TNDM - Earnings call transcript Q4 2019 | Tandem Diabetes Care, Inc.

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Operator

Ladies and gentlemen, thank you for standing by and welcome to Tandem’s Fourth Quarter and Year-End 2019 Earnings Call. [Operator Instructions] Please be advised that today's conference may be recorded. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Ms. Susan Morrison, EVP and Chief Administrative Officer. begin. may you Ma'am,

Susan Morrison

development welcome, date. call. Tandem's forward-looking Today's management's only events, statements And operating performance year-end and plans statements. quarter XXXX reflect speak product future about earnings discussion of expectations and everyone, you. financial fourth and today's to as and These timelines, Thank will include

results our statements. materially anticipated or actual under projected in There are no could be assume SEC that to release could events those earlier uncertainties to Annual of cause actual of filings. that our publicly statements Form from from recent or obligation press forward-looking factors. statements A forward-looking highlighted future update different information, result Factors’ risks or and results list in portion on a the factors other our to of in our today whether those differ other most by implied materially in is new and as these elsewhere and We Report issued any cause expressed forward-looking and any Risk XX-K

operating evaluate adjusted performance, refer discussion a further of to measure to measure. issued today to include release by references earlier Adjusted is Please and plans key for decisions information. which strategic for addition, today’s the us non-GAAP In EBITDA a future will is generate make capital. EBITDA, used financial operating allocation our press

and CEO; Officer. Vosseller, participants call Leigh Executive include Chairman; Today's and Kim President Blickenstaff, Vice Sheridan, Chief President John Executive and Financial our

into for to questions everyone themselves prepared remarks, two queue. questions. the we’ll back We getting our open appreciate call Following up before limiting the

call over turn to John. to like the now I’d

John Sheridan

today’s to Thanks, Susan, everyone, and call. welcome,

after an leadership of your express XX March metric a I'd the your Kim executive as to the President a year CEO in forward Chairman. than role and been transition with role plans this his X team stories Tandem moment take Before Executive financial incredible of years, has and and unwavering to Kim. became years we through discuss and thanks sincere more will guidance to a for past support. look appreciate like to Chairman for and year, and serving our to our and results and our to management Chairman. you closely Kim work of is new to continuing Tandem as personal because the me success We after

Kim Blickenstaff

is all our Thank to of a mission a people It's for have and customers our about build who of that diabetes. lives to improve building helped you, thanks passionate Tandem that success. our and employees John, with lives very by the company company into group hardworking its long-term

and less insulin Since years by that improve due We the United we believe pumpers XX% market and we XXX,XXX X% easy focus our Five that our such XX% States delivery and technology U.S. the insulin share. clinical are be market this strong share. trajectory the innovation fantastic and help has ago, Basal-IQ is burden to of and offered reduce time, we had than which on to to automated advancements have in pump of largely a diabetes nearly to grown to use estimate pump which Control-IQ designed as outcomes. insulin market technology

to years to a markets. and and there's customers products first we set standard a building we'll service insulin our therapy ourselves. management invest for to our opportunity the also If States, goal full international working our to to To products support X.X data-driven our flagship ecosystem of we've customer pumps. for robust and now, this, We'll adoption of portfolio worldwide. a around an up sales continuing pump world-class United be year in look services from strong by insulin drive million we lead being live more XXXX achieve be outside believe to five that's With similar use at

I passion believe to the this accomplish have goal. talent and John the the and team

the Tandem active value look shareholder As objectives. staying and and continuing company I of build forward term helping to remain to along to also the achieving forward look our I’ll long-term Chairman, meaningful with company. its path longer to

that, to turn John. With I'll back

John Sheridan

Thanks Kim.

We've spent time a vision the our of plans to lot achieve Kim refining described.

which today. I'll Some of our It touch really in with starts accomplishments XXXX. on tremendous

our years doubling more year-over-year past cash gross set year-over-year year, this positioned margin pumps sales, our include the success. a a shipping this year. $XX and in profitability generating nearly we us four measure for by well XXXX in During million throughout meaningful These combined, records nearly business term longer than X-point improvement crossing that past

glycemic the of first added pump and Control-IQ also of in ACE t:slim first interoperable first. controller pump The was company And We alternate to automated new designation receive insulin controller the automated again, to FDA or the February category. December, our industry as from the was list enabled in dosing XXXX. XX in software cleared the growing insulin

for Updater we me throughout Basal-IQ Scalability Device the accomplishments. geographies amazing was of all support cross-functional we the business. our infrastructure Tandem where to and growth up Tandem be the presence the continue have of also What business keep is the it in with to the in out to in these XXXX unprecedented launched addition, important our next stands of primary efforts we’ll XXXX the a to and us In States. we to invest for focus stages and prepare outside continue to the our majority United as in took

demonstrated with manufacturing during an three ordering commencing experienced third-party tripling and am of a partnership we output. the quality lines period, while team’s rapid effort We as successfully I manufacturer. level cartridge last particularly year by new high expansion, foresight maintained while a proud product good this our of

support service in to goals invested are customer we our technology world-class our as to We customers. both people also functions, of our providing and committed

with the happening While Tandem, focused now scenes XX Control-IQ. innovation behind of are were world much t:slim was newest on these at we the efforts the our which launching

community to most the anticipated in diabetes was Control-IQ launch in product years.

