Tandem Diabetes Care, Inc. (TNDM) Earnings Call Transcript & Summary

Okay. Good morning -- or good afternoon. Welcome to the 42nd Annual Raymond James Institutional Investors Conference. I'm Jayson Bedford. I cover medical devices here at Raymond James. It's really our privilege to have with us today the management team from Tandem Diabetes. With us today, we've got the company's CEO, John Sheridan; and CFO, Leigh Vosseller; and the company's Chief Administrative Officer, Susan Morrison. So we're going to be doing mostly fireside chat, but I wanted to give John a quick opportunity to kind of set the stage, if you will.

Absolutely. Jayson, thanks very much for having us today. We're excited to be here. I just want to say that we are really excited about 2021. I think it's fair to look back and say that 2020 was a great year for us. I think that the success of the company was largely driven by the appeal and the uptake of Control-IQ, which has really been spectacular. The physicians and the health care providers love the product. They have great confidence in it, and they trust it, as I mentioned on the call. We have over 100,000 people now that have upgraded to the system and are using it. And the physicians are seeing the results, and the results are much better than we have anticipated. We're seeing people today that have time in range in the high 80s and low 90s, and it's not uncommon to see that, and people are excited to see it themselves. So it's really been a great year. The entire company did a fantastic job, particularly when you consider the -- sort of the COVID situation that we've had to deal with. Looking forward to 2021, I think we feel great about our guidance. We look forward to the product coming to -- we look forward to Control-IQ continuing to do well this coming year. We think it's going to be very competitive. We know there's going to be competitive noise in the second half of the year, but we still think Control-IQ will do very well. And we're excited about our pipeline and the products that we are bringing to market this year. And I'm sure we'll talk about that as we go forward. Today, we announced that we have just brought on Dr. Jordan Pinsker as our Vice President and Medical Director. We're very excited to have him join the team. Jordan has -- he works at the Sansum Institute in Santa Barbara and has been the head of the artificial pancreas research there for quite a while. He has been a private -- a principal investigator in many major studies, including the Basal-IQ and the Control-IQ studies that we've done ourselves. He works closely with the NIH. He's done work with JDRF and Helmsley as well as other industry companies. So he's highly regarded, and he has a great relationship with our team. Our team loves him, and he really enjoys working with us. So it's a very, very good fit. And I just want to say we're really, really excited to have him on our team.

Okay. Perfect. Thanks, John. I guess just on that, is he replacing someone? Or is this a new role at the firm?

It's really a new role. We have had somebody who is retiring here in the next couple of months, and her role was -- I think this is kind of -- it's a broader scope in terms of what the person who's retiring was responsible for. And I think that the key differences are that he will basically be actively involved in our artificial pancreas research. He'll be working closely with the R&D teams, collaborating, helping direct them when it comes to just understanding the clinical benefits of decisions that we're making. He's going to be working with our market access teams in terms of just the payer relations, payer access. And just -- I think he's also a guy who -- he's a practicing endocrinologist today. He's a pediatric endocrinologist, and he really understands what goes on inside the health care providers' offices. And we are trying to change that. We're trying to make that more efficient. So he's going to be able to leverage his experience to really help us as we design systems that provide decision support, just ideas and developments that we plan to make to improve the interaction between our company and the health care provider to make them more efficient in the long run. So we're excited to have him. He's a great addition to the team.

So last question on Dr. Pinsker, where and when will investors see his biggest impact?

Well, I think that it's going to -- internally to the company, I know it's going to be quick. We'll see his impact right away. He's starting in April. And I think that from a product point of view, it's really -- he will be influencing our -- the selection of the features that we add to the algorithm over time. He'll be influencing the decision support tools that we've talked about. And he'll also be influencing just the mechanisms and the systems in which we interact today with the payer organizations. So it's not going to be very long. I would say, certainly, in '22, we'll see the results of some of this work.

