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

So welcome back. We're in the afternoon sessions. I'm thrilled to have the management of Tandem here. And Lee and John, thank you for traveling to warm New York, and especially from your cold Southern California. Anyway, I want to -- I'm going to start big picture...

Before you ask any questions, we have a new corporate counsel, and I want to read this. Either read this. Today's discussion will include forward-looking statements. These statements reflect management's expectations about future events, product development time lines and the financial performance and operating plans, and they speak only as of today's date. These statements are not guarantees of future performance and involve a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied in our forward-looking statements. Further details related to our forward-looking statements can be found on the safe harbor slide, it included Tandem's corporate Materials.

Can you say backwards.

That's the first time I've ever had to do that.

Glad, I was here for it.

Okay. So in slum pumps, can you give us sort of an update on where you think the market is, market penetration type 1 versus type 2? Let's just sort of lay the groundwork for the rest of the conversation.

Sure. I would say if you look back to 2017, prior to any of the companies on the market today, having automated insulin delivery systems, we would say that approximately 25,000 to 30,000 people came to market annually, and the penetration rate was in the mid-20s. We brought Basal-IQ to market in 2018 and Control-IQ again in 2020. both of which really drove substantial uptake in MDI conversions. Insulin and about 18 months ago, also introduced the Omnipod 5. Medtronic bought on 780G to market here last year in the last 2 quarters. Beta Bionics is now on the market. And so there's been an increase in the number of companies that provide AID therapy. And the results are fantastic. I mean all of the systems on the market, they really have produced good results where people see in their daily lives, a substantial improvement, how they feel, but also a meaningful reduction in the risk of the longer-term comorbidities. So AID has really driven a substantial uptake. And I think that we have seen the number go from 25 to, I think in 2022, it was maybe 75,000 to 80,000 and the penetration rate is, today, we would say between 35% and 45%. So meaningful growth, we do believe that, that number can get up to 65%, and we think that's something that, with new innovation, with technology that reduces the burden of diabetes, we expect to see increased adoption.

Okay. So this is a question I just had at lunch, which is how many years did it take you to get to 35% to 45%, type 1? How many years do you think it takes to get your 65% number?

Well, I think you have to say -- first of all, let's just second, but it was 2018, I think the 35% to 45%, what it says, so it's 4, 5 years. 4, 5 years to get here, but you also have to recognize that we are the only player in the market for the first 3 of those years, and it's really been -- it's something that's -- as more and more people come to market with systems that improve the overall outcomes. As the organizations like the American Diabetes Association recommend this therapy for their patients, and as physicians become aware of the benefit it provides, we expect to see that number get up to 65%. So I don't think it's impossible to see that number get to 65% in the next 4 or 5 years.

Okay. And what about for type 2s or insulin dependent?

Yes, Type 2 is a different story. Right now, there is no approved AID system for use with type 2. We all -- I mean, Tandem, Medtronic and Insulet all have pivotal studies underway right now to get the indication. I think that the -- roughly, I would say these companies will have the therapy available in the '25 timeframe. So that's what I think that would be the driver of the catalyst to see uptake within the type 2 community for pump therapy. I would say that today, though, it's very underpenetrated. In the U.S., it's roughly 2.3 million people that have insulin intensive type 2 and about 100,000 use pumps, and so less than 5% penetrated. And I think if you go OUS, it's significantly higher in terms of the number of people using -- or excuse me, having type 2 and the penetration is even less.

So the catalyst really is not just finding insulin via pump, but providing insulin via pump using a...

That's right. I think it's really the closed loop. The AID system is what's going to be driving the uptake in type 1 and type 2.

So let's spend some time on your AID system. Obviously you have Control-IQ with G6. Remind us to have approval with G7?

We have approval with G7. So it turns out that a couple of years ago, the FDA introduced this concept of interoperability. And so the system consists of an algorithm, a sensor in the pump. And you can have those all approved as interoperable systems. Once they're interoperable, you can pretty much integrate all of them into 1 system and use the algorithm without any regulatory requirements.

Okay.

