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Presentation

Senseonics Holdings, Inc. beats earnings expectations. Reported EPS is $-0.03, expectations were $-0.04. SENS isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good evening and welcome to the Senseonics Fourth Quarter and Full Year 2023 Earnings Release and Conference Call. All participants will be in listen-only mode. After today’s presentation there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Trip Taylor from the Gilmartin Group. Please go ahead.

Trip Taylor: Thank you. This is Trip Taylor from the Gilmartin Group. Before we begin today, let me remind you that the company’s remarks include forward-looking statements. These statements reflect management’s expectations about future events, operating plans, regulatory matters, product enhancements, company performance, and other matters, and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. A list of the factors that could cause actual results to be materially different from those expressed or implied by any of these forward-looking statements is detailed under Risk Factors and elsewhere in our annual report on Form 10-K for the year ended December 31, 2023, and our other reports filed with the SEC.

These documents are available in the Investor Relations section of our website at www.senseonics.com. We undertake no obligation to update publicly or revise these forward-looking statements for any reason except as required by law. Joining me from Senseonics are Tim Goodnow, President and Chief Executive Officer, and Rick Sullivan, Chief Financial Officer. With that, I would like to turn the call over to Tim Goodnow, President and CEO. Tim?

Tim Goodnow: Thank you, Trip and thank you all for joining us this afternoon. Today’s call will start by providing some highlights of our 2023 performance followed by an update on Senseonics’ strategic initiatives, including ongoing measures to support Ascensia and strengthening ever since its commercial performance. I’ll also provide an update on Senseonics’ development programs to advance our product pipeline. Then our Chief Financial Officer, Rick Sullivan will discuss the fourth quarter financials in detail, and we’ll then open up the call for questions. 2023 was a successful year across the business for Senseonics as we made solid progress on each of our strategic growth initiatives. On the clinical and regulatory front, we completed our ENHANCE clinical trial and subsequent data analysis supporting our imminent submission for the 365-day system, and we filed the FDA submission for the ICGM designation.

We expanded market awareness notably with an increase of over 300% in website impressions as a result of ADC’s direct-to-consumer advertising campaign and we expanded access to Eversense for millions of patients by securing coverage from UnitedHealthcare and Medicare. We also gained expansion through the basal only and hypoglycemic indications across a significant number of commercial payers. Financially, we achieved our full year revenue guidance and strengthened our balance sheet by reducing our debt and increasing our liquidity position. We see 2024 as another year of key catalysts as we work towards delivering our plan for development milestones, regulatory approvals, patient expansion and progress across other strategic growth initiatives.

For 2023, we achieved our revenue guidance as Senseonics generated total revenue of $8 million for the fourth quarter, representing 44% growth compared to the prior year period, and generated total revenue of $22.4 million for the full year 2023, representing 37% growth compared to the prior year period. In the U.S. fourth quarter sales totaled $6.1 million and sales outside the U.S. totaled $1.9 million. Through our collaboration agreement, Ascensia has responsibility to drive awareness and access and to increase adoption of Eversense in the market. While both awareness of Eversense and access to the product notably improved in 2023, new patient insertions fell short of Ascensia’s and our expectation. In 2023, the patient base did increase nearly 40% to approximately 4500 and U.S. users increased more than 50% year-over-year.

However, we believe Eversense holds the potential for greater growth and recognize together with Ascensia, the importance of further strengthening the commercial support Eversense receives in order to drive stronger results. We believe a set of positive dynamics will improve this commercial performance. Most importantly, having key payer wins from 2023 in place for the full year, such as UnitedHealthcare, the establishment of a broader inserter network to make access easier, Ascensia’s CGM focused organizational changes and hires together with a further build out of their commercial team, our view that this positions them more strongly to take advantage of the demand and potential for Eversense adoption. Encouragingly, Eversense user retention remains high.

In many of our key geographies we are seeing patient retention rates in the mid 80% range and those rates continue to improve with each subsequent sensor insertion. We know the features and benefits of Eversense, the longest lasting CGM available, exceptional accuracy, removable transmitter and predictive on-body alerts are resonating with patients. Not only is this supported by the patient retention figures, but also by the success of the direct-to-consumer marketing campaign that was launched in October. This highlights Eversense’s unique benefits. With that campaign, the number of leads increased by three times, which we see as validation of strong interest in the benefits of the product. As we discussed on the last quarterly call, ADC launched this new integrated campaign that included television commercials, expanded social media, and new ad creative to build awareness among patients and healthcare professionals.