Okay. Fair enough. So I wanted to ask you a few things in the current business, and we covered a bit of this last week, but geez, fourth quarter was strong not only for you guys but for the entire industry. Is there any inkling of pent-up demand at all? And then I guess the other question on that is, in this virtual environment, are endos seeing more patients? Is that leading to additional pump volume?

I think that the -- I would just say that, just to answer the latter part of that and I'll let Leigh take it from there, the -- I think the endos have always had efficient processes in terms of getting patients in front of them every 15 minutes just the way the office practices work. So I think that they've -- I think that they're probably at the -- sort of their capacity today. I think where the benefit comes is on the training side, where we were actually investing in virtual training prior to this whole thing happening because it makes our -- the people who do the training more efficient. They spent a great deal of their time in cars. This way, you can schedule things out, and you can -- that whole organization is going to be more efficient and cost-effective. So I think it's -- I think it helps that part of the -- I mean they do have trainers in their practices, and we as well do. So I think it makes that part of it more efficient. I think it's going to stick around for a while. I don't think it's ever going to go back to 100% face-to-face. I think that people recognize the benefits of this virtual environment that we're living in today, and I imagine it's going to stick around. Right now, I think in this past quarter, about half of our trainings were done virtually. And I would expect that, that's just the way it's going to be going forward. Sorry, Leigh, do you want to jump in on that?

Yes. I was just going to add some of the strength that we were seeing in the fourth quarter. We really attribute to the growing momentum behind Control-IQ. Fortunately, we got it launched in Q1 before COVID hit. Although, I will say that we're still seeing some level of pressure from COVID. I don't know that it's -- there was pent-up demand or anything released itself necessarily, but people are becoming more comfortable maybe operating in this environment. And as Control-IQ's been getting more exposure and people have seen the real benefits of it, it's continuing to drive our strength, and it will drive into 2021. That's one of our biggest tailwinds for the year. So really, I don't know that I can say there was any dynamic related to COVID. We still hear from our field sales reps today when they talk to physicians, there are some that are prescribing at normal levels. There are still some that aren't prescribing at all. It's pockets here and there, but it says something about what the environment is still holding back a little bit on what the possibilities are.

That's helpful. John, just a couple of follow-ups. You mentioned with the virtual world here, training has become more efficient. Are you getting folks through the funnel quicker? And then you also mentioned 50% of the training is done virtually. Where was that? Remind me, either in 3Q or 2Q.

It basically went to nearly 100% in March through April, maybe even May. And then in the summertime, it kind of -- it backed off a bit. So I think that in the last 6 months of the year, it was approximately 50% throughout the rest. And then I think even today, we're still seeing it roughly in the 50% area. And I think I just -- I didn't recall what the first part of the question was.

Yes. It was just the efficiency of training. I'm just wondering from kind of -- from the time someone commits to a pump to the time they're on the pump, has that time horizon shrunk here, meaning getting folks through the so-called funnel a little quicker?

I mean I think I don't -- it's a good question. I don't have a solid answer for it. I would just say that we definitely have the ability to do that. We have our own internal trainers. Health care practices have trainers. And then we have consultants, who are basically trainers as well. And I think that it did back down when we first entered the COVID environment. We're back up and we're kind of running on -- it's kind of full capacity at this point in time, as I would say. And so I think that we do believe we're more efficient this way. So it's likely that we have seen a reduction in that training time -- in that training funnel time line, but I can't solidly commit to that.

Okay. Fair enough. A little bit bigger picture, you've talked about 50% type 1 penetration in the U.S., I think, in over a 3- to 5-year time horizon. To be fair, pump penetration has ticked up slowly over many, many years. So I guess, why is this 3- to 5-year time horizon, the right one? And what are the biggest risks into achieving that as an industry?

