Senseonics Holdings, Inc. (SENS) Earnings Call Transcript & Summary

Good morning, and welcome to the Senseonics Holdings, Virtual KOL event. [Operator Instructions] As a reminder, this call is being recorded, and a replay will be made available on the Senseonics website following the conclusion of the event. Before we begin, I'd like to reference you to the forward-looking statements and legal disclaimer slide on the screen. I'd now like to turn the call over to Tim Goodnow, President and Chief Executive Officer at Senseonics. Please go ahead, Tim.

Good morning, everyone, and thank you for joining us today. I'm Tim Goodnow, the CEO of Senseonics. We appreciate your time and interest as we share exciting developments about our Eversense 365 continuous glucose monitoring system. As many of you know, Eversense 365 is the world's first and only CGM system that provides continuous glucose monitoring for an entire year, this with a simple single sensor insertion. Additionally, as part of our recent approval, we're excited that the FDA labeling recognizes the accuracy that we've achieved while requiring only one finger-stick calibration per week for the year. Eversense 365 also received the iCGM designation, which not only speaks to its high level of accuracy, but it also enables pump connectivity for those using AID systems. And we're happy to report that Senseonics is currently working with those pump companies for these integrations, and we look forward to reporting on these developments in the coming quarters. Its 1-year life is significant since traditional CGMs require users to replace their sensors every week or 2, which involves time-consuming sensor insertions, warm-up periods, discomfort from multiple insertions and the resulting CGM interruptions due to the need for multiple sensors each week. We're confident patients will prefer the simplicity of a quick weekly fingerstick over the inconvenience of frequent sensor insertions. In the real world, many sensors end early and do not last the advertised life of 10 to 14 days. By minimizing the need for frequent sensor insertions without short-term transcutaneous sensors, Eversense 365 offers a much more convenient and user-friendly experience for patients. For providers, a continuous 1-year sensor enables high compliance and minimizes data gaps, lost sensors, patient attrition and patients taking extended breaks from their device. So this recent FDA clearance is not just a milestone for Senseonics but a significant breakthrough in diabetes technology management and a 1-year sensor has been our goal from the beginning. And our market research confirms that 1 year is the time frame that patients want. Our world-class technology team has achieved what very few thought was possible. Now we're honored and excited to bring this groundbreaking technology to the millions of patients who have a need for a solution that delivers on the full promise of CGM, optimal diabetes management, protection and the convenience. Eversense 365 delivers on all fronts without the hassles and frustrations of a short-term CGM. Today, we're here to discuss the clinical and population health implications of a 1-year sensor versus the need for at least 25 and frequently more transcutaneous sensors every year. Before introducing our 2 speakers, I want to first walk through what we hope you'll take away from today's discussion. We could speak all day long about the attributes and benefits of Eversense 365. Now that the product is proved, our focus turns to supporting the commercial execution and ensuring that we can provide access to all patients who can benefit from our 1-year sensor. We're pursuing a multipronged commercial strategy to make Eversense 365 available as broadly as possible, far beyond our previous generations. As part of this strategy around our partnership with Ascensia Diabetes Care, led by Brian Hanson, who earlier joined as Ascensia's President of their CGM business, Brian has a long and distinguished career in leading commercial organizations to success. Previously as Chief Commercial Officer of Tandem Diabetes, this will be our first commercial launch with Brian at