Dexcom’s system cleared addition hybrid utilizing to to users advanced sugar. and feature the prevent system to targeted low the sensor help insulin deliver only As and high automated glycemic also offers GX in blood It's reminder, boluses a to help correction in increase range. first time CGM the this closed adjusting loop an

Control-IQ where in primary was from control an outcomes secondary began met representing improved wide statistical significantly. the pivotal of after to for point and with The had results participants and group. Sessions percentage Time Excitement range and All Scientific revealed. group June improvement all the each study XXth positive. build was The first range XX the XX% were very were significance. AXcs

six metrics study were outstanding, remained study XX% quality dedicated above of the included life X. month of clinical The of the had closed scale X.X results. the the of loop exclusion that to of group and significance control loop was for system first period no criteria, the closed a all It large a and scale in on increasing time a X

our half participants media key the further of got New in fueling in trickling opinion announced England Control-IQ Journal Reviews we trial Control-IQ. of from the the clearance second the also FDA’s for social the the mid-December anticipation began October of and study attention Medicine. publication leaders novo of of application the This de the of results out during and year then release through was the

X,XXX initial top in and nearly started trained date, our providers training more We and than providers To began all January. healthcare have orders processing surpassed healthcare goals we of Control-IQ training including immediately our prescribers. early have

the already Control-IQ believe of in experience their seen growth positive awaiting based delaying year. We from half decisions the has now this last purchasing we've lifted people second year the approval on

updates for software out rolling began customers also XX t:slim warranty no United we States. month the Last to in cost in

update, the out update system invitations. began launch had the Control-IQ than portal Basal-IQ, to used previously more before prepare in who customers logged sending we As getting XX,XXX of for into we anticipation our

portal support wait our customers overwhelmed during questions with we had experience. extended we this about generally of this frame as in seeking we products the and support apologize. an prescription meet provided and during as as technical availability not time We did believe help was Our just that goals. team our XX service the our important is of time, the process about who Control-IQ, called questions people with

Thankfully, as updated with more than t:slim inspires us further and user been experience has their and have took wait The our times. the were I immediately customers throughout reduced by mentioned, action regularly innovations big response dramatically scalability a XX,XXX and bring used their people year. Today phenomenal. technology, We initiatives XX our new business which last described focus is to exciting and term Control-IQ life market. changing to have

in available along charter Control-IQ, our world. health offering Control-IQ for a teams hardware development pump we offering with advanced product system our delivery AID Advancement the launch technology, now digital and of with innovative most insulin with our the automated progressing initiatives. new primary commercially Starting technology of are our is the

We this in to are our lead the accelerating clinically efforts maintain are and position.

above intended that's now complete for lower our to Control-IQ supporting age six to Our quarter. file we the people and this indication is trial to are track submission pediatric on regulatory and age

conjunction announced last Control-IQ. data in consistent adolescence we week with in positive results the the for we saw the with was ATTD As and using conference, adults

for that XX% four months XX% using compared children from range increased increased to and Time Control-IQ from alone. control XX% for using the pump sensor to augmented group a in those to XX%

to outcomes was control often XX% period, range especially was keep fantastic technology group. overnight the and to time It the compared glucose children these in in see their Control-IQ During struggle range. with XX% to since

system Control-IQ market. further enhancements bring to ability our to accelerate help To

We determine on with allow a regulatory to to our to various Control-IQ risks are features will the incremental make deliver regular working then and path basis. ultimately updates the segment by clinical level to technology FDA customers new that to of benefits us our

outcomes algorithm, as the future toward are to while The the the easier continue as use. working to improve make we intended personalization clinical greater Control-IQ offer well we systems to are enhancements of

add a detailing are reasons next working are our these that to features system automation. loop closed offer bolus to capable update insulin basal plan complete XXXX. a we seek but AID fully we to Ultimately, competitive for of for and offer timeline we We in

t:sport its well manufacturing making Turning hardware initiatives, development as to progress process readiness. we our as are innovation great

is for a and doesn't of to operated dedicated a separate therapy device. reminder, who touch by We've people a app device phone. controlled controller or As t:slim, their keep management prefer t:sport a screen to is from the about be by it developed it size the separate half via t:sport mobile have a mobile

offer been prefer is integration automated and Both management people pumps feature our more insulin operation. t:sport discretion greater XX a remote addition XX t:slim who t:sport portfolio people our XXX-unit is expand in with people in to cartridge diabetes to management. to designed intend diabetes provide CGM in pump contained to latest single who their flagship have for and our with in order is want delivery well remote device. choice their suited a product to designed for and XXX-unit a We cartridge t:slim updatability, technology.

wise, result the a recent the be will t:sport One As FDA now t:sport mobile with with our for filing our by as goal and a pump is t:sport a pump with Timing a regulatory pathway t:sport, summer other full the broken with from submit the still controller of pump regulatory the app. this dedicated two mobile discussions controller with ace control app. a into the filings. to separate regarding for and dedicated followed an t:sport

first our testing greater commercial thinking for commercial for begin which until activities between we t:sport launch, to it's to before gaining beta the use app. We the current pending planning For launch and with FDA is are with the wait to the in XXXX. clearance full both is approved time t:sport plan and half controller experience the approvals

to As and of now XXXX is year look be the commitment Control-IQ XXXX t:sport. the of our year to positioned we to innovation,

And capability to for we've I'm for the the on to that XX submit we this ability features to summer. application remote However, also for with requested for bolus The working highly our a the XX most opportunity time. this our an t:slim for bolus of customers one their that goal bring to t:slim identified the excited mobile t:slim mobile feature to regulatory To device. interim end, was deliver filing discretely XX the pump. the share from been some t:slim

as territory an using precedent there unrestricted control will insulin submission pump not for a be commercial device. from an a is bit uncharted This mobile of mobile