Yes. I mean I think that it's past -- it's basically been flat for many, many years, with the exception of the last 2. And in the last 2 years, we have seen it step up. I mean the conversions from MDI therapy to pumps was averaging about 25,000 people annually. And 2 years ago, we saw it go from 25,000 to 40,000 to 50,000. And in this most recent year, 2020, we saw it go from 50,000 -- up to the 50,000 to 60,000 range. So those are pretty sizable jumps. And I think that largely what's happening is there's just a lot more technology in the marketplace. And I think the technology brings better outcomes, and it reduces the burden of diabetes so people have to think less about it. And it's not just Tandem. I think that everybody is innovating. And I think this is really important because I think the innovation, in my mind, drives adoption, and it does move people from MDI. We're reducing this threshold that people experience, the threshold in which they're willing to take and wear a pump on their body. And so that's -- I think that's a really positive thing because when you see the outcomes, it has an immediate effect on their lives as well as it reduces the longer-term morbidities also associated with diabetes.

Okay. That's helpful. Just on that, the adoption of new technologies, can we assume that the vast majority of your new users use a CGM? And the thought here is there's a lot more CGM users than there are pumpers. My sense is that with a good integrated solution out there, those stand-alone CGM-ers, if you will, are fertile ground for an upsell with the pump.

Yes. I mean I would say that, today, the majority of people who use our pump are using CGM. About 2 or 3 years ago, it was about 30%. And as we brought these new algorithms to the market, the algorithms are only effective when you're using CGM. So today, roughly, the majority of people who could have updated to the pump have updated. And so if people are seeing the benefits, they must be using CGM. So we've seen a substantial increase. And we absolutely agree with what you're saying. I think we're drafting off of CGM. CGM believes that they can get to 70% adoption. And I think once somebody tries CGM and they see the benefits of that technology, I think they're more open to considering a pump.

Okay. That's fair. Okay. Switching gears a little bit to the pipeline. On the call last week, you mentioned enhancements to Control-IQ for greater personalization and, I think -- in certain ranges. So I guess the quick question is, how will this improve outcomes? Or do they simply just expand access into a bigger population?

Yes. I mean I think this first change here is it's really about access. It's accessing pediatrics and also people who are -- have more intense insulin usage. So that's really -- and then there's -- there are some, I would say, user interface improvements just for benefiting the experience. That's where -- those are kind of the 2 elements of this change here. We have submitted this. We submitted it back in 2020, and we have submitted it with no clinical data. We have theoretical justifications. We've got human factors worked. And we believe we're going to be successful through the FDA with the justifications that we've made. I think this year, we're really looking at more clinical trial work to prepare and collect the data that's going to be needed to make and justify more significant changes to the algorithm. That would be, as you've mentioned, personalization, more aggressive behavior of the algorithm and then simplification. Those are really the things that we're looking at today.

So when will you be able to come out with more flexible blood glucose targets?

I mean I think it's something that we're clearly working on. We haven't made any commitments in terms of timing. But I guess we are beginning now to initiate the clinical studies that are going to just generate the data that will allow us to do that. We've been working on it for a while. We've been doing a lot of work internally to make those changes. And I think the next step really is it's the clinical work. And I think what's important about Tandem is, I mean, we don't ever anticipate stopping. We're going to continue to improve this algorithm over time. We've stated our goal is to have a fully closed-loop system. We expect to make incremental improvement at least annually, maybe more, to the device to allow people to see the benefits. And as I said, there's 100,000 people that are currently using it. So our entire installed base will have access to all these improvements as soon as they're available. And now that people are more and more confident using the Tandem Device Updater, we expect people to update and take advantage of these improvements almost instantaneously, which is -- that's a big, big advantage that we've got today.

Why is it -- I haven't fully thought through this question here, but clearly, there's an international dynamic to it. But why hasn't everyone come on board in Control-IQ? What's the barrier here? Is it cost? I understand the market segmentation to some extent. But why hasn't everyone adopted Control-IQ?

I think that everybody who could have -- has for the most part -- I mean it's a large majority of that. And I think most of -- the large majority of people purchasing a pump today are purchasing Control-IQ. So I think it is in that state, as I think.