the helm, and we are confident that his knowledge and expertise along with the team he has built is poised to make Eversense 365 our most successful product launch ever. We're thrilled that Brian will be joining us for our upcoming third quarter earnings call in November. So you'll have an opportunity to ask him questions about the launch in just a few weeks. Today, we're honored to have 2 esteemed clinicians and health care leaders that are with us who will share their insight and experience with Eversense 365, Dr. Jeff Ciaramita and Dr. David Ahn. Dr. Ciaramita is the President of Specialty Service lines at Mercy, one of the nation's most innovative health care systems. He has been instrumental in our collaboration, leading the integration of Everson 365 within Mercy Health System. Dr. Ciaramita will discuss the significance of our collaboration as it relates to patients, the cost of care and the importance of innovation within health care. This collaboration with Mercy will demonstrate a new approach to bringing Eversense to market that will knock down many of the barriers that patient face in starting and continuing on CGM. It represents a major step forward in making a long-term CGM accessible to a broader population of people with diabetes and we're thrilled that things have already begun underway with the first 365 insertion having been completed at Mercy 2 weeks ago. The integration of Eversense 365 with the Mercy's health care system is a pivotal staff. Mercy's commitment to patient-centered care and health care innovation aligns perfectly with our mission to improve the lives of people with diabetes through cutting-edge technology. Together with our new remote patient monitoring capability, we aim to enhance patient outcomes, reduce health care costs beyond the CGM alone and set new standards in diabetes management. With a successful commercial launch through Mercy, we look forward to collaborating with other health systems and ACOs to expand access to tens of thousands of patients in other systems. Mercy is already serving as a valuable case study and is committed to helping us translate its approach and results to other leading health systems. These systems want self-sustaining solutions and do not have time for repeated starts and stops. Our health system strategy is uniquely enabled by Eversense 365 and is a significant differentiator compared to previous launches. In addition to the traditional professional sales channel, and direct-to-consumer strategies that rely on one patient and one provider at a time, this approach enables a system to proactively identify patient populations in need and accelerate the realization of the benefit of CGM for both the patient and the health care system. Before going further on Mercy and the opportunity we have with its health system, it's important to understand what the core of what makes Eversense 365 essential to the future of diabetes care as its clinical value to both the patient and the provider. In a moment, you'll hear from Dr. David Ahn, who has been using Eversense in his practice since our first 90-day sensor. He'll share with you the impact Eversense has had on his patients and how it sees Eversense 365 extending that even further going forward. Dr. Ahn is an endocrinologist specializing in diabetes and metabolism and currently serves as the Chief of Diabetes Services at Hoag Medical Group. With a passion for empowering individuals with type 1 and type 2 diabetes, Dr. Ahn has a keen interest in depth of experience in diabetes technology, including continuous glucose monitors, insulin delivery and AID systems. Following their presentations, we'll open up the floor for a live question-and-answer session. We encourage you to submit your questions to questions at lifesciadvisors.com and we'll address as many of them as time allows. Once again, thank you for joining us. We believe that Eversense 365 represents a significant advancement in diabetes care and offers a highly differentiated solution. and we're excited to now have this breakthrough technology for people with diabetes. Now without further ado, I'd like to turn it over to Dr. David Ahn.

