TNDM - Earnings call transcript Q4 2017 | Tandem Diabetes Care, Inc.

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Operator

Good day, ladies and gentlemen, and thank you for your patience.

You've joined Tandem's Fourth Quarter and Full Year 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference may be recorded. turn Ms. over to Chief your like Officer, Administrative now the to call host, I'd Morrison. Susan you Ma'am, begin. may

Susan Morrison

that call. year you. our Thank under any could Good earnings results of the forward-looking full Tandem's product statements future and elsewhere Risk reflect materially timelines issued afternoon, in be you by will management's conference statements those forward-looking release statements. XXXX expectations These thank different highlighted for everyone, Factors and joining is portion quarter fourth or Today's include from cause actual differ discussion factors. events, about anticipated result these that our and development financial on There in annual implied and are We expressed date. whether projected no today performance of XX-K, obligation or could other actual press forward-looking list forward-looking our to new as publicly of cause earlier report information, today's statements. and those as operating of only assume plans and materially results other statements our in SEC factors update to events and any or and filings. uncertainties from to a speak most recent A Form risks future and

during periods performance that operating will information discussing a we reporting better comparisons reflects we Non-GAAP and our non-GAAP believe measures financial these facilitate In indicative include financial and references non-GAAP addition, investors We number believe is today's our results measures. give will ongoing today's to measures discussion to of of operating core our financial call. GAAP business are operations. of across provided

financial the release. Use be leading about Financial in I'll of heading information see this press today's over President our the time, please Kim. turn information will measures, additional our at to CEO, And call. use it Tandem's Non-GAAP Measures of Blickenstaff, and Kim non-GAAP For under

Kim Blickenstaff

Financial our Officer. welcome is me to Leigh call. Chief joining today's today Thanks Susan, Also everyone and Vosseller,

am We I who she was the anyone fourth gross the the start highest to our quarter position And it results to and more in proud ending has meet and Leigh, with off first For the a in and progress. for and business, in bringing number shipments of to teams as year, strong had Leigh's year already CFO the opportunity of continued back of our quarter unique of looking our history in as well demonstrated the assumed results. very date our delivering XXXX, the is greatest particularly. not passion have at pump a sales margin successful

in pumps We of also quarter. successfully very clinical process to integration with addition launch with manufacturing our And the leverage our trials. also exited with in the GX year new third of insulin the improve XX The the several delivery initiatives progress launch transition custom t:lock advancement in and making to These infusion such facility. allowed the to sets our as QX. improvements algorithms The to of Dexcom automated close of the us meaningful strong. t:slim our operational

the for the robust growth reaching in the first we demonstrating continued quarter quarter half anticipate support breakeven will $XX strong on second of month, XX to Demand flow which goal anticipate successfully our a has XXXX. our quarter we first cash remains we completed beyond of in XXXX. t:slim quarter fourth and financing and expectations the this the compared XXXX. from was momentum original of positive Our Last million

on commercial features this which with target We keeps application low Basal-IQ, suspend trial summer. for product for algorithm for outstanding launch recently a which t:slim a review, the results XX a track also and to from PMA pivotal submitted us predictive glucose reported a the FDA's

computer. survey CGM half the continued people second over your design, September, with dedication of the customers hard rather touch Thanks to our lives dedicated the partners contribute of with building pump outside with goal in employees Bluetooth software improving making hardware in report smallest of capability a radio. driven perseverance the GX including ability is along Offering things and look Mobile the the to by industry t:slim group meaningful especially beginning market the t:slim the both do ability which pump customers. taking big the When also diabetes launch simultaneously innovations. a of so the demand lives like the And rapid achievements of sides deeper we our to resilience, feature the updater high [ph] a to revolutionary of We're past our The integration. new offers remotely underscores provide work In QX, market set everyone and choosing and make new the using with the tool, the this to XX a among from simplify integration update XXXX. were Tandem able access Dexcom setting and upgrade the business of than with people and These good using to research provides the diabetes recently personal in three clinical BQ&A participants GX offering pump software new durable through foundation distributors, by updates sales pump efforts are the current customers to top device for software for style replacements standards suppliers, we our screen their diabetes. CGM. a which the and our XX features that in United successful remotely year. for reasons leading by our color progress for for launched the XX We integration at possible States the our of

the this meaningful we future. differentiating apart As for is and only today the offering a that pump feature, believe factor company tests it foreseeable

more continue former number from fees customers to former glad customers we Johnson decided in increase from Historically, the the particular the to insulin than look half low-teens, continued in we they exit great more and fourth to we quarter that customers Animas was a came who the former another it see from continuing see of our saw new expand to have market therapy As Of report shows manufacturer, new market than are to is more Tandem the benefits we to next for estimated It's Medtronic shipments XX%. following to a to therapy. being Animas pump people note in Animas, from, are pump high customers bring that the to converting pump our and the diabetes. to year report Johnson insulin announcement who with of pump suggestion as our the & customers December, grew market.

