DexCom, Inc. (DXCM) Earnings Call Transcript & Summary

Morning, everyone. Happy to introduce our next company. We have DexCom's CEO, Kevin Sayer, joining us now. And following up in the Q&A session, we'll also have Jereme Sylvain, the CFO of DexCom. [Operator Instructions] But for now, Kevin, I'm going to turn it over to you and join you in a little bit.

Well, Robbie, thanks for having us again this year. We're going to start on Slide 3, and it's a great day for us. I want to start by emphasizing that DexCom still has, and we have tremendous opportunities ahead of us. I've been doing this for a long time with respect to diabetes and the story never changes. Diabetes continues to grow, be a big problem and it never slows down. And consistently, DexCom has provided the best outcomes and solution across all diabetes. We have a lot of runway left in our U.S. market. While we've achieved a lot of penetration here, there's still plenty of room to grow. We've only scratched the surface internationally, but we did learn something very important this year that expansion and access really do go hand-in-hand. Our CGM solutions have been used on a lot of other problems this year rather than just classic type 1 diabetes, and we've seen very good solutions in these complex problems. And last in this presentation, I'm going to get to talk about G7 and share some data with you on that great product. As we move on to the next slide, on Slide 4, I'm going to go over a bit of the results for this year. We had another great growth year in 2021 with our annual revenues increasing to $2.448 billion, that's $500 million of growth and more than 300,000 patients added to the patient base this year. And in a year when we consciously brought down our annual revenue per patient, our gross margins exceeded our initial guidance by 300-plus basis points for the year and expanded over 2020. We've achieved several other important milestones over the course of the year. From a product perspective, we got 2 very important apps and advances in our technology platform approved with respect to our app and app solution and also the live APIs. We're very pleased with DexCom ONE's launch exclusively on our e-commerce platform. That's been very successful. I'll talk more about that a little bit later. Our commercial expansion with the ads in the U.S. and our international expansions through increasing access were very successful. And finally, the mobile study published in JAMA this year is a very good success and shows a lot of good things for our growth going forward. On Slide 5, you'll see that our guidance for 2022 is consistent with our long-term plans with projected revenue range of $2.82 billion to $2.94 billion for the year, representing 15% to 20% growth. Our guidance contemplates continued increased access and awareness for CGM all over the world. It anticipates really the last year of shift to the pharmacy channel from the DME channel for us. We do believe, and we'll talk more about this in February, our margins will be adversely impacted this year by the fact that we are bringing a new product lineup in G7. We have some very clear objectives for the year outside of our revenue numbers. First and foremost is the G7 launch. We want that product launched all over the world this year, and it's really our first truly global launch. We want to expand our DexCom ONE coverage. We'll continue to scale the type 2 market and continue to grow that and be prepared to enter that market with a number of initiatives we have going on. And finally, scale is just an overall goal of ours, scaling the infrastructure on a worldwide basis to get the product to more people, scaling our manufacturing and internal operations to serve many, many more. Slide 6 presents a sobering reminder of the opportunity that's ahead of us here at DexCom. Diabetes continues to be a worldwide health care problem, and there is no signs of diabetes slowing down at all. In just 2 years, 74 million more people have been diagnosed with diabetes. And with all of our improved technologies and the advances made in pharmaceuticals, the cost of treating diabetes worldwide are approaching $1 trillion. We believe and we continue to believe that DexCom can disrupt these trends and provide a solution to transform diabetes care, and you'll see this in the next slides. This story never changes as you turn to the next one. If you are on insulin, intermittent glucose measurement isn't enough information to treat diabetes in the short term or the long term. Once again, this person took 4 fingersticks in the day. 2 of them within range, 2 of them a bit high. But as we turn to Slide 8, we see the problem. Fingersticks just don't give a patient a full picture of what's going on with diabetes management. This intensive insulin-using patient has no idea how long they've gone or could be going during the day, leading to dangerous hypoglycemic events like we see here. And just as importantly, they don't know how much time they spend too high, and this high range over the long term is what causes long-term complications. The same holds true for the millions of people who are managing type 2 diabetes in a nonintensive manner without mealtime insulin as we take a look here on Slide 9. For type 2 nonintensive management, the standard of care is taking a fingerstick once a day. And hear this one point is in the morning, which is very often what happens. I've seen this first hand. Both my mother and my grandfather had type 2 diabetes, so when I would visit my mom, she would stick her finger in the morning and look at me and say, "See, I don't need your sensor, I'm good." Well, I lost both of them to diabetes complications. And here's what happens. This is a customer on Slide 10, who is in our DexCom pilot. And while these patients don't usually experience the acute lows, look at these highs. This patient is on 2 very expensive drugs. The system is spending a great deal of money taking care of this person who really has no idea that it isn't working, neither does his healthcare professional and certainly, the patient doesn't know what changes to make in their lifestyle. The best way to get this patient in better control is to put him on full-time CGM and give them the information necessary to make better decisions. This chart is a perfect indication why DexCom is so committed to the time and range initiative as the primary measure of the effectiveness of diabetes management. If we measure this person on time and range rather than A1c, their caregivers, this patient to everybody else would have a different perspective as to what's going on. And if we look at Slide 11, the answer to this is all very simple. We can do so much more. We can do more to reduce costs. We can do more to reduce the outcome of diabetes on patients and the caregivers, and ultimately, we can make everybody healthier. Moving on to Slide 12. Let's first take a look at our core market here in the U.S. If you go back just 5 years, we've more than doubled the access of our technology domestically as more than 85% of U.S. intensive insulin-using patients have reimbursement for our product. And