TNDM - Earnings call transcript Q4 2021 | Tandem Diabetes Care, Inc.

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Operator

Thank you for standing by and welcome to Tandem's Fourth Quarter and Year-end 2021 Earnings Call. [Operator Instructions] I would now like to hand the conference over to your host, EVP, and Chief Administrative Officer, Susan Morrison.

You may begin.

Susan Morrison

Thanks Latif. Good afternoon everyone and thank you for joining Tandem's fourth quarter and year-end 2021 earnings call. forward-looking include will discussion statements. Today's management's These development as future product about financial statements of performance date. only reflect timelines, speak and events, and expectations operating today's plans, to uncertainties in projected forward-looking statements. cause risks anticipated our that are from those and actual There results differ materially or could the A factors our today forward-looking these statements other cause highlighted in that Factors actual materially earlier to be Risk of list from by those elsewhere filings. SEC on under most any release and of press and issued annual different recent our expressed Form could in results or portion implied is and XX-K our report We a assume new or information, update any obligation publicly events, result forward-looking statements of to whether future as factors. no other

press will our a of Vice references President which today and operating is Sheridan, and CEO; and Executive Hansen, include EBITDA, make to Chief to by EBITDA call Adjusted future Vice decisions discussion non-GAAP for Brian Executive our allocation Chief measure. key operating for adjusted President Financial refer is capital. Commercial John measure a used plans, strategic evaluate us our today's to Hosting release Leigh addition, In and generate financial Officer; performance, are today's Please President information. and further earlier Vosseller, Officer. issued the

back limiting prepared to queue. Following the over for question open to yourself questions. the before into advance up turn remarks, in one getting we'll one Thank the the call I'll you for John. call and now follow-up

John Sheridan

everyone call. today's to Thank and welcome you, Susan,

the quarter the an And both to the record can year, was see strong quarter looking highlights impressive and finish of we the for you for today's set year results, Tandem. sales of year. fourth As in back at a

throughout leadership of first launch our improvement margin. We position positive with focused business expanded an impressive achieving the IQ an markets our and year international of States milestone on reached Control technology. of continuous we our we in also outside Operationally, United our furthered operating

we to as highlighted Day at portfolio. late development we R&D our efforts last and support our longer-term year, product Finally, near furthered our

In achieved insulin a enables are operating mobile week, for longer-term we prepare over list strategy. the their delivery near-term a addition Care. and pump few to We bolus of exciting smartphones. FDA Tandem management to creation that we important these accomplishments our market-leading with who also smartphone With great structure systems. we our app leadership we've to step milestone the complement just t:slim opportunity clearance position users and of Tandem individuals enhancing our this in from of last our XX product both insulin past positions. adding of app of and first-ever clearance, experienced Diabetes Organizationally, welcome is this business talented quarters, execution as iOS as the strengthen and capable Android the and the firsts, launches, scale the been initiating has on new further our the senior of as an It's growth, to continued FDA-cleared team

innovations our past for nearly achievements in use that is goes these worldwide our XXX,XXX that nearly am years, XX people has base t:slim installed the to their adoption. drive which employees. Our evidence quadrupled Credit management. for I talented therapeutic three proud a

outstanding great the commitment people have with flexibility living of We diabetes. an demonstrated and to improving lives

Tandem. cases, in pandemic. as for quickly. showing continue the with COVID-XX positioned the challenges prepared of XXXX a is look navigating we to can encouraging another to and We're mindful also ahead, seen to historically, but things being we've decline be see oscillate As exciting year It's headlines associated

still That chain the trail being and the focus clinics achieving to rate uncertainties as will case such and recover unwavering. remain, is we serve effects will addition, global supply broader the pandemic-related time staffing our commitments In our of headwinds improvements. in and pandemic, take said, the goal to while challenges

underlying include for the growth These him our who Importantly, dosing to from that of like quarter our and years EVP, his technology, current place our these Officer customers, automated product the Tandem I'd perspective share renewal now to hand over on pump worldwide insulin new in and ahead. the robust Chief customers different seen demand Hansen, from to are the purchase drivers innovative eligible still provide call today. Brian first are recent each our Commercial and and remains positively experience market pipeline, conversion strong growing our A for a to him we the year large opportunity competitive and an opportunity, under-penetrated. our again. turn has

Brian Hansen

John. stands therapy insulin continues segment the that is me pump durable leading to be pump for the t:slim out is solution market. the largest platform of our which Thanks, What the insulin community, for XX

way of accelerate. I benefits who continues make more which In now off to fact, to pump also where meaningful the pump from extra the back the adjusting sources United with the how quarter, multiple provide. the form more gaining to our time computer, Control home reporting conversions our was that a quarter pump is the proud obviously strong of of into daily compared software goal It's in that pressured to number provider factor shifted pump effort team adopted quarter put customer ability territories with during long-standing We resurgence progress January, also as our year performance of cases. visibility shifting remained XX,XXX in from XXXX virtual At we experience great more in similar increased interactions and see they from coming that United suggests support was operating. its year pump our pump conviction the With double balanced very high that and outside last any In a we IQ international a was We're injections. wide typical sales both penetration of Outside IQ in territories were and Healthcare team approximately in three from before customers and COVID-XX the States. achieved that the of full XXX offices fourth people therapy proven region. held range fourth the a of which use staffing whatever proud people worked of we multiple in am I meeting, growth recent and to there t:slim who sales U.S. for converted our a XX people our country varies growth Despite we that just once get source they therapy. therapy outside demanding their chose our in In to fourth COVID-XX so again where timing the into that we ease high prescribers which States, to of force continue the the States and the trend XX challenges, diabetes. Control pump a accelerating. heard remote therapy greatly in The bring the and market is many meeting, to the and customers we to therapy as half for manufacturer adopted United and data end, our to the competitive is that suggests record shortages technology also another and the see partners flexible our were people by our new was United customer injections a new update the the do enthusiasm only of number saw people year the is commercial Outside of able Tandem estimate they've half United States, States these complete. with to national a practices. insulin platform, our in activities interesting by for of this year United best sales pump distribution XX testament the t:slim market challenges navigate reset to new deductibles. than expansion we offerings seasonally This was years daily third continuing other pump were ago. the before a ensure particularly wanted and technology. growth, often States,

