Senseonics(US:SENS)2019-08-07 20:21Revenue and Sales Performance - The company generated product revenue from Eversense and Eversense XL systems, with expectations for continued revenue growth in both European and U.S. markets as commercialization efforts expand [143]. - Net revenue increased to $4.6 million for the three months ended June 30, 2019, compared to $3.6 million for the same period in 2018, primarily due to U.S. sales of Eversense [157]. - The company has entered into distribution agreements with Roche and Rubin, obligating them to purchase specified minimum volumes of Eversense components, which supports revenue recognition [143]. Financial Performance - For the three months ended June 30, 2019, the company reported net losses of $31.1 million, compared to $32.5 million for the same period in 2018, and accumulated deficit totaled $418.2 million as of June 30, 2019 [141]. - Gross profit was $(4.6) million for the three months ended June 30, 2019, with a gross margin of (99)%, compared to $(0.2) million and (6)% in 2018 [159]. - Net loss for the six months ended June 30, 2019, was $60.4 million, compared to $54.8 million for the same period in 2018 [174]. Expenses - Research and development expenses are expected to increase as the company continues to develop future product enhancements and conduct clinical trials, particularly for the PROMISE study [151]. - The company anticipates an increase in sales and marketing expenses as it expands commercialization efforts in the U.S. and Europe [149]. - Sales and marketing expenses surged to $14.2 million for the three months ended June 30, 2019, compared to $6.2 million in 2018, reflecting increased costs related to the U.S. launch of Eversense [160]. - Research and development expenses increased to $10.5 million for the three months ended June 30, 2019, from $8.3 million in 2018, mainly due to higher clinical study costs [161]. Financing Activities - The company closed a public offering of 26,136,363 shares at $1.10 per share, raising gross proceeds of $28.7 million before expenses [126]. - The company issued $82.0 million in 5.25% Convertible Senior Notes due 2025, using $37.9 million of the proceeds to repurchase $37.0 million of outstanding convertible senior subordinated notes due 2023 [127][129]. - The company anticipates needing additional capital to fund operations, potentially through debt financings and equity offerings, which may dilute existing stockholders' interests [183]. Cash Flow and Liquidity - Cash and cash equivalents as of June 30, 2019, totaled $65.3 million, with an accumulated deficit of $418.2 million [175]. - Net cash used in operating activities for the six months ended June 30, 2019, was $65.9 million, consisting of a net loss of $60.4 million [206]. - The company reported a net cash decrease of $71.5 million for the six months ended June 30, 2019, compared to an increase of $167.8 million in the same period of 2018 [205]. Regulatory and Market Developments - The company received FDA approval for the non-adjunctive indication for the Eversense system, allowing it to be used for dosing decisions, with plans to roll out this indication in the second half of 2019 [140]. - The Eversense Bridge Program was launched to provide financial assistance to patients without insurance coverage, stimulating interest and engagement among patients and providers [139]. Debt and Obligations - As of June 30, 2019, the outstanding balance of the Oxford/SVB Term Loans was $10.0 million, with an interest rate of 6.31% plus a minimum floor rate of 6.95% [186]. - The company borrowed $45.0 million under the Solar Term Loan, with an interest rate of 6.50% plus a minimum floor rate of 8.98%, maturing on June 1, 2024 [189][190]. - The principal payment schedule for the Solar Term Loan includes $30.8 million due in 2022-2023 [215]. Currency and Exchange Rate Impact - The majority of international sales are denominated in Euros, impacting revenue due to exchange rate fluctuations [225]. - A hypothetical 10% change in foreign currency exchange rates would not have a material impact on the company's operating results [225]. Other Considerations - There were no material changes in contractual obligations and commitments as of June 30, 2019 [212]. - The company will no longer be an emerging growth company at the end of the 2019 fiscal year, affecting compliance with certain auditing requirements [219].