This was a meaningful investment in direct-to-consumer marketing for Eversense. With the increase in leads, patient enthusiasm was stronger than expected and we are very pleased to see the patient response to a campaign that better articulated unique benefits of Eversense. While the increase in lead generation clearly demonstrated and further validated the demand for our implantable CGM, significant influx of leads stressed ADC’s inside sales infrastructure and processes, limiting their ability to effectively convert the leads. Lead conversion is critical and relies on having the right commercial strategy, resources and execution. Ascensia’s new leadership is currently redesigning and bolstering their direct-to-consumer and lead conversion approach, and we expect these efforts will enable them to take advantage of their latent demand for Eversense as the new campaign builds.

However, given that the increased demand was offset by lower conversion that was not projected when fourth quarter orders were placed, Ascensia has accumulated inventory that will impact their purchases from us in the first half of 2024. As Ascensia continues to implement several commercial measures to strengthen these functions and enhance its CGM dedicated commercial infrastructure, we expect to see improved conversions going forward. To strengthen Eversense growth, PHC has created a dedicated CGM business unit within Ascensia with independent resources directly reporting into PHC leadership and clearly separated from its blood glucose monitoring business. The leadership of the CGM business unit has now full responsibility for the performance of the CGM business.

This is a very important and positive step, one we believe will provide additional focus and acceleration. To that point, we were thrilled to recently announce that industry veteran Brian Hansen would be leading these efforts. He was appointed President of this new CGM business unit and is a very valuable addition to our collaboration. Brian previously served as Chief Commercial Officer for Tandem Diabetes Care, where he helped transform the company into a worldwide leader, driving revenue tenfold in the highly competitive insulin pump market. He has built a reputation for successfully launching innovative products, driving revenue growth and overcoming commercial challenges within the complex durable medical equipment channel. We’re excited to be working with him and look forward to his contributions.

With this commercial leadership transition an updated commercial plan for 2024 is being developed. After the current strategies are reviewed, we look forward to continuing to collaborate with Brian and leveraging his experience to improve the commercial strategy and execution going forward. Together, our top priority will be to ensure we are primed for the next phase of growth for Eversense as we advance towards the planned revolutionary launch of the 365-day system. We expect to submit to the FDA for review in the coming weeks and continue to plan for approval and launch of this new platform product this year. Considering Brian’s recent appointment, the timing of ADC’s fiscal year which begins in April, the current patient base, inventory dynamics, conversion improvement initiatives, and the inherent uncertainty in the timing of the approval and launch of the 365-day product, today we are providing our first half outlook for the year.

Keeping in mind that Ascensia purchases will be lower in the first half than their actual patient sales given the year end conversion shortfall that they experienced. New patient starts are growing and Ascensia is on pace to exceed the total number of new patient sales in 2023 within just the first half of 2024, with new patient sales expected to grow over 150% year-over-year in the first half. As a result, we expect Senseonics’ first half of 2024 global net revenue to be approximately $10 million, representing growth of approximately 16% over the first half of 2023. We plan to provide the full year outlook in the second quarter following a comprehensive analysis of our current commercial initiatives and a more refined view of our product launch timing and dynamics.

Outside the U.S. in Q4, we ended the year as expected with sales of $1.9 million. Consistent with prior periods, growth in Italy and other geographies continued. In Germany, it appears that the user base has stabilized and Ascensia can now turn its efforts to growing patient demand. In the future, as ADC further builds out the CGM channel in Europe, we expect them to continue to win new coverage and tenders to support future growth in the region. Now I would like to provide updates on our strategic growth initiatives, particularly focused on our efforts to expand patient access and streamline healthcare provider experience. Our Eversense inserter network is key component of this strategy, designed to provide more convenient sensor insertion options for patients and a more streamlined workflow for providers.

The network, which consists of Eversense certified providers, is instrumental in expanding access for our fastest growing segment, type 2 diabetes patients. As the vast majority of type 2 patients are treated outside of endocrinology offices as opposed to type 1 diabetes, it’s important that we expand insertion options for the increasing user base. It also allows the Ascensia sales force to focus on educating healthcare providers on the clinical benefits of Eversense without the need for insertion training. Our strategic partnership with NPG has been a significant driver of the network’s expansion, with 18% of users receiving their insertions through NPG in the fourth quarter. Improving the patient experience is via a two-pronged strategy that is well underway.