despite the significant growth in the category over the past 4 years, the penetration in the reimbursed population remains relatively similar to where it has been before. We have a lot of runway. A huge driver of this expansion has been very targeted studies, studies that demonstrate simply that CGM is better for everybody no matter what your age, race, gender, education, whatever, people do better with CGM. Studies like Diamond and GOLD sponsored by DexCom have changed clinical standards for CGM use, validating what we said for a long time. The CGM really is a first-line defense for all diabetes. Our MOBILE study that was published earlier this year proved pretty much the same thing for those on basal insulin only. And as the new CGM guidelines came out by the ADA recently, they recommended that full-time CGM be used by basal-only insulin patients. This is a tremendous market expansion opportunity for us going forward. One of our biggest challenges in the U.S. market has been making it easier for our customers to get our product and positions to prescribe it. As you see on Slide 13, we're on track with our pharmacy access plans to get this product into the pharmacy channel more aggressively. We had a great year. As you know, it's a much more efficient model for us going forward on all fronts, and it's really the key to our long-term sustainable growth because the significant number of the patients we're going to get in the future are type 2 patients who see primary care physicians. It needs to be easier for them to get the product, but it also be needs much easier for the patient for the patient's physician to prescribe it. Many of these patients are intensively on intensive insulin therapy, but there's more than 30 million [indiscernible] type 2 patients not on intensive insulin. Now let's take a look at Slide 14 and see how we're going to go after these. Our 4 areas of focus on the type 2 epidemic have not changed. And we made progress on all 4. Our diabetes program partners continue to make progress with their software and analytics efforts. Providers see tremendous cost, therapeutic and effective -- efficiency benefits by adding CGM to the regime and therein they continue to introduce DexCom into their ecosystems. The Level2 program at UHG demonstrated the outcomes we anticipated, and we're very poised for a second year of growth. On the patient side, the 2 technology platforms we got approved this year are going to be very beneficial for our patients is, we're going to be able to get data in the situation or in the app or the format that they want to, to best manage their condition. And as you also saw with our DexCom ONE launch here in Europe, we believe software as a product platform is going to be a very important thing for us. As you see on Slide 15, we continue to feel there are 3 elements necessary to serve the type 2 nonintensive community and ultimately, disrupt this global epidemic in a sustainable manner. First, we need to create an experience through our own product and software solutions and our ability to share data with others. This experience needs to be different than what we have for our current intensive insulin patients. More meaningful, timely insights, fewer alarms, differentiated patient interaction are the things we're contemplating. The outcome data needs to continue to be built. This has to be a slam dunk clinically. It will be critical over the long term to get a group of providers who are not used to providing this technology to patients to get them to use it regularly. And finally, we've always said this, we have got to cut down cost that we have to save more money than we're spending. We can't just throw another element of cost into the type 2 ecosystem and expect people to use it. That's why I've long-stated this business model may be a little bit different. So what are we seeing on these fronts? Here are the results of what's gone on this year on the next slide. The yearly results are great and support the things that are very critical to developing this market. Cost savings have been consistent, both the Intermountain Healthcare study and our large DexCom pilot, the cost savings came in both around $5,000 per member per year. And most recently, we've seen tremendous outcomes from Onduo and WellDoc. On the Onduo side, they had reduced medications, reduced blood pressure, weight loss, and other metabolic improvements in addition to better diabetes control. And the recent WellDoc study with type 2 patients on CGM, they experienced a time and range improvement of 3 hours per day. And even more interestingly for me, those patients who had an average glucose above 180, after a 24-week trial with full-time CGM, experienced an average reduction in average glucose of 54 points per day. Even with our current G6 platform, patients have been very engaged had no problem wearing the device full time. In fact, everything we've learned supports that full-time CGM wear is by far and away the best model in this market. We're going to continue to build the evidence base for this, and we're working to leverage these findings in 2022 as we continue to grow and try and establish this market. Moving on to International Business on Slide 17. Our efforts this year and over the next few years will focus on establishing the necessary infrastructure to triple the size of our total addressable market by the end of 2023. Sometimes forgotten by everybody, we started from nothing internationally. We've had to grow this ourselves, and we're well on our way towards this goal. We just finished another strong year in 2021 with organic growth well over 40% in the second half of the year, and we have a clear pathway to extend this momentum. Look with me at Slide 18. Our International roadmap really hasn't changed. We're developing plans to enter several new geographies and go direct in some key geographies over the next several years. In 2021, we did launch in Japan with our partner, Terumo. We acquired 2 of our distributors, the distributor in Benelux and the distributor on Australia and New Zealand. We'll make investments in these geographies like we've successfully done in Germany, the U.K. and Canada. And those key markets where we're not direct, we'll continue to support our distributor partners and look for new strategic partners that can expand our infrastructure. And in other markets, we have our e-commerce platform. Improved access to the product is fundamental to continued international expansion and growth. We have to make it easier. Lower cost, improved reimbursement, reduced administrative barriers and our e-commerce platform are all going to be critical for this. And 2021 was a year of great progress on this front, and we expect 2022 to be even better. We also extended our product portfolio to facilitate our growth opportunity internationally as you can see on Slide 19. Our DexCom ONE product line provides us with a great opportunity for expansion. We launched DexCom ONE at a very compelling price point only as a cash pay product through e-commerce platform. It's going to give us an opportunity to grow in key markets without having to