Tandem Diabetes Care, Inc. ($TNDM)

Next presentation. Very pleased to welcome John Sheridan, President and CEO of Tandem and Leigh Vosseller, Executive Vice President and CFO.

Very timely to have you here coming off ADA. So I thought that maybe that would be a good place to start, just to maybe talk us through kind of your reflections on the conference, key themes, both from kind of a market perspective, what you heard kind of walking member and talking to customers and what you thought the big takeaways for Tandem were?

Yes. It was a great conference for us. We had -- you guys probably know, we received CE Mark for our pregnancy indication just a few days before the conference started, and we had a symposium on Saturday morning in which we actually went through and presented the data to a pretty large group of doctors, and that went over very well. Pregnancy is a really important indicated for us. It's people who are pregnant that have type 1 is not necessarily a large audience, but when you consider it's people who are considering pregnancy. So it's really anybody who has -- who was in childbearing years, they're really the market for this because you want to be on the product before you get pregnant, so that -- and you can use the exact same product during pregnancy. So important population. I thought the data was excellent, really well received. So that was -- that was a big part of the day or the weekend. The other thing that we did is we actually had an innovation suite set aside -- and in that suite, we basically took 20 doctors at a time and let them get up close and personal with Tandem moves tube system, which I thought were over incredibly well. In fact, David was in an afternoon session of that with a number of sell-side investors, we did pretty much the exact same thing. And I will say, when we actually just put it on and show people how easy it was to do that, there are absolute gas in the audience, which I was pretty surprised to see that. That was a total awesome response, similar behavior from the physicians. I think a lot of excitement about it. And the thing that's really important about the tubes version of Mobi is that the basis of competition to 4 or 5 years ago was primarily therapeutic outcomes. And with Control-IQ, I think we dominated the market at the point in time and did quite well. I think over time, that's changed, though. Now it's not only therapeutic outcomes. It's also form factor and market access. And so over the last year or so, we've been working on all of those elements. We have -- we're really now in the execution phase of the pharmacy transition. We're making good progress. I'm sure we'll talk about that in a few minutes. And then we're also just about ready to commercialize our tubeless version of Mobi. So with that, we have addressed the elements of that competitive situation that we didn't have. We now have pharmacy, we have form factor and we have the best algorithm. And I think as a result of that, we expect to see double-digit growth. We expect to see significant growth in starts, and we expect to see competitive conversions go up as well. So we're very excited about that. Like I said, it went over very well. We've had a number of papers or posters that were presented on just the ease of use of using economic and I think the experiential benefits of using Control-IQ over a large population, pediatric populations, so things like that went very well. But I would say for us, it was a great show and it just confirmed the strategy that we're working on.

So maybe just one kind of market-related question. It feels like it's hard to talk about diabetes or ADA without sort of facing the question if you think about the past 3 8A, it's certainly, I think, been an evolution of the conversation of GLP-1 versus diabetes technology, whether that's pumps or CGM to kind of question marks to the GLP-1s with some of these technologies to augment like what you kind of walked away from ADAS, where are we with kind of the GLP-1 discussion?

I think we've kind of like gotten past that hurdle last year. And I will say 2 or 3 years ago, certainly, a great deal of anxiety about the impact that, that may have. People with type 2, maybe it's going to slow the progression of type 2 and reduce or limit the growth in the insulin intensive type 2 area. What we've done is we've done several clinical studies. And in those studies, we've had a significant portion of the group. In fact, our -- our pivotal study was roughly 300 people and half of the control group had used GLP-1s for at least 3 months before the study started. They had to repeat of modern GLP-1s. They had to remain on the GLP-1s. -- throughout the study. And when you look at the A1cs of that group, before the study started, they had very high A1cs. So they may have been losing way for their diabetes was a very poor control. So like high single digits, low teens. It was problematic. And when they went on to Control-IQ, we saw a substantial reduction in A1c. And I think the conclusion from that study as well as several others before that, is that the -- it's a complementary a situation where you need both. You need both of them, really, I think, to manage the weight in diabetes control. And I think that's pretty much -- I mean, I think our competitors have been saying the exact same thing. It's a complementary situation. And I think now has been confirmed in multiple clinical studies. So I think it's no longer the risk that you had received it was, like I said, 2 years ago.