Part one was to extend the longevity of the sensor, thereby reducing the number of insertions required per year. When we moved from the 90-day sensor to 180 days, we cut the number of insertions per year in half. We plan to do that again this year with the 365 sensor. In parallel, we are continuing to build the inserter network to make it easier than ever for patients to get Eversense. As the two arms converge, we are confident that patients will readily accept one local 10-minute office professional insertion procedure in lieu of having to manually self-remove and reinsert sensors over 30 times per year. Every day we continue to make strong progress towards that end. Moving on to the access front, we are encouraged by the recognition from both commercial and government payers of the value that CGM brings to the broader range of patients than just those on multiple daily injections.

We recently announced expanded Medicare coverage by three Medicare administrative contractors, Meridian, Palmetto and NGS. These MACs have published final local coverage determinations that extend Medicare coverage for plantable CGMs by removing the MDI restriction and including all individuals with diabetes who use insulin, as well as noninsulin taking patients at risk of hypoglycemia. As is typically the case, we are also seeing commercial payers follow suit with CMS’s expanded coverage policy. We estimate that these two new indications, basal insulin use and hypoglycemic risk, effectively double the total addressable market for Eversense. Given our product’s unique advantages for the Medicare population, such as professional sensor placement, which eliminates the need for self-insertion, long sensor life, and on-body vibration alerts that serve as a secondary safety mechanism for patients, we anticipate strong adoption within this expanded Medicare population.

Moreover, Eversense offers additional advantages for type 2 patients and typically prioritize simplicity, not having to replace sensors every 10 to 14 days, not having to worry about sensors frequently falling off, and the flexibility and convenience of being able to remove the transmitter as needed, are key factors contributing to type 2s now being our fastest growing segment, representing over 60% of our new patient growth. These recent policy decisions further validate the need for an implantable CGM. Throughout 2024 we anticipate the remaining MAC and commercial payers will adopt similar policies, which we see further fueling awareness and penetration of Eversense. Looking ahead, we are actively engaging in discussions with large health systems and accountable care organizations.

These organizations, which assume the risk of managing patient populations, recognize CGM as an effective means to improve patient outcomes while simultaneously reducing healthcare costs. There is a substantial opportunity for these health systems to leverage their influence over care pathways and directly integrate Eversense into their provider offices. Given the inherent long-term adherence that comes with an implanted product compared to the high turnover of a weekly or biweekly transcutaneous sensors, health systems are beginning to recognize the potential for us to help their patients achieve improved outcomes, while simultaneously providing the system with the important diabetes quality measures required by their value based agreements and supporting a positive ROI from the reduced overall cost of care.

Beyond Ascensia’s ground level commercial efforts, Senseonics is working to prove out a scalable diabetes population health management model in 2024. This is being designed to showcase a comprehensive solution combining product, data intelligence and services with the goal of offering a compelling value proposition to health systems in ACOs going forward. To close out the commercial discussions, Ascensia has been making the moves and investments to support growth, as is evidenced by the announcement of Brian Hansen joining the team and their commitment to extending the payment assistance and simple savings program to unlimited systems. As the market opportunity continues to expand, effectively doubling with the expanded indications, we are aggressively working to address the challenges that come with being a market disruptor, all while laying the groundwork for growth in exciting new areas such as health systems.

Together with Ascensia, we still have a lot of commercial work to do, but we are energized by signals from patients, providers, payers and health systems that long-term implantable CGM has an essential role to play in improving diabetes care. Furthermore, as you are aware, Senseonics responsibilities and our collaboration with ADC are focused on the remaining business elements of research, development and manufacture of the Eversense product. Advancing our pipeline through innovation and new products, of course, remains at the forefront of our strategy and we continue to make important strides on our side of the partnership as we achieve more innovation milestones. Starting with our iCGM designation for iCGM, the submission is in active review with the agency and we believe that we have provided all the information necessary for them to make a decision.

Integration with other diabetes technologies is essential and the next steps for Senseonics iCGM strategy are important for the company. We look forward to providing more updates here this year and more importantly, providing additional benefits to the approximately 1 million patients who are currently using automated insulin delivery devices. Looking slightly further out in the coming quarters, we continue to plan for approval for our next generation 365-day system in the fourth quarter. With the completion of the enhanced pivotal clinical study and the data review, we are in the final stages of preparing an FDA submission and plan to submit upon approval of the Eversense iCGM system. We anticipate the 365-day system will offer several differentiated benefits of an implantable CGM, with a full year of protection from a single sensor and a significant reduction in calibration frequency.