Okay. App-based mobile bolus, I think on the call, you referred to it as a tipping point, but at the same time, it's not going to have the same impact as Control-IQ. So what does that do for the business?

I mean I think when you look at Basal-IQ and Control-IQ, these really are the first products that have come to the diabetes marketplace and community, where they absolutely have reduced the burden diabetes has in people's everyday lives. The systems operate in the background. It makes decisions for you. It manages your blood sugars very well. There's no fingersticks. People can sleep through the night. They have confidence in the way the system is working. So I mean they think more about their lives now than their diabetes. The mobile bolus feature is just one step in that direction. Basically, now there's this discretion factor that comes along with the mobile bolus feature. The only reason people need to take the pump out of their pocket when they're outside the house is really to bolus for meals. And so now that can be done entirely through a mobile app. And so you've got that added discretion, which is, again, it's reducing the burden. This, in this case, is really the mental burden, I think, but it's reducing the burden. And we think this is meaningful. This is what people want. They want to be able to live lives that are as normal as possible. And we think by giving them the ability to bolus from the mobile phone, you're making a big improvement in their lives. And so this is -- it's just another step forward in increasing and improving the patient experience, which we think is key to adoption of the technology.

That's first half '21, correct?

Yes.

In terms of t:sport, so you pushed out the filing by about a quarter. I guess, how are you addressing the issue today? And kind of when do you expect to know whether this fix worked or not?

Yes. I would say it's not just one fix. There's just a number of things. As I said, we were delayed by COVID when it first came about because we just couldn't do anything. And then we experienced just some delays on our human factors testing even after we were able to start doing it again. But when we started -- when we looked at the data carefully in the December time frame, there was just a number of things that we said is good but is not excellent. And I think that the important thing about Tandem is we're committed to improving the experience. We're committed to making devices that are simple and intuitive, easy to use. That's really our design priorities from the very beginning. And so these experiences that we saw, they weren't excellent, and that's what we're all about. And so it's as simple as when you're in a screen and you're navigating through the screen, we want the person to know exactly where they have to go next without telling them or without providing training or without them having to memorize. So there's this intuitive aspect, and it just wasn't there. When we do these human factors testing, we have a camera that's located on the pump in their hands. We're watching them from a different camera to see what their -- are they confused? Is there any emotion being communicated? And we look at all that very carefully just to make sure that people -- we look for misses and near misses as they go through a script of a protocol that we've asked them to execute. And so as I said, we just -- it was great -- it wasn't a great -- it wasn't great. It was good, but it wasn't excellent. And that's really what we're focused on. We've made a number of the changes already that we think are going to get us there. And so now we need to go back into the human factors testing and just confirm that the experience is positive. And we look at t:sport as being a driver of growth for us for a long time. And so when it comes to market, it has to be right. And we feel that just sacrificing a few months is the right thing to do in order to get it right so that when it does come to market, it's going to have the same impact that Control-IQ and Basal-IQ did for us in the past.

And just to be clear, John, the issue is a software issue. There's no real changes to the hardware.

That's right. This is not hardware. It's not architecture. It's nothing that's, I would say, a substantial portion of the design. This is just -- it's the user interface, and it's making sure that the user interface is intuitive.

Can you remind us the regulatory path for t:sport?

Sure. This is going to be an ACE pump submission. And once it's an ACE pump and it's approved as an ACE pump, we can then integrate it with the Control-IQ algorithm, sensor and iCGM. So it's -- from the very beginning, we were a big proponent of the ACE pump because it did allow us to get the t:sport to market without doing clinical studies. The clinical studies have been done. They were done on the Control-IQ algorithm. And now since it's an ACE pump, we can integrate all 3 of those elements into one and bring it to market with just the one filing.

Okay. And just -- it's been a while since everyone's kind of talked about these ACE pumps. Remind us. This is pretty much a more streamlined path to market, correct?