success driven the which scaling operate IQ nearly as factors everywhere is by States. launch such technology, now we of multiple our Control offered Our outside was the United

for the year both In full represent XX in markets available was larger a was where and France, launched which addition, two a Control and our fourth quarter. t:slim Germany of our IQ in

this the of is IQ responsible work people we experienced positive. been United with of a a more as are IQ there management and demand launch who reimbursement, hear provides. providers helps all pandemic, the and hear Control supply fuel customer distributors complexities. and also outcome distributor to benefits with products activities. product healthcare our experience of improvements reminder, for the States, associated the to adoption addition It's see and tough high the innovation It's inventory customer As and the environment the forecasting on and This for their similar feedback for dynamics care fantastic growth selling, to in America, our been product the Control experience clinical chain to are North navigating what in we outside overwhelmingly

to sea For of contend the predict. to been had difficult with freight a that been availability they've example, that timing has variable and has

XXXX. see the we'll variability As a result, throughout in we've distributor anticipate seen patterns to ordering and continue

available clearance having our competitive data to customers people it clearance t:connect pump The largely was significant t:connect team including this bolus well their phone, also their XXXX as week's States, as pump to and pump on a more the sales and worldwide display their secondary used users which convenient discretion automatic of receive cloud-based serves already pump to our discrete as the environment, personal most last view of benefits offer as to application. freedom FDA a therapy have mobile United smartphone. way of recent their app consistent t:slim the to continues in app. thrilled web on In weeks. Turning XX our throughout using uploads alerts provides feature to frequently the mobile to for pump news been the wireless It's their our updated enjoying for was

convenience be with is our XX are the nearly now progressing spring provider trainings feature a to they That's summer. this of their of availability upcoming months, with their taking We we'll for launch and healthcare throughout just a In on and through for delivery get easy existing in-warranty reason new mobile truly our teams of different. the followed it how innovation our update U.S. XXX,XXX the can of off to prime tiered be and feature access thereafter is for the advantage. free perform positively software makes Tandem the an of the in a offer competitive to the also pump our And the and home. it's we'll It customers example a next mobile by Device type for connect own to customers rollout who This everybody comfort the charge. sidelines buy offerings Updater as to internal with that to waiting for opportunity bolus the launch XX. provides of then training their able be t:slim t:slim power us may

reminder, customers new typically purchase years. once for a every become As pump four eligible

year low well is roughly pursue not pump warranty a customers averaging that has will their purchase expired experienced after that Our many renewal until later.

our continue seeing and infrastructure customer enhance are process renewals used great and We to drive results. to internal

whose pump, to where a which second warranties more purchased For for XXXX XX% the than a example, our customers expired milestone lengthy even retention in now high customers of their speaks over third timeframe. XXXX in or hit have we

fantastic many of percentage our their the quarter. improving, purchasing has become in eligible of newly is already eligible year people are fourth a the who six did improved and third warranty speed in months as XXXX That a half renewed. is pump of customers row have for Our expiration nearly until the not customers within so progress

turn driving the are see growth to can that, our was year to contributor With busy a longer-term being continue initiatives commercial call our a back I As well-positioned John. over you objectives. to and XXXX will and accomplished

John Sheridan

big extensive event Thank our continued been has Company's which results in Brian. market is began diabetes all that December, wear one person shared we their a the A research, through at growth R&D practice these vision you, purchasing It's Day strategy we to fits based inception. pump personal driver of for rooted a solution in it's and innovation. from there their longer-term and foundation How outcome on chooses is in a management. is in At that driving our consistent needs preferences. and a size no decision

creates and new people our to solutions segments to bring is this result, with living in both approach X markets As the a Type diabetes. more and Type designed X portfolio

development an app hardware a t:slim with referred technology. to the delivery year mobile week to interface. t:slim pump to mobile history market to control insulin t:connect learning The applied used is we pump has the mobile to From confidence using on we to feature of and factors This the Last was new Tandem mobile be with review were pump Mobi full options. human a Mobi pump to way FDA's mobility represent Mobi human bringing through advancing are We control be to a us human as Mobi's filing than tested, named This this warrant support regulatory designed to last during including high for to our well smartphone. the functionality. formative to historically a will leading-edge testing. an rounds a the discrete controlled foundation underway. gives tubeless smaller, personal is app functionality the perspective, for which in is expectation our a factors The is t:sport. it's cleared platform the later more as user's gave study the mobile our for in bolus to Mobi that even pumps new invest app-based pump the market nod the and the chose the launch XX get all been durable XXX(k) continuing under in FDA summer. its study mobile has is We that for entered serve on name fully now been is next Mobi app development we validation the we clarity extensively largest miniaturized also XX able us its mobile control intend factor bolus our Company's Mobi platform, along opportunity of as which and effort. more timing segment

