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Senseonics Holdings, Inc. (SENS): Transforming Diabetes Management with Innovative Implantable CGM Technology
Published on September 24, 2024 | Ticker: SENS

Senseonics Holdings, Inc. is a medical technology company focused on the development and manufacturing of long-term, implantable continuous glucose monitoring (CGM) systems to improve the lives of people with diabetes. The company's flagship product, the Eversense CGM system, offers a differentiated solution that provides patients with up to 365 days of continuous glucose monitoring from a single sensor insertion.

Financials

In the fiscal year 2023, Senseonics reported total revenue of $22.39 million, a decrease from the previous year's revenue of $25.12 million. The company's net loss for the year was $60.39 million, compared to a net income of $142.1 million in the prior year. Operating cash flow and free cash flow for the year were negative $70.16 million and $70.51 million, respectively.

Despite the challenging financial performance, Senseonics has made significant strides in advancing its product pipeline and commercial strategy. The company's first-quarter 2024 results demonstrate the progress it has achieved.

In the first quarter of 2024, Senseonics generated total revenue of $5.1 million, representing a 22% increase compared to the prior year period. U.S. revenue for the quarter was $3.7 million, while revenue outside the U.S. was $1.4 million. Gross profit for the quarter was $0.3 million, a decrease from $0.4 million in the same period last year, primarily due to higher fixed manufacturing costs.

Research and development expenses for the first quarter of 2024 were $10.4 million, a decrease of $2 million compared to the prior year period. This reduction was mainly driven by a decrease in clinical trial expenses associated with the completion of the ENHANCE pivotal trial. Selling, general, and administrative expenses increased by $0.4 million to $8.1 million, primarily due to higher legal and patent costs.

The company's operating loss for the first quarter of 2024 was $18.2 million, compared to $19.7 million in the same period last year. Net loss for the quarter was $18.9 million, or $0.03 per share, compared to net income of $1.3 million, or $0.00 per share, in the first quarter of 2023.

Liquidity

As of March 31, 2024, Senseonics had cash, cash equivalents, and short-term investments totaling $99.1 million, and debt and accrued interest of $55.9 million.

Outlook

Looking ahead, Senseonics continues to expect first-half 2024 global net revenue to be $10 million, representing growth of approximately 16% over the first half of 2023. The company plans to provide full-year 2024 guidance, including revenue share percentages, at the upcoming American Diabetes Association (ADA) conference in June.

Strategic Partnerships

One of the key drivers of Senseonics' growth strategy is its collaboration with Ascensia Diabetes Care, the company's exclusive global distributor. Ascensia's main objectives remain focused on driving expanded awareness and access to Eversense within the diabetes population. The partnership has resulted in quarter-over-quarter patient growth, both through direct-to-consumer and professional sales efforts.

Recent Developments

Senseonics has also made significant progress in advancing its product pipeline. In the first quarter of 2024, the company announced that the Eversense CGM system received the integrated continuous glucose monitoring (iCGM) designation from the U.S. Food and Drug Administration (FDA). This designation allows the Eversense system to integrate with compatible medical devices, including insulin pumps, as part of an automated insulin delivery system.

Furthermore, Senseonics recently filed a 510(k) premarket notification with the FDA for its next-generation 365-day CGM system. The company is confident in the clinical data and quality of the submission, and it is working towards a targeted launch in the fourth quarter of 2024. The 365-day system is expected to offer a compelling combination of a full year of protection from a single sensor and a significant reduction in the required calibration frequency.

Beyond the 365-day system, Senseonics is also developing its Gemini and Freedom self-powered products, which are designed to leverage the technology and FDA approval of the 365-day system and further enhance the Eversense platform.

Innovative Collaboration with Mercy

One of the most exciting developments for Senseonics is its innovative collaboration with Mercy, a leading healthcare system and accountable care organization based in St. Louis, Missouri. Mercy has identified up to 30,000 patients across its system who could benefit from CGM, and the two companies are working together to build a comprehensive approach that combines Eversense CGM, advanced data analytics, and Senseonics' new Eversense remote patient monitoring (RPM) program.

The Eversense RPM program is designed to provide patients with a stronger foundation for understanding and utilizing their CGM data, supported by diabetes counselors who can offer coaching and insights to help patients make better-informed choices about managing their diabetes. The program is also intended to improve the communication loop between patients and their healthcare providers, enabling more timely interventions and accelerating progress between in-person visits.

Senseonics believes the partnership with Mercy represents a substantial opportunity to help these patients better manage their diabetes and avoid costly short- and long-term expenditures. The company sees this collaboration as a model that can be replicated with other healthcare systems, further driving the adoption of Eversense and the company's comprehensive diabetes management solution.

Growth Opportunities

In addition to the Mercy collaboration, Senseonics is exploring additional growth avenues for Eversense, notably the expansion of Medicare coverage to include CGM for all patients on insulin, as well as diabetes patients not on insulin with a history of hypoglycemia. This expanded coverage, combined with similar adoption by many commercial payers, presents a significant opportunity, as the company estimates that less than 25% of eligible patients are currently using a CGM device.

Conclusion

Senseonics' focus on innovation, strategic partnerships, and comprehensive diabetes management solutions positions the company well for future growth. The successful launch of the 365-day Eversense system, the integration of Eversense with leading insulin delivery devices, and the expansion of the Eversense RPM program to additional healthcare systems could be key catalysts for the company's performance in the coming years.

Despite the challenging financial results in 2023, Senseonics has demonstrated its ability to execute on its strategic initiatives and drive progress in its product pipeline and commercial strategy. As the company continues to navigate the evolving diabetes management landscape, investors will be closely watching for further updates on the company's ability to capitalize on the significant opportunities ahead.

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