STIFEL 2026 HEALTHCARE CONFERENCE - SENSEONICS HOLDINGS INC

Explicit Guidance:

• Revenue & Growth: Expecting 4Q performance to follow the strong trend of 1Q–3Q; 2027 revenue growth anticipated to continue with operating leverage; 2027 sales guidance confirmed to be $100M+; trajectory suggests potential for $60M quarterly revenue (approx. 2H28) as Freedom penetrates.
• Margins: 2026 gross margins expected to exceed 60%; Freedom product (target 2H28) projected to drive gross margins to over 70%.
• Operating Expenses & Cash Flow: 2026 cash burn guidance of <del>$120M (</del>$10M/month); 2027 operating expenses (OPEX) expected to rise slightly due to revenue-driving investments (DTC, inside sales, new territories) while TSAs expire; 2027 expected to see operating leverage as margins improve.
• Balance Sheet & Liquidity: $127M cash on hand (end of quarter); $85M additional capacity under Hercules facility; total accessible capital >$200M (pro forma cash + facility); next tranche of facility available Q4, remainder available through 2027; fully funded to reach Freedom product launch.
• Direct-to-Consumer (DTC) Spend: 2025 Q3/Q4 spend ~$13–14M; 2026 budget maintained at ~$13–14M but spread evenly (40% H1, 60% H2) for efficiency; 2027 DTC investment confirmed to continue with more specific guidance expected early 2027.
• Share Count: No specific guidance on buybacks, dividends, or share count changes provided.

Business-Segment Outlook:

• U.S. Commercial: Strong momentum driven by "365" product adoption; physician prescribing base estimated at >5,000 individual physicians; direct-to-consumer advertising successfully driving primary care (Type 2) access; 40% of 3Q insertions facilitated via Eon Network.
• International (Europe): "365" product launched 2 years ago; CE marking for 365 in Europe delayed >1 year behind U.S. approval; commercialization in Europe expected to follow U.S. trajectory but growth initially slower than U.S.; International revenue share expected to remain near current ~15% in 2027 before potentially growing.
• Product Mix: Current patient base 80–85% Type 2; strategic shift toward Type 1 via pump integrations and future products.
• Eon Network (Services): Target scaling network of 1099 nurses to 120,000 annual insertions by year-end; 2027 headcount expected to be larger than 2027 target; funded via CPT reimbursement codes to facilitate sales.

Market and Competitive Outlook:

• Demand Trends: Type 2 NIT (Non-Insulin Treated) market identified as a major growth opportunity; demand driven by need for simple, low-interaction monitoring for patients not yet on insulin.
• Pricing & Economics: Product pricing parity between competitors; economic efficiency improved by removing "through-skin" transmitter requirements (via battery tech in new products).
• Competitive Positioning: "Freedom" (2H28) positioned as a "Grand Slam" product with integrated Bluetooth and pump connectivity; "Gemini" (2H27) targets non-insulin users with 24/7 self-powered operation.
• Share Shifts: Expecting to gain market share as competitors face reimbursement pressures and competitive bidding timelines; strong real-world performance (76–77% Time-in-Range) cited as differentiator.

Macro / Industry Outlook:

• Regulatory (CMS): Anticipating CMS LCD changes to cover Type 2 NIT patients within 1–4 quarters, potentially aligning with competitive bidding cycles; ICGM designation allows Class 2 (510k) regulatory pathway for new products.
• Reimbursement: Eon Network operations funded by CPT codes; reimbursement rates critical for scaling the insertion network.
• Market Size: Diabetes market valued at ~$15B; significant runway for share capture, particularly in Type 2 population.

Strategic Initiatives:

• Commercial Integration: Full in-house transition of commercial operations (completed 2026 implementation) to reduce complexity, increase efficiency, and align marketing/sales with R&D.
• Product Launches:
  • Gemini: Targeted launch 2H27; self-powered (internal battery), no external transmitter; clinical trial initiation delayed to Q1 to prioritize Freedom testing.
  • Freedom: Targeted launch 2H28; adds internal Bluetooth to Gemini's battery tech; enables 24/7 monitoring and pump integration.
• Pump Partnerships:
  • Closed/Active: Medtronic Twist (strong uptake, best-in-class integration); Beta Bionic (integration expected with patch product launch early 2027); Tandem Control-IQ (Mint) expected to be ready upon launch in 2027.
  • Pending: iLet (integration confirmed); additional pump partners expected by 2028 pending capacity and technical alignment.
• Sales Force Expansion: U.S. rep force (~45) stable for 2027 with potential minor territory splits; European commercial team (approx. 30 reps) fully onboarded; international scaling to follow Freedom progress.

Risks and Headwinds to Outlook:

• Regulatory Timing: CE marking delays in Europe (currently >1 year behind U.S.); Freedom and Gemini submission timelines may shift based on clinical trial pacing.
• Reimbursement Uncertainty: CMS LCD changes for Type 2 NIT patients are not yet finalized; timing of competitive bidding could impact pricing pressure.
• Operational/Supply: Potential capacity constraints and technical hurdles with external pump partners may delay broader integrations.
• Execution Risk: Reliance on successful execution of "Freedom" to drive cash flow break-even; margin dilution risks if new product ramp is slower than expected.
• Competition: Competitive bidding and potential cost concerns from payers if market opens broadly.

Management Tone on the Future:

• Confidence: High confidence in "Freedom" as a cash-flow catalyst; optimistic about 2026–2027 margin expansion; comfortable with $100M+ 2027 revenue guidance despite consensus being lower.
• Strategic Shift: Emphasis on "owning our destiny" via in-house commercial ops; transitioning from "awareness" challenges to execution and scale.
• Caveats: 2027 revenue growth expected to be "a little bit smaller" than U.S. growth initially due to European market infancy; specific 2027 financial metrics to be clarified early next year.

Miscellaneous:

• Clinical Performance: 76–77% Time-in-Range reported in real-world Twist integration data.
• Patient Demographics: Strategy heavily weighted toward Type 2 (80–85% of base) via physician-led insertion (Eon Network), though Type 1 remains a long-term AID growth vector.