year. This approval followed the earlier Eversense E3 CGM system, which could measure glucose for up to six months. The extended sensor life of the Eversense systems is a key differentiator compared to other CGM devices, which typically last only 7-14 days.

Financial Performance

Senseonics' financial performance has been characterized by significant investments in research and development, as well as ongoing commercialization efforts. In the fiscal year 2024, the company reported total revenue of $22.5 million, which was consistent with the prior year's figure of $22.4 million. However, the company's patient base increased by more than 50% during this period, reaching approximately 6,000 global patients.

The majority of the company's revenue, 82%, came from its distribution agreement with Ascensia Diabetes Care, a related party. An additional 15% of revenue was generated through consignment arrangements with healthcare providers.

The company's gross profit for the full year 2024 was $0.5 million, down from $3.1 million in the previous year. This decrease was primarily driven by $4.8 million in one-time charges related to the transition from the Eversense E3 to the Eversense 365 system, partially offset by an estimated $1.6 million reduction in pre-approval manufacturing costs previously expensed to research and development. Gross margins declined from 13.8% to 2.4%.

Research and development expenses decreased by $7.7 million to $41.1 million, as the company completed clinical trials for the 365 system. Selling, general, and administrative expenses increased by $4.3 million to $34.2 million, driven by higher personnel costs, legal expenses, and consulting fees.

Senseonics' net loss for the fiscal year 2024 was $78.6 million, or $0.12 per share, compared to a net loss of $60.4 million, or $0.11 per share, in the prior year. The increase in net loss was primarily due to a reduction in gains from the exchange of existing notes and changes in the fair value of derivatives.

For the fourth quarter of 2024, Senseonics reported revenue of $8.3 million, representing a 3.75% increase from $8.0 million in Q4 2023. The net loss for Q4 2024 was $15.5 million.

Liquidity

As of December 31, 2024, the company had $74.9 million in cash, restricted cash, and cash equivalents, and $56.2 million in debt and accrued interest. The debt-to-equity ratio stood at -3.66, with a current ratio of 2.35 and a quick ratio of 2.24. Senseonics has a $50 million senior secured term loan facility, of which $35 million was outstanding as of December 31, 2024.

Subsequent to the end of the fiscal year, Senseonics has taken steps to simplify its capital structure and improve its balance sheet, including the repayment of the remaining $20.4 million in outstanding 2025 convertible notes and the conversion of all preferred stock into common stock.

Eversense 365 Launch and Outlook

The successful launch of the Eversense 365 CGM system in the United States during the fourth quarter of 2024 represents a significant milestone for Senseonics. The Eversense 365 is the world's first and only once-yearly continuous glucose monitor, offering patients a transformative solution for managing their diabetes.

Early indicators of the Eversense 365 launch have been positive, with the company reporting the largest number of new patient shipments and the largest number of prescribing providers in any month under the Ascensia partnership. Senseonics' patient base increased by 56% in 2024, surpassing the company's target growth of 50%, with a significant number of patients switching from competitive CGM systems.

Looking ahead, Senseonics has filed for CE Mark approval for the Eversense 365 in Europe, with plans to launch the system in the European Union in the second half of 2025. The company is also working to transition US reimbursement from the Eversense E3 to the Eversense 365, which is expected to have a notable impact on the company's average selling price and gross profit margins.

For the full year 2025, Senseonics expects global net revenue to be in the range of $34 million to $38 million, as the company continues to transition US patients to the Eversense 365. The company anticipates that its revenue will be skewed towards the second half of the year, as it accounts for the impact of patient assistance programs and annual insurance deductible resets in the first half of the year. Senseonics is forecasting gross profit margins to steadily increase throughout 2025, with full-year gross margins projected to be between 25% and 30%.

The company expects its global patient base to approximately double in 2025 compared to 2024. Senseonics also anticipates its cash utilization in 2025 to be between $50 million and $60 million.

Geographic Performance

Senseonics generates the majority of its revenue from the United States, with $15.3 million (68%) of total 2024 revenue coming from the US market. Revenue from outside the US was $7.2 million (32%) in 2024.

Future Product Development

In addition to the Eversense 365 and E3 CGM systems, Senseonics is developing future product variations to enhance its CGM offerings. The company is working on its "Gemini" product, which would combine the functionality of CGM and flash glucose monitoring in a fully implantable, self-powering system. Senseonics is also developing its "Freedom" product, which would include Bluetooth connectivity in the sensor, eliminating the need for an on-body transmitter component.

These product development initiatives are aimed at further improving the convenience, functionality, and user experience of Senseonics' CGM technology, as the company continues to compete in the evolving diabetes management market against established players like Dexcom, Medtronic, and Abbott.

Strategic Partnerships

Senseonics has established key partnerships to enhance its market presence and product integration. The company collaborates with Ascensia Diabetes Care for the global commercialization of the Eversense system. Additionally, Senseonics has partnerships with Mercy Health and SweetSpot to expand patient access and integrate Eversense data into digital health platforms.

Industry Trends

The continuous glucose monitoring (CGM) market is expected to grow at a compound annual growth rate (CAGR) of around 15-20% over the next several years. This growth is primarily driven by increasing adoption of CGM devices, especially among people with type 2 diabetes.

Risks and Challenges

Senseonics operates in a highly competitive medical device market, with well-capitalized competitors such as Dexcom, Medtronic, and Abbott. The company's ability to maintain and grow its market share will depend on its ability to continually enhance its product offerings, obtain regulatory approvals, and secure favorable reimbursement coverage from third-party payors.

The company's reliance on its collaboration with Ascensia Diabetes Care for the commercialization of Eversense systems presents both opportunities and risks. While Ascensia's sales and marketing capabilities can be leveraged to drive adoption, any failure by Ascensia to perform satisfactorily could directly and adversely impact Senseonics' commercialization efforts and financial results.

Senseonics also faces the challenge of securing and maintaining adequate reimbursement coverage for its products and related insertion/removal procedures. Failure to do so could limit patient access and hinder the company's ability to generate sufficient revenue.

Additionally, the company's lengthy and expensive product development and regulatory approval processes, as well as the potential for product liability claims, pose ongoing risks that could impact Senseonics' financial performance and future growth prospects.

Conclusion

Senseonics Holdings, Inc. has demonstrated its commitment to transforming the lives of people with diabetes through the development and commercialization of its innovative Eversense CGM system. The recent approval and launch of the Eversense 365, the world's first and only once-yearly continuous glucose monitor, represents a significant milestone for the company and the diabetes community.

With a strong focus on research and development, strategic partnerships, and ongoing efforts to expand reimbursement coverage, Senseonics is well-positioned to capitalize on the growing demand for advanced diabetes management solutions. However, the company must navigate the challenges of a highly competitive market, regulatory hurdles, and the risks inherent in the medical device industry.

As Senseonics continues to execute on its strategic initiatives, including the planned European launch of the Eversense 365 and the development of its pipeline of next-generation products, investors will be closely watching the company's ability to drive sustained growth, improve its financial performance, and solidify its position as a leader in the continuous glucose monitoring space.