Executive Summary / Key Takeaways

• Senseonics is focused on commercializing its differentiated, long-term implantable continuous glucose monitoring (CGM) technology, with the Eversense 365-day system serving as a significant catalyst for potential growth.
• The Eversense 365, the world's first and only once-yearly CGM, offers distinct advantages in longevity and reduced calibration (once weekly) compared to short-term wearable competitors, aiming to improve patient convenience and adherence.
• Early U.S. launch metrics for Eversense 365 show positive reception, increased lead generation, and a growing patient base, with approximately 81% of new users switching from other CGMs.
• Strategic partnerships (Ascensia for global commercialization, Sequel for AID integration, SweetSpot for virtual care, Mercy for health system access) and a pipeline of next-generation technologies (Gemini, Freedom) are key to expanding market reach and enhancing the product offering.
• While facing ongoing net losses and a stated need for additional funding, recent financing activities and expense management efforts are intended to extend the cash runway, with management projecting significant revenue growth and improving gross margins in 2025 driven by the 365 launch and European expansion.

The Promise of a Year: Senseonics and the Implantable CGM Revolution

Senseonics Holdings, Inc. (NYSEAMERICAN:SENS) stands at a pivotal juncture, aiming to transform diabetes management with its unique long-term, implantable continuous glucose monitoring (CGM) technology. In an industry dominated by short-duration wearable sensors, Senseonics has carved out a distinct niche, focusing on the development and commercialization of systems designed to provide glucose monitoring for extended periods, currently up to 365 days. This strategic focus, refined since 2010 after years of broader sensor research, positions the company to address key patient frustrations associated with frequent sensor replacements and calibration demands.

The company's journey reflects a persistent pursuit of longevity and convenience. Starting with a 90-day system approved by the FDA in 2018, progressing to the 180-day Eversense E3 approved in 2022, Senseonics has now achieved a significant milestone with the FDA approval and U.S. launch of the Eversense 365-day system in late 2024. This progression underscores a core strategic principle: leveraging proprietary technology to deliver a differentiated value proposition in the competitive diabetes care market.

The Technological Edge: Longevity and Convenience

At the heart of Senseonics' investment thesis is its implantable sensor technology. Unlike competitors' wearable patches that require replacement every 10-14 days, the Eversense sensor is inserted under the skin by a healthcare provider and can remain there for up to a full year with the Eversense 365 system. This fundamental difference offers tangible benefits for patients.

The Eversense 365 system features a sensor with a Mean Absolute Relative Difference (MARD) comparable to leading short-term CGMs, demonstrating accuracy while providing unparalleled duration. The system requires calibration only once per week after the initial adjustment period, a marked improvement over previous Eversense generations and significantly less frequent than the daily calibrations sometimes associated with other systems or the inherent interruptions of frequent sensor changes.

For patients, the "so what" of this technology is profound. A one-year sensor means significantly fewer insertions and removals, reducing the burden of managing diabetes device changes. It offers peace of mind, reduced interruptions to daily life (including activities like swimming or showering without worrying about adhesive failure), and potentially improved adherence due to the set-it-and-forget-it nature for most of the year. While the upfront procedure is required, the long-term convenience is a powerful differentiator. This technological moat, centered on sensor longevity and reduced maintenance, is Senseonics' primary tool to compete against larger, more established players.

Commercializing the Catalyst: The Eversense 365 Launch

The FDA approval of Eversense 365 in September 2024 and its subsequent U.S. launch in Q4 2024 represents the most significant catalyst in the company's history. Management and their global commercial partner, Ascensia Diabetes Care, are now focused on capitalizing on this breakthrough. Early U.S. launch metrics are encouraging, with reports of positive reception from both providers and patients. Lead generation has reportedly exceeded expectations, and the company has seen an increase in both new patients and prescribing physicians. Notably, approximately 81% of new Eversense users in 2024 switched from other CGMs, indicating the technology is attracting users from competitive platforms.