Hello. My name is David Ahn. I'm an adult endocrinologist. I'm the Chief of Diabetes Services for Hoag Hospital, which is a large regional hospital in Newport Beach, California. Personally, I'm very passionate about diabetes technology, which is why I'm really happy and honored to be able to advocate for Eversense 365. The Eversense 365 is a different type of CGM, which makes me really excited. I'm a big believer in options for patients because every person with diabetes is not the same. And I think it's easy for us to just assume everybody is going to be best with the same type of system, but that's just not how it is when it comes to diabetes devices. You have to find the right CGM for the right person. And the Eversense 365 is a totally different type of product, very different from the transcutaneous competitors on the market. I'm sure you already know this, but obviously, the fact that this is a 1-year sensor versus a 7- to 15-day sensor is such a big difference. And I think one of the biggest differentiators comes in the removability of the sensor. So I always like to kind of describe it by, I think with current CGM systems, diabetes has been kind of in this box. We've all kind of gotten accustomed to this world where you have to wear a sensor, it has to be on you 24/7 for 7 to 15 days, if it falls off, you have to put it back -- or if it falls off, you can't put it back on, and you have to get it replaced at the pharmacy. And when I talk to patients who are newly starting CGM, that can be very intimidating. Some of them are not yet ready to fully expose their diabetes to the public. So the fact that they can have a continuous glucose monitor that they can take off when they get shy and put it back on when they feel more comfortable is really quite fascinating for patients. And a lot of times, it will get them over that hump of being willing to try CGM. And I live in Orange County, so I have a lot of patients that go to the beach and they love the fact that they can just take off their CGM, go swim in the ocean and then when they come back to shore, put on their CGM. So it's great to have this completely different type of CGM that has a totally different list of benefits that -- for patients to choose from. Other things that make the Eversense particularly unique is the fact that it has vibratory alerts. So you may or may not have thought about this before, but the Eversense is the only CGM on the market that has a vibratory sensation that comes from the motor on the transmitter so you don't have to have your phone nearby to know whether you're going high or low. So imagine you're giving a presentation, you're at the meeting, you turn off your phone because you don't want it to embarrass you. But you can still know if you're going high or low based on a vibratory pattern that only you will be able to feel during that meeting. Or similarly, if you're -- I have a patient who was kayaking in the ocean and he would leave his phone on the shore because he didn't want it to get damaged or lost, but he would still wear his Eversense because he would be able to know just based on the vibrations, whether he's going too high or too low. Another population that does really well on the Eversense are patients that have adhesive issues with continuous glucose monitors or with Band-Aids or things like that. That patient population is actually a larger percent of the population than you might think because type 1 diabetes is an autoimmune condition just like a lot of these adhesive allergic reactions that people will have to various adhesives. So the Eversense adhesive is much more gentle on the skin because it's meant to -- it doesn't have to be designed to last 10 to 15 days. Usually, the Eversense adhesive can be changed every day or multiple times a day, you can actually peel it off and put it back on a couple of times. So the adhesive is extremely gentle on the skin and essentially, we'll have no allergic skin reactions. And that can be a game changer for my patients because many of my patients aren't able to wear a traditional CGM at all or they just can't wear it long enough because they get such skin reactions from the adhesives. Another big frustration that people have with the mainstream CGMs is that they can get knocked off. And like I alluded to earlier, if they get knocked off, you can't put back on a traditional CGM. Thankfully, with the Eversense, literally, you can just slap back on the transmitter, it's actually designed to be taken off and put back on. So there's -- even if you walk through a door frame and it knocks off the transmitter, it's totally fine because you could just slap it right back on. You don't have to contact the manufacturer to get a replacement. You don't have to explain everything to a pharmacy, you don't have to worry about it, you just slap back on the transmitter, which is a