build a great big infrastructure in advance. The software for this product is really a differentiator versus our other system, and it's a completely redesigned software platform, making it much easier to use. This really is our first step in software differentiated product lines. So how has it been? Turn with me to the next slide, and we'll see. We started serving customers with this product in 4 Eastern European countries in Q4. Within 60 days, more than 1% of the intensive insulin populations of these countries were on DexCom ONE. Nearly 20% of these users have type 2 diabetes. There truly is pent-up demand for real-time CGM in these markets and particularly, in markets where we're not today. An encouraging development since the launch, 2 of the 4 countries have taken step to reimburse the product, bringing access to this life-changing technology to the people in those countries. The results have exceeded our own high expectations, and we will continue to roll this product out into several new countries in 2022 and beyond. DexCom ONE represents one significant addition to the product portfolio, but it's just one of many innovations we have to position us for extending growth runway that brings us better health care for all those in need. Let's take a look at Slide 21. Our success more than anything else is attributable to the fact that we have the premier product and the best-performing product in this space and the infrastructure necessary to support our customers. Our current G6 and G7 systems have been designed to readily connect with the automated insulin delivery. Our developments are going to be coming out over the next several years and currently is on the market. In addition to smart pens it will be coming out over the next several years. We built this data platform which is no simple task to enable us to share data, and I won't even go so far as to say sharing data may be one of the most significant innovations this company has done over its history. So we do share data with patients for their personal care and with their providers, but we're also working on how to best share this data in the overall health care ecosystem. And we believe with this data, again, we can share it with partners and come up with numerous software solutions where our data can be digested and displayed in different manners that can be more meaningful to our patients. Let's move to Slide 22. I am really happy to discuss DexCom G7 in a little bit more detail today. Similarly, when we launched our G6 system before, this is a real-time factory-calibrated iCGM that's going to set a new standard in the industry. As I've said on many occasions, whatever you like about G6, G7 is going to do better. We've heard our customers loud and clear in designing this product and the related software. First and foremost, we have a 30-minute warm-up period. You put it on and by the time you get everything paired and going, it's actually much less than 30 minutes. Those in the trial loved it. It is a much smaller form factor on the body, a 60% size reduction from G6, which will be very important to our patients. There's a smaller, easier to use receiver for those patients who choose that platform. And there's more information in one place with this app. We've moved key insights currently found in our CLARITY system directly to the G7 app. So it's a smaller overall footprint on the body, but also from a materials perspective. So this will be much better for the distribution channel and for the environment, but most importantly, and this is the data I haven't shared before. The performance of this product is something I really never thought I would see in nearly 30 years in this business. So let's move on to the next slide. Take a look at the performance here. This table compares our clinical study data to the iCGM standards established by the FDA. The far right column of the table displays point accuracy performance at the system and the middle column presents absolute performance in these categories with consideration to lower statistical bounds, which is required by the FDA iCGM category. This is the data we submitted to the FDA in the fourth quarter. You can see that G7 very comfortably meets iCGM standards and note the number of patients in this study and the match pairs to produce this data set. This data set is 3x larger than our G6 data set and much larger than any data set that anybody else has ever produced in the industry. With a sample size this large, there is absolutely no doubt as to how the system will perform. Performance of the device is consistent across all glucose levels across all type periods and the results are much superior to G6 and any competitive product in the market. But there's an even more simple way to present this data. If we go to Slide 24. No CGM has been assessed in a large-scale clinical study with an MARD at this level with the MARD -- starting with an eight for both adults and pediatrics. Results in both are nearly identical. And when looking at the study, as I said earlier, the sensor performance is consistent across all days. The MARD in the early days, 1 or 2 days is less than 10%, again, an improvement from G6. But after that, in the middle and later days, the MARD for adults and [indiscernible] is around 7%. What a tool this is going to be for diabetes management. Just think how much better the automated insulin delivery systems can be with the better features of this product combined with this accuracy for patient adherence. On top of that, as you think about other markets we're going to serve type 2 health wellness exercise and the likes, accuracy is every bit as important for these patients as it is for insulin users as they're going to start this with limited experience to this kind of data. And if that data is not strong and robust and reliable, they may not want to use the product. We think it's going to be a fabulous product across the board. It's been very rewarding when we launched G6 to see how that changed the world. This product is going to do it again. Turning to our last slide, we conclude here what we always do with our customers. We continue to be relentless in our pursuit of the best technology and partnerships and the best customer experience. With our G6 product, we now have the best Net Promoter Scores we have ever experienced. This leads to higher customer satisfaction, increased engagement and better outcomes and more retention. There is not a company with a CGM product portfolio that can deliver more valuable to customers, providers and payers than we can. And it's going to remain true forever, both up and down the acuity curve. As you think about the accuracy I just presented with G7, think about how much -- how great that product will be in a hospital setting or in home setting with somebody who is definitely in need. And also, as you go down the acuity curve and prediabetes and health care overall health care with that form factor, we are best engaged to drive engagement in glucose management across the entire spectrum and look forward to continuing to do so in the future. Thanks, and now I'll conclude my prepared remarks.