And I wanted to dive into your portfolio, but 1 more kind of broader question to ask, which is -- you talked about FormFactor meeting 1 of the kind of unmet needs for Tandem in the marketplace. So when you go in EDA, there's so many different presentations about time and range, up from 66 to 67 okay. And then you gave out a form factor and then you hear about close the ballot. I mean there are a lot of features that can inform patient and physician decision-making around prescribing a technology. How do you think those kind of rank in terms of -- how do you think about the interplay between those different features? And are there different things that matter to different population?

Well, it's a very segmented market. And people have different opinions on how they want to wear, control, interact with the device. And so that being the case, we believe that you have to have a choice in the market and just having a single pump with a single sensor, it's just going to -- it's not going to work because I said people really want to have differences and they want to have choice. So I think that, as I said, form Factor is a significant issue these days. And I think the patient population, there's definitely a market for form factor for a tubes form factor out there. And I think physicians, when they have a patient that comes in that's using pens and needles and they ask for a patch device if it has an AID system on it, which, of course, one of them does, they're going to put them on that product. I will say that one of the things that I continue to feel very good about is when you talk to the general physician community, they will tell you and tell us that we have the best algorithm on the market today. And so I think that -- so again, we're going to eliminate that form factor advantage here in the not-too-distant future. And so in that case, it comes back to the algorithm. And I think our system has better control there's immediate and sustained improvement in that control over time. So again, I think that when you look at the tubed market today, the tube market is growing slowly, it's growing maybe mid-single digits. If you look at the 2 list market, it's growing in excess of 20%. And so we will -- we want to participate in that market. and take advantage of that opportunity, which I think we're going to do in the second half of this year.

Have you filed Mobi too?

Well, you know the answer to this. And what we have said is that we will file in the second quarter. We're not going to tell people exactly when I will say absolutely confident that we will file in the second quarter. And I think we'll probably talk about it on the second quarter call.

Okay. Not on -- Fair enough. -- transition, which is obviously a huge part of not just 2026, but sort of your commercial strategy going forward. I thought Leigh on Saturday, you provided a very helpful perspective on just the mechanics and flow through the pharmacy. Maybe you can just kind of update us on where we are and maybe just sort of reiterate some of those comments you made.

