Senseonics (NYSE:SENS) shares took a hit today on second-quarter results that missed the consensus sales forecast.
Shares of SENS fell nearly 12% at 65¢ apiece in mid-morning trading today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — stayed relatively even.
The Germantown, Maryland–based implantable continuous glucose monitor (CGM) maker posted losses of $20.4 million in the quarter. That amounts to 4¢ per share on sales of $4.1 million for the three months ended June 30, 2023.
Losses per share came in equal with Wall Street estimates, while sales came up short of the analysts’ forecast of $4.5 million. However, BTIG analysts Marie Thibault and Sam Eiber noted an outlier in the average forecast. Without this, Senseonics would still be short of a projection of $4.2 million, but only just.
Senseonics recorded a massive bottom-line slide into the red despite 11% sales growth. The company attributed its losses to the accounting for embedded derivatives, fair value adjustments and the exchange of notes from a financing agreement with PHC last quarter.
Quarterly highlights included the submission of its Eversense CGM system to the FDA for an iCGM designation. The analysts expect this approval to integrate with insulin delivery systems to come in 2024.
Still, they maintained their “Neutral rating” due to some concerns over the company’s expectations for a sales ramp-up and its valuation.
“While we like the Eversense technology, we cannot yet say with certainty that adoption trends are nearing an inflection point,” the analysts wrote. “We think a longer-duration sensor and iCGM designation will make the technology more appealing to a broader segment of the population, but until we see robust, sustained adoption of Eversense, we remain skeptical of the steep step-up in sales projected for 2024 and beyond.”
More about how the second quarter unfolded for Senseonics
The company also received a positive insurance coverage decision from UnitedHealthcare. That decision expanded access to its latest-generation Eversense E3 CGM to approximately 300 million covered lives. The company also announced its first pediatric 365-day CGM insertion in April.
Thibault and Eiber noted that Senseonics plans to submit the longer-duration sensor to the FDA in early 2024. The company then expects potential approval in mid-2024.
Senseonics also strengthened its balance sheet with exchange agreements to exchange up to $30.8 million in 2025 notes for cash and stock.
“In the second quarter, we continued to execute on our strategic priorities of advancing our product pipeline and collaborating with Ascensia Diabetes Care, our global commercial partner. The FDA submission for the iCGM designation and the expansion of both Ascensia’s dedicated U.S. CGM salesforce and the NPG partnership support our drive to increase patient and provider adoption of our Eversense System,” said Tim Goodnow, president and CEO of Senseonics. “Additionally, we are pleased with the positive data readouts presented at ADA, demonstrating that our current sensor configuration delivered accurate results for 365 days. This data gives us confidence in the execution of our product pipeline, and we are looking forward to the next generation products, which we expect to further support ADC’s efforts to build the Eversense brand and drive global adoption.”
Senseonics reiterated its 2023 sales guidance for between $20 million and $24 million.
“We acknowledge the large market opportunity for the Eversense platform, but do not think a premium valuation multiple is warranted given the company’s past challenges in commercializing the product and the remaining risks related to commercial execution with its partner,” Thibault and Eiber added.