Great. Thanks, Kevin. Lots to talk about there. So maybe let's start with the preannounced fourth quarter, and then we'll get into 2022 guidance here. So there were a lot of moving parts here in the quarter, I imagine. I'm sure U.S. looked a little different than outside the U.S. Maybe if you could give us a sense of how the geographic trends played out. And more importantly, I think to investors is this is one of the few times we've seen where DexCom hasn't significantly exceeded consensus estimates. Any one-timers or things under the hood we should be aware about?

And I've got Jereme joining me here. He can add to my remarks. Let's start with the OUS sales. Those numbers were very strong and robust, very much a factor of our investment in our direct markets and our increased access in many of those markets. So those plans that we introduced over the course of the year have very much played out as our OUS growth organic is 41% for the quarter. So that is real strong, and we'll cover more details with that in our earnings call later. On the U.S. side, it does seem a little lighter than usual. And I would tell you, there's a couple of things that have happened. The first one, we're a little lighter on new patients than we would have liked to have been. Our guidance when we offered at the end of the third quarter was this is our base case. And we hit our base case, and we usually do better than our base case. We had a bit of a tough time getting into some of those offices that we're serving that are new or that we haven't been in before to get new prescribers up due to COVID this quarter. People don't want new things entering their environment. I would tell you in endocrinology market in those places, we're already strong. We did very well, but we are a little light on new patients. It still good numbers, mind you. It's not like things were horrible. We just missed a bit. And the other thing that's happened is the shift in the channel. There's a few things that have been going on here, Robbie. Seasonality is not going to be what it's been before. If you look at our sequential growth from Q3 to Q4 over the past several years, you see that it's come down significant. It's come down every single year and that's really a factor of 2 things: the move to the pharmacy channel as we've added a lot of patients into the pharmacy channel; and the second one is, the government payers and Medicare, in particular, which remains a large segment for us. There's no seasonality in Medicare that those revenues are derived every month. So as we've grown new patients in the pharmacy channel in the Medicare channel and they become a larger portion of their base, there's less seasonality. And so it's not a pricing thing. It's really just more of a shift in the marketplace to markets where there's not going to be as much fourth quarter spike. I don't know, Jereme, do you have anything to add to that?