As a Medtronic another customers their to reminder, to pump. Animas shows aid transition and their

country selecting period. prospective they options puts of history us and use calls said, are which However, t:slim Animas users particularly difficult being pump the and already customers the of within now because they pumps an the Current warranty Animas' high. Medtronic long and had customers suggest integrated based substantially that following the we Animas their term That remain customers have days our increasing our will to Animas inbound alternative Medtronic. business. announcement the Early different attractive XX because disadvantage. many on continue to Dexcom list evidence subsequent insulin offer be to impact orders on at pump Dexcom highly CGM Animas where a in it's only decision control their a is quantify to

pump our decisions we a with XX hard and XX of people of Animas' customers using one by quarters. However, we the as pump preferences to to and most t:slim the Animas Overall, rated over interest will number the is and working believe XXXX. purchasing as the communicate service make that this the t:slim and better features tailwind aligned demonstrate view be the through early upcoming new customer users Animas of potential to an they we're their we encouraged look from benefits

the going to and look pump the initiatives. fall main our to market As number help and high insulin new expand we in develop is three innovation to efforts pumpers, continue a current to attract exciting to what

low and algorithm technology. predictive Dexcom resumes a glucose And Two, which GX Basal-IQ XXXX, near values connected automated our bulk center which suspend generation hybrid insulin which AID, TypeZero's levels were t:slim closed to algorithms low with three, automatically is First, IQ, previously suspender delivery glucose using loop is delivery Control to we system efforts In platform. help. when automated glucose are delivery or utilizes R&D begin or XX insulin referred next our rise. the advancing on insulin hardware insulin which our is this focused are PLGS Starting platform. to term for resources and when predicted of Basal-IQ,

left night FDA. trial results hypoglycemia feature Our our controlled are results of impressive XX% very number to that market The were product spent submitted people that alone. research mystery of has the These and especially compared participants X.X%. this we is started up and at the augmented the therapy due in complications of untreated. clinical risk recently outstanding wrapped when primary an In the the the time AXC to the system with out with achieved of by algorithm, sensor reducing severity hypoglycemia of reducing one pump diabetes outcome the support showed given meeting well January, we to want of in shown which of PMA, particularly

the computer Diabetes get started. XX% performed to results had it were this demonstrated give This significant was the and any hyperglycemia. ease past these use important among initial they the of and of increasing Technology burden see training. confidence the Basal-IQ fourth success our after time us support without will the rate a based a of technology system accomplished the are presented launch new available level the reduce series We training compared announced thrilled users us competitive our participants, use was the to in rate hypoglycemia the to expensive other advantage to delay technology will quarter, XX feature. effectively in made approved on believe no preparing is and the clinical consumer the are necessary all Basal-IQ cost. compete access but ways without may FDA who which for participants study critical using be therapeutic is tool we front. system of a feedback high diabetes and system reduction by the including data launch easy with study We available XX of the support spent in new the t:slim clinical allow at the Meeting been of a we that to equally t:slim and usability Importantly believe to for to that to quarter, using on I can this to a barriers always features more Basal-IQ Tandem to will has decision front, FDA currently of be this leader with we to vision available management us summer approval. to In Basal-IQ the that systems software fourth and our The subject XXXX a

Following the product school letters trial, quickly their about as market story completion parents provide to multiple study throughout lives. telling their quality as of as received this children motivation bring participated possible. organization from elementary I personal the of continued letters system Basal-IQ the the These improved well our as whose participants to

making The system for close targeted a on with we TypeZero. We to research products look the technology great additional and designed uptake system. Control people Basal and believe with And our t:slim generation the XX for improve market that within XX automated to are t:slim the as which delivery progress compared customers. hyperglycemia insulin delivery spent second our hypoglycemia glycemic products reported the correction we values automated from insulin minimize this hybrid analysis has and t:slim providing designed a range. increases competing Dexcom's benefits decreases all Also bring GX for will user's got to also by system The insulin XX our preference been utilizes as or sensor a IQ strong IQ. users, system time software automated Control competitive

pump insulin we first pilot completed was The these combined with that a fully was in earlier XXX plan are is year X on Dexcom commence the by Our a The second the in believe integrated control system. file continues attractive studies including the Tandem trial the Closed International to started GX of Accordingly pivotal quarter. we FDA system across part type sensor used the studies. this The in of all this expected algorithms. the study as IQ to adults diabetes to review rolling and blood XXXX PMA Control in late the launch Early in the Loop glucose progress. up participation and to first Closed phases smartphone goal running half Loop with of is Control the in stay submission is series use of to our Trial with FDA latest t:slim second XX year Diabetes TypeZero's a of of devices approval. half following to and include trial its an XXXX,

our Our R&D products the have delivery past year over market. to automated efforts prioritized bringing insulin