Sure. Absolutely. So -- for us, pharmacy this year, it's a race and restart. We talked a lot last year about launching into the pharmacy channel where we started with just the Mobi comp and supply. And we went in with the business model that looks very similar to what it looks like in the DME space. And so this year, when we started the year, we decided that the best approach for us to maximize the pharmacy opportunity and to launch with the pay-as-you-go model. And so what that meant was when we came into the beginning of the year, we really had to restart while we had contracts last year with formulary coverage, we had to go back and renegotiate every single one of them for the new pricing structure. So the first quarter for us was really about building up the opportunity. So getting that formulary coverage to get us started and it was also about the operations. And so it was implementing the system that we needed to launch pharmacy at scale with a model of this sort. And so we did a really good job, I would say, outperformed our own expectations in terms of market access. We had a goal this year of getting to 40% to 50% formulary coverage. And as we exited the first quarter, we were already at 40%. And -- and that's really important, too, because we were able to do that off cycle from the normal formulary. So when we talk to payers and PBMs today, they're already thinking about 2027, and we brought them back to this year, and we were able to make this change. at a pretty rapid pace. And we're not done. I would say there's still a great chance we'll be at 50% by the end of the year. We have a number of things in the works we're still looking at. and movie tubeless with approval will give us another chance to talk to people this year that can also help with growing that formulary coverage. So then when you turn to the operations side of things, it's not as easy as just turning on a switch you have access there's work you have to do. And it's not insurmountable, but maybe underappreciated operationally, how this changed every one step in the process. And so it changes how we engage with the patients. When we talk to them now, we have to talk about 2 different benefits and help them understand the value of each and which one might work best for them. it changes how the physician writes their prescriptions to us. And so there is a way they can do it in DME, which was a little bit more flexible with a lot of engagement with us. in pharmacy, it's a little bit more rigid, if you will, and so very structured and the type of information they have to share. So it may result in some back and forth with the physicians as they're getting used to the new way to prescribe. It changes how we engage with our distributors. It's the same distributors that we use for DME. They also have a pharmacy capability, but how we operate within our own system and how we hand over referrals to them to process. all changed. And so that's what we were working on in the first quarter. And we were fortunate to have everything in place to kick off a launch in March. And so we started with only the month of March, we started with about -- with just less than 5% of our shipments going through pharmacy for that free Pago pump and then less than 5% of our customers ordering through pharmacy in our installed base. So that number of customers was relatively the same in Q4 and Q1 because we were focused on the operations piece. But we weren't really trying to drive that through -- and that's what the coming months and quarters are about. It's about continuing to iterate on our learnings from the process and to drive more volume. And so you can expect to see month-over-month, quarter-over-quarter an increase in the throughput. And so for us to achieve the goals that we laid out at the beginning of the year.

And maybe on the script read, 1 thing that I didn't appreciate it. So if I -- I'm a tandem user and I come up for renewal and I'm ordering supplies. If I'm already the DME, I would call it order supplies, you would check my benefit. If I can order to the pharmacy, you go contact my physician to rewrite the script? And is that a digital engagement? Or is there how seamless is that engagement on the scripts amendment?

Yes. So I would say when we -- when the engine is running smoothly, it's going to be pretty seamless. But today, it does require another prescription from the physician. And this is at a point when they don't normally have to write a prescription. And so that's where there's just this new interaction that physicians aren't necessarily prepared for their use to focusing on the pumps and the therapy, getting patients going once they've gotten them on the supplies, it's not something they have to ordinarily reconsider. And so we're reaching out and asking them to engage in the process. And so it creates a little bit of extra work for everybody in the whole channel or the whole work stream. And so that's why it's not necessarily something that you can just flip on overnight. But again, not insurmountable by any needs just behavior change that we have to manage through.

We do have examples, though, of patients who express interest in the pump and they don't interact with Tandem at all. they get the prescription, it goes through this channel, and they get their pump in a couple of days, and that's kind of the model we are working to get to. Not there yet, but we definitely know we've been -- we've proven it now many, many times. And it's -- there's a learning curve issues we're dealing with in a general basis, which I think are all attractable -- and I think when you look at the market, people have been there and they've done that and they're in the channel, we expect to be there just as I said. -- as successfully as they have been. .

And I think we always get a lot of questions on price in the pharmacy. I think when you introduced the $350 number, you were very clear about your -- the reason why you won't -- the $350 number is what you represented in guidance. but is not necessarily your go-to-market pricing strategy. Maybe just clarify how you're thinking about pricing and what you're seeing so far as you work through the transition?

Yes. So as we thought about, we had to look at the array of contracts that we've signed with different rebate percentages across them. And then we also had to anticipate what we think might be required from a co-pay assistance perspective. And so you have to think about from the co-pay assistance, we're not just competing with others and what their out-of-pocket is it's actually competing with our own DME channel. So what we want to make sure is that for the patient, it's the lowest out-of-pocket if they were to shift into the pharmacy channel and without any history to show evidence of how these might even out over time in a sustainable trend, we gave a modeling assumption. It's not meant to be the price point. It's not our gold pricing. It was just to say, while we're getting started as we're learning, this is a good baseline to think about what the average monthly rate would be for supplies in our business. and as we continue to gather more information. And again, we're still actually measuring our time and pharmacy in really weak, fairly months at this point. So as we move through this year, we'll continue to perform you more regularly at what that might look like and how to think the future. It's really just about us as we're taking these initial steps, making sure that we have everyone grounded appropriately.