No, I think the fourth quarter seasonality is important. Robbie, I think you'll see the same thing in Q1, right, where you've seen as a percent of the sequential kind of movement, you've seen it go from 17 to 13 to 11. And so that mix shift has played out over time as we move more into those markets. So a little bit as expected, I think the one thing that was a little bit more than we expected, clearly was in the impact on new patients. Kevin addressed it. Our new patients have always -- this year at least, have always been a record every quarter and where our new patients are trending here for Q4 is right in line with Q3. That's a little bit different than our past where Q4 has tended to be our highest new patient add of any individual quarter. That's generally been our high watermark. We ultimately didn't see it this year. It gets back to Kevin's point. The in-person visits that these primary care physicians have, been a bit challenging as both Delta and now Omicron has ultimately played out in terms of access in to these physician offices.

Well, maybe we could put a finer point on that. How much do you think is access to physicians? How much do you think there maybe patients waiting for G7 to come and don't want to start or get involved with the CGM ahead of the new technology launch? How much is maybe some other factor that I'm not thinking?

I don't think there's a big pent-up waiting demand for G7, Robbie. In the past, in our business, there was because there was a huge upfront investment to get started on CGM. But with pharmacy plans, for example, you start with the monthly charge and a co-pay at the drug store, and it doesn't change. And when we shift to G7, you'll just shift over to that product line, and it's not going to be a huge investment upfront. And it is our job to make sure patients understand that and they don't delay, but we don't have to offer anything to get them there. It will be relative. It would be relatively simple. And that change really happened, we went from G5 to G6 and then as we've shifted to the channel, same with the government payers. I mean they -- it's a monthly fee. Once we get the G7 system approved, we can migrate them over as rapidly as we can. So I don't think there's pent-up demand there. Like I said, our NPS scores have never been stronger.

So maybe how do I think about the percentage of your U.S. business that's now in pharmacy and Medicare as we think about trying to normalize these trends going forward?

Sure. I can take that one, Kevin.

Go ahead, Jereme.

So as we've migrated, we started last year, we were around 50% split in the U.S. commercial business, pharmacy, DME and we're making that progression to 75%. Pretty linear, if that helps to kind of understand where we are in the commercial business. In terms of -- so that will give you kind of a feel for the split of the commercial business. In terms of where the Medicare or the government business is as a percentage of our overall revenue, while we don't get into the details of the splits, the one thing we will say is, it's historically been or at least, it consistently is the highest growth segment of the business and continue to grow strong into the fourth quarter. So you do still see the Medicare and the Medicaid businesses, especially as access continues to get approved and those channels grow. And so it is a larger part of the business as is the pharmacy. The 2 fastest-growing parts of our business are those that do not have as much seasonality, pharmacy and government.