unit insulin will market IQ a the make generation leading also alternative t:sport algorithm and We're platform XXXX, rechargeable being and also research XXXX in or anticipated unit Well. anticipate of We we a we is hardware flexibility we hardware would prototyping in offering of pump generation and years and needs. clinical our It's is a When potential year, development our thinking is which a a half cartridge of product evaluating is XXX for for XXX with as seek Bluetooth research, people that already this testing and our insulin progress and alternative the timeframe. and t:slim designed with plan with greater significant to a t:sport is the platform next t:sport first a discretion use designed launched and on t:flex However, UXXX we is we result pumping t:sport. back being We and cost even trial and t:sport goal Control pump. a complete. who second hardware their insulin greater low continue size conduct concentrate about on planning about XXXX launch battery for use on of in that what or were insulin to for radio. offer. next generation already effort XXXX as to this call people cartridge t:slim a feature

major of all Connected third insulin Our R&D which really and Health, is current touches future pumps. to our initiative refer we

consumer's will information application via blood Our currently version the will management of data pumping t:connect glucose has Connected our first patients one to uploading a display since number application streamline rated our available CGM efficiency. been which is management t:connect application software Health comprised and the is that multiple for by XXXX. The use data of providers t:connect healthcare pump utilize USB data t:slim office the ACP wirelessly integrated and to mobile for t:connect XX's pump for the Bluetooth time to subset to data of related XXXX application of launch support from receive and the forms, in We pump third t:sport. upload second control a sources other capability first alert and information radio health party notification generation future of features. the capabilities these for half intend a of and mobile with

Turning year. outside are filing to early We announced a this XXXX. CE Canada of initiative, late we of commence our half second different application in type receiving States actively medical recently or anticipate preparing device United QX to the the in of and QX growth sales mark the in

We primarily expect support other to but sales and operate resources. operation in domestic customer direct clinical Canada leverage our

we to geographies, other and For existing with distributors infrastructure resources. plan utilize mostly

us. our with company a the bust see At XXXX people be heart can year lives to diabetes. improve is the passion for of another you As will of

are the over offerings in to to financial customers further product toward challenged the as margins In In will look to Leigh our service a over our business the XXXX and mission of are now future cash I sustainable guidance. combination, and breakeven. for forward are efforts sharing Our call development and this process, and flow I quarter top improving results support these discuss upcoming priorities turn our the our building with and committed for achievements. quarters, to initiatives. moving we sales

Leigh Vosseller

fourth the and forward. such Closing great Kim, confidence quarter with us moving you, good strong gives afternoon, year Thank everyone. a

influenced As that the positively event. not are onetime results our factors

drivers inflection will XXXX we had factors and continue sales beyond strong now be in focus expect where We return same an while we of can investments growth. we and point infrastructure growth on have our to these leveraging

Our even basis impact approximately and a fourth we to upgrade which GAAP program fourth of were on a XX% an XX% sales you $XX the an increase of quarter quarter when XXXX May, in with remarkable XXXX. exclude technology compared of launched the more million

full-year year, occur be time the the Fourth the options and due evaluate substantially insurance customers in Pump that third X,XXX at spend our a shipment rollout increase connect for It renewals period. we positive warranty since mentioned, majority GX to pump comprise in the the quarter nearing of XX% bringing for originally in our to the opportunities processing decision, customers purchased take including to fourth We keep in approval renewals with us with This the total. beginning shipments XXXX, increase as launched do X,XXX mind revenue infusion the us sequential were of of sales largest of quarter also vast the t:lock an process. majority end the verification to of It the who the quarter of the quarter. time from quarter when to as XX XX%. important t:slim the the year renewals the in GX. provided Kim first XXX gradual not the can fourth approximately fourth fully four integration. well the factors, Dexcom in sales of pump by sequential the sales approval similarly automatically FDA in to ordering impacted in market and set grew at products. XXXX. received approximately t:slim but shipments continue for and patient quarter This pump connector year renewal t:slim number to the fourth with beginning The our As in August pumps experienced also price of our new in

in increase fourth in percent the to ratio steady as cartridges beginning XXXX, set quarter a the in course first we of sold XX% quarter. a XX% the the Over of at infusion saw of

December. XX% a ratio reached in of we fact, In

infusion in were to growing sales. quarter, result, than total set XX% more our As X.X sales the a of million fourth

Overall, in for on impact these upgrade sales excluding the the basis, non-GAAP on a years, We Pump to look XXXX beyond. level a XX,XXX mid-XX% last sales for active shipment technology nearly full to increase our GAAP over in base. believe the year install or XXXX program. is way the just approximately at and expect million year basis XXX.X good of million XX,XXX we were XXX.X and to to four our the since the inception full at being a XX,XXX which were

We expect XXXX five beyond drivers. based key to growth continue on this momentum into and

on to Basal-IQ IQ launch we Control Kim XXXX First, as track respectively. XXXX discussed, and are in and

our Second, on we to will execute continue renewal strategy.

portion ultimate Our XX% of high at rate, with customers expectation that most scale tenure The well customers for least level renewal goal and approximately is a of are XXXX our to existing significant shipped is near a retention XXXX overtime. retain survey. new in X,XXX of our product to term customer only offerings which at process is We these in XX,XXX our originally provide pumps steady us pumps opportunities. and their and state