Very helpful. And then as we think about just the evolution, I think there are kind of 2 pieces to right? There's the new patients going through the pharmacy, but then there's also the existing installed base converting that. I think you said existing installed base potentially to be 80% converted within -- by the end of -- is that right or wrong? And how should we think about those 2 moving pieces.

Sure. So actually, the other way around -- so this year, we expect for pumps going out the door that about 20% will go out in the pharmacy model, so for free, basically. -- starting low, as I mentioned, first quarter less than 5%. So obviously, we have to exit above 20% to average that for the year and 2 to 3 years, 80% of pumps could be going through that channel. And then in the meantime, what we'll be doing is building up the installed base who's ordering in pharmacy through the PayGo model as they get a pump but also converting customers over time. So as patients come up for renewal, we'll check their benefits, as we said earlier, and we'll encourage them to shift over to the pharmacy channel. So the key metric we'll really be looking for the future. It's not the individual parts and pieces, but just pharmacy sales as a percent of U.S. sales. This year, we expected to average 15% in 2 to 3 years. We expect to be around 70%. And -- and because of the pricing power there, that does not mean 70% of customers have to be ordering through pharmacy is much less than that. And that gives us the opportunity to continue to drive that installed base over the next couple of years as we build up formulary access.

Okay. Maybe we could turn back to in the pharmacy business and the interplay with actual performance of the pump franchise, a little bit hard to necessarily get a great view of market share because each of you provide different KPIs and metrics we it's pump shifts or new patients arts so we're getting a lot of different data points from you and your competitors. But -- what do you think is happening in terms of underlying market share for Tandem, both in terms of new patient starts and also the renewal population?

Yes. I think that the fact that now one of our competitors is now public, and we can actually see the data, it will be a lot clearer because that's something we haven't been and let's see. We haven't had to estimate that over the last couple of years. I would say that we've had the first quarter data, and I think there was some concern that the market is slowing down based on the first quarter. And I would say it's just not enough data to make that assertion. If you look at 2025, I think all of the pump companies did quite well. There was growth. I think we saw the penetration rate increase. And if anything, when you look at 2026, there's more technology coming to market that's going to reduce the burden. It's going to make it easier to use. It's going to enhance the performance. And I think those are the factors that drive growth as well as, I think reducing out-of-pocket. So all of these things are happening in 2026. I think I anticipate that we'll continue to see growth in 2016 and beyond. And I think that there's seasonality that's impacting the first quarter. We saw seasonality in line with the way we normally see it. There was no surprises for us. I do think that there's some macro factors that could be impacting the performance in that quarter. Certainly, people are concerned about the cost of gas and inflation. And I think they're being more cautious when it comes to spending. But that's why moving into the pharmacy channel right now is so important. -- because we can't significantly reduce their out-of-pocket and really offset that concern.

And as you kind of take a look back at the past couple of years, do you think -- have you gained share, lost share, held share in each of those categories that new patient starts or renewals?

I think our renewals have done quite well. I mean we continue to see a greater percentage of people renewing in time, and now it's over 70% -- and it's -- 1 of the things I'm very proud of is when you look back at the most competitive period, when 1 of our competitors came to market with attached, you would think at that point, we would have lost people -- in fact, if anything, we saw people renew faster and more people renewed. So I think once you become a member of the Tandem family, you stay with it, and that's because we do things like we give away technology for free if you're in warranty. -- and we also provide excellent service. So I think on renewals, we did see continued performance I think on new starts, certainly, we did see a reduction in MDI during that period. But I think over the last couple of quarters, we're starting to see improvement. I mean we're still losing share, but we're losing less share. And as we move into the second quarter of the year, we expect to see growth there again. And so -- and then on competitive conversions, I think that most of the competitive conversions we've had over time have come from Medtronic. Medtronic is now doing a much better job of retaining their competitive conversions. So on the new start side, it's -- we've lost some, but we expect with the things that we're doing now, our strategy is intended to get back to the point where we see double-digit growth. We see growth in new starts, and that's primarily where we want to see it.