Got it. So maybe shifting, I want to save enough time to talk about G7, the data today and timing. But maybe before we get to that 2022 guidance, this is I believe, now your fifth year of 15% to 20% sales growth guidance to start the year off. How are you thinking of that in relationship to past guidance and the environment you're sitting here today? And how do we think about that cadence of growth? And is it more back-end loaded to think about G7 coming online?

Our guidance certainly contemplates a G7 launch date, but it is not based solely on G7 and G7's timing. It is based upon patient adds and building a model really from the ground up, and we expect to add these patients. We would like to see a boost when we get G7 out there, but isn't going to be the end of the world if we miss a month or two. We're really committed to hitting those numbers and our model suggests that. I think along Jereme's comments, seasonality is going to be a little bit different. You're going to see volume growth similar to what we experienced this year, even in Q4, Robbie. And one of the things I didn't mention early on the U.S. numbers, our volume growth is still in the mid to high 30%. I mean this is not a -- the fact that we're not selling sensors are getting -- keeping customers, we're doing very well. It's that channel shift and how seasonality, this has changed. So our model is trying to account for all those things. We've accounted as much as we can with predictions for COVID and what's going on in offices. I can't tell you exactly what's going to happen today because none of us know. We navigated through it very well last year. We'll continue to try and navigate through it as best we can. If we have something else to say, we'll tell you.

Got it. Turning to G7. As we think about it, I just want to make sure you were planning to submit in fourth quarter in the U.S. I want to confirm. And if you could give us a time on when that was submitted? And there was some language in the release this morning about navigating the environment in Europe. How do we think about where that approval sits right now?

Sure. We're going to stick with Q4 as far as submission. Our initial feedback from the FDA has been exactly what we would have anticipated. Our experience with the FDA, Robbie, has been very consistent. We work very hard to get on the same page as them. We tell them what we're going to do. We then do what we say. And when we do that, we've been very efficient getting through the FDA regardless of what the process is, and they've been very cooperative with us. So I have no complaints there. Where we have not done well with the FDA in the past is when we don't do what we tell them we're going to do, and we submit something that surprises them. We've not done that with G7. G7 is -- you saw the size of the study, you saw the number of [indiscernible] pairs, we tried to absolutely leave no doubt as to how this product performs. So it's submitted. I won't predict a timeline for approval because, again, of all that's going on in the world, we have a timeline baked into our models. We know of nothing to tell us when we are going to hit that time line. With respect to the CE mark filing. We would have expected CE mark this quarter as well. We would have liked to have launched and reported on that today, but we don't have CE mark yet. We're going through the MDR process, which are the new regulations in Europe, and we've just been going through a lot of interaction with our regulatory authorities over there. We hope we're getting to the end of it and winding down. We don't see any showstoppers as far as gaining approval. We just don't have it. And once again, I have learned a valuable lesson for myself. The sense of urgency of the approving bodies probably don't match mind. So I can put all the pressure I want. We've had good cooperative interactive discussions here, and we hope we'll get through it in the near term.

I think that all investors want you to be able to predict regulating bodies, but at the same time, it's a very tricky business to be in.

It really is.

So Kevin, I've always had this view that the glucose sensing market is large enough for, at a minimum, 2 players, and it's not an either/or game for you or Abbott. But I got to say, the data you had in the slides today was incredibly impressive, accurate amongst pediatrics and adults, and that's very difficult to do across all days, across all metrics. So how are you thinking about not just at this point share gains, but maybe competition and potential -- sorry, not just penetration for CGM, but also share gains at this point. There's a lot of Libre patients. Why would they remain on a Libre, given the accuracy of this product?

Well, that's what I keep saying. I would tell you, first of all, let's be clear, there is room for multiple players in this market. This is a very large market to address a very large problem on a worldwide basis. What we believe with accuracy, we've moved the needle several times, Robbie, and I go back here a long time. When we first launched G4, it was the first product that actually delivered what we promised and that was when our company took off. And then again, with G6 with no calibrations and the performance there combined with this connectivity and better form factor. Now G7 is better on all those fronts. We certainly have -- we have to perform better. We don't have the budgets of our larger competitors as far as going to markets. We don't have the infrastructure of our larger competitors. So we hang our hat on performance, and we knew that would be the case with G7, which is why we did a study this large to make sure we can validate the performance that we've been seeing. So we will push hard. We'll push our performance hard. The form factor is spectacular. We'd love to gain share, and we certainly have gaining share on our 5-year plan. Don't get me wrong. We have to execute on the gaining share front, but the share of this market could become so big if we can expand into basal insulin in the U.S. and type 2 nonintensive in the U.S. and open up more of these international markets. The pie is going to get bigger, it's not going to get smaller.