XXX from a connector Third, all These the for confidence in provided the XXX from million fifth, half the strong And long modest well capture for only to XXX% in give guidance a U.S. for ability Fourth, to second we continued return for our XXXX. XXXX. We opportunity Animas' outside preparing provides factors the benefit representing term believe growth. exit into million growth. successful are the set and a positions XXXX entry of of of our us for anticipated sales base us installed it double-digit to efforts of beyond. international of expect We our markets infusion XXXX sales us our by t:lock launch see we market.

a to impact materials, of improvement basis. year had of was the also was year warranty mid-XX% our the have expect majority facility they for is process basis doubles our we as relatively recent non-GAAP increase transitioned The and XX% quarter us Gross yields our and is of manufacturing the going continue factor supply's over manufacturing no we and overall capacity increase, technology material from XXXX to well only focused to will volumes the efficiencies. inception, production overall as we and full although sets average. fixed continue We gross margin continues XX% as sales from volume. in particularly By in fourth margin as experienced. of pumps remained cost Since product mix become across spread Volume fall upgrade program. gross months the overall sales. the will XX%, positive the represent a which as This percentage historically allow gross at our labor reductions the greater margins progress operations to a overhead just range XX% margin on We in on now distributer nominal the below comparison, biggest unchanged costs the increased to margin and forward infusion GAAP costs. on with domestically to full the ability improve expected our to

in a variety for our While fluctuate given of gross margin quarter may seasonality. reasons particularly

million while in on than much operating basis. XXXX. We to cash are year XX%, of XX% were which track fourth XXXX is goal expense gross in of second for an rates. a our expenses only of approximately at of $XXX Operating of achieve are sales long the and going half This less $XX anticipated represents of growth year X% row which quarter the million higher increase at on term breakeven third in is full our the margin point a

ranking. We focused maintaining product service increasing dollars driving on number growth in efforts supporting the without our R&D and customer territories pipeline, on have sales our

drive are long All key which of our term success. to

structure and We spending margin XXXX $XX to to stock-based expect non-cash of XX% This range compensation of the will operating sales. which less gain to as at made early This includes than appreciation expenses XX% we operating million of within in we the successfully of our $XX negative expect for fall and launch we leverage negative the in operating in approximately additional a grow rate international necessary market. million. Overall, again XXXX investments. XX% includes in

financing capitalizing priority our we the $XX in major target by which We million last properly company. sufficient up-siding half month continue operational believe for XXXX. to breakeven gross is public proceeds, XXXX of began to cash reach these second it's our to goals, in flow Beyond our the

We also completed we which to opportunity up of exercise the the outstanding the to last have $XX half in October, April. from equity million warrant offering additional expire of raise through

point, us, sell Our choose competition to as where the our against used main rather recent financing excel. they market eliminates our our one features of financial against tend condition product we to the than

Our incredible to competitive did growing sales an headwinds despite line uncertainty is our months. force job top proceed to financial and the growth XX over the XX last

focus area we great breakeven for point. outlook, reach is how and XX% to confidence back next guidance $XXX to us of quarter current sales business. it. and XX%. due level at operating Our Historically, our with negative this fourth raised with best finalize the was hand an million XXXX the except provide sufficient quarter allow least that a with our XXXX. the the believe customers financial from million XXXX consistence margin cash reach on base first with the we turning the cash the having debt is the breakeven base, anticipate between seasonality, negative to the believe range evaluating saw this giving that highly on timely of XX% the our address I To our to in million installed of flow $XXX in Overall, us point cash XXXX of at was for we XX,XXX XX% an sets of encouraged, quarter $XX seen strength is to and first bases. We supplies half contribution about a from of sales at ordering and to We of to flow supplies growing which funding XXXX to XX% installed to increased for increase recently infusion of slightly slightly end in

for the continue long confident diabetes. improving have further and to aspirations our operator that, company's ability our big goals our term in of to the lives reach our it With with We mission turn over and to I'll people Tandem questions. for of

Operator

first of question Instructions] Deutsche [Operator our line the comes of Bank. And Stewart Thank you. from Kristen

Your line is open.

Kristen Stewart

afternoon, everybody. Good Hi.

Kim Blickenstaff

Hi, Kristen.

Kristen Stewart

model? renewal had assuming just stated, I the what over in you I assumption the go wanted numbers, to those again missed sorry you were that

Leigh Vosseller

Sure, it's no problem.

on renewals work, high Just to remember of a give little how end of renewals to stop that four year generally thing level one year important and there the automatically about a a period. bit at period the is four and

the about rate. take sale. could on experience some The a average industry it that XX% in secure XX% so renewal to after generally time to of And order

Our is goal take XX% hit us the but rate to to scale for some it will there. time

both look that we older One hitting XXXX, to point most note shipped. we those and still which look our XXXX as I expect the you rate in late well pumps important said, XXXX XX%. as back customer renewals to a two to the scale year year on to As if you ten about shipped the from back, XX% early rate about to we if XXXX represents X,XXX over next or we are again, that XX%

Kristen Stewart

renewal you're as XX% so stands it the Okay, rate is at today?