The commercial strategy relies heavily on the exclusive global partnership with Ascensia. Ascensia is responsible for the substantial majority of Senseonics' revenue and is tasked with building the necessary sales and marketing infrastructure. While Ascensia initially had limited experience with CGM, they have refocused their efforts, establishing a dedicated CGM business unit and bringing in new leadership to drive commercial execution. Senseonics complements Ascensia's efforts through initiatives like the consignment program, which allows healthcare providers to stock sensors for faster patient access, and the newly established Eon Care subsidiaries, intended to support convenient insertion services and potentially become a self-sustaining economic model through CPT code payments.

Expanding market access beyond individual prescriptions is also a key strategic pillar. Senseonics is pursuing partnerships with health systems and accountable care organizations, exemplified by the collaboration with Mercy Health Systems. The goal is to integrate Eversense and a remote patient monitoring program into systemic workflows to improve population health management and reduce costs for the system, potentially unlocking access to large patient populations.

Furthermore, Senseonics is strategically integrating its technology with other diabetes management tools. A collaboration with SweetSpot enables endocrinology practices to leverage Eversense 365 data for virtual CGM monitoring and enhanced patient care between appointments. A recently announced partnership with Sequel Med Tech aims to integrate Eversense 365 with Sequel's twiist automated insulin delivery (AID) system, positioning Eversense to be the first one-year CGM compatible with an AID system, a significant step towards simplifying diabetes management for insulin pump users.

Building the Future: Pipeline and Global Expansion

Building on the 365-day platform, Senseonics continues to invest in its pipeline. The Gemini system, currently in first-in-human testing, utilizes the 365-day sensor but incorporates a built-in battery for a fully implantable, self-powering system offering both continuous and optional swipe testing. This aims to provide greater flexibility, particularly for patients who prefer no on-body component. The Freedom system, further down the pipeline, envisions integrating Bluetooth directly into the sensor to eliminate the need for any on-body transmitter, creating an "invisible CGM" that communicates directly with a smartphone. These pipeline initiatives demonstrate a commitment to continuous innovation, leveraging the core implantable technology to address evolving patient needs and further differentiate Eversense.

Global expansion is also critical. Senseonics submitted Eversense 365 for CE Mark approval in Q1 2025 and plans for a European launch in the second half of 2025, pending approval. Expanding the 365-day product globally is expected to offer meaningful supply chain synergies and cost of goods improvements.

Financial Performance and Outlook

Senseonics' financial performance reflects its stage as a company transitioning from development to commercial growth. The company has historically incurred significant net losses and negative cash flows. For the three months ended March 31, 2025, total revenue increased by 24% year-over-year to $6.3 million, driven primarily by U.S. sales growth, including the consignment program and initial demand for the 365-day product. Full year 2024 revenue was relatively flat at $22.5 million compared to $22.4 million in 2023, despite a reported increase in the global patient base, which management attributed to inventory dynamics related to the 365 transition.

Gross profit saw a significant improvement, rising to $1.5 million (24.1% margin) in Q1 2025 from $0.3 million (6.6% margin) in Q1 2024. This margin improvement was attributed to previously expensed manufacturing costs now flowing through cost of sales and more favorable margins on the 365-day product, partially offset by increased revenue share to Ascensia. Gross profit for FY 2024 was impacted by $4.8 million in one-time charges related to the E3 to 365 transition, resulting in a lower reported gross profit of $0.5 million (2.2% margin). Excluding these charges, the FY 2024 gross margin would have been over 16%. Operating expenses saw a decrease in R&D in Q1 2025 due to the completion of 365 trials and headcount reduction, while SG&A saw a slight decrease overall, influenced by restructuring efforts in late 2024.

Liquidity remains a critical focus. As of March 31, 2025, the company had $64.2 million in unrestricted cash, cash equivalents, and marketable securities. Debt and accrued interest totaled $35.3 million. The company repaid $20.4 million in outstanding convertible notes in January 2025 and converted all preferred stock to common stock in Q1 2025, simplifying the capital structure.