So for instance, in the case of the G7, it's interoperable, and we can have it used with our t:slim pump and the control acute algorithm, without any regulatory. We just have to do a letter to file, but we don't have to do a filing. So it simplifies the process for doing that. The only thing that really requires a clinical trial is the algorithm itself. So any changes that we make to the algorithm, we have to do a clinical study for it. And when we do that, it can be used in that interoperable system from that point forward.

Okay. So when you -- you said that on the earnings call that you didn't think really the ramp would be when G7...

Yes, I think that -- so we just introduced a brand new pump called Mobi. And Mobi right now has G6 model. G6 is the -- it was the generation to go for Dexcom sensors. And we introduced Mobi with G6 because Mobi is a brand-new pump platform for us. And in our testing phase, we wanted to be certain that the system was working properly, and we didn't want to introduce another variable, like the G7 that -- where we didn't have as much experience. So we are working hard now to get it, the G7 on to Mobi, and we expect that to happen here in the late spring. And we think that's probably -- there may be people out there today that are going to wait until Mobi has G7 on it before they purchase the pump. And so when that becomes -- I mean it's commercially available today with G6. When we introduced it with G7, the system pumps that are in the market today, are updatable using remote software updates. But we think that, that will -- there'll be another group of people who would now be purchasing the system that has that implementation.

Okay. So just to be clear, t:slim, G6 and G7 not yet Libre, Mobi G6, not yet G7.

That's right.

Actually, we have Libre on X2.

Okay. Excellent. And that you're marketing all in right now?

That's right. When you buy an X2 pump today. Yes, t:slim pump, you can -- you log into -- you open up the screen for sensors. And you can choose between the G6 to G7 and Libre too, today.

Okay. And how do people make decisions? I mean, I would assume -- and does it really matter to you?

We are Switzerland when it comes to the selection [indiscernible]. We do not want to get into any of the competitive dynamic. We just want to make the choice available to people who are using the system. All of those sensors are good sensors, but people have reasons for selecting one or the other. And we don't -- again, that's a personal choice. I think we really believe that we're driving towards wearability and choice. And those are the things that we think are going to drive adoption of technology with the best algorithms on the market.

Just to go backwards for a second. When does Mobi with Libre come out?

We haven't said that specifically, but it's a fast follow.

Fast follow, meaning 2024?

We're -- basically because of competitive dynamics, we've begun to refrain from actually indicating specific dates. I think as we come close to commercialization, we'll basically indicate at that point in time. So -- but we're working very aggressively to get Libre 3 on to Mobi and also into the European markets or OUS markets.

Okay. That's some [indiscernible] going?

It's going great. We've had it on the market now for about -- we had -- and we would call a limited launch with about 150 people for 4 months now. And the feedback has been overwhelmingly positive. We knew it was going to be a good product. We knew it was going to be a product that actually got us back to the point where we saw more MDI conversions on the product, but it's really exceeded our expectations. And the things that people like about it, first of all, it's very small. It's light. And we sell it with an adhesive patch. So you can wear it with a very short infusion set. And what people are saying is they forget they have it on. And one of the descriptions that people use is that it's liberating. It's controlled entirely by a mobile app. And because of that, you don't have to interact with the pump at all. And that's why people forget to have it on. So you have the convenience of a mobile app, but it's also very discrete. And I think that the combination of those 2, the fact that you can put any place you'd like on your body. I mean we have a couple of people who ran marathons recently, wore it on their leg.

I was looking at those pictures online. It was like it's on their legs.

And there's people who were -- I was talking to somebody in the office they had it right here, right below their shoulder. You can put it anywhere you want. That's the idea of wearability, depending on what you're going to do, where you're going to go, you can put it where you like. And it's also, you can take it off if you'd like to, which is why it's very important.

Do you think that Mobi -- and this is something I'm trying to get my head around, and I think we've talked about this in the past is it cannibalizing your t:slim franchise? Is it expanding your t:slim franchise? How do you think about -- well, you may be agnostic or Switzerland to which CGM partners with your pump, I don't think you're agnostic to Mobi versus t:slim?

Yes. We believe that the diabetes community has many segments to it where people have differences in how they want to wear and how they want to control the pump. And so we think that our portfolio approach is the best way to basically get at those different segments. And so we think there's absolutely going to be continued use for t:slim, which is a tubed pump. Mobi will be tubed or tubeless with great flexibility in terms of how you wear it. And then Sigi, the product that we're working right now is a patch. So we think that there's a need to have all 3 of these different form factors to address the needs of the market.