partners, pump commercialization a additional submitted will ace the to relevant of benefit XXXX This iCGM allows progressing with priorities for from and As technologies is will well algorithms Mobi XXX(k) integrated will interoperable has reminder, be with CGMs and and for Abbott. pathway, be we the algorithms first can to are when customers determine we evaluating launch. insulin both our work CGM new Mobi without be our These CGM it integration that which strategic the along which regulatory the been sensor in particularly be through delivery features review. so Dexcom AID integrated systems. us timelines with of our to FDA for as

for are making are with feasibility on note. Control set feature a great IQ's and Type advancing first our We our clinical currently milestones We initiatives also progress enrolling of few labeling study. X

old, use support in and six several other to intend we years and planning as data programs. in the and our to than indication Our for pediatric the the have we children progress phases well pursue studies trial is progressing further discussed AID to an age past, younger in also

turn ahead, we the primed of again look to As technologies the innovation it's Leigh. the to continue diabetes now a I bring community. with revolutionary I'll well benefits with as more am confident to our our relentless experiences call longer-term and customer to diabetes. our near year With opportunities in living team's people ability meeting that, exceeding as once and to goals to over the and delivering

Leigh Vosseller

in good XXXX. of million we more just to a XX% This our us base of worldwide was quarter a which installed Thank more of a approximately the in record-breaking than of our in represents as shipment $XXX sales $XXX you, million More performance a scale customers. from meaningfully timeframe. another John, The in comparison worldwide to were of full-year under everyone. our sales XX% and afternoon $XXX sales grew million, XXXX for and than Specific pumps record sales XXXX which brings as worldwide, sales Fourth unpredictable nearly challenges is pumps successfully U.S. by growth over shipped significant to of XX,XXX XX% we XXX,XXX is fourth than delivered XXXX in achievement nearly pandemic. We This three-year year. XXX,XXX despite point to $XXX This the XXXX. the in which the quarter were shipped approximately market, half us driven unique were only the XXXX, alone. million. sales

Our U.S. installed drove in base builds supply growth sales pump renewal the for sales the of nearly meaningful XXX,XXX foundation customers in future. also our and

reached that regarding to at XX% the progress, pump remarks renewal renew XX,XXX end approximately our our we of goal expired warranties more of Brian's the cumulatively on than XXXX. Following

from renewals of warranty continued this still were generated past. as years XXXX from warranty in sales as contributions that XXXX majority the expect explorations the in meaningful far expired and there from were back the warranties year a renewal While future explorations, we

XXXX As eligible based additional on we become XX,XXX opportunity, look our at approximately renewal our customers will XXXX for shipments. renewal

these will will at for in and timing sales more growth with our XXXX. timing Importantly, We than highest quarter. the their the renewal we XXX% in shipped uptick more insurance to Outside than which the we were fourth eligible Fourth the the million of the over XX,XXX single strengthen ended sales, of not the the in due presence U.S. renewal operate. million in a traditional XX U.S., sales deductible to pump in continues from renewals benefiting have volume countries $XXX across year. which shipments XXXX the until expire which influence experienced warranties resets of XX% seasonal we was XXXX $XXX quarter quarter across of those be on customers

We the outside outside U.S. the impacted strong $XX discussed. over our fluctuations but pump the doubling patterns derived the installed year to pump of that were nearly from of XX,XXX into the sales on demand the U.S. the these variability XX,XXX shipments, continue essentially sales to with ordering anticipate customers. million products of challenging base year that will saw XX,XXX we half for throughout ended our the environment Brian continued Just fourth-quarter reflective COVID in by We due as XXXX. strong shipments

optimal to orders XXXX For anticipate sufficient inventory pumps will of quarter example, inventory quarter first-quarter Therefore, both to certain follow-on focus exited to levels. with achieving and than in continue of anticipated first be and lower orders meet XXXX supplies QX distributors lighter we fourth XXXX. distributors the demand on place the as for are

we have Control worldwide, XXXX it commercialization. to U.S. still the phases our Looking growth in of outside the the where markets is technology, market-leading especially from IQ significant opportunity in early

sales Our stream also sizable supply proportionately in will XXXX recurring installed base. in growth meaningful represent that predictable revenue a and our with increase the

in continuous We for approach XXXX particularly surprises reopen. the at have we markets XXXX even began when that are to COVID may reflect a cautious times the on impacts business, maintaining on as in

reasons, million, XX% these range to at sales XX% our to we to of growth For of $XXX quarter smallest years XX%. $XXX U.S. and seasonality XX% we million a expect of similar approximately in XXXX sales anticipate the to sales the Due be be rate will ordering international QX to the worldwide year between and patterns, past.

historical expectations our of impacting of million Our U.S. U.S. the pump the to resets of $XXX with growth percentage fall insurance XX% million the to are annual million pump $XXX tend sales. supply XX%. sales scaling or in $XXX impact in due U.S. XX% with outside U.S., or a of the sales in $XXX of quarter year to in and deductible to to to both range the XX% the growth Sale estimated the guidance the in be as sales first high-teens full-year up shipments sales in across Overall includes patterns. of line expectations seasonal to million

with the in create the across our occur are mind we to market QX in on of expect COVID we holiday as While guidance Therefore, degree are base, distributor in with and that to increase impacts lowest markets the distributor keeping to in continue we operate. pressure continue each seasonal that summer strong markets some likely penetrate a to the tends various high timing across where to due installed of as European to monitor are we demand we variability orders Sales the remains the quarters. third being dynamics conservative partners. of season. in OUS be the expected year with quarter our our the sales growth

