TANDEM DIABETES CARE INC Q1 FY2025 earnings call

• U.S. Performance: Continued double-digit growth in new MDI conversions for the fourth consecutive quarter. Had healthy pump shipments to new and renewing customers, strong supply sales driven by high retention and improved customer utilization, and improved average selling prices. The newly expanded field sales and clinical structure was completed as planned.
• OUS Performance: Started the year with all-time record sales of $84 million, driven by demand for t-slim X2, strong supply sales, and early positive momentum for renewals. Progressed with plans to begin direct sales in select countries, including having transition service agreements in place and hiring in-country talent.
• Control-IQ+: FDA cleared for type 2 diabetes, featured in the New England Journal of Medicine. Launched in late March, broadly available with initial commercial efforts in select areas to gather customer experience data.

Worldwide, Tandem achieved record first-quarter sales of $234 million, representing 22% year-over-year growth. In the U.S., Q1 sales were $151 million, a 15% year-over-year increase. Outside the U.S., Q1 sales were $84 million, a 35% year-over-year growth. Revenue contribution: U.S. sales accounted for approximately 64.5% of worldwide sales ($151M / $234M), while OUS sales made up about 35.5% ($84M / $234M).

• Sales Guidance: Worldwide sales expected to range from $997 million to just over $1 billion. U.S. sales anticipated to be in the range of $725 million to $730 million, with OUS sales between $272 million and $277 million.
• Margin Guidance: Reaffirmed 2025 expectations to improve gross margin to approximately 54% and adjusted EBITDA to approximately 3% of sales.
• Pipeline: Intends to offer two new sensor integrations in 2025, including U.S. launch of FreeStyle Libre 3 integrated with t-slim in Q2, Android app for Mobi (pending FDA 510k clearance), progress on tubeless feature for Mobi, and development of Durable patch pump Sigi.

• Factors causing actual results to differ materially from forward-looking statements, including market access challenges, competitive pressures, regulatory uncertainties, and supply chain risks.

Q: How did the sales force changes and realignment impact performance?

A: John Sheridan stated the sales force expansion is complete, with new salespeople needing 9-12 months to ramp up, and expected full productivity by the fourth quarter.

Q: How much did price play a role in U.S. performance?

A: Leigh Vosseller said price played a role, with pump side roughly 2%-3% and supplies closer to pump perspective, and this is the new bar for pricing going forward.

Q: What's the outlook for pharmacy channel access?

A: Leigh Vosseller mentioned increased U.S. lives covered under pharmacy benefit to 30%, with early learnings showing lower out-of-pocket costs for patients, and excitement about long-term opportunity though modest contribution factored in for 2025.

Q: How does the AMS write-off impact Sigi development?

A: John Sheridan said terminating the agreement gave more control and flexibility, bringing development back to San Diego and improving time to market.

Q: What's the outlook for Control-IQ+ in type 2 diabetes?

A: John Sheridan said it's been approved for about a month, with new pump shipments underway, and Leigh Vosseller mentioned modest contribution factored in for 2025, focusing on reimbursement and Medicare access.