These differentiators are the basis for our belief that our 365-day system will represent a major advancement in diabetes management technology and an inflection point for Eversense in the U.S. market. As we work with the FDA with the goal of securing approval for the planned one year Eversense system approximately six months after the submission, we continue to target its launch in the fourth quarter of 2024. In addition, the 365-day system platform is also the basis for the development of the subsequent generation Gemini and Freedom self-powered products with the ultimate goal of removing the need for any on-body transmitter. We are excited for the first-in-human testing of Gemini in the second half of 2024. This vision for Gemini represents another massive step forward in CGM technology.

With that, I’ll now turn the call over to Rick for a review of our financials.

Rick Sullivan: Thank you Tim and good afternoon everyone. We appreciate the opportunity today to update you on our business. In the fourth quarter of 2023, net revenue was $8 million, compared to $5.6 million in the prior year period. U.S. revenue for the fourth quarter was $6.1 million and revenue outside the U.S. was $1.9 million. Our shipments to ADC in the fourth quarter are intended to support future demand for Eversense. As a reminder, Senseonics recognizes our portion of revenue when shipments are delivered to Ascensia and they take title and ownership of the inventory. This begins the multistep distribution to patients via Ascensia and their distributors. We manage our manufacturing based on patient demand generated from commercial activities targeting 60 to 90 days of inventory across the various channels.

Currently, inventory levels are greater than our target and we’re working closely with Ascensia to return to target levels. We are also monitoring inventory levels with consideration of the plan for the transition to the 365-day product later this year. Our share of revenue for 2023 represents approximately 75% of the expected Eversense revenue generated in the global markets. The revenue share percentage for Ascensia increases according to our collaboration agreement based on duration of the contract and annual revenue levels. Gross profit in Q4 2023 was $1.1 million, an increase of $0.5 million from a gross profit of $0.6 million in the prior year period. The increase in gross margin was primarily driven by an increase in revenue as our volumes increased, which covered a greater portion of our fixed manufacturing costs.

Research and development expenses in Q4 2023 were $10.7 million, a decrease of $0.9 million compared to $11.6 million in the prior year period. The decrease was primarily due to decreases in clinical trial expenses associated with the enhanced pivotal trial as patients completed the trial. These decreases were slightly offset by planned continued investments in our product pipeline for development of next generation technologies. Fourth quarter 2023 selling, general and administrative expenses were $7.3 million, a decrease of $0.5 million compared to $7.8 million in the prior year period. For the three months ended December 2023, operating loss was $17 million compared to $18.9 million in the fourth quarter of 2022 due to a larger gross profit contribution and decreases in R&D and SG&A expenses.

For the three months ended December 2023, total net loss was $17.2 million, or a $0.03 loss per share compared to a net income of $11.6 million or $0.02 gain per share in the fourth quarter of 2022. Net income decreased by $28.8 million due to the accounting for embedded derivatives, fair value adjustments and the exchange of a portion of the 2025 Notes. As of December 31, 2023, cash, cash equivalents and short and long-term investments totaled $109.4 million and debt and accrued interest was $46.1 million. In continued efforts to strengthen our balance sheet in early 2024, we drew an additional $10 million on the loan facility with Hercules Capital, further enhancing our liquidity position. Turning to our outlook for 2024, we expect first half 2024 global net revenue to be nearly $10 million.

Our guidance reflects time for new leadership to formulate a full year plan, expected inventory dynamics from a new product launch cycle and our current patient base. In Q2 we’ll provide second half and full year revenue guidance along with expectations for 2024 revenue share percentages, taking into consideration this work, greater visibility on the 365-day submission progress and the result of commercial initiatives. For the full year 2024 operating expenses are expected to be similar to 2023 at approximately $80 million. With that, I will turn it back to Tim.