Mobi tubeless still on track for, I think, it's 2026 is what you said at AGM?

Yes, we're -- again, we're continuing to work aggressively on these products. And I think as we get closer to communication -- commercialization, we'll definitely let people know when specifically they'll be available.

If you're selling -- if you're an endocrinologist or [indiscernible] that's recommending this pump.

Yes.

which is [indiscernible] have that conversation start off with Mobi on a chip [indiscernible].

Absolutely. Yes. I think what happens now, though, is that the physician has to talk to the patient who decided to actually move to pump therapy until they want the options that are available. And let them understand the pros and cons of each and let them choose. That's typically what happens. They're the biggest influencer when it comes to someone going to pump therapy, which they actually choose. So I mean I think that we definitely think that the form factor of Mobi is appealing, and a significant number of people are going to choose Mobi. You had mentioned cannibalization. I think that it's possible that there's going to be some cannibalization out here. But we also think there's a distinct market segment that this will appeal to, and as a result of that, it will drive more MDI -- it will drive more penetration into the MDI Group.

Okay. From an economic standpoint, Leigh, do you care Mobi versus t:slim?

From a sales perspective, it makes no difference. The price is the same when it comes to reimbursement, but from a gross margin perspective, Mobi is going to be one of the single biggest drivers of our gross margin expansion in the next 3 to 5 years. We have a long-term goal of achieving 65% margins, and Mobi gets us more than halfway there. The pump itself is the beginning piece of it. So it has a 10% to 15% lower manufacturing cost when you get to scale. And we're cautioning people that 2024, we aren't at scale, obviously. And so it will be dilutive to margins in the first half of the year, but as we exit 2024, we should start to see it being accretive to margins. Then the cartridges is about a 20% lower manufacturing cost. And so you'll start to see that in the coming years, as the Mobi cartridge becomes a larger percent of what we're shipping in terms of supplies, and so it's a multiyear expansion opportunity.

Do you have a Mobi with you?

I do. I have to unpack it.

Sorry, I should have warned you about that in advance, if it's going to take a while, it's okay. Here you go. Excellent. How is it getting this through TSA?

So this is t:slim.

So this is your go-to product right now?

And this is Mobi right here.

And this is Mobi, which is much smaller.

At least half the size.

it's at least half the size.

At least half the size when you do it that way. And the pod piece of it -- sorry, [indiscernible] pod, the pump piece of it is right here?

Yes. This is the disposable piece right here. And that's the pump.

That's a pump and the disposable piece. So where I'm heading, and you probably see this is, how do you price the difference? Does this difference remain and you just put the insulin in here or...

What you do is there is -- when this comes. It comes with a little apparatus around it. And you basically just take your insulin vial and you attach to the apparatus and you just draw the insulin into the reservoir.

Okay. And so is that disposable, how often do you dispose of it?

Typically, every 3 days.

Every 3 days that goes. Okay. And then -- so it doesn't come preloaded with insulin.

No.

You have to get the insulin and put it in there.

That's right.

So when you move into the pharmacy with that and on your call, you said you expect one pharmacy -- at least one, I think it's the language this year, what piece of it is [indiscernible] from pharmacy. How do I think about moving this device in the pharmacy [indiscernible].

Yes. So the whole system is expected to be available through the pharmacy channel. And to be very clear, that means mail order, not retail. You're not walking into a pharmacy and picking up any piece of it, at least initially, that's something to think about in a long, longer-term situation. But what we did a lot of homework in the past about what would allow us to get into the pharmacy channel. And I would say a year ago, there was still a question of if a durable pump will be accepted in the channel. But now we firmly believe that, that question is taken off the table. So it's not if, now it's about building the infrastructure to support it. So we have to put systems in place. We have to work on packaging, and we're actively negotiating contracts. And so we're going to be very thoughtful and prudent about those contracts. Two important goals are that we can lower the out-of-pocket cost for the patient. And ideally that we would get appreciation on the revenue line, but either way, at least as good as our DME contracts. And so that's to come. That's what we're working on right now.

So right now, if I went to buy t:slim, that's several thousand dollars upfront, you get into your pocket. How does the economics work for that?