And but retention should be a big opportunity if you're right. If you go back and trace your trajectory to when you go to '19, '20, '21, '22, you had a period of really strong outside performance all of those patients and some of them have already passed a renewal with some of them are still on the forward in the renewal pool. So it seems like that's and converting them to pharmacy is a big opportunity.

Yes, exactly, I think that we're going to certainly try to convert people who are just as they come up to purchase supplies to pharmacy. But once a person is renewing and they have -- they see the opportunity to renew for 0 out of pocket. -- that $1,000 during DME has been a real -- it's been a problem. And I take that away. I think if anything, we'll see the renewal [indiscernible] Out-of-pocket costs rank in terms of the barriers to renewal or barriers to the pump adoption in general. . I'd say -- I mean, I can't tell you a word is -- I'd say it's a significant concern. Yes. And I think that people are always thinking about it. That's why I think that's why we have seasonality because they wait until the fourth quarter when there's their deductible has been met. And that's why the -- that's why we see the lion's share purchases in the back half of the year.

And how are you going to handle for the Mobi to tubeless hand off? And are you going to -- in a period of time where patients who someone gets move today, but you get approval for tubes in 2 weeks, and on let them swap it out. How are you thinking about .

Well, it's -- Mobi tube was -- it's the exact same pump that's on the market today. So there's a significant number of people out there that have Mobi today. And what they do today is they buy a cartridge that works with a tube and then we have the infusion set. And so that's the sort of the cartridge and the infusion set or the supplies people purchase today. With MobiTbless, we have a different cartridge and we have an infusion plate. -- and the infusion plate has adhesive on 1 side and it has an inserter on the top. And so you would put the adhesive on your body, you would insert the cannula -- and then you take the cartridge that is the tubeless carters put it on the same movie pump and you slip it in to the plate, and that's how it works. So it's really -- it's about providing new supplies to an existing Mobi user or it's about having somebody purchase a new movie with the tubeless supplies. So we expect a significant portion of people in the marketplace we'll be interested in trying out the tubeless option. And I would imagine that some people would want to have both tube and tubes and they can because that's the way this thing works. So there's real really nothing on the market that's going to give people the opportunity to try -- when it comes to wearability, there's nothing like it on the market today. And I think that the other benefit of it is that infusion plate, it's the infusion place that uses the steady set technology -- so it's an extended wear and fusing plate. So it will last for 7 days, which reduces the amount of time you have to insert a cannula by -- it doubles that amount of time. And what you do simply is you just take the pump off you change the cartridge when you run out of insulin in your cartridge and you fill it back up and then you put it back on. And so that's 1 of the great things about the product is you can just take it off when you want to. You could charge it, you can do all sorts of things. But again, it's a great variety of options when it comes to the wearability.

And is there any -- I don't know if it best to ask this question is on these product transitions, there's some sort of weirdness in the gross margin as you ramp a product? Are you selling more pieces there? Anything that investors need to just be aware of from a mechanic standpoint when you launch tubeless movie?

You're right, we typically do see some level of headwind when we launch a new product until we get to a level of volume and scale to leverage all the benefits from the fixed overhead. We had something similar with Mobi. But what you may remember is it didn't -- we didn't go backwards. It really just I guess, kept us about even as we got through the early parts of the launch. And so I would say Mobi-twas a similar expectation. It might initially have a little bit of a buffer on being able to increase gross margin, but it should necessarily drive it backwards.

Very helpful.

And we saw an awesome year. Our first quarter was awesome when it came to gross margin, and we also saw a positive EBITDA, which is the first time we've seen that for quite a while. .