Yes. Maybe to follow up and then there's a lot of we could talk about, including the reimburse -- or the guideline changes for basal insulin and the statement that's made there. But I want to focus on type 2 intensive in the U.S. and even nonintensive. And this is one area. We do doc calls and we hear Abbott came around a couple of years ago with disposable sensors and reimbursement is okay. And so there's just this good foothold that Abbott has been able to get, especially in primary care setting today. It's one area you've not focused on as much because you were growing so fast in other areas and sampling was difficult with the nondisposable transmitter. So as you think about the go forward, you've ramped up your direct-to-consumer spend. G7 will allow for much easier sampling. How are you thinking about the primary care and the type 2 intensive and nonintensive patient with G7 in the future?

Well, the primary care, the best way I can describe it is: A, we've got to get access to these people, which is why we doubled the size of the sales force. And they did do well, bringing in literally double the prescribers outside the endo market than what we had in the past. So those efforts worked, but we still have a long way to go. We don't have the breadth and depth of our competitor in going into this market. We also have to make it easier to get our product as -- the selling points that come against us in the field have always been it's too hard to get a DexCom. And I've had numerous people tell me stories, including one of my wife's high school friends, he went to his doctor and requested a DexCom, his PCP and the guy said, well, I can't get you one of those, it's too hard for me to fill out the paperwork, not knowing the guy had pharmacy coverage. So we've got to increase our awareness, and we've got to make it easier for the PCPs to write prescriptions. And we put a number of models in place to do that, but it's a full-on effort for us. We think G7 will better position us, but we don't have to wait for G7 to do these things because we believe G6 is a much better product for these patients, if we can just get it to them. Medicare reimbursement rates, for example, are the same for us and our competitor. But if you ask the PCPs, they would all say our competitor is less expensive, but it's not, and both go through the DME channel. So we've got some awareness to build and some work to do. We have programs in place to do that and are confident we continue to make inroads. On the nonintensive side, I've often said we need a different business model. We also think we will need a different experience overtime to whereby it is a different app. You saw we've launched DexCom ONE with the new app. We think a new app in the type 2 space will be very useful as well, and we can have differentiated product from our type 1 product that's integrated -- can integrate with systems and provide all the connectivity and alerts and alarms that we do, but we can charge it at a different price point and make more accessible. And that's what we'll do over time, but it's going to take a while. But that -- those are our thoughts.

Great. Maybe with the last 2 minutes, there's a lot to touch on, obviously, but maybe you can spend the last few here just on the basal insulin opportunity. There is plus or minus 4 million patients in the U.S. from what I remember. That's about double the type 1 opportunity. It's now a Level A of evidence, I believe, in the latest guideline update. Reimbursement is the next step. How should we think about the timelines to move into that market and the rate and use case that exists there?

Well, all I can say is, I think it will move faster than it took us to get into the intensive insulin market, which has been a multiyear effort. Really culminating in 2017, went at conference, we got Medicare approval 2 days after I said it would take 18 more months before we got Medicare approval. I think our mobile study laid the groundwork to show that the outcomes for this population are very effective. That A1c came down and time and range was better, pretty much everything across the board. We'll continue to present that evidence. I think the key here is, certainly, we'll go to CMS with this evidence and payers and try and push it. It will take time. I can't give you the exact timeline, but we're confident we can get there, and it does literally double the size of the population we can address here in the U.S. And I think these patients deserve CGM as well. And again, even G6 with this larger form factor, the patients in the mobile study, they had no problem wearing the device full time. They loved it and the same with all the other type 2 studies that we do. So I think we're well positioned to go after this as soon as -- but we do need reimbursement to make it go and to make it go faster.

Got it. Well, Kevin, Jereme, unfortunately, we have to stop it there, but thanks so much for your time today, and hope you have a great rest of the day.

Thank you, Robbie.

Thanks for having us. Bye-bye.