Absolutely. Yes, absolutely. It's the right thing for us as an industry to do, and I compliment the FDA. And it not only helps us because it simplifies our regulatory path, but it also helps the FDA because if they had everybody in the industry submitting regulatory documentation for minor changes, they just -- they wouldn't be able to keep up. So this helps their capacity as well as I think it helps the individual companies who are participating in the industry as well.

Okay. And just remind me. Where does t:sport fit into the long-term strategy here in terms of market expansion? Does it cannibalize what you're doing today? Just give us an idea as to how you see t:sport being folded into the portfolio in the business.

Well, first of all, we anticipate having both products available in the market, and we think that's going to drive the highest demand for Tandem. When we did, a lot -- when we did market research on t:sport, the community that's really interested and most -- was most just positive about the experience, it was the MDI community. And we just talked about increasing the penetration from MDIs. We think that the discretion, the size of the form factor that comes along with t:sport is going to help us get to our goal of 50% there. So it's -- that's the priority, really, is we get it to market. We think it's going to help accelerate the interest from the MDI community as well as pediatrics. Those were the 2 groups that I think showed the most interest in t:sport, but we do anticipate having both available. There's likely to be some cannibalization when t:sport comes to market. We'll have to wait and see how that plays out, but we do anticipate having both products available.

Will t:sport be able to go through the pharmacy?

Well, it doesn't work perfectly because it is a 4-year purchase. But I think that it's something that Leigh and the team have been evaluating. Leigh, you may want to speak a little bit more about pharmacy channel and how it applies to t:sport.

Sure. And just starting with t:sport, we specifically designed it to fit into the typical billing code so that it can be fast to market. When we think about the pharmacy, as John said, that's usually more for commodity-like disposable-type products. So no product that we offer today or plan to offer with t:sport, in particular, changes that dynamic. What we're doing is looking at what is it that is attractive about the pharmacy channel and can we optimize some of the processes in the DME channel to get that same look and feel as we continue to evaluate whether or not we could fit into the pharmacy channel. So we're looking at it from the patient perspective. What's their experience? And why do they -- why does the pharmacy channel feel more efficient to them? We're looking at it from the physician perspective. How can we streamline that paperwork process or that upfront buying that comes with it? And when you think about it, when someone is buying a durable pump from the patient perspective, it only happens once every 4 years. We're already beginning to offer the auto reordering of supplies. So from a patient perspective, they can send us their information, and we can just set them up for recurring orders that get shipped directly to their home. It's really that once every 4 years experience that we're trying to optimize with them. With our new platforms, we're hoping that we can have more digital solutions to help while we continue to evaluate the pharmacy. I think one key point is -- today is there's the perception that potentially a physician might recommend something because of the insurance channel that you go through. And what we see and understand is that physicians are still looking at the product and who -- where will the patient be the most successful, where will they be compliant, where will they get the best outcomes. The type of channel that you build through is secondary or even further behind that first most important decision.

Okay. And Leigh, when you talk about the typical billing code, that's a 2-pump billing code, correct?

That's correct. Those codes were established years ago and have been in place, and we've been using them consistently along with everyone who has a tubed durable pump.

Okay. So maybe that's a decent entrée into the discussion around type 2. And my sense is that your tubeless competitor out there has hinted that access to type 2 is more of a channel dynamic, DME versus pharmacy. I'm just wondering kind of your view on that. And then is t:sport the angle to get into the type 2 market? Or can you think -- is it more Control-IQ and generating the data to get that way?