huge advantage to the Eversense. So I also find that patients who are quite athletic, really like to use the Eversense as well because I guess it kind of speaks to the same thing, but I have a couple of patients who like to do mixed martial arts. Naturally, when people are doing physical combat sports, they might knock off the sensor. And so it's really nice to have a sensor that they can put back on. The other thing that's really special about the Eversense is that it's quite accurate in the low blood sugar range. The low blood sugar range is particularly problematic with traditional continuous glucose monitors. There's a phenomenon that you may or may not have experience if you've worn one in your own personal life, but there's something called compression lows, where if you're wearing a traditional continuous glucose monitor and you fall asleep and you kind of are applying pressure to it while you sleep, there can be a measurement artifact where it produces a false low alert, and this can be very disturbing to your sleep, to any partners who might be in your bed with you, it's disturbing to their sleep when it's purely a measurement artifact. It's not a true low blood sugar. But the good thing about the Eversense 365 is that it has virtually no issues with pressure lows and it's been shown to be extremely accurate in the low blood sugar range, which, of course, for patients with type 1 diabetes or type 2 diabetes on insulin, we're very concerned and worry about low blood sugar accuracy. So the fact that the Eversense 365 is so accurate in the low blood sugar range is a huge feather in its cap. I do have a pretty large population of Medicare-age patients who have found Eversense to be a great option for them. A lot of times, they have dexterity issues, their fingers aren't as -- they're not able to do as fine motor tasks. So the fact that they don't have to do these insertions every 7 to 15 days is extremely valuable. I do the heavy lifting or the proceduralist does the heavy lifting by putting the sensor in and all they have to do is put on the transmitter, but it's just like plop and stick and pull off and -- so it's very easy. They don't have to press any buttons or apply any pressure or do any fine motor movements. Also for that Medicare age population, it has vibratory alerts, so if they're hard of hearing and then they can't hear the typical sound alerts from their phone or their watch -- and I find that sometimes the older population, they're great at using smartphones, but they get confused by the alerts. So I find that they do really well with the vibratory alerts on the Eversense because there's no confusion. They know exactly what the alert has to do with, it has to do with their sensor and there's a unique pattern for high blood sugar and a unique pattern for low blood sugar. Also unique to -- or not unique, but especially important for the Medicare population as we get concerned about low blood sugar. As you get older, we're more prone to low blood sugar episodes and more vulnerable to them. So the fact that the Eversense 365 is so accurate in the low blood sugar range is crucial for the patients that are above the age of 65. So I found that many of my patients do very well on Eversense who are in the Medicare range. Along those lines, the amount of bulk and just supplies that you have that come with Eversense is so few. So imagine over the course of the year, how many boxes of supplies, disposable plastics that you're having to throw away if you're going to use something like a standard transcutaneous continuous glucose monitor. But when you're using the Eversense, literally all you have is a charging cable which you can actually use a generic micro USB, any micro USB charging cable to charge the Eversense 365 transmitter. And really, the only other thing you have to carry around are adhesive pads, which are basically the thickness of like Post-it notes. So you can theoretically have a whole year of supplies in a simple box in your hand of adhesive pads and a charging cable and the Eversense transmitter. And that's pretty mind-blowing to patients as well because I don't know if you have any family members or loved ones with type 1 diabetes or something like that, but going to Europe on a 2-week trip can be a real point of stress because you're having to carry around extra Dexcom supplies just in case they fall off because you can't replace it, which we already talked about before. So something like the Eversense, I think, just presents such unique value propositions that I love that there is another completely different type of CGM on the market. Like I said earlier, I don't think that every person necessarily needs to be on an Eversense. But I think the fact that you can have an option for patients that are struggling on the current transcutaneous sensors is what really makes the Eversense