And U.S. so But predict. approval the are is of the preparing as XXXX. the we second to timing half launch feature in to in difficult this

with app the is control t:sport R&D XX the mobile remote t:slim States. full to United the other capability digital brings to for free in remote to our charge we of updater, offer remote with t:slim really the The delivery featuring our device updates our for in-warranty third initiative. XX update bolus us focus all As and health intend to software the Tandem bolus customers the major software offer which

exciting are our the quarter which particularly strategy. first this the of as the app in process digital our launching We is mobile health foundation of of is generation new

of feature CGM upload our management The takes allowing t:connect their in This health upload app a first to their and XX a from to and to our by customers of patients the information trending t:connect. wirelessly data our data see it significant will is a from generation t:slim USB as having to away manual benefit application. pump care step tracking cable pumps providers through and

ACP's commonly share meaningful from they each pumps day. different data waste time accessing office that insulin

these are offering business. terms prepare With for by new States and We United talk often to the of domestic address the products as the our the be improve of first to wireless of streamlining we this product launch but launches scenes well. outside each about solution we in pipeline issue behind efficiency working app, launch will office our

international ended than Control-IQ similarly the available an for XX States outside or more United countries to Basal-IQ impressive geographies t:slim in nearly United available now accomplishment how States and full our is We of is first half than in now international the this back the outside out with which XX,XXX to year we XX customers, our our of half rolled is US. year the our goal Basal-IQ. launch in more year is

insulin Overall, further offerings committed We're a believe payers company. we therapy to are XXXX so who the benefit the we We'll set demonstrating who solutions and as for is for our leader delivering we them. of products outcomes, improve portfolio well-positioned of our management. drive be by to patients to the and support care adoption customers, health designed that care to in in position longer doing working a achieve providers goals worldwide to our value our term the by that the of

strengthening investment support In we with our quarters upcoming achievements. profile. represent remain margins growth Tandem’s are combination these for improving currently to future forward our addition, period look of In XXXX in but sharing future the committed I and building business to sustainable a to a priorities top profitability over

full XXXX call I'd to now for the like for turn color additional the year. well our guidance Leigh as as over to on

Leigh Vosseller

Thank you, John, good and afternoon everyone.

and to in from for within conversions people optimistic growth expectation demand double million Strong XX% highest growth history. annual We our continues our entered the $XXX own MDI, a XXXX worldwide at from is nearly using an our of success all our closed which XXXX least at with and higher penetration in population. year sales opportunities t:slim sales the of increasing sales previously XX drive number competitor traction and renewal growing rate

pumps alone fourth We worldwide shipped which XXXX. we shipped pumps shipped XXXX. XXXX XX,XXX versus in the than quarter all XX,XXX in more in we XX,XXX In of is

XX% sale. for pumps about nearly $XXX our to million us million from of sales. fourth of total happy report year Our very shipped domestic that half sales of full bringing were to pump have included We the quarter were of international $XX new international our to million $XX operation continue to XX,XXX total they in Domestically $XX pump sales first our customers a driving to therapy. of new in our quarter million we

the fourth growth It In quarter XXXX. timing the had the difficult on from XX% of represented shipments increase the and of a to impact quarter is Control-IQ XX% quantify third year-over-year.

customers purchased XXXX pump X,XXX approximately a best estimate in that will However, year. would who have is otherwise our purchase last a pump

X,XXX approximately renewed more XX% note the approximately cumulatively from renewal which was warranties than XXXX in year-over-year. XX,XXX continuously us It's Since for to to expired. of nearly have those an half included quarter automatic. continue and occur pump increase opportunities renewals strength of out of that not pace are increasing We XX% inception important our with of see our quarter in whose progress the did customers pump not were of expirations fourth our warranty renewals until shipments with have the our that

the focus total Internationally existing and XXXX. opportunities our the distributors Device our rollout shipped quarter in QX reach as Basal-IQ X,XXX pumps into patient. additional a new initial increase of forward their an was expectations total in turned of by Tandem to our of with both XX,XXX in to patients in fourth Looking line the to XXXX This to launches the will shipped we Updater XX,XXX.

pump that quarter This benefit in to largely in there is these XX% which people conversion the end estimate insulin opportunity in of This less we quarter. XXXX We second markets. XXX,XXX third years’ by today with Animas using the that the suggests the modest exceeded those two already experience therapy were in approximately geographies. share primarily fulfilled with was due have than

Looking ahead, strong, to launch drive France, in growth with into new early we expect countries the to our Germany, continue Benelux combined for of and will introduction that years come. the products XXXX double-digit

in-warranty estimate are United installed people XX% increasing States. base sales. with that increase base people XX,XXX XXX,XXX XXX,XXX we is in a people Overall, approximately the installed and supply domestically annual drove This continually outside

the year, sales XX% For followed represented XX% infusion at total sales and an by set comp of at full XX%. cartridges

to of As the adoption will Control-IQ both share. with XXXX technology the the still catalyst year growth driver that the look is capturing well-positioned new and majority of we market XXXX. growing in domestic drove be the our in place ahead,

also from base. to own our renewal growing benefit We continue will

the Accordingly, seasonality the are across trends will past. expected our domestic demand experienced years of to in the $XXX to have in to range we sales increase similar build shipments for pump million. believe year $XXX million be to We