Yes. I mean I think that, as we spoke about in the call, we are definitely initiating kind of a multipoint plan to really understand and sort of formulate the strategies to go after the type 2 market. We've done that in the past with t:flex. It wasn't as successful as we would have liked it to have been. So we want to really look carefully at what are the clinical needs, what are the product needs and, as you just mentioned, what are the market access challenges as well. And so I think that initially, we're going to be focused on taking the existing products. We do have Control-IQ, and we do have t:sport coming. And let's see how t:sport with Control-IQ does in the type 2 arena. We think it's going to be successful. We think it's not -- it's probably not the end-all product, but I think it's going to enable us to understand more about what the likes and dislikes are about the product and how we can optimize that for -- to develop something that's more discrete, specifically for type 2 community. So we've talked about getting -- right now, Control-IQ is only approved for type 1. We believe we can get an indication for the type 2 community. And I think that once that's approved, we can get it onto t:sport. We think that the form factor and discretion that comes along with that will be appealing to the type 2 market. We also think about the question about access. I think that -- I think when, as Leigh mentioned, the -- when it comes to the pharmacy channel, it's really about the frequency of interaction. I mean you only -- when it comes to the pump purchase, you only really interact with us once every 4 years. And so I think that, clearly, on the supply side, there's an opportunity for us to streamline and make that process simple and automated online and really replicate the experience that people do have today when it comes to interacting with a pharmacy. So I think that's really our intent, would be to study factors that impact access, what the people like about the pharmacy channel. And I think that -- I don't think we're saying it's off the table, but I think that there are ways for us to look at using our digital health assets or digital health initiatives in trying to come up with systems that provide the same experience.

So it sounds like the type 2 pathway initially is through Control-IQ. When do you think you'll have more visibility in terms of kind of time line on that expanded level?

Well, I think it's -- right now, it's a matter of interacting with the FDA. And so we obviously understand that at least in the short term, there's going to be some -- there's just some slowdown as their resources are focused on COVID. But hopefully, as the year opens up, that opens up as well. And we intend to get in front of them as soon as we can to speak about this. We have -- as we've talked about in the past, we have a significant number of people today who have type 2 that are using Control-IQ. So we have data. We have data to present to them. I think it's just a matter of whether they're going to be satisfied with that or want something different.

Okay. Okay. Last pipeline-related question, what have you done with Abbott and Libre over the last year? And when can we expect an integrated product?

Well, we've initiated the relationship. We're working closely with their engineering team. It's a good collaborative effort where Tandem and Abbott are working together to integrate the sensor into our system and Abbott is working in parallel to address the vitamin C issue that they have with their product. And so we're hoping that both of these issues are addressed simultaneously and that sometime in the 2022, we actually have a product on the market. And we're working to get it on the market in 2020 -- as soon as possible in 2022. That's really our goal.

Okay. With Control-IQ approved and launched in Europe, could we see an international approval for an integrated product before a U.S.?

Probably not. Our focus really is on the U.S. and the Canadian market to begin with, and then we'll look at international opportunities later.

Okay. I wanted to ask about competition. One of your competitors has data coming out late this month, I guess. Most assume that the time in range will look good, and I think there'll be inevitable comparisons to what you guys have produced. So I guess, what is the -- what does Tandem say to the new data coming out? And how do you position your data relative to what's out there?

Well, I mean, we've seen preliminary data already. So I would expect that is going to replicate. It will be close to what has already been presented. And I think when you look at the last couple of clinical studies, I would say most of the pump manufacturers have presented data that looks a lot alike. There's not a whole lot of differentiation. So my feeling is that the algorithm and the nuance of the algorithm isn't the only factor that drives the patient experience. And I think that we know now from -- we have so many people using the product. We know what the real-world data suggests. And we know that the -- we have met the therapeutic outcomes that we expected. We are delivering value from that point of view. And so I think the second thing we really focus on is the patient experience. And I would see that the algorithm is one element of that. It's also the entire product. Is it easy to use? Do you have to use fingersticks? I think that the experience with the company is also very important. We have a strong customer service function. Do we take care of our customers? Do we enhance the value by simplifying the interaction with the business? So the customer experience or the patient experience is hugely important. The algorithm is only one element of it. And I think that today, as I said the other day, the algorithm is table stakes. You've got to have one. You've got to have one to deliver, at least the results that we are all seeing. But it's beyond that. It's interacting with the company that I think that drives the patient experience, which I think is important in just retaining and -- retaining our current pumpers and as well as bringing new pumpers into the Tandem experience.