so valuable. And kind of speaking to that point, one of the things that I'm really excited about the Eversense 365 for is that it does integrate with automated insulin delivery systems. You probably know that automated insulin delivery systems have been a game changer for patients with diabetes, but I have many patients that can't go on automated insulin delivery because they can't tolerate or they can't work with the current options of CGM on the market. So I'm so excited that Eversense 365 will eventually be able to partner and integrate with these automated insulin delivery systems. So for my patients that have to use Eversense because it's their only functional CGM option, they'll finally be able to unlock the glucose control benefits that automated insulin delivery brings to the market. And I have some patients right now who like, literally, they've told me they're going to contact their pump manufacturer because they cannot wait until it integrates with Eversense 365 because they'll finally be able to have those benefits of automated insulin delivery. One concern that I think some people get scared of when thinking about Eversense is the whole concept of the procedure. But I found that it hasn't been a barrier at all. I have one patient who actually prefers Eversense because he is needle-phobic, which is a little bit might seem counterintuitive because it does involve a procedure. However, the way he sees it is I'm the one doing the procedure, so he doesn't have to really think about it it's currently once every 6 months, but his next one, of course, is going to be once every year. And after that, he doesn't have to do the puncture that the CGM brings every 7 to 15 days. So he really likes that even though he's very averse to incisions and needles, he actually prefers the Eversense because it takes that process sort of away from him, and it just offloads it onto the inserter once every 6 months or a year, depending on which brand of Eversense you're talking about. The other thing is the insertion process is extremely feasible and extremely doable if you're interested in doing it. So for me, I like doing the procedures. I like being able to do different types of things in my practice and having different types of interactions with my patients. So for me, I found it to be really enjoyable and refreshing to be able to do the procedure. The insertions are very, very quick, from incision to close, it's 30 seconds. The removal is variable in time because you do have to find it and pull it out. But still, it's 95% of the procedures are going to be under 5 minutes. And if they go a little bit longer, it's under 10 minutes tops. So the procedures are very straightforward, and that hasn't really been an issue at all with me. Similarly, for doctors or I guess, I should say, for doctors that aren't interested in doing the procedure, there is a really vast inserter network that Eversense has built out over the years. So they have -- so there are other clinicians that are ready and able to do these procedures if the endocrinologist or diabetes prescriber is not wanting to do the procedure themselves. So finding an inserter should be very doable for patients across the country. Yes. So overall, I think the Eversense is a really fantastic option for patients that are just not finding the current solutions is fitting them. One of the things -- one of the pain points that I didn't really highlight is dealing with pharmacies and durable medical equipment supply companies. That's probably one of the hardest and most frustrating things now for people living with type 1 diabetes especially, but also type 2 diabetes, having to reach out to these pharmacies and DME companies every 3 months, every 6 months, to get more supplies -- and that's something I'm also very much looking forward to with the Eversense 365 is that you're only going to have to deal with your insurance company to get a new sensor every year. And I think patients will really welcome that time frame. So in many ways, like I said, I think the Eversense has always been a great product, a great option for patients. But I think the 365 product, especially really upgrades and clears a lot of the hurdles that some people might have previously had with Eversense, and that's why I'm very excited for Eversense to see their market grow. I think especially as they integrate with automated insulin delivery, it's going to become a very popular option for people on the market that just are not finding that the Dexcoms and Libres and Medtronics of the world are meeting their needs as much as they should. So I'm really excited for the Eversense 365. So thank you so much for allowing me to share with you about my experience with Eversense. I'm super excited about these next 6 months, and I can't wait to see the popularity of this system rise. So yes, now back to you, Tim.