This in production pumps Moving on continue from XX% to the to gross our XXXX costs for XX% in both approximate per-unit in margins, improvement an reflects margin improvement demonstrate to and increasing our cartridges. we XX% XXXX. in

notable While our in overhead benefit as increase, impact OUS base. These reductions initiatives. a cost-saving supply increased markets we prices offset growth the than of seeing the well from contributing as our factor installed pump lower from as volumes benefits selling more average are are large sales also in our sales from

sales XX% a XX% by margin As our U.S. pumps were to gross highest XXXX. XXXX sales compared worldwide then OUS are in consumables. reminder, and product, in of followed pumps overall Pump

in fourth gross quarter of flat to the compared margin essentially period Our XXXX. was XX% same

drive We within associated cost with but supply year, partially incur to continue offset costs savings period. of were product challenges benefits increased the to that began these we with chain the through the end global

sales supply as sales our represented both the of of compared XXXX. to quarter XXXX in Additionally, higher fourth a international sales and overall percent

which margin expect freight we to XXXX and expectations, ahead gross in to XXXX, anticipate line increased cost with be to This annual XXXX. in continue the a an will Looking of XX%. to achieve is material due we burden

these our continuing more to long-term to achieving to remain goals as near-term our extent confident the business managing view cost cost to offset a pressures. are impact programs and temporary drive increases possible. We in this these while We cost-saving the

in with of across expect XXXX significantly gross cost-saving margins more new but progress and from future scale We product initiatives the achieve and from reimbursement introductions years incremental the to initiatives. XX% by

we path operating Tandem This achievement achieving comparison, By milestone was full-year profitability meaningful reported our margin a XXXX. margin operating long-term to in on first a XXXX objectives. the X% which on as X% time for the margin we progress another operating of positive negative that our was is Our marked to continue basis. demonstrate

improvement non-cash stock-based metric in in more progress. a a appropriate commencing gross compensation margin, XX% drive profitability of took percentage second to of improved margin points number measure of excludes programs, to which our pipeline We in continue to as key XXXX the adjusted view including expansion We to with That two line and reflecting our up trials. near-term year-over-year. our R&D our in clinical our margin the hiring investments EBITDA significant XXXX personnel half step

Our anticipate top full-year financial foundation as priority to long growth. product the to business goal to in adjusted the also range the for is and on are in term. XX% high-revenue We investments our EBITDA sustained These continue long-term margin operating well XXXX will invest leverage be deliver innovations that to we will into of build our of and track we achieving in margin XX% model XX%.

million. estimate outside $XXX in of $XXX substantially of investments investment summarize Our sales to to ending at million of margin XX% well-positioned a the and balance are $XXX strategic of XXXX, year be average year for to execute We on plans. our to estimated the believe in We range the to range worldwide be and our $XXX make are adjusted outlook, to XX% we of cash sales. EBITDA million. to $XXX XXXX U.S. $XXX the gross sales necessary in increased million including the by million million to XX% the To

our million the of as made I positioned mission compensation, execution questions. is break in included diabetes. to With and out records be to by overall that, XXXX Tandem operating more proud Our and financial the I conclusion, turn noncash amortization employees. were solutions expected carry once components people it charges efforts benefits our approximately amazing continue our to possible of both sales cost are for to achievements for with am we depreciation, our that of $XX as expense. living over the of operator stock in of will by and bringing XXXX again again In to

Operator

Chris [Operator the first comes line Guggenheim. question of Our Pasquale of from Instructions]

open. Your is line

Chris Pasquale

next you for Thanks over year. of be to in guys years. renewals XXXX. and think just to drill nice on a something you It that for driver opportunity would Wanted renewal get just finish great absolute couple the a an were congrats to in the on the number a big strong be what should

but of baseline gave around have it'd rates, to there. You lot great details a a be

Leigh Vosseller

Thanks Chris. for the compliment, Sure. talk you to happy I'm today. to

it's all meaningful regards with say renewals, in which coming the growing yes, years. be first opportunity, So to becoming I'd a will much of that more

and we it's will come from the And that XXXX hasn't For of have majority pump opportunity still vast progress for much. to not pumpers made and Tandem. volume as people, are great the we XXXX, our that it's even new though again just grown sales renewing

XXXX, contribution, give of we shipped a breakdown, are it's on start and to in the more in more XX% think into XXXX. is little going XXXX that which you what opportunity and of perspective XX,XXX really think you XXXX see we'll about just to So than can of to increase back maybe more new pumpers a still being new by about opportunities, where is more but it's so pretty half-loaded, we can

Chris Pasquale

broadly, on industry maybe the you goal. that's flat surprising hear the cost long-term pressures good Okay, not the with then is too some was given 'XX to gross thanks. reiterate of it but And margins, 'XX, margin, helpful, versus dealing

there, control drivers of XX the is of on is little how on new products? is dependent it long-term? getting on curious as How out the much bit which it about reimbursement, Just you much of dependent think your

Leigh Vosseller

Sure.

cost-saving seeing the you benefits volumes, when it, as and it our put efficiencies overhead, about within you've been just leverage keep demonstrated initiatives year we we real themselves, three identifying the each that's changes in buckets. is I when processes grow our will the really come step and So What new usually products. think incremental launch

level XX% should t-slim cost be itself. get we Mobi that of coming with estimated about product scale, to example for than So a we've that the once better

like the about will progress continued towards to more So payers, initiatives move data see that it's share you our direct insurance that you changes seeing we their can as start the conversations patients incremental looking really are getting similar as using volume goal. especially side, along, and are more benefits increases we're clinical to with to XX% seeing. contracts, see long-term we're that's the The reimbursement on step where going for price

those can you about three it So ways. think within

Operator

from comes Brooks Street O'Neil of Capital. question next Our Lake

line Your is open.