Control-IQ begin becoming Outside year. rollout are to of more the the we Basal-IQ the the second is of US, and half preparing broadly in available

of drive will We million. international with million this combined that our in expect opportunity sales double markets $XX range a to international that $XX new our

by in of more our international uptake in the and our momentum sales anticipated of the our driven geographical second half We timing expect expansion system. AID see the that we will

Overall, Having with the the to that, year products is our demand benefit still opportunity million which exit. familiarity expectations $XXX XX% quarter-to-quarter range launches. outsized and are to the $XXX of sales continue in difficult the are over anonymous which our predict particularly our [indiscernible] ordering market from experienced market the XX% of of new said they a distributors timing million patterns around in we to worldwide growth international gain as beyond to XXXX,

full-year compensation to to improved in to X% margin with comp quarter typical from bringing XX% And the representing of for full-year the stock noncash Gross sales. us based pressure expectations of a fourth sales. margin stock at XX% line This in in on included XX% seasonal gross a basis. X% XXXX compared with

a We gained be as specifically output demand pump demand pace to target of in stocking balances investment we of to in tripled we significant current a leverage well inventory manufacturing capacity cartridge as prepare in market XXXX for XXXX as as will return growth. next year nearly meet continue stage our and to with levels. keep

drivers The expectations on and have volume, reimbursement. that gross are sales typically impact largest margin geography the production mix,

In of for onset tariff associated with XXXX, to approximately impact addition expect the potential and of Therefore uncertainty we Control-IQ points we raw a materials. of XX%. margin in from anticipate X overall X royalty gross an

well managed our in initiative of greater goal five-year from We leverage our increase care investments near-term as percentage. benefit as in as to XX% we contract are fixed continue these direct to confident our infrastructure reaching than

of with EBITDA quarter. fourth record which was fifth towards positive of a excludes stock straight impact adjusted profitability in long to term noncash XX% margin continue the objectives of EBITDA comp. This We adjusted the our quarter progress the

operating prior stock non-cash XX% from in $XX million XXXX million XXXX comp of our only We compared fourth business the X% which million in to in improved expenses we including adjusted $XX to to negative dramatically in compensation. full meet scaled million EBITDA the year including demand. stock expenses year the were quarter rapidly as $XX Operating in $X market

to year activities necessary began pipeline, we investments will increasing our of infrastructure XXXX the employee year R&D installed investment. development to a growing organization of support our advancement facilities the of all the parts continued our Throughout be company across accommodate the including our for of population organizational and base, a size. commercial

term XX% recognizing to building full launched EBITDA year we the to We long an will focus in exceed last we leverage of achieving With impact anticipate scalability range execute continue the mind in year on margin goal of in initiatives XX%. confidence that in on in XXXX what achieving XX% the to adjusted for our with and the term. long

million with plans with cash stock and cash in We ended $XX remaining $XX warrant investments $XXX XXXX total employee flow This exercises. from for includes generating from benefit million the million cash and in year. free the

to XXXX of $XX $XXX million To worldwide of in range million to $XX summarize estimated million million. our including the are outlook be $XXX international sales sales to

expect year XX% expect average We adjusted XX% and gross to in the range we EBITDA of XX%. for margin the to

Our sales approximately noncash million expected $XX for charges operating as both components amortization and included be depreciation of expense. cost of stock and compensation, are to

that, the I it will turn to operator questions. for With over

Operator

Brooks Street Capital. [Operator Instructions] And Lake our from first O’Neil comes

Your is line open.

Brooks O’Neil

With questions, all to your going two in the so? myself amazing things prepared you limit hard guys difficult very it’s try but remarks, discussed I’m

John Sheridan

Thanks.

Brooks O’Neil

sensitive any about area. I’m the I in was that the curious, and share you’re is by that FDA particularly issues with intrigued I particularly just related doing phone to Can control the you work hear and approval they for for demonstrate t:sport? us you’ve sense to you to give had phone the are the key FDA. And with control want issues of conversation you the from what sort

John Sheridan

open from fact ago they their phone And today. a good But the actually or them with control had phone year us have it's half what time uses in in the control. because you is that conversations year encouraged say move to the FDA’s unrestricted we've as to in last feeling phone a lives Sure, and everybody I with way true. have of couple the describe become would is about more gone control question. years on has forward

want a reducing a the matter burden. of of just kind as - They

achieve. moving they So us We're direction. forward want that that I in think it's to something

really which bolus t:sport XX will heard I but to only deal. big a remotely control full phone ability we is the not for You from have app also we mobile the think that t:slim have

obviously making with that concerned sure that associated that The and are thing the device. in are design they're the factors think cybersecurity addressed risk the about of I cybersecurity are is

Brooks O’Neil

Yes okay.

second at the not curious from tone So And obviously any related just Care, have what them appears the a their the in I'm discussion you’ve success problem UnitedHealth relationship detected - the had Control-IQ. for to the question, Medtronic with your change had discussions to my recall? in friends be whether you and significant with but you with

John Sheridan

Well, conversations algorithms. updates we presence particularly pleased situations. say general goal I we're additional and we're to don't seek the that for with payers with increase specific payer these But having all provide is direct on very would in reimbursement and longer term our our

You England Journal that do article know now New the is huge.

in think exactly do that's we're Control-IQ think they to market. I conversations have and And to I that what meaningful position the in now with asked us a is them.

Operator

from Alex question Craig-Hallum from Capital next comes Group. Our Nowak

is line Your open.