Thank you, Dr. Ahn, for your insights and for sharing your experiences helping patients manage their diabetes. I especially appreciated your passion for how greatly patients benefit from new-generation diabetes management technologies like CGM and AID systems. We're especially proud to have secured an iCGM approval for Eversense 365. And as I mentioned earlier, I look forward to updating you further as we integrate 365 with AID systems. It's now my pleasure to turn the call over to Dr. Jeff Ciaramita, who, as I mentioned earlier, is President of Specialty Service Lines at Mercy. Thank you, Jeff. The floor is yours.

Hello, it's nice to be with you all today. I'm Dr. Jeff Ciaramita, I'm practicing cardiologist and President of Specialty Care at Mercy. It's a true pleasure and exciting opportunity for me to be speaking with you all today. At Mercy, we are one of the top 20 largest health care systems in America, with nearly 5,000 employed physicians and advanced practice providers covering more than 50 hospitals and 1,000 clinics across our Midwest. Our mission and goals have always been focused on consumers, our patients. Our patients deserve the trifecta, what I say is delivering the highest quality yet lowest total cost of care with a deep focus on innovation and a frictionless experience when they seek us out for their care. At Mercy, as the #1 performing ACO for quality metrics in the United States today, we take pride in our excellence in managing chronic conditions like diabetes, which affect millions of people worldwide. Our commitment is to continually seek out and adopt cutting-edge technologies that can significantly improve the lives of our patients. We were thrilled to announce that Mercy was the first health system in the world to implant the Eversense 365 continuous glucose monitoring system. This groundbreaking collaboration with Senseonics marks a milestone not just for our organization, but for diabetes care globally. As with all chronic conditions such as congestive heart failure, chronic kidney disease and diabetes, access to real-time actionable data is imperative to actually improving medical outcomes. These outcomes include overall long-term diabetes control but also immediate benefits, such as keeping patients out of the emergency room or having glucose emergencies requiring intervention. Obtaining constant and reliable glucose data is the foundation. And at Mercy, we recognize that the positive outcomes of CGM utilization are well established. However, the reality is that the majority of patients who could benefit from a CGM today are not using these devices. They are either not started on a CGM or alternatively are started on a CGM, but don't continue to take or take extended breaks from their device. At Mercy, we have 30,000 patients alone on insulin that could benefit from a CGM. This underutilization isn't due to a lack of awareness or reimbursement. Both of those are firmly in place. Instead, challenges like complicated acquisition processes, limitations of traditional CGM devices and limited patient understanding of the benefits all hinder higher adoption rates. This is where the advantages of Eversense and the capabilities of Mercy come together. With Eversense, our patients will experience exceptional accuracy and unparalleled convenience in managing their diabetes. The ability to monitor glucose levels continuously for up to a year with a single and simple sensor insertion is simply a game changer. It minimizes the inconvenience, discomfort and higher costs associated with frequent sensor replacements that has thus far limited the adoption and compliance with CGMs in the United States today. We anticipate that this advanced technology will lead to improved glycemic control and reduction in both hypo and hyperglycemic events by providing consistent and reliable glucose data. Patients can make more informed decisions about their health. Clinicians, too, will benefit from access to comprehensive data, allowing for more personalized and effective treatment plans that soon will be incorporated directly into the nation's largest electronic health record. Beyond all of the obvious patient benefits that a 365-day CGM provides, I believe the impacts on population health are transformative and cannot nor should not be underestimated. That is why health care system of our size, with greater than 50% of our overall system revenue coming from patients within some form of value-based care reimbursement model is committed to this unique, innovative and expansive collaboration. We absolutely expect a significant reduction in diabetes-related hospitalizations and emergency room visits. Continuous high-fidelity data results in tighter glucose control, which means fewer acute events that not only improve patient outcomes, but also reduces the overall cost of care. Long-term monitoring leads to cost savings by preventing complications before they require intensive care acutely and in some cases, an extra ER visit or hospitalization. Both of these situations hurt the patient's outcomes, their experiences and do not support our focus on value. Eversense will also positively impact the known long-term deleterious consequences of uncontrolled diabetes, with the associated higher costs appear therein, a key metric that matters to everyone in health care. At Mercy, we're dedicated to adopting innovative solutions that improve patient care in every community that we are honored to serve. Back in 2015, Mercy invested more than $50 million to build the world's first completely virtual peer hospital with the ability to deliver remote patient monitoring inside that facility. Building upon our experience and expertise in this realm, we are perhaps most excited about the near-future plans to similarly improve diabetes care 24/7/365. Later this year, we'll be implementing Eversense's remote patient monitoring service at Mercy and Mercy Virtual. This service will allow clinicians to monitor patients' glucose levels and patterns in between office visits, enabling timely invention, personalized care adjustments and the opportunity to prevent avoidable costly emergency room visits. No longer will we be solely reliant upon patients giving us occasional blood levels during their physician office visits that are many times many months apart and often after long delays to treatment plan changes that should have occurred much sooner. Remote patient monitoring and its inherent proactive approach means we can address potential issues before they become serious problems, and all the results will be a part of the patient's electronic health record. I know this will enhance patient engagement and lead to even better clinical and economic outcomes. We believe that our integration of Eversense 365 into Mercy's care model and platform will serve as a model for other health systems. Our goal is to establish a new standard, a much higher standard in diabetes population management that prioritizes patient convenience while proving better clinical outcomes. The scalability and adaptability of this approach make it a viable option for health systems of all sizes across our country. And because we will always keep patients in the center of everything that we do at Mercy, we are committed to collaborating with other health systems to expand the adoption of this transformative technology. By sharing our insights and results, we hope to encourage widespread adoption and ultimately improve diabetes care on a larger scale. The collaboration between Mercy and Senseonics' Eversense exemplifies our dedication to improving patient lives through innovation. We are excited about the possibilities that Eversense 365 brings not only for our patients but for the future of diabetes management. Mercy is honored to be recognized as a pioneer to implant the world's first 365-day CGM within this collaboration and look forward to engaging with the diabetes community to further this important work together. Your support and interest are invaluable as we embark on this journey together. I really want to thank you for your time and attention today. I'm excited to answer any questions that you all might have as well. Thank you.