And maybe it's a good segue to talk a little bit about the P&L implications of the pharmacy transition because there's a lot to it. There's the pricing piece and the revenue, but it's a very different profile P&L for asset sold to the pharmacy, if you think about the fully loaded P&L versus what is sold through DME because I would think that the incremental SG&A and R&D allocated to that are needed to support that almost nothing. So maybe just talk us through kind of the broader P&L implications as we think to the pharmacy transition.

Yes, it is a very different infrastructure. So for the DME business today because of all the labor that goes into getting somewhat prescribed on the technology. We have hundreds of people in the organization customer service folks that are supporting doctors and patients through that journey. And so for this year, in particular, we're still supporting a primarily a DME base at least right now. and we've built the infrastructure to support pharmacy, which is more technology based. And so there will be some incremental variable costs, but it will be nothing like the DME space. And so we'll be able to grow and scale pharmacy with little incremental cost. And as we transition more we're out of BME, we'll start to get leverage on that side as well. And so this year, you can think about it in SG&A, those costs are almost more doubling up to some extent. And the next couple of years, you'll start to see more leverage in SG&A.

And how -- as you generate some of that incremental profitability, where are you thinking about putting it from an investment standpoint? Is it -- I appreciate that there's a degree of profitability you want to achieve, but that will create a lot of room to redeploy resources. And we -- what's on your mind for where you think that might go?

I think we have opportunities to continue to invest in the commercial team. I think that advertising marketing dollars or something that we don't have the benefit some of our competitors have that comes to the ability to do that. And certainly, I think we'd like to, I think we would use that just to make increased awareness in the market. . And then certainly, on technology. I mean, we're always looking for additional technology for the company. And while there's no silver bullets out there that are really opportunities for us right now. over time, that may change. And I think having additional cash on hand to enable us to take advantage of that is something we're certainly considering.

Maybe it's a good opportunity just on the commercial side to touch on 2 things. One is the international doesn't get a lot of airtime, but it is -- it's a nice growth driver for you, and you're also going through a transition, OUS from distributor to direct. Maybe you'd touch on the OUS commercial dynamics and then also maybe talk about chief commercial officer transition, I think sometimes when those things happen, people want to read into it is an indicator of something from an underlying business basis. It didn't sound that way from your comments I don't think over the weekend, but maybe you could just address both .

So first of all, I just -- over the last year, we've definitely invested in sales and commercial specifically, last year, we added to the sales organization. We've been working on improving the systems that they use to improve the -- to manage how they interact with physicians to prioritize keep track of the interactions that they've got and just make them more efficient in the field. And so I think that these productivity improvements are in process of being implemented right now. They're significant. And again, it really automates a great deal of the stuff that they used to do in paper. And by doing that, I think we expect to see benefits from that. And then the other investment was really in going direct OUS. And so in 2025, we really spent the entire year developing the systems necessary to run a business direct. And so I mean, we were depending entirely on distributors at the end of '24, and we had to put in the infrastructure to basically to order to basically supply chain to manage customer service. All of that stuff has been done. So it's a pretty heavy lift in -- in 2016, we've gone direct in 3 countries. In the first quarter, we went direct in Switzerland, Austria and the U.K. We have another country we're planning to go direct in at the end of this year. And then we have several more that we plan to go direct in, in 2027. So I mean the process is in place. We've got almost like a cookie cutter that we can use. -- to go from country to country. We've expanded the sales organization in the countries that we are direct in. We're planning on doing that right now with the sales organization that is in the back half of this year. And so I think from an operational point of view, the team has done an excellent job. I think having our own sales team, having our own operations in the OUS countries, there's 2 benefits. One is you have closer relationships with the HCPs. You could help them understand the technology better, you can interact with patients more than we have in the past. And then we have a great deal of technology that we've developed that's now available in the U.S. with our own team in country, we can do a more effective job of getting the technology into the OUS markets faster. And we think that's very important. And when you think of the OUS markets, it's twice the diabetes type 1 diabetes community is twice the size or more than twice the size than it is in the U.S., and it's much less penetrated. And so I think there's huge opportunity there. So we definitely want to continue to invest bring technology, grow the -- our own capabilities. And is a direct operation. We still have many sense to go direct. And so we'll probably exist in a hybrid format for quite a while. And I think we're looking to take advantage of the big opportunities first.

