Senseonics Holdings, Inc. (NYSE American: SENS), a medical
technology company focused on the development and commercialization
of long-term, implantable continuous glucose monitoring (CGM)
systems for people with diabetes, today reported financial results
for the quarter ended June 30, 2020.
Recent Highlights & Accomplishments:
- Reduced net loss by $23.6 million to $7.5 million in the second
quarter of 2020, from the prior year period, due to the execution
of cost reduction actions and streamlined operational focus
deployed in late March 2020
- Continued efforts to support existing patients and progress
with anticipated submission to the FDA of the up to 180-day
Eversense product in the U.S. in the third quarter
- Formed strategic collaboration with Ascensia Diabetes Care
(Ascensia), a KKR portfolio company and leading global manufacturer
and distributor of self-monitoring blood glucose devices to over 10
million worldwide diabetes patients, through a collaboration and
commercialization agreement concurrent with additional financing
- Collaboration and Commercialization Agreement – Ascensia
and Senseonics entered into an agreement to collaborate to maximize
the value of Eversense in the worldwide market. Senseonics will
remain focused on product development and manufacturing, including
regulatory submissions, approvals and registrations, and Ascensia
will assume sales, marketing, market access, patient and provider
onboarding and customer support. Ascensia will obtain exclusive
worldwide distribution rights upon launch of the 180-day Eversense
product in the U.S. and the expiration of Senseonics’ current
international distribution agreements in other markets. The parties
will jointly share in net revenues as consideration for each
party’s contributions to the success and growth of Eversense.
- Financing Agreements – Senseonics has agreed to issue
$35 million through of senior secured convertible notes to
Ascensia’s parent company, PHC Holdings Corporation. The agreement
also provides Senseonics the option to sell and issue convertible
preferred equity to PHC Holdings Corporation in the amount of up to
$15 million following receipt of FDA approval for the 180-day
Eversense product in the U.S. and receipt of any required
shareholder approval required by the NYSE American listing
rules.
- Senseonics has also signed an agreement to issue up to $30
million in convertible preferred equity to Masters Special
Situations, LLC and affiliates thereof (“MSS”). The funding will
take place in up to two closings, with the initial 10% expected to
close on or about August 14, 2020. MSS has an option to purchase
the balance of the $30 million of convertible preferred equity in a
subsequent closing that would be expected to occur within the next
three months, subject to the receipt of stockholder approval.
- On August 3, 2020 the Centers for Medicare and Medicaid
Services (CMS) released its Calendar Year (CY) 2021 Medicare
Physician Fee Schedule Proposed Rule that announces proposed policy
changes for Medicare payments, including the proposed establishment
of national payment amounts for the three CPT© Category III codes
describing the insertion (CPT 0446T), removal (0447T), and removal
and insertion (0048T) of an implantable interstitial glucose
sensor, which describes the Eversense CGM system. Currently,
Eversense is contractor-priced by the Medicare Administrative
Contractors (MACs).
“Our second quarter results demonstrate significant expense and
cash burn reductions resulting from our suspended commercial
operations and other cost reduction initiatives. We continue to
support our installed base of users efficiently in anticipation of
the 180-day Eversense product submission and subsequent planned
launch in the U.S. early in 2021, if approved. At this point over
75% of our users are on at least their second sensor, where we
continue to see a high level of patient engagement as people with
diabetes are keenly focused on their healthcare during these times.
Anticipated revenue headwinds were caused by our reduced commercial
operations and early in the quarter impacts of the COVID-19
pandemic,” said Tim Goodnow, PhD, President and Chief Executive
Officer of Senseonics. “Moving forward we are in a stronger
position to help patients with diabetes. Our collaboration with
Ascensia represents a mutual commitment to penetrating the CGM
market with Eversense and the next phase of growth for Senseonics.
In addition, building upon our success with the MACs, CMS has
included a national payment amount for implantable CGMs in the
proposed 2021 physician fee schedule as a medical benefit, which
could lead to access to Eversense for millions of Medicare
recipients. We are very excited about the opportunity ahead of
us.”
Anticipated Key Milestones:
Q3 2020 – Submit 180-day Eversense product to FDA for approval
with reduced calibration Q3 2020 – Shareholder meeting to approve
future financings Q4 2020 – Restart of US Sales and Marketing
activities in the U.S. with Ascensia Q1 2021 – Proposed Medicare
National Payment Schedule Implementation Q1 2021 – Initiation of
O.U.S. commercial activities by Ascensia Q1 2021 – Expected
decision on approval of 180-day Eversense product by FDA H1 2021 –
Planned IDE approval of 365-day Eversense clinical trial by FDA,
including pediatric population H2 2021 – Planned enrollment of
365-day Eversense clinical trial by FDA, including pediatric
population
Second Quarter 2020 Results:
In the second quarter of 2020, revenue was reduced due to the
temporary suspension of commercial operations in March in the U.S.
after the repayment of the Solar Capital loan, as well as the
effects of temporary patient deferments resulting from the
pandemic. Total net revenue for the quarter was $261 thousand
compared to total net revenue of $4.6 million for the second
quarter of 2019. U.S. net revenue was $206 thousand after
accounting for gross to net adjustments. Net revenue outside the
U.S. was $55 thousand due to the deferral of orders by Roche. Gross
revenue for the second quarter of 2020 was $165 thousand.