Alex Nowak

the want happened was just a trending start to with quarter. I international quarter here around in on that what pumps X,XXX

you the So gives quarter. what the half in in confidence it guide? what happened curious in rebound just of there as then in that And did about you just so, included the come

Leigh Vosseller

Sure, thanks year the it a When quarter. I say of in fourth Alex international where you. nice to we up to number the comes for would there the were third moving and ended parts talk to

the by about quarter. almost As end before Animas we the conversion fully had of was opportunity talked second complete

benefited third more is from third Some quarter of quarter slightly a Animas it fell opportunity. bit the little so into

Device impacted distributors Tandem what new was become third of began and the cases of many the end we But Basal-IQ that available was not to the to in Updater. little pumps launches Basal-IQ product quarter didn’t happened happened That bit. importantly more which existing very and until out did also rollout even that begin they’re the update, until want could patients what sending a

the fourth So that’s going really was in what quarter.

say the doubling in which quarter. geographies baseline new good the we’re it’s about as It’s a we’re an we existing launching year, quarter excited really the also what we our you that but year. go into about as think I And fourth are think next our we launching markets, opportunity next as the into third and point would of average saw

Alex Nowak

accessories PBM Okay, understood. trialing channel. and is And the XXXG saw the we the the then Medtronic pump recently by

So similar is what insulin there. doing to

channel pathway here Tandem the for preferred So you? is for PBM or I'm remain an curious option the ever DME

Leigh Vosseller

that I the us. the is off don't table see pharmacy not for channel

More our right and to building channel closely with importantly we're to presence. the for our right the the we direct avenue on with working that's increasing the the payers relationships think now product. right determine payers And work

highly between Our being us very durable Medtronic different a pump, note today one with center I is only not to they're think combined specialized, is sensors. selling standard and they're selling that pump

what our it is So really on can't go But different too. they that impact which through, channel I comment from position. has

Operator

comes from question next Our from Pasquale Chris Guggenheim.

Your line is open.

Chris Pasquale

to want I start Control-IQ with launch. the

You trained today. mentioned healthcare providers I about X,XXX you think

far those broadly to are the to more managing? that How are to that patients it providers get want and in how much Just available a sense process? you work of make you all do have along really do on front to

John Sheridan

you would say that all we've that plans the train. I we're nearly think we're people and know well, Chris. we have Thanks, I to - approaching our trained

continued goes planned that on for what is on, going accomplished. has think there been a as of think we now time But I this. - I majority this be requirements the doing to

Chris Pasquale

I to And that the factors to are margin on wanted different Leigh, then that. just gross back impacting go

I X progress? sort you there that think items other I know points to making steady royalty. you heard from X and holding specific Are that year of you keeping back this are headwind from Control-IQ the there

Leigh Vosseller

when expand, point you And have would a that we’re imagine, extending can again. capacity so where point foremost to you manufacturing I couple then and you leverage. to of our as to Sure, first get factors a you can

one the we utilizing that of an in weren't be XXXX. the a onset cartridge of won't number royalty, factors which So, was fully capacity really a that we're Add then point of you doubling that that combination means smaller the but significant. to individually the

tariffs royalty - where little think next and primary around that year. were the XXXX. story, Those my uncertainty it was bit were I But a new when together, for added two in head that of to the items

Operator

of Travis Steed comes from question next Bank Our America. from

open. Your line is

Travis Steed

you that delayed. just to think I wanted the patients X,XXX touch on

higher and in Just the would curious revenues impact QX. that - given be little I on guess a the the number QX thought I than

conservative So, the Medtronic know being you're I don't upgrade impact you're a maybe if program. XXXG if seeing there small or from

on up came with how number? curious Just you that X,XXX

Leigh Vosseller

were from the Yes some a can but looked the There from anecdotal number the had it's ascertain, that bit at factors were our waiting. - of field typical particular were interacting waiting and information some that to patients in offices we were as some that we as that they offices. or couple physicians you were little to physician’s - imagine, prescribing in a

expectations And that of what X,XXX fourth little than quarter. the our a represents XX% the in roughly own then more we did for But the add to pumps year.

And where are we today. so, that's

Travis Steed

And the you're assuming And in or in acceleration then was curious shift gains? it conversions. QX, thoughts XX% the just or what full are patients from that XXXX, like you MDI XXXX? driving So, on did did for your Animas U.S. - looks any contribute patients in share gains more year versus

Leigh Vosseller

we more. as who year - patient pace will come of to nice balance competitor competitor that this not about year conversion. Yes, keep many perspective, patients also we're did to so in we looking the that MDI us expect from at we will next XXXX. look are XXXX. an that and XX/XX will as we what conversions come - more market expecting if least we between actually And year think in we than I'll we start kept with healthy ahead, to And MDI If

be From an comp fourth averaging went decline start fourth as quarter to about the - some down the quarter though, under they're that that shipment. there come prior they to folks And upgrade in been perspective fourth to and don't much XX%, anticipated had Medtronic it we but had dwindle. XXXX. will our may advantage Medtronic’s new just we XX% who of us did Whereas program just analyst’s would customers, that appearing to we them of in really continue quarter took anticipate in think it from

Operator

comes Our next from Matthew question Stifel. from Blackman

open. is line Your

Matthew Blackman

think guidance XXXX? assuming in I'm I philosophy Leigh, about maybe that think to would you as hope your we goal exceed. philosophy as past the to that still is post a start you've unchanged characterized

Leigh Vosseller

try capture we think to up what frame to is just we within so is, philosophy more Yes our our control.