That's still the open piece. And so you can envision there, it could be that we have a different business model, depending on the payer. And it could look from the reimbursement side like the DME channel. It could have all the -- most of the economics on the pump and then ongoing pieces for the supplies. It could go the extreme other direction and be a full subscription model. Those are the pieces that we're working out. And I would say, different plans have different views on the way it should be reimbursed. And so we're going to be giving more information or color on that if and when it becomes material to the business.

So given multiple contracts, [indiscernible] I heard, they may be different in different areas or different...

That's correct. That's correct. Right now, everyone is an individual negotiation. There's no set standard. What we'll learn a lot this year as we're having these introductory conversations to get a few contracts under our belt is if we can set the standard for how that's going to look going forward.

Is there a stage [indiscernible] will go through the pharmacy? Or is there a benefit to continue to go through DME?

So there is an importance to the DME channel. It's well developed. The pricing has been consistent, and we know how to do it. And so what we envision is this is that t:slim remains in the DME channel. Mobi becomes sort of a hybrid because it's starting with DME and as we add pharmacy contracts, we'll be shifting it over. But the ultimate goal is to have Sigi go straight into the pharmacy channel. So Mobi is, in a way, if nothing else a pilot to getting Sigi into the pharmacy channel.

Okay.

We have a number of DME contracts that are actually really good contracts where the person purchasing a pump has 0 out of pocket. So there's benefits to maintaining those relationships while expanding into a multichannel approach.

Do you think a pharmacy is as important to the business cycle as I think Wall Street thinks it is?

We believe it can offer additional access. If nothing else, if we focus on the patient out-of-pocket, we can remove that perception that it's more costly to have durable pump. And so we see that there's opportunity there. There's pros and cons to both channels. And so that's what we're [indiscernible], and we're being cautious about as we move into the pharmacy channel.

But having access to both gives you the flexibility to manage how -- which of the channels you use based on what might be going on.

So I'm also thinking you're picking up -- well, you may not be picking up your CGM, but you're probably getting your CGM from the pharmacy. Does that help us more and more patients use a closed-loop system versus 2 separate systems?

Currently, they're sold independently. So I mean people purchase their CGM through the pharmacy directly, and they purchase the pump once every 4 years.

It may offer convenience for people when they're purchasing their supplies if they have one place to go. But to John's point, the they will still be sold separately.

They'll probably sell separately. You don't ever see a stage where they're packaged together?

It's a possible outcome, but we'll have to wait and see.

Okay. Okay. That makes sense. I want to talk -- are we done on Mobi. Anything else you want to say?

I mean, it's a great product, and I think that it's really going to change the direction of our growth this year. Certainly, it's not included in our guidance for the year. But I do really think that this is going to be -- it's going to be the product that brings Tandem back to the growth that we've seen in the past. And the change in growth for the company really has been in MDI conversions. It's people using pens and needles decided to come to pump therapy. What's happened in the last 18 months as some of our competitors have got more of that than they have in the past. We think that with Mobi on the market, the wearability of choice options are going to help us return to that more significant new product start percentages.

Okay. You walk straight into my next question, which is, if Mobi is not included in guidance, why not? And how much upside is that? I mean I really don't want people to start thinking well, it's -- if the guidance is for 10%, it's really 20% because they can get 10% growth from Mobi? I'm making that number up by the way.

Not affirming or denying. We wanted to start the year setting expectations in a way where people could look at the numbers and they could, I would say, based on what we would call our predictable revenue streams. So they could see those numbers and they could understand and see the line of sight and feel confident that it was achievable. So we built it mostly predicated on the recurring supply sales, very predictable. They represented about half of our business in 2023. The renewal stream, which also has become a very predictable pattern and really important in 2024 because the number of people whose warranties are expiring this year, is growing more than 30% to what we saw last year. So there are 70,000 people coming to market. And if we repeat our performance from both '22 and '23, we'll renew half of those people this year alone. And we still have people from the last year and the year before, who we will be working on the renewal opportunity. And then -- and this is mostly a U.S. focused conversation when you put those 2 -- when you line those 2 up, what's left is what happens with new pumpers? And in our 10% growth target, what this implies is that new pumpers could be flat to slightly down from 2023. So what that's reflective of is, if we were in an environment much like we saw in 2023, so if the competitive dynamics remain the same, we saw new entrants into the market, we now have trends and information on how we're competing against them and feel confident that we know what that could look like going forward. And we're leaving aside what we think the new products can do for the business. And we have extreme enthusiasm for the growth that they can bring for us. But what we want to have are trends and we want them to be sustainable trends. We don't -- we have to be careful in the first couple of quarters of any launch but sometimes you have the pent-up demand coming through. We want to make sure it's something off which we can build on the basis. And as we see those trends in the coming quarters, we'll talk more about that in terms of informing potential guidance updates in the future.

