Good afternoon, everyone, and welcome to the Senseonics Second Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. 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 floor over to Trip Taylor, Investor Relations. Please go ahead.

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 the quarterly report on Form 10-Q for the quarter ended June 30, 2024, and 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?

Thank you, Trip and thank you all for joining us this afternoon. During our call today, we’ll begin with a review of our quarterly update and then we’ll turn to a discussion of the recent important developments of our strategic initiatives. Then our Chief Financial Officer, Rick Sullivan, will discuss the second quarter financials in detail, and then we'll open up the call for questions. 2024 is a transformational year for Senseonics, and we are confident there is a significant growth runway ahead of us, which we are focused on to capture. We have advanced each of our major objectives as we work towards driving increased awareness and access to our technology for people with diabetes. Our global commercial partner, Ascensia Diabetes Care, continues to strengthen their capabilities to bring Eversense to more people with diabetes. We have augmented our long-term CGM with a remote patient monitoring capability to support diabetes population health management initiatives. Initially with our collaboration with Mercy Health Systems, and most recently we established a Senseonics subsidiary to provide Eversense insertions and trainings to complement the partnership with a nurse practitioner group to further support access for people who want to use Eversense. Underpinning our commercial efforts is the foundational strength of our technology, and we continue to advance our product pipeline to further differentiate our offering from short-term CGMs. Following a successful quarter, we are preparing for our next generation 365-day system launch in anticipation of FDA clearance. We expect this system to again redefine the long-term CGM category by doubling sensor duration and generating important future growth opportunities for the company. ADC has been driving important commercial initiatives and refocused the organization with a view to supporting the expected approval. With their collaboration, we see a tremendous opportunity in front of us. Diabetes technologies…

Thank you, Tim, and good afternoon, everyone. We appreciate the opportunity today to update you on our business. In the second quarter of 2024, net revenue was $4.9 million compared to $4.1 million in the prior year period. U.S. revenue for the second quarter was $3 million, and revenue outside the U.S. was $1.9 million. As a reminder, our collaboration agreement with Ascensia is for revenue sharing, with the percentage of revenue to Ascensia increasing based on duration of the contract and annual revenue levels. We recognize our portion of revenue when shipments are delivered to Ascensia, and they take title and ownership of the inventory. This begins the multi-step 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. Therefore, our shipments to Ascensia during the quarter are largely intended to support future demand for Eversense. Second quarter shipments are intended to support third quarter demand for 180-day systems and take into consideration the planned transition to the 365-day product when launched in the fourth quarter. Gross profit in Q2 2024 was $0.3 million, a decrease of $0.1 million from a gross profit of $0.4 million in the prior year period. The decrease in gross margin was primarily driven by higher fixed manufacturing costs. Research and development expenses in Q2 2024 were $10.8 million, a decrease of $2 million compared to $12.8 million in the prior year period. The decrease was primarily due to reductions in clinical trial expenses, mainly associated with the completion of the 365-day Sensor Pivotal Trial. These decreases were slightly offset by planned continued investments in our product pipeline for development of next generation technologies. Second quarter 2024, selling, general and administrative expenses were…

Thanks, Rick. As I mentioned at the start of the call, we feel we are well positioned as we head into the second half of the year with a solid foundation and enabling further advancements the progress of our strategic initiatives. We believe we are set to deliver higher growth and greater shareholder value. And as we look at the near-term horizon, the expected clearance and launch of our 365-day product represents one of the most significant catalyst in the company's history. We are executing our development and operational initiatives while Ascensia continues to enhance its commercial capabilities. Further, we are supported by our differentiated technology and a pipeline that has continuously advanced next generation products. There is a large opportunity in front of us as we make inroads with new patients and continue to advance our core products. And we are excited to continue to simplify the lives of more people with diabetes and build on our momentum. 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.

[Operator Instructions] Our first question comes from Marie Thibault from BTIG. Please go ahead.

Hi, good afternoon Tim, Rick, Mukul. This is Sam Montemarie [ph]. Thanks for taking the questions. Maybe I can start here on the any more details you have on the dialogue you're having with the FDA and what's giving you that confidence in launching the 365-day sensor in Q4?

Sam, thanks for the question. We won't go into the gory details of the conversations. We are actively in the middle of it, but I'll let Mukul update where we are.

Hey, Sam. Yes, so it's, as we had previously stated, 510-K. So there is a certain timeline that FDA moves with. And our confidence comes from our past interactions and the relationship we have with the agency and the data, the quality of the data that we have submitted. So everything put together, we pretty much see where the trajectory is, and that's what's giving us the confidence.

Okay, good to hear. And then maybe I can use my follow-up here on some of the comments you made about Ascensia working behind the scenes on the 365-day readiness. I would just love to know any more details on what exactly that means. Is it more feet on the street? And then on your end, how you're thinking about the investments needed to support that launch, whether it's marketing initiatives, more direct-to-consumer type of campaigns, just general thoughts on getting ready for the launch. Thanks for taking the questions.

Sure, Sam. And as you summarized, obviously launching a new product, it's an exciting time for us. It is a big step forward from six months to a year. So yes, there'll be a new marketing campaign that Ascensia is driving. We've had an opportunity to see some of the preliminary work. We're quite excited about it. So a lot of consumer marketing, a lot of professional marketing as well. We also have efforts and focus in the St. Louis area with our new Mercy partnership. So there's quite a bit going on as we launch this new generation product. And Ascensia is doing a great job of getting us prepped for that and getting ready to go here in October.

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

Well, great. Thank you. I appreciate everybody's opportunity to spend time with us in the afternoon, and we look forward to updating you on the next quarter call. Good day.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.