Leigh Vosseller

longer you environment that On expect. think oldest establish year we're four here just also than decision that little But making customers. competitive that so taking some the cycle might that still again straight we we working, with process, of a what people's impacted it's the

Kristen Stewart

around that Okay is cash us breakeven and are to to possible? try sufficient, what to assumptions give confidence to get get comfortable that's assumptions kind Thank the that perfect. assuming And with being I the then raise you the that little us and maintain, sufficient warrants that out two just other that breakeven the are you million XX you you to a you of cash additional gives just are that XX of just million enough from guess your making and color additional flow with you maybe kind the exercising respect assuming or bit of

Leigh Vosseller

sure. Yeah

As XX for had to that we to that financing, point. that's we we to breakeven million flow told get million. million the cash as they $XX public you for we And took everyone to XX know us raise went think believe really

our is are cushion the think benefit. operating to If just that's that additional you breakeven for us use exercised to get for point, so so there. that warrants when about to second sufficient And And customers to we ordering takes about have that really XXXX. And in of what XX,XXX are than are be that to little consistently supplies. the more are how it half looking us us

get it's in could that points to it will but the folks So supplies ordering we year third that that consistently and those XX,XXX seasonal pass that going possible hitting fourth point. will quarter be and earlier us

Kristen Stewart

getting high enough And margin you enough that this well? confident as do feel supply over up period

Leigh Vosseller

to pump the cost well improved be we're at and the warranty that at gross Q of just the we've last benefits a in that reduced now Absolutely. volume really and experience leverage becomes combination fixed story our the we margin. as the point, expect we've some as of as put the we When infusion that's the addition to year XX% into it the where pump and And of the we materials overhead. supply then sets margin the

Kristen Stewart

questions. perfect, very I'll much. others Okay, some for Thanks let

Leigh Vosseller

you. Thank

Operator

Thank you.

Our next of question Rick Stifel. comes from the line of Wise

Your line open. is

Rick Wise

afternoon, Leigh. Good and Kim

just Maybe well. with to separating things a me I'll as questions. with here. am the of gross Let trying start start I couple margin

you that's what the of of infrastructure, and you think big about of this just leveraging this sales the could on that who You would gross as where that infrastructure, exit to towards some out year, some part answering us through would goal, know these that margin the maybe is that talking operating hope got as infrastructure phrase know about you're frame infusion just mix. that, drivers steps, help to you mid-XX and you and well? the part but you leveraging part volume based in initiatives big think exit But capturing to the leveraging of as to you where we hope margin used - only to help of us your through a obviously march think that, year means I

Leigh Vosseller

Sure Rick.

learnings actually I out from and said margin improving really So last gross at fact having a the had the to improved from XXXX, the the I'd really story the points in few as is cost years you facility and mean down of and volume lot gross point. this in came product yield. margin that on that that we actually our and XXXX we by a a from the our we've already focused materials lot really efficiencies of just point shrinking X have

in this increased And in of It's cost so of actually means that our with we started we manufacturing facility we we big hardly doubled but year the the official early of the And what increased made XXXX. it, XXXX. that one capacity, we part manufacturing facility. investments moved our

have to So now previous again overhead years at that to and in cash can fixed have seen least to point. same volumes the grow that and but flow breakeven that to invest we path increased appreciate see not we we've expect

do now drive really and We volumes now our we that efficiencies. stripped other in really to help cost, so have improvement I to just And margin our yields the forward. and improved down look one gross labor direct appreciate of mean add increase materials some we've point. the going just I'll

that those will in warranty pumps with has put forward. we XX. the more the warranty field as continue improvement of significantly improved also move help Our experience t:slim to as And

Rick Wise

thinking gross about margin exiting direction? own And XXXX trends again aspirational

Leigh Vosseller

expect at Yeah, our of the about - and non-GAAP the was so was it that quarter end of point a I gross XXXX, XX% basis in for actually hitting XX% would particular XXXX. think margin fourth on we it,

So I we across to somewhat move scale as it expect the would years.

the in outcome the the pump early seasonality of keep year just because in year. and that margin So can of the across gross pressured sale the mind be

the being greater to pumps the So contributor margin.

year again see might at the actually of gross the We at giving a begging because improvement the and seasonality. year any reduce in of will margin the bigger of it end the

Rick Wise

you that the race you're two how conversations a and highlighting cetera, your expand. to I practitioners with and market pipeline the in how town really et horse your dynamics. keep Medtronic doctors the and seeing in maybe diabetes offering and if reflecting acceleration you it Kim, there nurse Animas all I will here. customer that changing fact that two you are factor as sort bit to about mean games amusing talk in And you're on want capture you a dynamic is But Right. builds

about Just maybe talk general just in that?