Brooks O'Neil

Dexcom I'm whether of Thank terrific and the included and the little just you XXXX to include XXXX. curious Thanks and in congratulations could if mentioned curiously, Mobi a and how you I talk X? assumption GX XXXX about Abbott, you the lot. impact from good and Libre the guidance? in think then John CGM afternoon I'm in guidance. finish both on a about the contribution think about And partners, assumptions you've two you bit

Leigh Vosseller

Okay. Brooks. Thank you,

IQ. market potential we're and months. in is especially just guidance philosophy into So questions any the as It starting just not been France has be in guidance factored where yet Control would in still out point. two even overall do it for well XXXX to at though not as terms so the around level, in continued of been now full products this U.S. in here we for those your as What our years, included enthusiasm recent has our CGM its approved answer not yet guidance, Germany the to the where not just U.S. our it's of on reached Mobi, but typically roll include outside

bolus, great And IQ mobile a runway talk customers. with us to a so our of about it Control with have the now we addition and we gives with still think lot

Operator

comes Our Biegelsen Larry question of Wells next from Fargo.

open. is line Your

Unidentified Analyst

Larry. Nathan is for on this Hi,

saw just Medtronic's what in pump? assuming and So competition we question your are What a letter their to we Omnipod for guidance. impact potential to X XXXX approval, that have also guidance? warning sticking Just assume to you

Leigh Vosseller

Sure. for And the thanks question.

in see still continue and but the about I when IQ, we think what's included, we already we're competitive mentioned MDI in to population So think growth going conversions Control year-over-year. penetrating particular

we in level. would noise we year, think more I say competition the about at really this As factored

about causes seen pumps past noise products tubeless the like little at launched at sometimes and have near-term between the level think you back If still pump in the of segment, the it, pump player largest the don't and we're are that see so are contouring we tubed leading durable is I this forth mean, of lot disruption. point, and we segment. a switching which in and new bit of a where we

Unidentified Analyst

Okay, study provide to would timing? previously you? the in and you And you to Type expect you update achieve also, important X the X need this inside in do when 'XX. show that's the then IQ is you how on label plan traction and study think indicated an What Control Type pivotal to you the Can on helpful two? would beginning

John Sheridan

Thanks, David. community say would test next Type what or XXXX work I pivotal late out the Type - a enrolling Well, sometimes, that probably feat would roughly the to study. to with Type we expect of study. is It year would that's initiate the large various right that this our now feasibility we're think just early our study, understand that them something to out a X It's and And our on X FDA in segments we just smaller for I we X be turns going timing. study. and

So I in indication XXXX think at probably we're timeframe. it the looking

Operator

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

line open. is Your

Alex Nowak

to the the in FDA you that a their you bolus, those making see then you you might to you everyone. when then then into are the Great. to diabetes at the how there? how change on With need be that mobile are studies about the way And additional here? learnings side? for approval Good fold thinking take to them about several timing what bit bench are you agency needed from of ease last and document you start weeks, couple And thinking Mobi backlog to starting Mobi, afternoon, approvals

John Sheridan

whether as say that still questions, to have in. the would Alex. they additional from are COVID FDA supporting the Good not involved just I work back that resources Yes. got it's or difficult come has say to

that in comes learned it's into development transitioned really essentially get the from staff So the with appreciative deal. received And to say to happy new to in they - right so we see would point we there. limited if still I testing the I There early was a When that we've and device, a lot as and I I need we're wait great been as good did think and they've more questions would not my that mode. very have from a supportive information another now we mode we last at would that do or two change fact Mobi, in mind incorporated to think things I the to time. quarter approve we say it Mobi very that still. but see have approval, learnings this was which we've into a the of year came that of say

XX As least at that - studies, least I for largest XX at of or to maybe some indicated, human XX leading factors the we've did we're formula involved testing, done right up the now it. study we in

be types a It's complex a comfortable experience cities multiple to So be several we're results, the involved. It's very involved, great months. of but community - within segments study. of take deal with will will going there's to the diabetes going that it's multiple be involved

a extensive long study. it's So and

studies that's really, also have There are additional company. validation so that. we we to inside have and finish to do things verification the that And test

puts to us submission feel So I that. summertime good think a and we that about

Alex Nowak

pumps installed new XXXG process where how much here, the placed Medtronic outside And more us of U.S. just for U.S. share an as there update versus pumps you then pump you? today the important just on your base as becoming the of changed sales the can outside company as then with And you market? to far stand give there, being launch just out the the

Leigh Vosseller

our when coming the wrong where as like people little with correct as to I'll well here, I of competitor where conversions way a please new I'm U.S. our business MDI. think question where start about on just color is today. So coming your it's of from, level if is me stand If the a bit understand we high there correctly, much you

IQ demand interest seeing then today. and the we environment we a that And the little and look Control those about about and great especially So to relates product penetrate as XXXG continue selling that it markets talk will forward. in we're there out to as we're excited Brian bit if