Second quarter 2020 gross profit increased by $3.4 million
year-over-year, to ($1.1) million.
Second quarter 2020 sales and marketing expenses decreased by
$11.0 million year-over-year, to $3.1 million. The decrease was
primarily due to the recent changes in commercial activities.
Second quarter 2020 research and development expenses decreased
by $6.7 million year-over-year, to $3.8 million. The decrease was
primarily driven by lower clinical study costs and personnel
related expenses.
Second quarter 2020 general and administrative expenses
decreased by $1.0 million year-over-year, to $4.4 million. The
decrease was primarily due to a decline in personnel related
expenses, legal fees and other administrative costs.
Net loss was $7.5 million, or $0.03 per share, in the second
quarter of 2020, compared to $31.1 million, or $0.17 per share, in
the second quarter of 2019.
As of June 30, 2020, cash, cash equivalents and restricted cash
were $21.6 million and outstanding indebtedness was $106.4
million.
The company anticipates annualized cash burn will be below $60
million. If the company closes the full amount of potential
financings as announced as part of these agreements, the company
expects to be able to fund its operations through 2021.
Conference Call and Webcast Information
Company management will host a conference call at 4:30 pm
(Eastern Time) today, August 10, 2020, to discuss these financial
results and recent business developments. This conference call can
be accessed live by telephone or through Senseonics’ website.
Live
Teleconference Information:
Dial in number: 877-883-0383
Entry Number: 7703001
International dial in: 412-902-6506
Live Webcast
Information:
Visit http://www.senseonics.com and select
the “Investor Relations” section
A replay of the call can be accessed on Senseonics’ website
http://www.senseonics.com under “Investor Relations.”
About Senseonics
Senseonics Holdings, Inc. is a medical technology company
focused on the design, development and commercialization of
transformational glucose monitoring products designed to help
people with diabetes confidently live their lives with ease.
Senseonics' CGM systems, Eversense® and Eversense® XL, include a
small sensor inserted completely under the skin that communicates
with a smart transmitter worn over the sensor. The glucose data are
automatically sent every 5 minutes to a mobile app on the user's
smartphone.
Non-GAAP Financial Measures
In accordance with U.S. GAAP, Senseonics reports revenue in its
financial statements on a net basis, which takes into account gross
to net reductions resulting from discount programs, such as the
Eversense Bridge Program. To supplement its unaudited condensed
consolidated financial statements, which are prepared and presented
in accordance with U.S. GAAP and present total revenue, net,
Senseonics is also providing investors with gross revenue. These
measures do not reflect the gross to net reductions from these
discount programs and, accordingly, may be considered to be
non-GAAP financial measures. The presentation of these non-GAAP
financial measures is not intended to be considered in isolation or
as a substitute for, or superior to, the financial information
prepared and presented in accordance with GAAP, and Senseonics’
non-GAAP measures may be different from non-GAAP measures used by
other companies.
Senseonics uses these non-GAAP financial measures for financial
and operational decision-making. Senseonics’ management believes
that these non-GAAP financial measures provide meaningful
supplemental information regarding Senseonics’ performance and
provide better transparency on the impact of reimbursement and the
Eversense Bridge Program. Senseonics believes that both management
and investors benefit from referring to these non-GAAP financial
measures in assessing Senseonics’ performance and when planning,
forecasting, and analyzing future periods. For more information on
these non-GAAP financial measures, please see the reconciliation of
these non-GAAP financial measures to their nearest comparable GAAP
measures at the end of this press release.
Forward Looking Statements
Any statements in this press release about future expectations,
plans and prospects for Senseonics, including statements about the
potential benefits of the Ascensia commercialization and
collaboration agreement, potential coverage decisions, the
potential impact or meaning of coverage decisions, including
without limitation making Eversense available, claim adjudication,
and the potential life-enhancing benefits Eversense offers people
with diabetes, the potential FDA Premarket Approval application for
the 180-day Eversense product, the timing of future milestones,
including dates of enrollment for clinical trials, dates of
regulatory filings with the FDA and decisions by the FDA, the
availability and closing of future financing and the resulting
ability for the company to fund its operations through 2021, and
other statements containing the words “believe,” “expect,”
“intend,” “may,” “projects,” “will,” “planned,” and similar
expressions, constitute forward-looking statements within the
meaning of The Private Securities Litigation Reform Act of 1995.