Okay. In terms of time in range, you mentioned that you're seeing some results, some real-world data in the high 80s, low 90s. I guess, what is acceptably competitive out there right now? What is the new bar? Clearly, you guys -- the structure of clinical trial was different. It was a few years ago now. Things have changed, you've. Improved. What should we think of as the bar right now for time in range?

Yes. I mean I don't remember the exact body, but there's a body of physicians and technologists to who represent a number of clinics and research institutions that met, I think, a year or 1.5 years ago, and they came out and said these automated insulin delivery systems need to have a minimum time in range of 70%, a very small amount of hypoglycemia, and they also defined the numbers for hyperglycemia. So there are standards that have been set out there already. And I think that when you look at the data that's being presented today, most of the companies are achieving that. And I think that when you look at our real-world data, which is I think what's really important, because it's a body that reflects a lot more data from a lot more people, I mean, we're seeing very high numbers. And I think that's great. And then I think what it says to me, at least, is when you use the system properly, you get these great results. And that's a tribute to the people who helped us develop, from UVA and TypeZero as well as Tandem. The combined product really is outstanding.

Surely, John, 70% is -- to me, is kind of an old bar. You're seeing much better data than that. So I'm just wondering, is there a level where you would think, hey, that's competitively inferior or you'd be a little fearful of if it produces some pretty high time in range data is that a threat to your business?

I think that the -- when you look at people who do not have type 1, their time in range is in a low 90s. And so I think that's a good standard right there. I'd also say that when you look at the people using the system today, as I mentioned, there are people out there who are -- they carefully bolus for meals. And they see these high time in ranges. There are people out there -- adolescents probably is the most -- the largest category who don't bolus at all. And they see the benefit of Control-IQ, but it's not time in range in the high 80s and 90s. And so really, what we're focused on today is to try to identify what the issues are and simplify that bolus interaction. So that either happens automatically or it's simplified. And by doing that, you get this one category of people using the system to bolus or you help them bolus. And I think when you do that, you really reduce this per percentage of people that have hyperglycemia, which is, I think when you look at the sort of the other 10% or 20%, it's really hyperglycemia that we're experiencing, and we need to reduce that. And that's really where the directions of the development team and our clinical team are focused today.

Okay. Okay. That's helpful. International, we kind of touched on it a bit earlier. It looks like it's about 10% penetration in the international markets you're in today. Why so low? And kind of what needs to happen to increase that percentage?

Do you want to get that, Leigh?

Sure. The way of thinking about international today is that it's a few years behind the U.S. I think the technology explosion, if you want to call it that, that started driving the change in behaviors here and increasing the penetration is just starting outside the U.S. We just launched Basal-IQ there first a year ago and are starting to roll out Control-IQ, and some of the same advancements in the CGM and everything is starting to come to the table at the same time. So I think it's just a matter of time. It's just a little bit behind, which is why the OUS market is really exciting for us. If you think about that opportunity to continue to drive that pump penetration, it just drives opportunity for us as a business to grow pretty significantly.

Okay. Is reimbursement sufficient in these markets, sufficient for broader adoption?

Sure. I would say yes to the markets that we're operating in, and that's one key element of where we decide to launch into markets, is where reimbursement is at a level that it can support pump therapy. And so the markets we're in today right now would be reflective of good reimbursement, good for our business but also good from a patient perspective and driving them to move to the technology.

When you think of the first year we were in international markets, it was really about the Animas conversion, and that's where the entire organization was focused. Let's get the Animas business, which we did a really good job of. And then the organic growth began really last year, and COVID didn't help us. It just -- and it was more problematic OUS than it was in the U.S. just because of the -- just the significant disruption that these markets experienced. And so we're in about half of the countries today with Control-IQ, and the people who are using it are having the same experiences that the people in the States who are using it are having. And so we expect to be in the majority of these markets by the second half of -- or in the first half of this year. So I think as COVID begins to seemingly become more and more controlled, and we have more and more markets with Control-IQ, then we expect to see acceleration in OUS. We're excited about it. I think it's going to be a huge opportunity for us.

