Product Development and Innovation - The iLet is the first FDA-cleared insulin delivery device utilizing adaptive closed-loop algorithms, designed to autonomously determine insulin doses without requiring users to count carbohydrate intake [135]. - The company is developing a bihormonal configuration of the iLet that combines automated delivery of insulin and glucagon, with a clinical trial for the glucagon product candidate initiated in March 2025 [151]. - The company intends to pursue the development of new diabetes devices and treatments, including a patch pump and bihormonal configuration of the iLet [177]. - The company entered into a collaboration and license agreement with Xeris Pharmaceuticals, Inc. to develop and commercialize glucagon products, with a one-time payment of 3.0 million for development milestones [162]. - The company ordered 0.6 million made in March 2025 [243]. - Future product offerings include the patch pump and bihormonal configuration of the iLet, with ongoing research and development efforts [244]. Market Adoption and Sales Performance - Approximately 1.8 million people in the U.S. have type 1 diabetes (T1D), with an estimated one-third using insulin pumps or hybrid closed-loop systems, while the majority rely on multiple daily injections (MDI) [137]. - As of March 31, 2025, approximately 71% of iLet adoption came from users previously utilizing MDI, indicating strong market resonance [138]. - The installed customer base grew to 19,151 in Q1 2025, up from 4,901 in Q1 2024, indicating strong market adoption [226]. - New patient starts reached 3,853 in Q1 2025, compared to 2,597 in Q1 2024, reflecting a growth in user adoption [226]. - The company plans to grow sales by expanding marketing initiatives and partnerships, focusing on the T1D population treated by primary care physicians [172]. Financial Performance - Net sales for Q1 2025 were 12.9 million in Q1 2024, driven by higher sales of single-use products [199]. - Cost of sales increased by 51% to 5.7 million in Q1 2024, primarily due to higher sales volume of single-use products [202]. - Gross profit for Q1 2025 was 7.2 million in Q1 2024, with a gross margin of 51%, down from 56% in the prior year [203]. - The net loss for Q1 2025 was 12.4 million in Q1 2024 [199]. - Total other expense, net was 3.0 million in Q1 2024, reflecting a 233% increase [208]. - Adjusted EBITDA for Q1 2025 was (11.3) million in Q4 2024 [215]. Expenses and Cost Management - Research and development expenses rose by 39% to 5.5 million in Q1 2024, mainly due to increased engineering and clinical trial costs [204]. - Sales and marketing expenses surged by 75% to 7.7 million in Q1 2024, reflecting efforts to drive awareness and adoption of the iLet [199]. - General and administrative expenses increased by 89% to 3.5 million in Q1 2024, due to costs associated with operating as a public company [193]. - The company anticipates costs associated with scaling manufacturing capacity and expanding sales and marketing efforts, both domestically and internationally [244]. Revenue Recognition and Accounting - Revenue is recognized when control of goods is transferred to customers, with variable consideration related to pharmacy rebates and chargebacks impacting reported revenue [249]. - The company recognizes revenue related to mobile application access and firmware upgrades ratably over a four-year warranty period [250]. - Stock-based compensation expense is recognized over the requisite service period, with fair value determined using the Black-Scholes option pricing model [251]. Strategic Partnerships and Collaborations - The company has partnered with Dexcom and Abbott to integrate the iLet with their continuous glucose monitoring systems, enhancing the user experience [139]. - The Device License Agreement with Boston University allows the company to market licensed products and meet regulatory milestones, ensuring continued innovation in diabetes management [152]. - The company issued 1,140 shares of Class B common stock to Boston University (BU) as part of the Control Algorithm License Agreement, representing a specified ownership percentage on a fully diluted basis [157]. - The company is required to pay BU quarterly royalties of a mid-single-digit percentage based on net sales and a low double-digit percentage based on net sales by sublicensees [157]. Liquidity and Funding - Cash, cash equivalents, and investments totaled 19.975 million in Q1 2025, primarily due to a net loss of 211.1 million in Q1 2025, mainly from IPO proceeds [238]. - Company expects to fund operations through product revenue and potential equity or debt financing, with existing resources projected to cover expenses through the first half of 2028 [240]. Regulatory and Reporting Status - The company is classified as an "emerging growth company," allowing for reduced reporting requirements and an extended transition period for new accounting standards [263][264]. - The company qualifies as a "smaller reporting company" with a market value of stock held by non-affiliates less than 100 million [265]. - The company may continue to be classified as a smaller reporting company even after it ceases to be an emerging growth company [265]. - The company has reduced disclosure obligations regarding executive compensation as a smaller reporting company [265].
Beta Bionics Inc(BBNX) - 2025 Q1 - Quarterly Report