relationships that to fact have as renewals area example next our and of main visibility in drivers that's better into are well. available have what's should growth patients. us year one And for So, we one mentioned those I for with better

to things we're or timing typically competitor comes even around it But launches. FDA when then of approval cautious

we so, those are see until the And things demonstrated evidence.

reluctant - to build in. are We factor to that

Matthew Blackman

Okay, understood.

sort And year. on about reflect so a that in in the of shape the with comments and of mind your

below that And granted I If guess there imply prior I would mix the particular line there, having similar be a math the has on number in are as moving raw quarter bit would parts some in a so maybe it consensus. years. a little do but just and first in roughly there it

that And hey, to be all again does the you - sensitive go math off conservative plays we that point start initial this see is or something is right. is this - how should just out? So second, let’s the made there to and which back

Leigh Vosseller

Right.

the I in be - the the about traditional have Control-IQ the we that that which want about would agree to quarter. thing thoughtful XX% the U.S. are first I think seasonality is to year. about still has been shipments for what of on pump XX% in yes One curve impact typically So

while getting it. that the cautious going the very come, we're just so where we're to And and of about we're areas one opportunity enthusiastic that's still about with

And John start inflection. where demonstrate there's inflection say definitely an so that to to be would going we until

John Sheridan

to got an There's be inflection.

Leigh Vosseller

the we’re QX So actually with comfortable numbers.

Operator

Ryan question Cowen. from comes next Our from Blicker

is Your line open.

Ryan Blicker

question. the Maybe last just following up on

XX% declined to a patient to QX more just guess bit talk sense pushing than to new can rationale adds seemed customers I That doesn’t Control-IQ X,XXX versus your the XX% historic domestic QX why seasonality stronger the sequentially us be you about historically much U.S.? make and QX wouldn’t the plus given So in have seasonality typical launch. to QX. much

Leigh Vosseller

Great.

that to don't you So about is one all differently that in think quarter. to it anticipate call that want comes first we the thing if Control-IQ

have still are when these their And them if purchase. limitations in So will to you their some I reset. call folks who will make deductibles will on waited will of

is more about softer it. those QX of dynamic evenly was the think a now from across typically little for So that year. the to in typical deferral may an of piece because anticipate than see that way It that best spread But look we play we trend. QX are the interesting QX historical at to

Ryan Blicker

a capacity steps on in XX% pump been what to Could or overall then has updated there outsource increased versus awhile think years to And about moving gross margin. so? expand the gross margin since to next your be Thank production? do over pathway And us make supplies to margin five expect still gross you with you on then achieve you you as talk you've willing and it's supplies some you. do customers How XXXX? forward about the

Leigh Vosseller

infusion won't but since are by hit say we margins missing margin XXXX yes. to for the we cartridge leverage of product if have So, benefit I in as it, third competitive on we give call were, broke product scaled that and continue our to margin that even have you continue reasons, well we back XX% set Absolutely, as nicely track time. at quarter can supply scale capacity, our the the the still of we target. want Unfortunately, well point full in simply to sails first to that

very we're where And at headed. so, confident we're

help of Some third-party our that as opportunities mentioned again to would manufacturer just we're capacity the costs well you building. the reduce as to be as outsourcing leveraging other

Operator

from comes question next Our from Leerink. Antalffy SVB Danielle

open. Your line is

Danielle Antalffy

the quick pause guys of A whole that launch. saw question on of you this the Control-IQ dynamic ahead

and you to coming launches a market you same your within about two the of ability were Do perspective? competitive guidance are dynamic about thinking - might potential of patients. you the competitive from How how pause launches Just see have thinking you're launches factored into the a across coming impacting in ahead curious XXXX. add what's you new and competitive ahead those

Leigh Vosseller

Yes.

the one our guidance when think areas that's about So, where we of philosophy.

We are that year control thoughtful over. about the could don't later what in have come we

we difficult part even But predict the the back particularly to half. most visibility so curve into today, always what's the the in to the at the just much more leading here which is as pushes of and second half quarter. first have As seasonality back happening much have when we

So, those factors may continue each one us. the to not and you and more thoughtful thing or as we'll eyes it on about we'll quarter our learn may that them be about impact that's being and having update we're on we keep

Danielle Antalffy

And on well curious - from guidance around capture some a perspective color of rate is renewal capture next about can so an you the I'm stream. then where the perspective. as like as question are And you my competitive It if feels Curious true. for any rate. for much. give or expect you you the acceleration are probably from internal where Tandem you exiting assumes that's where be that your Thanks XXXX. to both

Leigh Vosseller

Yes.

as the within about when excited have opportunity pump, company progress we in renewal very the to through we're a we've far so effort whether on it's focus from can next just the a patient the a the that's imagine effort, made pump. that retention gets the way very and very dedicated So that renewed their the to end get them to all by beginning you

the I converting. I scale And or accelerate would so, have up so to number people guess that say are continued far we of

year still look from renewing what's increases by warrants subsets. think XXXX expired people me internal whose today versus at we’re I XXXX, XXXX we figures people and seeing those in is we exciting look year in our to when

And for us. needle so to the that continue move

on forward. part rapidly that a grew The adding we're business number significant exciting go is other so our the of opportunities

have adding to going try rate on forward. are really that renewal expired drive business are those the that improving the it's whether already to factors renewal the going So the but also that warranties

Operator

And question Piper O'Brien comes from next our Matthew Sandler. from

Your line is open.