And maybe just cover the CCO...

Yes, sure. So we hired a CCO about Mark Novara. He's a good person, capable guy. We hired them about 2.5 years ago. I would say his strength is, in particular, in strategic planning and decision-making. And so he really helped the team come up with the strategy that we're employing right now. I think if you look at what's happened over the last 2.5 years, I think it's now moved from developing a strategy to execution. And I think that execution is something that was not necessarily a strength of his. And so we've just decided to move on. I think that -- if you look at the T has right below, he's got a number of executives that are VPs or senior VPs that are all quite capable and doing an excellent job. And so there's definitely been some shuffling of the deck but we do have executives that report to me that have experience in sales, market access, all of those areas. And so we've realigned the team, but we still have high confidence in executing and there's a great deal of focus on executing. And we feel like doing it this way, we're going to continue on the plan. We'll probably do things faster than we were before. and we have a high degree of confidence in where we're going. I'll just say that in terms of bringing somebody else into the team at this point, we kind of want to get until we -- we want to wait until we get past this heavy execution phase because if we bring somebody in now, they're going to want to do things differently or change there going to question stuff. We don't want that distraction, honestly. And so let's get through this period of time and maybe later in the year, we'll start to look for a replacement.

Then the other area you talked about incremental investments is on technology. And it seems like just walking around ADA, the theme of the meeting seemed to be very much automation, automation, automation -- where -- can you maybe give us some perspective on your view on what fully closed loop means, what you're fully closed with algorithm -- what's the...

Yes. Well, I'll say that everybody knows that we partner with them back in the 2015 time frame. We licensed Control-IQ from -- it was a company called TypeZero, which was a spinout from UVA. And we've now employed that and improved the technology. We continue to work with them. And one of the reasons that we went with Control-IQ to begin with is that they had the most significant amount of clinical data on the algorithm, and it was excellent. And so today, we find ourselves in a similar situation where they have an algorithm that's called ADNET, it's been tested in feasibility studies quite a bit in the last year or 2. And what we're working to implement right now, 8 in that. And so it works -- it's basically a system that is you can set it and forget it. You can basically turn it on and not interact with the system at all. and it will control your blood sugar just as effectively as the system we have today does. However, if you feel like you want to interact with the system, it will allow you or the physician to go in and make changes to optimize the system. And I think that's a very important part because I know there are systems in the market that don't allow you to do that today. I don't know if physicians and patients find it very frustrated. So that's something that we intend to initiate our pivotal study for here in the second half of this year. I think that's going to be -- we're very excited about that. In addition to that, there's also optimization of the interface on the mobile app, which I think simplification is something that makes a great deal of sense to do in line with having the fully closed loop system on the market. And so that's certainly happening. And we have a very capable team of mobile developers that are working on that right now. And it's really exciting to see the work that's going on there. And then finally, if you look at the product -- the hardware, we have movies coming to market right now. But a couple of years ago, we acquired Siggi. Siggi has a number of very interesting technologies that we're employing. And I think that the way to think of sign now is really not -- it's not going to be a Sigi product. It's going to be the next-generation Mobi. And I think we will bring that to market. And we think Mobi today as it is today, will be very successful in the market for a few years. And so now we have time to go ahead and optimize the next-generation Mobi, which will be smaller and it will employ a number of differentiating features in addition to this optimized mobile app that we think will really make it a killer product in the market.

Excellent. That's a great place to wrap up. And John and Leigh, thank you for making the trip to Miami. We look forward to getting the next update in early August.

Good to see you, David. Thank you very much.

Thank you.

Thank you.