Kim Blickenstaff

natural jump huge Probably either patients Medtronic. a will pump Animas, competitive all will to group, biggest a Animas another doing us but well really, I go or we the last table. when know our what business conference the question are I the were condition, mean good choose probability. as our to sold and year majority was takes that's That competition, the against financed, you off we by a now we talked in know a tend You that for have go being durable Animas to headwind

just up pace is our of picked and Medtronic has here. truly I it So think us innovation and

behind half up, the XXXG so this in approval year dynamic in internal we're successful us. our If year and be the own meantime the so we of the catching or got two approval going of were ago, of for insulin that's because majority second was before the that programs, go sales last half years catching automated out role happened. quick important second last well a and back know up well PLGS the we of GG from is development, year to the big delivery with year you you The we're the for year, dynamic

fact in race, two only So now. your right it's have that Dexcom the the a alternative integrated innovation horse we

So I for well us. think both are

Rick Wise

Makes sense.

the How Medtronic for one as to will that perform XXXG. should that at ahead Animas their say coming on Tandem, their nine, use of specifically, selling do twelve seen resolved or we last whatever largely is concerned and seem to be you that existing the conversion Turning what everything the we six, dynamic in you XX is supply unfold. expect Tandem that the your that in over resolution know momentum given months I play fully the issue months - that wouldn't well supply to et months - debate be but all resolved change on sensor believe cetera? coming in you customers debate They months might way for as any the next we've of know the look and slow does their

Kim Blickenstaff

the put our year, available against Well the year product so you and XXXG first wasn't half put of premise. where couldn't shared last products, that before fact our and was last year you problem our products our get and

has ability available the mode to fraction CGM finger can to sticks, calibration stay which nighttime easiest it so experience will a control a no products. in there stuff pump XXXG hypoglycemia. that And is to better which real and make the and which for ones and it's now CGM, sensor learn patients has the ability choice a All with products the least which both that's be now automated has of other, tested head-to-head be

we have in be just market, been be compete. we wanted along we them the so saying So we've all can to

Rick Wise

me, do week are of been that have had am for about on to Kim. it and to learned one what mean, about your us how a I offering small last customers, Dexcom This we you asked we much. smart would took obviously it, one well? and curious seems that, important how most it and reflect so your thing thinking in as but to you how they and Just thoughts participated stake a their bit think do publically, about Thanks hear it again it be have

Kim Blickenstaff

Sure.

off the question us was are to of this So get came table. last it I major the question couple very was And this financings financing when about goal the financing, pick we didn't think the into far.

us. offering and delivery to would the of for helped market gets insulin the successful expand get the intend pegging marketplace marriage innovation in good we a natural a sensor very to the offering. have business, very and million technology said don't system mind and raise point and good where and great in Dexcom us a pump invest requires my algorithm pump yesterday I that which that's we'll say publically you the automated they us requires and and but also $XX to innovation so a came into and through will if were both They of us million for good stated the you get $XX your So it and

to it and we was it. thing So do the appreciate wise

Rick Wise

on strong congrats Yeah, quarter. Thanks the Kim.

Kim Blickenstaff

Thanks.

Leigh Vosseller

you. Thank

Operator

Thank you.

question Lichtman line Co. of Oppenheimer next from the & comes Our of Steven

Your line is open.

Steve Lichtman

with Thank loop general possibility you. look this should and Hi, we when we Kim, what other ADA data year? pivotal could forward a hybrid to in see data the closed be guys.

Susan Morrison

Sure.

overall the second able the of first that second I share in to the the data. the work this in from of PMA a this And pivotal be rolling goal of second pay It's that study and with a We for so here will PMA opportunities launch in in really conferences. to half submit the quarter major modular half half year, major we the XXXX. goal to year to our able hybrid commencing we Susan. product for for always loop close the conferences put

at for people look the which opportunities we'll way long So peek can we a a data. in give

Steve Lichtman

us on and thinking is Canada expansion? a sense Susan. in should about XX release give of And Thanks, just think expanding opportunity be big about then international there how we the months through XX Scandinavia. where other Okay. you guys us maybe Can could to process you in of over the international, you you words next thought then your the walk

Susan Morrison

believe start so they worldwide the Animas in base installed and we U.S. have the what we XX,XXX on XX% saying by people the Yeah, business, about of know just I'll those are

a XX,XXX because of Canada the good and see just we've across mostly the has proximity relationships imagine, right remaining can you We is pretty world. there. really as So some opportunity developed

here we infrastructure a really where our a because start in it's us business. to that So it's support can U.S. way leverage good for the

So natural starting it's for us. a point

to the But in the and getting business modest as rest the up a would just Animas XXXX door extent. had building it's we relationship. As and and or door well where I opening to be the work we on at expected some say the U.S. as be world are would us might would I for say that in of be opportunities the looking I to really say opened particular whether market for again benefit