Brian Hansen

see And in markets well. product international we that today. we IQ as Control Yes, in U.S. market, our shift see the influence as a power dramatic we I of the against here in the or compete think it we so really from seen haven't

it. visibility with pretty We So a have lot of partners. we feel our good about certainly

without great We have partners. relationships

right have We across we're all now. regions the in balanced growth

indications well. So Control is IQ early doing are very the very,

Operator

Steve comes next from Our question of Lichtman and Oppenheimer Company.

open. is line Your

Steve Lichtman

was did down? so obviously John, and what XQ, as you're turned, headwinds. seeing wondering come have kind see started and as to COVID to mentioned, I year overcome from of solid impact COVID you saw able COVID cases the what you You in quarter the

Brian Hansen

saw saw up, Europe open we access of it And proud by came healthcare Brian. And years for best to or I QX, an we characterized holiday interesting team the the I'll here and began kind here patients an It very have work as over in was saw first done it is of variant probably I the we've last QX, in America. say is think and of and providers. one, year and new vacation period. take to for the we but lot two before. The that things optimism. of cautious in kind then North thing was said sure. earlier remain this a we they've we moved our statements, we We almost because extended in into our and my us been change

and here some our providers, our our regions partners. in with and kind saw positives internal of care of staff lot many at that. their we we remote was health at COVID-XX were patients of QX we good saw towards The with difference that external, point. migrated We a and think our model with saw we in So we saw pretty back and internally

cautious it So We that through. again just - moderates clear now but navigate head was did of into it successfully. to and quarter XXXX, kind we hope waters in so certainly an some odd We we are

John Sheridan

as eye start there move this into on year uncertainty and to keep our we it. we'll is still I think

Steve Lichtman

on commercial in going weren't we benefit before the tailwind Is new is what expansion more in force of kind team? from also see or having sales you getting will providing in that deeper? 'XX it 'XX could 'XX? nice regions expand material into not the or And then more growth a you're And organization, commercial you in about the you meaningful

John Sheridan

workload the of to Well, patients with existing was staff the of in start simply reduce territories. current some I'll behind our to they were it. on purpose their a getting lot because One handle

was to are to talk for very were our going So going time accounts if to for further said, of this certainly we This XX that clinical burden, what also a to but areas. with, year to XXX release. that then we areas all out opportunistically little to and existing a get see some side in we not do it's may to not us Leigh, could some large. benefit and bit the that happy side be provide us just that sales in do too a that look so exactly us bit go you allows little right-size folks bit get ease that may want accounts and little allowed from we that. to deeper additional doing little think getting be and our we yes, much as you any the a those where I doing spend

Leigh Vosseller

That's great. No.

Operator

comes Please O'Brien go ahead. question Sandler. of from next Matthew Our Piper

Matthew O'Brien

the and question. afternoon, thanks Good taking for

the side finer So potential the on million I bit just of they to things, $XXX said point they to this tailwind put million a expect the impact Medtronic year. is $XXX little think on

using of Just folks of half durable of and insulin the I'm those and supplies that, into is I that assuming pumps midpoint are pumps. XXX, think around majority

side? the on like with tailwind. factoring guess kind And potential I then look, still of ballpark? numbers domestic don't Are So as in those be know, I I Leigh, tailwind the guidance, that to conservative range somewhere in, you're why it the $XX looks million Medtronic $XX million at only the from

Leigh Vosseller

So, thanks Matt. the for question,

go I competitive So our year, into thinking much it, we but how to were coming healthy from competitive opportunity people it obviously we year think haven't and I new this to going this we're pumpers one conversion expect that quantified will actually and in that maintain same guess about increase thought that coming balance make MDI down fact where is of was conversions. we point many still

to going environment, opportunity we're that to continued is until navigate COVID be trends the continuing otherwise. is and we So strong cautious might we're we nature initially that as but still suggest our see think the

Matthew O'Brien

Okay.

Medtronic so So there you've built-in based on far? conservatism what from is some seen

Leigh Vosseller

That's correct.

Matthew O'Brien

perspective a see thank to terms dislodge going really into year of IQ enough to got new strong or difficult full bunch with to patients of approval the then side, patients real-world competitive so Control the in Thanks. a from pumping it's slow be momentum things you you full [indiscernible] launch a have down is really data momentum existing or the heading for a need the that of you've is CIQ that Okay, kind post you. what of even going? on to And of do Form Factor momentum to or

Brian Hansen

I'd we in it's messaging say our phase where that's with certainly the comfortable to in sit haven't rollouts. we're right now early pipeline out our a really seen reduction and We competitive and position tell. briefly is these there certainly

our exciting us. more coming to the continued over be here, We mobile IQ to outcomes real us place, that then our think in us in bolus visit opportunity the get for in learn I and we next a the things Launching is have services pipeline great surely and year we for spot. of IQ at infrastructure to the good Control certainly accounts. and Control an puts The will end provide, but really year we've positive the periods leads product a to seen,

John Sheridan

the - that And to at to you add important. do the believe I XX, you there's I and significant as got lot anything. whole more tubeless, well there's here to and there additional you us And sensor integrations, are at doing we've say we've is give to shortly. if years. We've Mobi going that technology. got a the, would results, got Factor look patch think t:slim five new a in we've We've well really to IQ some convergence we And with at our which differentiation, next algorithms just got sales Form pipeline, Matt Mobi here of partnership got not I And themselves filing three when look today. when it's Control boost really we've got look it, the is of very really then this

in to But other and as feel there to what with lot of So compete very well out the a I we're feel a we positioned and we think to in compete position element market. - going very this right now, very, not have players Brian see wait strong that to information happens. said, other there's

Operator

Matt comes of question next from Our Taylor UBS.