Tim Goodnow: Thanks Rick. 2023 was a successful year across the business for Senseonics. Our accomplishments in the year included the completion of our ENHANCE clinical trial and subsequent data analysis supporting our imminent planned submission for the 365-day system. Submission of our iCGM designation, increasing awareness of Eversense through ADC’s direct-to-consumer advertising campaign and increased access with expanded coverage with UnitedHealthcare and Medicare, all while strengthening our balance sheet. While we face challenges, as noted earlier, with commercial execution in the fourth quarter, we are excited about the positive changes implemented, including conversion initiatives and importantly, the new leadership and the new structure within PHC.

In parallel, Senseonics is also working to create and evaluate additional options to accelerate sensor placements and drive revenue. As all these initiatives progress and we develop a refined view of 365-day product approval and launch, we look forward to updating you on our progress and expected impact on further revenue and new patient growth for this year. Finally, Senseonics remains laser focused on continuing to advance our strong product pipeline to drive increased Eversense adoption in the future. We believe we are well positioned to grow our franchise to create shareholder value. Product innovation continues to revolutionize the management of diabetes and Senseonics is committed to continuing to be a leader in the space. Thank you for your time today.

Also joining us for questions is Mukul Jain, our Chief Operating Officer. Operator let’s open up the call for questions.

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Operator: [Operator Instructions] The first question comes from Mathew Blackman with Stifel. Please go ahead.

Unidentified Analyst: Hi guys, this is Colin on for Matt. I wanted to start with a bit of a level setting question and ask how much did the increased essential inventory levels contribute to the fourth quarter revenues and how should we expect those inventory levels to be worked down during 2024? Is this a similar two quarter time frame as we saw with that 2023 destocking dynamic? And how much of a revenue headwind should we expect it to be during the first half?

Tim Goodnow: Well, thanks Colin. As we said, we do expect to have the inventory, the buildup of inventory from Q4 worked through in the first half of this year. So over the next frankly four months and ascension is building those plans, as we said, to work through it. The total quantification we don’t have yet based on the volume of the ramp, but we feel pretty confident with the plans that are in place that we’ll have it worked off here in the next four months.

Unidentified Analyst: And I was encouraged to hear the 300% increase in the lead generation from the recent campaign. Could you provide any color on how Ascensia plans to drive those conversions higher and any metrics you could provide on lead conversion in the pipeline and how you expect that to progress going forward, given the importance of this campaign that would be really helpful? Thank you.

Tim Goodnow: Sure. Most of the input comes in through the web, and what Ascensia is doing is building out the capability, the tools, the training and the personnel within their inside sales organization to handle those conversions. Much of that improvement is being worked on right now and really has been since they recognized that the conversion rates were not where they had planned in the fourth quarter. So we’re excited about those and we do fully anticipate have seen and we do fully anticipate continued improvement in that conversion. That will always continue to be a focus and a goal for us. You’re always looking to improve that lead generation conversion. But we are very excited. There is a lot of interest in a long-term implantable sensor and especially in these patients, Type 2 patients that are on basal insulin.

So we’re excited about the opportunity. As we said, we expanded the market by over 3 million new potential patients going on ever since. So we’re obviously excited about that as well and looking forward to where the Ascensia to work through all of those internal systems to be much, much more effective.

Unidentified Analyst: Thank you.

Operator: The next question comes from Marie Thibault with BTIG. Please go ahead.

Marie Thibault: Hi, Tim, Rick, Mukul. Thanks for taking the questions. I wanted to ask a question here on guidance and specially with the Medicare basal and hypo risk expansion, certainly we saw with other CGMs that led to an acceleration adoption. What are you expecting or what have you assumed in your guidance as you think about that win? I know the first LCD just went into effect a couple of days ago here.

Tim Goodnow: Yes, you’re correct. And many of the others we anticipate will be up and running here over the coming weeks, certainly by the June time period. So it is a portion, Marie, of the plan and then part of this burn off of the inventory that we spoke of here in the first two quarters. We’re still working with the new Ascensia team, if you will, to lay out what that looks like for the full year. But we know that it’s a very meaningful opportunity for us, and we’re certainly looking forward to being able to announce that in the second quarter. We also have some very exciting work with potential ACO partners that we are looking at, and there are a couple that we’re talking to that are really interested in managing their Type 2 patients. As you know, those are at risk, and anything that they can do to keep them out of the hospital and keep them in better care is really valuable for those organizations. So there’s also a big opportunity in that Type 2 space as well.

