Senseonics allies struggling with blood sugar monitoring giant Ascensia, pull much-needed $ 80 million
Senseonics made Ascensia Diabetes Care the exclusive global distributor of its Eversense implantable continuous glucose monitor and raised up to $ 80 million. Senseonics” the stock jumped 16% in pre-marketing trade Tuesday.
The offers that Senseonics disclosed alongside Monday’s second quarter results, positioning the struggling CGM player to focus on development and manufacturing, leaning on its larger partner for commercialization, and expanding its cash flow track to in 2021.
Senseonics has failed to make an impact in a market contested by companies such as Abbott and Dexcom, despite a product that differentiates itself from its non-implantable competitors.
Senseonics braced investors for a tough year in March when he revealed changes to a deal with Roche would lead to lower sales. Later that month, Senseonics started exploring strategic alternatives and halted sales of its 90-day CGM Eversense to new patients, fearing it would run out of money to survive for more than a quarter or two more. A $ 20 million loan kept Senseonics on the brink, but he was still in a vulnerable position.
In the most recent quarter, the company recorded a net loss of $ 7.5 million, an improvement from the loss of $ 31.1 million a year earlier. After temporarily suspending business operations in March, total net sales fell more than 94% year-over-year to just $ 261,000.
Now Senseonics has unveiled a series of deals that could put it on the path to profitability. Having failed to make its 90-day Eversense CGM implant commercially successful, Senseonics is set to hand over the responsibility for selling the next 180-day variant to Ascensia.
Ascensia was formed in 2016 through the acquisition of Bayer Diabetes Care by PHC Holdings, a company formed in 2013 through the spin-off of the healthcare assets of Panasonic and a transaction with investor KKR. Today, Ascensia is a company of 1,700 people, best known for its Contour line of blood glucose monitoring systems, with access to more than 10 million diabetic patients.
The deal with Senseonics gives Ascensia the exclusive right to market Eversense products for five years after the 180-day implant becomes available in the United States, an event slated for early next year. Tim Goodnow, CEO of Senseonics Recount Investors Ascensia will provide 30 direct sales staff in 2021 and grow its team to 80 by the end of 2023. In return for its efforts, Ascensia will reduce its teenage global sales to 40%.
Eversense is currently a small player in a contested CGM market by companies such as Abbott and Dexcom. With new sales pending, Senseonics generated second quarter revenue of $ 261,000. Still, the prospect of Ascensia lending its commercial weight to a product expected to benefit from changes to the Medicare physician fee schedule has raised expectations.
“In 2021 and beyond, we believe that the partnership with Ascensia – along with the recently established CPT codes that further encourage physicians to implant – will drive adoption, allowing the implantable CGM Eversense to realize its full potential and become a more viable competitor in the multi-billion dollar CGM market with a truly differentiated product, ”SVB Leerink analysts wrote in a note to investors.
Stifel analysts were also optimistic, saying the Ascensia deals give Senseonics “an opportunity (and capital) to disconnect from the challenges of trade execution and focus on substantial portfolio evolution, including: a 180-day US sensor in 2021; and maybe by 2023/2024 a fully implantable 365-day sensor. “
Senseonics has unveiled the Ascensia deal along with news of funding deals that will give it up to $ 80 million. Goodnow said Senseonics will primarily use the money to finance manufacturing in support of the expected surge in demand for the 180-day Eversense implant. With annualized cash consumption expected to drop to $ 60 million after Senseonics exits the business, the company said it has the money to run it through the end of the year. next.