Matthew O'Brien

of Just on start bit a new little to pump I side wanted the things.

new new about about to and looks in XX%. pumping and it you XXXX by closer our Again of pumpers talked our folks that's math. math your were by XX% think to to were pumping I it that was like in XXXX

So love going to have growth accelerate elsewhere there of as that really growth. terms about market that a the are or versus in seeing would what market the capturing accelerate to far hear maybe you're to in share market the bit as helping on little just dynamics people gone starting of coming

Leigh Vosseller

Sure.

XX/XX if saying that the the back patients difference coming pumps. history. the I from to shipments first for that's were beginning of competitor since very consistent number been is out renewal start about I'll our people think pump And you the people by in those versus therapies new years, of

of saw that strength XXXX. best the I and And think elements of was most one everywhere. We surprising

saw even increasing. population Tandem. So competitor increases was conversions MBI We therapy in coming to to similar pump the

we of think opportunity we strength in do And XXXX. so that the the we're to excited with and about have Control-IQ same that dynamic

Matthew O'Brien

this about And our the international over year then shifting versus you business. pumpers again I number but year. know is of last the guess flat upcoming math

I'm from pumpers So you I'm in big But that of just I a about talk number force for in wouldn't perspective. know Control-IQ. given there's surprised some better Germany bit keeping of there can growth it's especially you're a people pretty little know are a deferral again, pumpers there going be that expansion the as a you on a Tandem. just little doing waiting sales trajectory dynamics interested

Leigh Vosseller

Sure.

have opportunity. our known from analyst of a piece things important XXXX business the of one conversion So came about the - big was that majority that

as second activities analyst of type can year the these. new you the converters market at the pretty much of half So look half all that year almost is first and and

bit at both Those a new really little of of more happened other I to market all are but there like and I a there what our the which were will in parties geographies. going new draw QX there. was the for look call and line baseline QX, So, now, activities what existing on - like the say average

very slower And to have the it difficult be look even bifurcate have But though in new just mind those uptake Keep the really between of it's and XXXX at a from if and think Germany, to large I you starting geographies then will become market Benelux countries. they’re - a France to a coming base us go what our might because - have products. later in that physicians off and on we smaller halves familiar comparison as with will year. at the become with and difficult it’s to

Operator

comes next Matt Taylor UBS. question from Our from

Your line is open.

Matthew Taylor

that Control-IQ. the on follow of you customers comments made especially to to wanted up about on bottleneck saw QX with regards some with inquiring that just I you the And

So And with sales initial kind see comments of people get in could you of was the feedback? in sales or QX? disruption had did so uptake in question quarter? you dynamics on pause a looking we comment it prepared far that so color you’d lifting the that the really was my seen the the actual about Any just for far the

John Sheridan

Sure.

So a just have United have updateable actually pump today we by pumps. the have today who in let start the of me people the saying majority States

And in of information their excess pumps. mid-January. that by how And we just number looking on is Control-IQ in that to We overwhelmed update were for XX,XXX. available once announcement so people was made the

I So, a do So my XX,XXX-plus I prescription update? do in? work portal? do by get how we I to just surprise It calls that. was us. just the How And how had we're with overwhelmed

have since it. We gotten past

marketplace think the pumps. effect in control to deal our about this it as updating I already with got to I it's a any I This year had where said don't scalability. updateable on point had pumps. people really think on I we were think entirely focused in were it. we've to year and And that And last organization we now. been scale was able ship We new we the And ability

see very and sure are us we're and who as using look I'm real all a been you'll that life excited it’s the changing described enthusiastic. about - - to you it just are for today it media So device. have really to in. do really participate on all you And People people of just is excitement social

Matthew Taylor

leader. on some system of online to make kind system with one And are algorithms? that stay who competitors How stays some step you ahead of Control-IQ you to you're reasonable algorithm come follow-up the to sensors development, the then things that other just going your core doing clinical sure that and mentioned can and of enhance comparable these to clinical

John Sheridan

well. as That's a good question

our results saw, also completed we pivotal And the team’s for just you recently As groups. were great. the

is talking and great We FDA or here for FDA. this approval that And have the - the we mentioned on adults. which get the six-plus all the submitting age we consistent data we expect to - are shortly, in plan news. but we've shortly, data the the to category past, the here been with we from saw And

as about a well changes changes been number device. ease improve personalization clinical the of as we've carefully And to interested and we're would improve making in These device of of the that the looking use. outcomes

there’s the number conversations mind. So in of a we And having we're with the in have things today. that FDA

will for But profile update to be understand not see trying I them. Control-IQ is now, much XXXX. how expect when risk clinical meaningful these and will what of we're release Right support these specifically to changes to the the information - We're work will to going changes. as required next will say, we in be any think to I

Operator

Our Oppenheimer. next from question comes from Steven Lichtman

open. is line Your

Steven Lichtman

mobile to functionality opportunity the build Not look for talk You with we about Do sure later seeing key how much into little beyond new t:slim? be bit will But the can bolus this John. as will out question a more certainly mentioned anticipate XXXX? patients that and your with this continue functionality to you you latch with - that we’re the last answer, application year.