Marie Thibault: Okay, that’s helpful. And then it’s exciting to think about the 365-day approval and launch later this year. I do want to understand though, when we’ve seen new products come to market, sometimes we’ve had a little bit of lag on reimbursement or maybe working through some inventory or a little bit of pausing as people wait for a new product. I know it’s early days, but do you have any thoughts on how that exciting new launch could be impacting sales and inventory here toward the end of the year or even midyear?

Rick Sullivan: It’s not unreasonable to anticipate that coming with a new product, there were people that will say, well, let me wait for that one. So obviously that’s the planning that we’re going through right now. If people do come in for the 180-day product and the 365 comes out, then when they stay in cycle and they come in further replacement, they’ll continue to stay on the device, but just the new one they’ll get is 365. So all of that planning is going on right now, but we do also know that the 365 is just another huge quantum step forward in just that simplicity and the ability to manage your life without thinking so much about your diabetes. So we also know that it’s going to be much, much more attractive to people as well and we’re excited to be on the cusp of doing that submission and an approval later this year.

Marie Thibault: Sure. Okay and one just quick follow-up. If I could get the exact number of patients at the end of 2023, I heard 4500 worldwide and more than 50% growth in the U.S. Any chance you can give us the U.S. breakout?

Tim Goodnow: Rick, do we have the breakout on that? I’m not sure we have that.

Rick Sullivan: Yes, we’re keeping with the 4500 global patients for now.

Marie Thibault: Okay. All right, thank you.

Operator: The next question comes from Vernon Bernardino with H.C. Wainwright. Please go ahead.

Vernon Bernardino: Hi, thanks for taking my question and congrats on the impressive growth. Just wanted to follow-up on the inventory question, but before that I couldn’t readily find the numbers right away, but could you remind us what the sales were for U.S. and ex-U.S. were in third quarter? And along those lines then with the inventory buildup, does Ascensia separate as far as inventory accounting, for example, ex-U.S. and U.S. or is it all one accounting? Just trying to figure out, let’s say, day sales and all that change in rate.

Tim Goodnow: Sure. Rick, do you want to take that?

Rick Sullivan: Sure, yes. Vernon, first part of your question, I think, was breakdown, U.S. and OUS. Maybe it was for fourth quarter, and so $8 million was the total. It was about $6 million in the U.S. and $2 million OUS for the quarter. And Ascensia does break out their inventory between the two geographies.

Vernon Bernardino: Okay. Do you anticipate, you said the inventory will be wound down in the next four months, which I guess is the rest of first half, do you anticipate any further build up before, let’s say, the launch of 365?

Rick Sullivan: I think we expect that by the end of the second quarter that Ascensia will get back to which our target of 60 to 90 days throughout the entire channel. And then after that we’ll provide guidance in the second quarter with how we think that transition from the six-month to 365-day product will go.

Vernon Bernardino: Great. Thanks for taking my question and my follow up.

Rick Sullivan: Sure.

Operator: The next question comes from Jayson Bedford with Raymond James. Please go ahead.

Unidentified Analyst: Hey, this is Glenn on for Jayson. And to start off, I just wanted to ask if you think the iCGM designation impacts commercial adoption or is it more of a vehicle to integrate with pumps?

Tim Goodnow: Well, it certainly is a vehicle to integrate with pumps. Obviously, especially in the Type 1 space, there are clinicians that see the iCGM as a validation of the system as a whole. So there can be MDI patients that the docs would like to put on the pump in the future, so iCGM is certainly influenced there. But it’s also, of course, an avenue to get into the million or so patients that currently are linked together and doing sensor augmented pumping.

Unidentified Analyst: Okay, thank you. And just to be clear, the 2Q revenue for just, for example, 2Q to Senseonics translate to implants in 3Q, I’m understanding that correctly?

Rick Sullivan: Approximately, yes. We see the target of 60 to 90 days from when we recognize revenue for it to go through the channel.

Unidentified Analyst: Okay, so how much of the $22 million and $23 million came from new patient sales? How much of that is in a patient now?

Rick Sullivan: I mean we’re not providing that level of detail since we recognize our revenue in advance of the insertion into the patient. And so there’s the time dynamic, and then there’s also the inventory dynamic, which we spoke to being a little bit ahead of our target inventory levels.

Unidentified Analyst: Okay, that was all. Thank you.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Tim Goodnow for any closing remarks.

Tim Goodnow: Great. Well, thank you all for joining. Once again we appreciate it, and we look forward to further updates here in a couple of months with our Q1 call. Thank you. Have a good day.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.