Okay. What were your new starts in the last quarter?

We don't actually break down the new versus renewals. But I can say that they did grow from Q3, and they were very much in line with our expectations. In fact, we came slightly ahead of consensus in the fourth quarter.

Did it just got out?

Is it all 3 of us or...

I got to start singing.

Is it turned on?

I think it is.

Okay. Okay.

Really close.

I can hear now.

All right. We were talking about new starts.

Yes.

So in a timely manner. So it was up sequentially but still down year-over-year?

Yes. Yes.

But if you could give me the year-over-year growth rate, was it an improved year-over-year growth rate versus third quarter.

Not really speaking to that. The only comment that we made in terms of growth rate in that breakdown would be that renewals year-over-year from a full year basis grew more than 50%. And so focusing on the strength of the renewal performance, it was a challenging year for new starts, and we think we can capture at least as many in 2024 as we did in 2023, but we fully expect we're excited, I guess, to talk about when we see trends from the new products and what that can do for the business.

Okay. But the [ idea ] is in your guidance, it's flat to down slightly?

Yes. Yes.

Got it. What do you think we're going to see this year at ADA?

You're going to see Mobi with G7 on it, for sure. I'm sure that -- I don't think that the larger competitors that we've got in the U.S. have anything new coming. I think that Mobi will be the newest thing. There'll probably be a lot of data on the performance of the systems that are out there. But I think that my sense is that Mobi is going to be going to be the big deal this time.

Okay. So Mobi is going to be the main deal that's at ADA. What about data? Will we be seeing additional data of what Mobi looks like with G7 or with anything else?

Yes, we'll definitely have data at that point in time. We'll probably -- I mean, we won't be able to see our type 2 data until later in the year. But I think that from our point of view, Mobi is going to be sort of the big thing we're focused on.

Okay. So type 2 data later in the year, is that at a medical meeting? Or will I just got a press release that says we've completed our last patient, and this is what we've seen?

Yes. I think there's actually the opportunity for us to present the data. My sense is that the data will be available in the second half, but most of the larger shows are in the fall, in the late fall. And so I would expect that we're going to try to present there. We're going to try to get this data filed into the FDA late this year or early next year with an approval sometime in 2025.

Okay. And with ATTD next week, you're going to Italy?

We aren't unfortunately. We're going to be down -- we're going to do a few more conferences on the East Coast. We have a big team of people going to Florence. So we've got some great papers that are going to be presented all by people who are not part of Tandem, but they're all on Control-IQ and the performance of Control-IQ. And they all have -- they have great results, and I think we're excited to have this [indiscernible].

Okay. So more Control-IQ less Mobi at ATTD?

Yes, that's right. Mobi is really just on the market. I think that -- and it's not in Europe yet. So it's really going to be mostly about Control-IQ.

Okay. So 2025, you have the opportunity for type 2 patients. Is that a different call point? Is that a different manufacturing line? Is that just opened the spigot?

I think to start with, the product that we're going to really focus on the type 2 community is going to be Mobi. I think the discretion and convenience that come along with Mobi is very important to type 2 just due to the negative social statement that's kind of assigned to it. I think that when you look at the market, as I just said, there's only about 5% of the people using pump therapy in type 2. And I think when you have insulin intensive type 2, it's almost the same as it is with -- when you have type 1. Your pancreas has degraded in terms of performance and you have insulin resistance. And so your body is just not producing enough insulin and you need that for both basal and boluses. And so the pump gives you just -- the pump AID system gives you substantial control. And then we've shown some of our type 2 feasibility studies that people who were using it -- people came from MDI. In MDI, they had very high A1cs. And when they started to use the pump, they drop their A1cs down substantially, and to what would be the sort of the desired levels for. Someone with type 2.