Kim Blickenstaff

place mark and have multiple But in do we languages long quite CE programs for a list.

thing, peer more understand in year. of plan we the look have later about these that at size, sort environment, As opportunities, the different we'll it overall the more give begin concrete the to

Steve Lichtman

it. Got last… just And

Kim Blickenstaff

in I be both door manager a has that clue. gives sales and to

Steve Lichtman

a low infusion that And range? sales increase Good to lastly, Leigh, closer idea. XX% set will you I revenue of cartridge still in sort to double XX%, digit mid-XX%, mentioned think stay so in

Leigh Vosseller

of mostly we about about well. the pumps. seasonality mention of And thing terms with seasonality fair. tend business that's to a supplies, little I'll the as talk see do in supplies in We just bit one Yes,

in quarter which like quarter first like the see So as it's the debt they the just use pumps fourth have people tend increase insurance might left. in whatever to and that

Steve Lichtman

guys. Thanks it. Got

Kim Blickenstaff

you. Thank

Operator

Thank you.

of from question Jaffray. next comes line the Piper JP McKim Our of

Your line open. is

JP McKim

attract Hi, thanks patient Animas first to I over to to what going international the more you're those on in you offer similar year did U.S. for here wanted to to taking this question. an the for see have start out rapidly?

Leigh Vosseller

Yeah.

the I that we're now major And products. doing pump CE right will more the for think early talking the and be the the focus what internationally market we year. and still about lately in is and thinking pump we're getting phase that expiration in

JP McKim

out? and the why when you algorithm us help going the important Okay. understand of accurate And us of be then advantage and but I and main get when if key just to you think more the Loop got compare differences does Kim, I data can still touchscreen, real two that's was the could you Closed the Dexcom help the and mean obviously your sort you GX competitor, system differentiator wondering conceptually the you where between that's sensor is Hybrid to uses which come maybe

Kim Blickenstaff

Right, well two is bolus and the doses is one other dosing is decisions, there rates. basal

it make automating the responds glucose actual and basal setting so And levels. static takes part it circulating to

we both have that. So

do need error. and at very patient the the dosing bolus counting be probably eat carbs. you the the do to patient. That from is are the upon look they adjust based is glucose That They meals, going input calculation. make by dietitian, an insulin The the manual what has system is that. other an then response those they your is to if card piece in to can made also that ratio estimate the learning that's so blood piece current boluses an will and carb error bigger the correction There value enter what

error really reduce around pieces it's So of the clock. both takes dosing place that

JP McKim

last then from And me. helpful. That's one

Just maybe the payers can the new given on see several and back U.S. their covers back any you you have over list? then the and with got in in there all innovation launches years, is get reengage the side data commercial of large here you change we've on your product seen next and to the one go some,

Kim Blickenstaff

X, have to have over so Yeah, I done no have are approval or trial repeatedly data. PMA have we no a with get there we there of to, products. trial XX-K had are didn't before patient said clinical clinical prospected never We

two Now significant arms hyperglycemia. we hypoglycemia I clinical controlled and have have increasing a very we trial, showed it well to robust in reduction without

and again we So I conversations begin what will. to need we to have finally think we've those

JP McKim

Got it. Thanks for answering the questions.

Operator

you. Thank

Our next question comes Cowen. Schenkel of from the Doug line of

is line open. Your

Doug Schenkel

Starting taking your GX the Loop? you GX the Hybrid and Good to your into U.S. quickly Tandem Great. approval GX integrate to thank be get incorporate PLGS its use until around PLGS. on you time with of able PLGS, after afternoon Is there approved will Closed my like in the or it questions. launch for to seems Dexcom patients will any way launch not

Susan Morrison

will a The So, really trials for GX product that's question. PLGS question exploring, it's were sensor. done be regulatory that using the be going to

the difference to also that are to market to the also And to and for to bring we the GX the so IQ relative obviously product be time going see at actually that time Control is then patient, approval timing market to our between in product. looking bring market

something so to at we're question different that be dynamics to the that as these FDA. it's really by looking than continue both all regulatory again but approved else, we a those So more of closer move explore anything will

Doug Schenkel

I regulatory that you you pathways assumption is to opened on Susan with that's I just and described, GX launch think forward standpoint to going with be move with I'm Okay. the is are you'll the was, kind you what point Yeah, should should based from of guess GX. you, see what - a

Susan Morrison

Exactly.

Doug Schenkel

to XXXX, committed interest sales and Okay. likely with you fee you're effort. charge that Closed Loop in to is a to Is TypeZero assume just update huge upgrade existing customers to going at about some know customers step Hybrid or that Hybrid XXXX? in however it have thinking devise you've associated for Loop financial to to that forward given further guess in a nominal product Closed for and least going any at over product your least with Pivoting I it's in charging TypeZero, not upgrades

Kim Blickenstaff

and We safety We new cutting technologies actually haven't to cost unique that think made the will were off significant was is greater this yet. for more decision and that demonstrate and that's CMS to and that efficacy. they appropriate go developed healthcare reimbursement router get

approach. most that's that's will we So prudent the taking. you I probably that think And be approach know the

Doug Schenkel

that from upgrades? marketing you a in terms need don't better where change from pure a world in economic gets potentially your a to that approach but So, just ideal you puts a into and maybe not position standpoint point in of both standpoint software

Kim Blickenstaff

That's correct.