Thank you, Jeff. We are indeed grateful to you and to the entire Mercy team for your support, and we look forward to a long and fruitful relationship, improving the lives of people with diabetes. With that, we will now open it up to take your questions. You can direct those to Dr. Ahn, Dr. Ciaramita, to me and also joining us for Q&A is our Chief Medical Officer, Dr. Fran Kaufman.

Great. Thank you, Tim. [Operator Instructions] So our first question comes from Marie Thibault at BTIG.

Doctors, really appreciate your insights here. I have 2 questions. I think the first is probably best suited for Dr. Ahn. You talked a lot about the perceived advantages of Eversense and you obviously have a lot of familiarity with the 6-month device. I'm just curious how much of a difference we will see between the 1-year option and the 6 months. Do you have a sense of how many of your candidate patients would say no to a 6-month, but yes to 1-year? It's obviously much more convenient.

Great question. I think -- I mean, I've already seen personally an uptick in responsiveness to my patients to the Eversense system. I would actually say the bigger impression that I think for the bigger value, obviously doubling the length of time is huge. But I think the change in calibration requirement is actually the biggest advantage to patients, that are appealing to them who maybe passed on it before, so the fact that you're going from 1 calibration a day to 1 calibration a week, I think is the bigger advantage that patients are drawn to. So I am seeing a noticeable change in attitude. I think a lot of times when I say 1 calibration a day for the 6-month product, patients would kind of be like, okay, that's cool, but maybe not right for me. But when I say it's 1 calibration a week, pretty much everybody is like, oh, I can do 1 calibration a week. So I think that's the biggest change that I've seen in my patients when I talk to them.

Okay. That's really, really helpful, definitely. 1 week -- a weekly calibration, very helpful. And then maybe my second question for Dr. Ciaramita. At Mercy, it's a very interesting effort you're taking -- undertaking here. I'm curious how -- if I'm remembering correctly, this was going to be done through the electrophysiology unit. I'm curious how that's fitting into the workflow and what you're seeing so far with some of this -- with the procedures getting done in the electrophysiology. We cover a lot of companies in EP and certainly know those folks are very, very busy.

Yes. Certainly. Good morning, everybody. It's great to be with you. To answer your question, in Mercy in St. Louis, where my office is right now, we employ over 1,200 physicians and nearly another 1,000 advanced practitioners. As we started this journey in collaboration with Senseonics a year ago, we outlined a broad team that would look at all of the different, we'll call it, work streams that would promote faster, greater and more broad adoption, essentially, of the Eversense 365. One of the things that we heard across our system with Mercy was that in the past, there have been challenges with what, we'll call it, an implantation strategy. And what I mean by challenges is just simply, we have very busy primary care docs, endocrinologists, those that came up, maybe not necessarily with a procedural background or procedural bent even, if you will, that would have interest in implanting these. For us in St. Louis, we have 65 employed physicians, we have more than that surgeons, and we have a number of physicians who not only have a preference and interest in implantations of devices. So in my world, my cardiology world, we know there's plenty of implantable cardiac monitors that we implant every single day. But that predominance and number of physicians that we have allowed us to establish implantation clinics. So essentially, although you referenced electrophysiologists, we have surgical offices, we have procedural offices all throughout the metro area, where it's not a one-to-one, "Hey, can we get this patient in or slow things down?" We've actually built clinics where we'll be able to do 10, 20, even 30 patients all very quickly in a short period of time out of 1 office. So I think the answer is we have experience in implanting in our offices and our lower cost centers, not bringing patients into hospitals or some of those higher acuity care. And so that's where we're going to start because we believe there is the greatest chance for success.

Our next question comes from Colin Clark at Stifel.

I'll start with one for Dr. Ahn. I had a question -- another question about the duration extension from 180 to a full year. How does it actually play out in your practice? And maybe how does it play out for other physicians? For you, have any patients in particular, been holding out that now would consider an Eversense now that it's a full year? And does it expand the number of patients to whom you'd consider prescribing Eversense? And then I guess you've been at the buzz -- you've been in the middle of the buzz of Eversense for so long, does this change how it resonates with your fellow physicians when you hear people talk about Eversense and who they're willing to prescribe to?