John Sheridan

absolutely. Well

pump. the connected testing for First to of mobile of means device lot connected than it's systems. final all now, t:connect in asking of different updates. question. Right It's the all, a thanks midst the just That's our tethered computer a for that app. just the It's we’re to the of a

is sure we're that important work great And really device so, experience. going provide it's and a to properly that this

out month. plan to it we So, next here roll

mobile a and secondary will it say will - have and who to device their got help once really going they've to is time also t:connect. the uploads this display the at pumps which the never they people real look huge provide using it's again it are And actually ACPs because today device

a So offices meaningful to their to have people pumps when update practices. they'll their no their in them is longer come which for distraction

feature. excited we're about bolus to So, talk remote the

- would one when from are it's that's to the desire I to one the out who people do mobile general bolus you talk in thing think what phone. It's when our you a that number and app today the you that at you're really about If look using feature ability people that public.

a diabetes people discretion able our on and think that burden to phone the do improves really so for using who the are And systems. I of being the reduces

we I of of So think it's to very we're the be to and capabilities some And - time half out. to as We're about great it it. going products this roll at systems. excited our second year addition said looking portfolio a the with

it over mobile have one strategy the to has features. is in full we that step have with all come think I because app overall - a control control t:sport that when the basically full this our forward will

Steven Lichtman

believe. it. Would the investments as sales that cash or looking just as the just some And you looking at the you this look flow and cash, - given Yes, you're just generation, then to cash you accelerate how got secondly, curious free deploy position as about talked looking overall? are making side the be footprint the year to I on you there over customer service force -

Leigh Vosseller

resources we point, comfortable year. we think feel number, do always I that If but we'll we to we the size the need year the continue think order the to force we’ll we from so definitely about at that. territories of XX we use top very and with again of what our today. to mean sales our Great, evaluate add this across to We that increased drive middle then line. closely would XX look territories need about at to in actually

Operator

W. Our question Robert Baird. Johnson from next from Jeff

open. Your is line

Jeffrey Johnson

there. John, the to mobile want I follow-up on app

that's So the personal it's be it's Android on XX?. guess I controller allow separate not an just to auto And have the like a going that bolus a to phone, basal? to seen one, t:slim pump mobile like from tends make want if will I on and phone own to that or your importantly, an iOS sure confirm FDA your more

soon? What that allow be for other pump the you they'll the why if why I t:sport might would mobile What next year? other in are issues guys have bolus functionality phone - I’d looking getting FDA they assume or with pushed guess concerns about to control companies this all at already

John Sheridan

do first unrestricted on plan to I iOS Well yes, your think have and capability answer phones. we just Android to I question mean,

we that So, the is I forward think a look at we'll that direction. way stepwise process. be And it in moving

I mobile with. think the to that probably issue want that we bolus deal is complex most

t:sport, And we dealing right with the right planned at you is approach. had controller originally know it this with summer. so, look the to think you we submit away t:sport t:sport remote When

then And now the and recently for the will mobile filing just To we think conversations that changed that. I be submit with it had the the app in mobile be and following. that the FDA a pump separate we've will plus app

direction So it's it's from pathway and the way of matter our basically regard. has FDA I just pipeline the development also. that's And in a, think been the just a that defined following

Jeffrey Johnson

on Leigh, confirm on guidance then I'd just And like question the competition.

built little you've I can't a about in couple of of competitors that said that are times cushion thoughtful you and very back total I embedded how mean tell maybe think from a assumed those half on within You've think coming answer year? so, of and But does in makes now bit the guidance competition sense. your you've the you're

you you also you in comment things control made guidance. don't about Or embed a can't really

half perspective So of what's change does Thanks. that understand in in in half kind back trying guidance? guide? your Just of to dynamics mean any the kind a you embedded have assumed not market that competitive in from back

Leigh Vosseller

not right. potential you're and there, the discussion but coming, that When it's the put products when the sometime on. to it pressure even just the around product competitors comes Sure, market, to coming can

with some of level possibility. factored we in have associated so, pressure And that

Operator

James. Our from next Bedford Jayson question Raymond comes from

open. line Your is

Jayson Bedford

asked a has been here. Obviously lot

control. So on with just pump detail you with phone in share terms followers? of product to are ability enhancements to Control-IQ, data so-called appreciate Where the the

John Sheridan

in actually the specific doing. but it's yet, not something we've something on It's we we're definitely that interested works, in it’s times something have given

Jayson Bedford

on or with Abbott? Any progress your update partnership

John Sheridan

on We are agreement. still Abbott with working the

It’s the future. of I think it’s that team, been that just care when going it good right thing get working a we agreement this in have the near confidence the we're through - to details now. comes to of taken

Jayson Bedford

And then quick last me. one just from Okay.

something you kind do recognition Is France? revenue delay reimbursement In in that in of will that have terms the there? France, launch of

Leigh Vosseller

There and and for here of half the And there. pump Germany, the Benelux try launch in reimbursement year first countries. the to is France other we in

Operator

the today's And you. like now any remarks. that turn question-and-answer Sheridan for to does Thank conference. John conference back for to over conclude closing session I our

John Sheridan

look We Well, seeing in call for thanks, to everyone today. everybody, our soon. in listening and participating forward

in We a on on in conferences March plan weeks. a tours XXth; are York attending Healthcare upcoming tomorrow, on in hosting Healthcare Global and Conference the March on Conference Leerink of March the at the number We be X; the Global number of City. bus to Boston New the Annual the Cowen Conference XX; Oppenheimer Conference and in York Miami Healthcare X in Barclays Healthcare New

we much. again and company us as for today, look we progress on. go on Thanks updated forward to joining and the Thank you very you keeping our

Operator

and Ladies conclude does This thank for program. gentlemen, today's conference. participating you in the

have wonderful disconnect. all You may a Everyone, day.

Tandem Diabetes Care (TNDM) 24 Feb 202019 Q4 Earnings call transcript