Okay. That's helpful. I wanted to switch gears to renewals. I was a bit of a lingering question off of last week's call, you increased your cumulative renewal rate from, I want to say, 50% last year to 55% at the end of '20. Can we assume similar progress going forward? Meaning, is it fairly linear, 60% at the end of '21, 65% at the end of '22?

Let's start with where our goal is. Our goal is to get to a 70% retention rate. And I think what you pointed out was very important. That shows we're making great progress towards that. And some of the reason we had such a nice tick up in 2020 had to do with the fact that we've made investments in our renewal infrastructure, if you want to call it that, up to now, where we're investing in the people and the technology solutions they use to manage the pipeline. And so that's one reason -- and adding access -- full access to UnitedHealthCare, that was another nice boost to us this year coming in the middle of the year. We actually saw a little bit of a surge of people who had been sitting on the sidelines just continuing to use their existing pump because they weren't able to renew under the rules. So those are drivers that are going to help us as we go forward. One thing to point out about 2021 in particular, though, is we're adding about the same number of opportunities, which is roughly 15,000, that we did in 2020. And this is going back to looking at our business growth between 2016 and 2017. We do expect to continue to see improvement in that cumulative rate, but I wouldn't necessarily add 5 points onto it this year like we did the prior year. I think that was a nice big step-up with United being a piece of that, and it will tick up over time. I think the most exciting part about the renewal story is looking forward to 2022 because that's when we start looking back to time periods where we saw that steep acceleration in our business. And so as we go down the road, it's going to become an increasingly large part of what will make us successful and what will drive our top line growth.

And Leigh, just to on the 50% to 55% versus the goal of 70%. The delta there, it sounds like part of it's infrastructure related. But I'm just always curious as to why more people aren't renewing, especially given that you've got a better system out there with Control-IQ.

Yes, I think it starts with that one element, the holdback for the United patients that weren't able to renew. And really, our objective is to continue to offering further advancements in the technology so when they get out of their warranty cycle, they will be motivated to move forward with their next pump purchase. So for example, today, if someone is within their warranty, all of our innovations are offered so they can have the latest and greatest free across their 4-year cycle. But once they exit that cycle in order to have the next level of integration or advancements, they will need to buy their next pump. And so part of it has been becoming familiar with the renewal process. Part of it's been getting full access to commercial plans. And part of it is just the learnings that we've had across the year. So that's why I think we saw that nice acceleration in the last year, and that will continue to bear good returns as we look forward.

Okay. Okay. Has Control-IQ had any impact on the level of attrition or retention from that standpoint?

Control-IQ has made us successful in all ways. I would say you could point to it in the renewal cycle of retaining people. You could point to it in the MDI conversions and in the competitor conversions. And so it is benefiting the business across the board. And that's another reason, as John mentioned earlier, we're very excited to have it rolling out OUS because we think it's going to be the beginning of that next inflection there as well.

Okay. I think we're bumping up against our time. John or Leigh, do you have any parting comments that you'd like to give investors?

I just would like to say that I think we have a great team, and I think our team did an amazing job this past year. I'm very proud of everybody. And I think we feel very well positioned to have a successful 2021 and beyond. The same factors that made us successful in the past are very active going forward. We recognize there's going to be some competitive noise this year, but we feel confident that, that Control-IQ and our additional product offerings are going to match up with the competitive wins very successfully. So we're excited about our future. We have a plan set for ourselves for the next 3 to 4 years, which we feel we're going to accomplish in the time frames we set aside. So thanks for having us today.

Thank you for joining us. Have a great rest of the day, your day, and we'll look forward to seeing your results over the next few quarters.

Absolutely. Thanks, Jayson.

Great. Thank you.

All right. Bye.