Okay. Can we spend some time talking about international, the international market, international revenues. Most of -- not all of your OUS sales, the majority are in Europe. And remind us which products do you have in that market? And how cool is it that I get to ask you which products? Like plural.

Currently, we have the t:slim in the market, and it's the t:slim with G6 and G7. And we're -- and so those are the primary products I think we've got in the market, in the OUS countries. So it has Control-IQ. We're got a big year this year in terms of new products. We're bringing Tandem Source, which is our brand-new data management platform that we rolled out in the U.S. last year. That will be going country by country throughout Europe. We also have a mobile app that gives you the ability to bolus from your mobile app on t:slim, which will be coming. And then we also have the Libre 3 integration. Those are the 3 products that we're bringing to Europe, which we think are all going to be very compelling. I think people are excited to hear and see that. And I think it puts us in a very positive position from a competitive standpoint when you look at the organizations that we're competing against in those countries.

Can you remind us what the competitive dynamics are right now in Europe? And I'm going to add a secondary question to this. We talk Europe as if it's all one country, and it's not. So how do we think about different countries and different adoption rates?

We're in about 25 countries today. Most of them are in Europe. The big countries in Europe are the U.K., Germany and France. That's where most of the opportunity is. I think that when you look at our competitors, from Medtronic is in a lot of countries. I think there are like 90 countries or more OUS. Omnipod 5 is now moving into the OUS markets. I think they're in U.K. and Germany. And there's another competitor in the OUS markets called [ Ipsen Med ], which has been reasonably successful in the last year or so. So it's slightly different, but it's -- I mean I think it's going to become ultimately the same competitive dynamic that we've got here in the U.S.

And one on the numbers, one of the dynamics. I know when we were going through the quarterly gate for your numbers has to do with the comp for international. Can you sort of peel that apart a little bit, please?

Yes. So there were a lot of interesting dynamics in 2023 across the year, but most notably, in the first quarter, we were -- had the heaviest impact from a transition we were making by commencing operations of a distribution center in Europe. And so that's a great efficiency gain for the business. It's very well received by our distributors from their perspective, too, in terms of how they order and obtain their inventories. It also will help going forward because we won't have such a disconnect from what we report as sales versus what's truly happening in the market. And so it was disruptive in that many of our distributors had been carrying many weeks, months -- [ 3 year months ] or more of inventory in some cases because of the transit times they were managing from San Diego all the way to their home bases. And so what happened was now that it's local, many of them were destocking their inventory. And so we saw about a $20 million headwind in sales in the first half of the year, about $18 million in the first quarter. So that creates a pretty easy comps for the first half of '24 over '23. The other dynamic I'll point to was, in the fourth quarter, there was a new rebate scheme implemented in France, which impacted us for the first time. And because of the size of our installed base there, for which we've already recognized the revenue when we ship those pumps in previous years, we had to assess the potential for this rebate to impact those pumps in the coming years. And we had to take a pretty sizable reduction to sales of about $8.5 million because of that. I would call it, it's almost like a onetime effect. We will have a rebate implication every time we sell a new pump, but it will be more at the noise level now. This was more for looking at the past. And so embedded in our guidance going forward is to think about our pump ASPs to be about $2,300 per pump, which is similar to what we were seeing before this period of destocking and also accounts for the French rebate embedded in there.

How much is the French rebate?

Haven't given any other color other than -- now it will be minimal on the -- and not very material on the ASPs, I should say.

Okay. What is the -- we talked about, call it, 40% penetration in the U.S. Type 1 is going to 65%. What would those numbers be like in Europe?

More like 15%.

15%.

And we think we can get in that same time frame in the U.S. getting to 65% [indiscernible] say 25%.

And type 2s?

Type 2, it's very difficult to say. I think that it's a larger market. The dynamics in the OUS countries are different. It's reimbursement, it's a big element of the uptake. And I think it's more predictable in the U.S. Certainly, it's a big opportunity. We're going to go after it. It's hard for me to say what the penetration is going to do.

Okay. And how do you think about regions outside of the U.S. and Europe? I mean there's a big world out there.