Actual results may differ materially from those indicated by such
forward-looking statements as a result of various important
factors, including: uncertainties in the development and regulatory
approval processes, uncertainties inherent in the commercial launch
and commercial expansion of the product, uncertainties in insurer,
regulatory and administrative processes and decisions,
uncertainties in the duration and severity of the COVID-19
pandemic, the necessity of receiving stockholder approval that will
be required in order to raise all of the capital pursuant to the
preferred stock and certain debt transactions described in this
release, and such other factors as are set forth in the risk
factors detailed in Senseonics’ Annual Report on Form 10-K for the
year ended December 31, 2019, Senseonics’ Quarterly Report on Form
10-Q for the quarter ended June 30, 2020 and Senseonics’ other
filings with the SEC under the heading “Risk Factors.” In addition,
the forward-looking statements included in this press release
represent Senseonics’ views as of the date hereof. Senseonics
anticipates that subsequent events and developments will cause
Senseonics’ views to change. However, while Senseonics may elect to
update these forward-looking statements at some point in the
future, Senseonics specifically disclaims any obligation to do so
except as required by law. These forward-looking statements should
not be relied upon as representing Senseonics’ views as of any date
subsequent to the date hereof.
Senseonics Holdings,
Inc.
Unaudited Condensed
Consolidated Statements of Operations and Comprehensive
Loss
(in thousands, except share
and per share data)
Three Months Ended
Six Months Ended
June 30,
June 30,
2020
2019
2020
2019
Revenue, net
$
216
$
1,475
$
247
$
2,718
Revenue, net - related parties
45
3,132
50
5,312
Total revenue
261
4,607
297
8,030
Cost of sales
1,404
9,160
21,074
15,893
Gross profit
(1,143
)
(4,553
)
(20,777
)
(7,863
)
Expenses:
Sales and marketing expenses
3,142
14,179
14,287
27,013
Research and development expenses
3,796
10,504
11,159
17,612
General and administrative expenses
4,445
5,417
10,134
11,933
Operating loss
(12,526
)
(34,653
)
(56,357
)
(64,421
)
Other income, net:
Interest income
8
410
217
1,037
Loss on extinguishment of debt
(6,385
)
—
(10,931
)
—
Interest expense
(3,555
)
(1,965
)
(7,928
)
(3,999
)
Change in fair value of derivatives
15,238
4,889
25,549
6,961
Other (expense) income
(295
)
245
(658
)
(17
)
Total other income, net
5,011
3,579
6,249
3,982
Net loss
(7,515
)
(31,074
)
(50,108
)
(60,439
)
Total comprehensive loss
$
(7,515
)
$
(31,074
)
$
(50,108
)
$
(60,439
)
Basic and diluted net loss per common
share
$
(0.03
)
$
(0.17
)
$
(0.24
)
$
(0.34
)
Basic and diluted weighted-average shares
outstanding
220,305,606
177,012,497
212,025,792
176,983,467
Senseonics Holdings,
Inc.
Condensed Consolidated Balance
Sheets
(in thousands, except share
and per share data)
June 30,
December 31,
2020
2019
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
21,397
$
95,938
Restricted cash
200
—
Accounts receivable
670
3,239
Accounts receivable - related parties
—
7,140
Inventory, net
4,150
16,929
Prepaid expenses and other current
assets
5,688
4,512
Total current assets
32,105
127,758
Derivative assets
4,245
—
Deposits and other assets
2,716
3,042
Property and equipment, net
1,771
2,001
Total assets
$
40,837
$
132,801
Liabilities and Stockholders’ Equity
(Deficit)
Current liabilities:
Accounts payable
$
106
$
4,285
Accrued expenses and other current
liabilities
12,174
18,636
Term Loans, net
—
43,434
2025 Notes, net
—
60,353
Total current liabilities
12,280
126,708
Long-term debt and notes payable, net
61,192
11,800
Derivative liabilities
5,075
664
Other liabilities
1,895
2,278
Total liabilities
80,442
141,450
Commitments and contingencies
Stockholders’ deficit:
Common stock, $0.001 par value per share;
450,000,000 shares authorized; 230,551,676 and 203,452,812 shares
issued and outstanding as of June 30, 2020 and December 31,
2019
231
203
Additional paid-in capital
483,615
464,491
Accumulated deficit
(523,451
)
(473,343
)
Total stockholders' deficit
(39,605
)
(8,649
)
Total liabilities and stockholders’
deficit
$
40,837
$
132,801
Senseonics Holdings,
Inc.
Reconciliation of Total
Revenue, Net to Gross Revenue
(in thousands)
For the Three Months
Ended
June 30, 2020
For the Six Months Ended
June 30, 2020
Revenue, net
$
261
$
297
Gross to net reductions (additions)
(96
)
1,892
Gross revenue
$
165
$
2,189
Senseonics Holdings,
Inc.
Reconciliation of U.S.
Revenue, Net to U.S. Gross Revenue
(in thousands)
For the Three Months
Ended
June 30, 2020
For the Six Months Ended
June 30, 2020
U.S. Revenue, net
$
206
$
230
Gross to net reductions (additions)
(96
)
1,892
U.S. Gross revenue
$
110
$
2,122
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200810005705/en/
Investor Contact Lynn Lewis or Philip Taylor Investor
Relations 415-937-5406 Investors@senseonics.com
Senseonics Media Contact: Mirasol Panlilio 301-556-1631
Mirasol.panlilio@senseonics.com
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