Great questions. I'll try to remember them. I know they're all kind of related. So I guess to start from most recent, I do think there is a lot more interest in the prescribing community and obviously, the patient population as well. I think there's a variety of reasons for this. I think I think the CGM market has matured quite a bit. And I think with the current products, the current transcutaneous products on the market, they're solving problems for a lot of people, but I think they are also gaps in the population where we all know now, right, that essentially CGM should be standard of care. But for a sizable number of patients, they're just not finding the current solutions to be a good fit. The sensors don't last long enough. They have accuracy issues, customer support issues. And it's funny because certain patients really have repeat problems. And it's very frustrating for them. And I've talked with them, and they've been waiting for other options. So when I -- a lot of times if someone's complaining about these things, I'll always mention, hey, there are other options on the market like Eversense. And now when I tell them, it's 1 year, down to 1 calibration a week, it's going to integrate with insulin pumps. And I think that's when patients now are kind of like, oh, like I remember you mentioning it before, but now I'm a lot more interested. So I do think the market is kind of changing and there is more receptiveness now to different options, almost as the market has matured. I kind of liken it to -- the CGM market to like the iPhone in the sense that like for the first 5 years, you could do no wrong, right? Any CGM was better than no CGM. But now I think people are starting to become more critical of the options on the market and noticing that a lot of them just by nature of being transcutaneous have the same flaws, that aren't going to necessarily be fixed by small iteration. So I think that's why I'm so excited about having a totally different paradigm for CGM.

That's really helpful. It seems like 365 is the magic number. I guess I also had one question for Dr. Ciaramita about Mercy in particular. We generally hear about lack of coverage or awareness as primary reasons patients don't adopt CGM, but you mentioned patient acquisition processes, limitations of existing CGM as some of the reasons that Mercy patients might not have adopted sensors. These tend to be a little bit out of the norm. Can you speak a bit to the specific actions Mercy is taking to knock down some of these adoption barriers that we don't generally hear about?

Sure. That's a great question. First, maybe if I could just take a brief moment about Mercy's kind of primary care background. Today, as I mentioned just a moment ago, over 50% of our system revenue, a little over $9 billion of annual revenue is tied to a reimbursement model that's some form of risk. So that could be Medicare Advantage, ACO, could be our own employee patients, but it's also all of our direct employer contracts that we have. Said another way, we get compensated on different factors that primarily include quality outcomes and our ability to lower costs. So that's different than your traditional all-in, only fee-for-service model with our massive patient populations that we have. And nearly 1,000 primary care providers that we have across our 4 state system, we get compensated and benefit if the patient wins, the patient wins by higher quality. So we are looking to adopt, and this is what sparked our interest from a population health perspective, any technology that would give us higher fidelity data, but more importantly, higher compliance on data. So to be clear, we love CGMs because CGMs provide data. But we really love, and our interest a year ago when 365 was on the horizon, came because we believe that there's a higher compliance rate proven from the longer uninterrupted data that can be created from the 365 monitor. In turn, a system like ours that has an integrated platform, that has de-identified, tokenized data, in our Mercy Mayo Clinic platform. Our intelligent data platform, what we're looking for is not only can we get continuous data that's high fidelity for that acute patient, but how can we start to apply predictive analytics to predict outcomes before they happen in our patients. So the bottom line comes for us, the more data that we have and the more ability to get continuous data, we believe we can affect broader entire population outcomes. From there, the more we publish our outcomes and improve patient care, we think the adoption will go up continuously. And we think our scale can help add to that a little bit faster than the traditional models that have done in the past.

Thanks for the questions, Colin. So I'll now turn it over to Tim to read the questions that came over the webcast.

Great. Thanks, and we'll pull those up. Yes. Okay. So for the folks that are writing in, we do appreciate it. First up, a question for you, Dr. Ahn. Can you -- and you touched a little bit on this, but maybe just a little bit more color on any pent-up demand that may exist for the 365, and then what your experience has been with out-of-pocket patient costs as they choose that might be different with Eversense 365 versus the other transcutaneous options that are available.