I mean it's a -- when you look at the opportunity, just in the 25 countries we're in, the type 1 opportunity is, it's almost double what it is in the U.S. And the type 2 opportunity is, again, significantly larger than the U.S. So I think that the -- and it's underpenetrated. So I think that bringing the technology that we've got to the OUS market is a huge priority of ours. And I think that the growth rate can continue to be -- we can outgrow or grow faster in these OUS markets. The technology is what people are looking for. They're looking for the same ease of use and therapy benefits. And so I think that the things that drive adoption here in the States are not different when it comes to type 1 OUS. And so I think that we intend to invest significantly in that market.

And right now, it's t:slim outside the United States, timing for Mobi and timing for Sigi? And timing for Mobi tubeless?

Yes. So we haven't been specific about any of those. I'd say that we're working hard to get Mobi into the OUS markets. That's certainly something that's important for us. I would say that, that's going to happen here in the not-too-distant future. After that, I think that Mobi tubeless is something that we're also working on. And I think then Sigi. Sigi would be the furthest out. Nothing has really changed from what we've said in the past. It's just more in a matter of being -- I think that would not be specific until we actually are closer to the actual production.

Okay. You talk about an LRP, maybe LRP is the wrong word, goal of 65% gross margins. How do we think about operating margins?

That 65% gross margin is, I'll first say, correlated to 1 million customers in the installed base and a 25% operating margin target.

Do you have a time frame?

We don't have a specific time frame there now. Much like the conversation around how we establish guidance for this year, we want to get through this cycle of new product launches to be able to give something more specific in terms of timing for that. But we do -- I mean it's in the coming years. It's not 10 years out by the lease.

Okay. in coming years. Got it. With so many new products, I'm almost shy to ask this question. Are there others?

Yes. Yes. I think we have the most exciting pipeline in diabetes. We have the 4 new products that we've just brought to market in the last quarter, which, I guess, more than -- throughout 2023, but that would be TandemSource, which is our data management platform, the CGM integration of the G7 and Libre 2 and now Mobi. So that's a big lift for the organization, but it's really prepared us for an exciting to 2024 and beyond. The things that we're working on right now is we're working on a technology upgrade to t:slim. t:slim has been around for quite a while, and it's an opportunity, I think, to get more advanced technology that costs less and actually address any supply chain issues that we might have as we continue to produce that in the years. And so t:slim X3 is in the works. The Mobi tubless opportunity, which is -- it's the exact same pump that we have in the market today, it's a different cartridge and there's a [ slide ] that you attach to your body. So it's completely a tubeless option. And this would be available to people who have Mobi. You can choose tube or tubeless.

Can you move back -- can you move back and forth?

You can go back and forth. It's just disposable aspect or the supplies aspect that changes not the pump. And then of course, we've got we've got Sigi which is probably the furthest out in time. So that's -- and that basically when we have those products in the market, that is what wraps up the portfolio that we think is going to be particularly successful in this market.

If you have Mobi tubeless, do you need sick?

We think there's -- Mobi tubeless gives you this great flexibility in terms of in wearability. There are people out there that prefer to have just a patch pump. And so that's really what Sigi is intended for us, people who prefer the patch. Beyond that, we've got algorithm improvements. We've also got type 2. We've got the extended wear infusion set. There's a lot that's going on in the company. And I think that we're excited about 2024 and beyond. But because of these products that we've just brought to market. But I think that as you look in the future, we have a bright future with new technologies.

It practically wrapped up for me. So when we are here a year from now, what do you think we will be talking about?

I think there'll be -- I mean, I think we're going to be talking about how Tandem has beaten the race, number one.

On record.

And I think that the...

Leigh, you okay with that over there?

I can say it.

That's why I'm asking. I know that.

I think that Mobi is going to be a big success for us. I think the sense integrations in the Type 2 data. I mean I think the type 2 data, and we'll talk a lot more about the opportunity at that point when we have it something to share when it comes to data. And then we also have the technology that we've got here in this stage today. I think in a year from now, there'll be a lot of discussion about how they're going to be in the OUS markets and the specific timing of this.

Excellent. Thank you so much.

Yes. It's been great to hear. Thank you for having us.

Great to have you. Thanks.