Your is open. line

Matt Taylor

So, using that I that how you're what's for talk maybe on international follow-up did number seeing want be ask you we just what in some conservatism baking you're FX about mentioned And you're one the guidance, to the to conservative should being? international?

Leigh Vosseller

Hey, Sure. Matt.

explain So I'm think I the actually because bit - and very But little that environment the better I'll the have we about little into let helps guidance. talk is take one FX caution the Brian first that a which simplest we're exposure. putting

nothing So to speak materiality in to from perspective. a terms of

Matt Taylor

Thank Okay. you.

Brian Hansen

with relationships great our have partners. We

by It the regions. QX were prepared our supply get and just It that chain door that was out to there the and to schedule One by again, launch over it QX, our hard issues that cadence newest was of for several the encountered complex. complex Germany. into bit sea. were those we going quite was is it across markets in unique in large partners us. especially things demand. in the specifically hit visibility was and the we different year, Control later in the made interesting makes factors countries, it little or we launch some which one air IQ of and in all These were newer growth geographies, QX, into, on an they're and reasons, that unknown us balance great even have they France to They're and There of about talked our more there. as we doing end work whether distribution We models were a to really

should is move news as competitive the environment take from year the to itself now. and the of variability So as our fairly in and Control we part IQ about, that middle QX. the strong learn care plenty we experiencing continues right the position there's talked good into The remains of demand for we're

I So doing. remain pretty we're bullish on what

Operator

Antalffy Please comes Danielle of Our ahead. SVB from go Leerink. next question

Danielle Antalffy

versus on of the And sort number Leigh, year today. that year. So where patients year? on this pump about a end years congrats started on you've penetration long-term like your with to double then feeling on X based the think for question in out of a we And new the Type How I are exited mentioned are follow-up we penetration there strong three therapy something where you international. on target just ago. one pump

John Sheridan

to our but and all it's coming couple diabetes of continued and ahead XX% to go a reduce med competitors. drive tech that, and the years I to in just about specifically mean look and that innovation pipeline, that over as the we been stated it's believe we penetration not when burden get being general, and We've partners community look that adoption. is going that's penetration continue innovation ease-of-use we feel there's that think I got when just positive I we've we diabetes I'll in XX% there intended well you Tandem, by drives can think think take of think that's as to driven of the we at and you to at our very and last tremendous Danielle, occurred more innovation pump amount

growth today. the as in that in expect well. see it's this Europe in only of we seen not technology continue it there and as number think to you U.S. the other last happen, it's we're bring a going to We OUS to it's happen countries also And as but think couple we we've we going aggressive markets, in to to and So MDI that continue to expand. years, said, penetration

Danielle Antalffy

you've in that's - international some what think swept the next be on to my major where maybe, these My question John. way market question, the - through to Well, was going of better a what's where are years incremental is markets to And it, in few runway next for penetration we going over - the the going are internationally? what drive you drive to versus be about today? to incremental

John Sheridan

right pump same. the suggest penetration as diabetes, or markets probably in same And we know, XX% factors factors million double, our larger million in I it's million. can the five numbers now, going market, is double next and the are the a in the X X.X pump the think are with in more today much people in occur we're to a The in X% that that X.X think maybe we're penetration that U.S. OUS. three approximately improvements I than would are would in affecting States, and the also years, is say with today to approximately the to markets you that's

the we of make much pump so there, bigger as for improvements in And penetration to it's a number us participate all in.

Operator

Jayson of next question Our from James. comes Raymond Bedford

is line Your open.

Jayson Bedford

questions few a here. I have

maybe Brian, for over therapy XX,XXX So adopted XXXX. pump mentioned in folks you

the Just in number for the what's embedded expectation that guidance, XXXX? in

Leigh Vosseller

I XXXX. specific continue other increase think to than haven't that think we to our number the a penetrate ability MDI will in we given population

increase it's of So are year. made there. it's more way, renewals number the the conversions, us drivers patients still far have so more It's will successful our coming this that MDI competitor and that ship an in

Jayson Bedford

due incremental XX,XXX in I coming an mentioned of you Can there? renewals, renewals years, but of either the you of 'XX number exiting renewals on on number into us we 'XX back the actual XXXX. the update think just guess the I Okay. what's out or can just actual one

Leigh Vosseller

those. end XXXX, portion whose renewed actually since expired Sure. is the beginning of we XX,XXX and we years have people of achieved the the have What by significant than there a more over warranties

have so where of whose XXXX we nearly renewed. that on today we're think is forward, to as go things gave the that warranties of XXXX I in we think exited information about people at one we the looking what the which is half already And expired

is XXXX coming think and from about XX,XXX done still to forward. forward for done, as can be you there's into you we back that So way and that that what look continue us not provide and XXXX XXXX is as look will opportunities opportunities might additional people not renewal

Jayson Bedford

Okay.

that the So cumulative exiting renewals? in I about ballpark had XX,XXX a Is number 'XX. for

Leigh Vosseller

I Oh, XX,XXX think I XX% gave that mean, the Of of I have more them. sorry, XX,XXX think you don't renewed than the sorry, yes, customers, end of - XXXX. I by specific I don't metric.

Sorry.

John Sheridan

It was, say wow.