Recent financing activities, including utilizing the at-the-market facility, have provided additional capital, which management expects to extend the cash runway into mid-2026 based on current operating plans. However, the company has determined that substantial doubt exists regarding its ability to continue as a going concern without obtaining additional funding.

For 2025, Senseonics has reiterated its global net revenue guidance of $34 million to $38 million. This outlook is based on the assumption of approximately doubling the global patient base compared to 2024, with steady patient growth throughout the year. Revenue is expected to be weighted towards the second half (approximately two-thirds) due to the ramp-up of the 365 launch, European expansion, and seasonality related to patient assistance programs impacting average selling prices in the first half. Gross profit margins are projected to improve significantly in 2025, reaching 25% to 30% for the full year, driven by the unit economics of the 365-day product. Cash utilization in 2025 is projected to be between $50 million and $60 million, reflecting expense management efforts, including a targeted reduction in cash operating expenses.

Competitive Landscape and Risks

Senseonics operates in a highly competitive CGM market dominated by large players like Dexcom (DXCM), Abbott Laboratories (ABT), and Medtronic (MDT), as well as pump-focused companies like Tandem Diabetes Care (TNDM). These competitors offer established wearable CGM systems with broad market penetration, extensive distribution networks, and strong brand recognition. Dexcom and Abbott, in particular, hold significant market share with their G7 and FreeStyle Libre systems, respectively, which offer shorter wear times but benefit from scale and integrated ecosystems. Medtronic and Tandem focus on integrated pump-CGM systems.

Senseonics' competitive positioning hinges on its unique implantable, long-duration technology. While competitors offer wearable convenience, Senseonics offers long-term wear and reduced calibration, appealing to a segment of the diabetes population seeking minimal interaction with their device. The MARD accuracy of Eversense is comparable to leading competitors. However, Senseonics faces disadvantages in scale, manufacturing efficiency (though improving with 365), and financial health compared to its larger, more profitable rivals. Its reliance on Ascensia for commercialization also presents a risk if Ascensia's execution or strategic priorities shift.

Key risks to the investment thesis include the successful execution of the commercial strategy by Ascensia, particularly the ramp-up and adoption of Eversense 365 in both the U.S. and Europe. Achieving targeted patient growth and revenue figures in 2025 is critical. The company's need for additional funding raises concerns about potential dilution or the ability to fully fund operations and strategic initiatives if capital markets are unfavorable. Delays in regulatory approvals (e.g., CE Mark for 365, IDE/pivotal trials for Gemini/Freedom) or partnership integrations (Sequel, Mercy) could impact growth timelines. Supply chain dependencies and potential impacts from international trade policies, such as tariffs, could affect manufacturing costs and gross margins. Finally, retaining key personnel and managing growth effectively are crucial operational challenges.

Conclusion

Senseonics is betting on the differentiated value proposition of its long-term, implantable CGM technology, with the Eversense 365-day system serving as the primary catalyst for growth. The company's strategy to expand adoption through its partnership with Ascensia, complementary service initiatives like Eon Care, and strategic integrations with AID and RPM platforms is well-defined. Early signs from the 365 launch are promising, supporting management's outlook for significant revenue growth and improving margins in 2025.

While the path to profitability remains challenging, marked by ongoing losses and a need for future funding, the successful commercialization of Eversense 365 and the advancement of the pipeline (Gemini, Freedom) could fundamentally alter the company's trajectory. Investors should closely monitor the execution of the 365 launch, progress on European approval and launch, the impact of strategic partnerships on patient adoption, and the company's ability to secure necessary funding to support its operations and growth initiatives. The potential for a truly long-term, invisible CGM offers a compelling long-term vision, but near-term success hinges on the effective rollout and market acceptance of the one-year Eversense 365.