Doug Schenkel

helpful. Thanks both. Okay. Alright, that's really for

Leigh Vosseller

Thank you.

Operator

you. Thank

Our of Baird. question Jeff the Johnson comes of from line next

Your question, please.

Jeff Johnson

Thank you, good guys. evening,

think to factors? I back you it, can So us it you pump all first question into will could those you've versus about enough just we level growth know but supply how you numbers talk set XXXX given look think in off on two

Leigh Vosseller

Sure.

be with fact again So and be about the pump the take if still will revenue was it sets XXXX, along range. revenue. information XX% going in you we be infusion majority revenue that expect that And forward. have it will the tended the of to XX% in mid-XX% of Back to majority

aware you help get think here. will that I

Jeff Johnson

to come way I have guess some one launch I you Yeah, you've of kind had alright, XXXX that the first to on have external will first with know helpful know a you or obviously the funded Kim, fair look I enough. you at then thing. by And that a half burned HCL, two this you been when launch, your is some raised which development questions, is of away. of know get cash sources a mid-XXXX you When up

you'll and what next to kind enough a get really Medtronic trying relative understand HCL think or been how where So my could help well, do down heavy something cost that there external to just do track external is hard might financing on we your some at to question there launch as I flow go happens as you be that that launch big have point, year? closer cash think is of doing, launch you what you guess

Kim Blickenstaff

just as like our won't software, so a the hardware replacement we competitors. we Well upgraded have cost know you

of we the products, marketing incremental think strong already and to there's terms for physicians in it. sales reach our don't now t:slim, by of our and prospected much What that In the believe you have so them. cover launch can do force support we'll that to is educate year. benefits to launch play current field about therapeutic launch need clinical really of to But them you like I a adequate few cost the team both on a the trying we'll demonstrate We're this improvement study sell. is

I to launch. there's don't a be So drug like going anticipate

Jeff Johnson

more Okay, that, whether will side the I think things don't sounds to yeah significant on DTC anyway? like like costs docs out marketing think would you be it's it and reach those

Kim Blickenstaff

our analyze sales people and mean go No, is ultimately have have just not a we sales along. we as incrementally new set decision sales renewal you expand I now we we'll what higher saw make now. component to growth. when organic know than about that spend a before field force Big of we'll and that

it become more may when doesn't. reach and now a makes point you right as they that So they productive, increase saturation territories sense, but will know

Jeff Johnson

guys this one about for think could me, it's close potentially know have thanks. there of moving very you. HCL, time Alright, when next year for then obviously I pathway And are to you just last taking question kind you the are the quickly

piece I pivotal guys competitors piece be taking more you by point who's You this and may much going of IDEs to may or year. They of hit quickly. think to know when at your one later this not several seem approach, kind of moving

move that I are in much quicker what just you answer the what the than develop in allows others the and as know opportunities to so systems? that risks I me kind HCL of think remind maybe know You doing they but to these

Kim Blickenstaff

There that. two are for parts probably

them is are to algorithm control that aircraft. design very the are quickly. of You and the on hardware development company the as aerospace Also quicker used a out software can majority update Also know we develop we're autopilots from software team, commercial know. you really our in the systems set software becoming with that and on patients than

closed system than So in there's no's. sophisticated no more loop use

FDA know are They And doing. so a those aerospace they is of device experience world. which more really far the medical have what regulated than lot folks in

So our advantages. I two major of believe those are

Leigh Vosseller

doing And support have that as the trouble for well Kim's each to noting we worth process the IDE phase. that been be comments

the I into IDEs through You Closed to move mean many big process. broken know international just I we've trial that we part have had efficiently in able have same of discussions it we different doing is FDA are Loop very segments because so the exact has and between. is we those with updatable. think hardware ongoing the stock been and platform a that But

Jeff Johnson

Thanks guys. Understood.

Leigh Vosseller

Thank you.

Kim Blickenstaff

Thank you.

Operator

time, At closing over like you. the back turn I'd this Thank to remarks. call any for

Kim Blickenstaff

joining Yeah, this is Kim. Thanks us today. for

an Oppenheimer we'll and conferences, Just Healthcare next the investor Healthcare March on Conference the XXst, update, month be then first at XXth, attending Conference in is one we'll in New on Boston be two York. March

as great and Thanks. today to listening for updated thanks progresses. us And we the questions. you keeping So forward asking to look year

Operator

wonderful your a concludes gentlemen, today's conference. Ladies Thank have this you and and Thank for you, day. sir. participation

Tandem Diabetes Care (TNDM) 1 Mar 182017 Q4 Earnings call transcript