Leigh Vosseller

know. I

Jayson Bedford

Okay.

in Europe, of of you can challenges about terms helpful have laws and in and in around just bolus of just stricter privacy? think thought introducing maybe I there you they technology that's mobile where Okay, the then some where then Europe are, such your talk

John Sheridan

And you about company. When from we've question. great came quickly at see international results the quarter you that of an that Yes, OUS. look can revenue think I our become

structured and OUS the have think provides also we I this technology to so that our product to that pipeline need innovation and represents countries.

products OUS So bolus all to mobile is we do. and to of committed we're absolutely our Mobi that and providing have something

about right, you're but release some think in Tandem so the been state clear the mobile Source. timing early what just think come Source integrate now, there we and with would roadmap. complexity. We out of definitely Tandem Right will talked in the the But past, it's very rolling I a, to now, that I we intent in in is time. guess, intentionally yet we've about have be is, something the technology that I are right and as UK haven't it's in

Jayson Bedford

that 'XX of bolus more Europe than And in 'XX, is dynamic so is a mobile fair?

John Sheridan

about to but say. fair clear thing clear I it's that's - mean Yes, I haven't a think we it, been fair. that

Operator

Baird. Jeff from next of Our question comes Johnson

open. is Your line

Jeff Johnson

on of this Good one ACE the for or Mobi submission summer question in for then modeling guys. volume Leigh, talked afternoon, but side, mid-summer question year. for maybe clarifying and pump John, you of the question, you. clarifying maybe Thank about pump middle you one

you think I said.

John Sheridan

Yes.

Jeff Johnson

submission XXX(k)s than less there Is kind created review that I pump or six-month. think around review a typical mean, that but XXX(k) make uncertainty about COVID that is more a - typical has know it's of think think timelines, a pathway? within I we would a would ACE anything than six-month historically us

think that about late the 'XX approval it? or is kind submission early Mobi 'XX a way with fair So, maybe of potential timeline to a is or

John Sheridan

because much normal I FDA next COVID get it's at I in jury Group We hope out Diabetes very additional right think staffing time out. is we'd their I it product to things to still to a we're to just return to point market occurring, uncertainty couple I still resource that in the - resources but months. prior think that's get fair but the there's think inherent the plays that by think as like more the levels but now, quickly course that of how this as how time to and to wait time, possible, at bit see going on this in the have of little as

Jeff Johnson

about to Okay, so that it? is is ex-FDA pump fair, way ACE assumptions kind of typical six-month that think it in

John Sheridan

Yes.

Jeff Johnson

know from ask volumes, pump volume a guide don't just then, And a that going you perfect. Yes, Leigh, but to standpoint, question pump Okay. I'm I around to anyway.

the grew for You of know, between U.S. Is the COVID at is volumes when little hopefully upper your falls so grow somewhere maybe between pump your I bit, the the comps a the this second off ease, of in think year? half somewhere year guesstimate there in for volumes I guidance first kind implying pump in of and 'XX, half a that half, reasonable the look second up over single 'XX they in half they digits. first of U.S. XX% 'XX, were

Leigh Vosseller

rates challenging of to normalcy the growth apply it's any you it. in sense I Yes, know, take think XXXX to and

we was If you the of feel the the happening are that that the to significant first what demand the we at think things that half back were like and first coming half bit impact the year about half, point it back starting of to and getting base were was had in through. little of to actually from optimistic a of really in most pent-up and year year see XXXX, in what normal seems maybe starting COVID was

it We somewhere range. curve XXXX as pump off this the in with as percent might I the seasonality of XX-plus the in at of makes and maybe launches, of the shipments depending for usually that unfair, vary think rates look probably in year where we product high-teens U.S., are of year. being thinking that's point the the percent in launching in just in that why on the anywhere years but terms a in kind but bit fourth quarter, and of the had So - a come you more middle, little sense growth

Operator

from of Company. Cowen next question Jennings Josh and Our comes

open. is line Your

Unidentified Analyst

Brian two the in for in term is the that's I on Josh. have for This you Thank my questions. ones taking pipeline. longer opportunity tubeless

way after your eventual opportunity patch since its views pumps this revealed today competitor commercialize to segment? R&D market the comes patch Tandem's the in intent First, in that any Day. Does on change

John Sheridan

at all. Not

aware made surprise. that In not in fact, I they're of think past that it's it's had and and considering so own change we were the It moving they doing the segments. our this. and of our that doesn't surprising forward investment a support Yes, in tubed the tubeless both products decisions with strategy company not

Unidentified Analyst

U.S. success two speaking, the of patch generally can distinct process the development And rounds leveraged pump so thinking you. pumps two and you're are thank - a just agency, the for to my Okay, the is pumps I'm those very two follow-up for about... streamline patch accruing for regulatory pumps or FDA be

John Sheridan

Yes, yes think I that...

Unidentified Analyst

Yes, are I we the to was going scope to a out size there? know the of just exact work like trial say I'm pivotal of far or too thinking factors about

John Sheridan

and have types would I We've data we of filings, depth a the it FDA of doing its the analysis understand we say with now it. and that been for provide. comes when great to to we of that deal need years many experience working the and actually the with Well, it

or also think these I that I So initiative and comes whether benefits tubed patch it's when play of a not us, interoperability to it that say a have the for or tubeless sorts does don't comes pump. experienced of our designation pump filings. a of have the when one think they I'll our entire to pump team competitors interoperability is very distinguished ACE because

to and continue do one that thought-out is just we will not the produce other. impact I landscape well way the have going to to that, technology. or justifications we for regulatory So analysis us I be And think think We the to successful. if continue

Operator

conference for And call. gentlemen, today's you ladies this concludes Thank and participating.

You may now disconnect.

Tandem Diabetes Care (TNDM) 23 Feb 222021 Q4 Earnings call transcript