德康醫療 (DXCM) 2016 Q2 法說會逐字稿

Welcome to the DexCom second-quarter 2016 earnings release conference call. My name is Sherry, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session. Please note this conference is being recorded.

歡迎參加 DexCom 2016 年第二季財報發布電話會議。我是 Sherry，將擔任今天會議的接線員。目前所有與會者皆為僅收聽模式。稍後我們將進行問答環節。請注意，本次會議將被錄音。

I would now like to turn the call over to Kevin Sayer. Mr. Sayer, you may begin.

現在我想把電話交給 Kevin Sayer。Sayer 先生，您可以開始了。

Thank you and good afternoon, ladies and gentlemen, and welcome to the second-quarter 2016 DexCom earnings call. We will start off with our Safe Harbor statement from Steve Pacelli. Steve?

謝謝，女士們、先生們，下午好，歡迎參加 DexCom 2016 年第二季財報電話會議。我們將先由 Steve Pacelli 宣讀「安全港」聲明。Steve？

Thanks, Kevin. Some of the statements that we will make in today's call may constitute forward-looking statements. These statements reflect management's intentions, beliefs, and expectations about future events, strategies, operating plans, and performance. All forward-looking statements included in this presentation are made as of the date hereof based on information currently available to DexCom and are subject to various risks and uncertainties, and actual results could differ materially from those anticipated in the forward-looking statements. The factors that could cause actual results to differ materially from those expressed or implied by any of these forward-looking statements are detailed in DexCom's annual report on Form 10-K, quarterly reports on Form 10-Q, and other filings with the Securities and Exchange Commission. Except as required by law, we assume no obligation to update any such forward-looking statements after the date of this presentation or to conform these forward-looking statements to actual results.

謝謝你，Kevin。我們在今天電話會議中所做的部分陳述可能構成前瞻性陳述。這些陳述反映管理層對未來事件、策略、營運計畫與績效的意圖、信念與預期。本簡報所包含的所有前瞻性陳述，均以本簡報日期為準，係基於 DexCom 目前可得資訊作出，並受各種風險與不確定性影響，實際結果可能與前瞻性陳述所預期者有重大差異。可能導致實際結果與任何此等前瞻性陳述所明示或暗示者產生重大差異的因素，已詳載於 DexCom 的 Form 10-K 年度報告、Form 10-Q 季度報告，以及向美國證券交易委員會提交的其他文件中。除法律要求外，我們不承擔在本簡報日期後更新任何此等前瞻性陳述，或使該等前瞻性陳述與實際結果一致的義務。

Additionally, during the call, we will discuss certain financial measures that have not been prepared in accordance with GAAP with respect to our cash-based operating results. The presentation of this additional information should not be considered in isolation or as a substitute for results or superior to results prepared in accordance with GAAP.

此外，在本次電話會議中，我們將就以現金為基礎的營運結果，討論若干未依 GAAP 編製的財務衡量指標。此等補充資訊之呈現不應被孤立看待，亦不應作為依 GAAP 編製之結果的替代，或被視為優於依 GAAP 編製之結果。

Kevin?

Kevin？

Thank you, Steve. Joining me today are Jess Roper, our Chief Financial Officer, and Steve Pacelli, our Executive Vice President of Strategy and Corporate Development.

謝謝你，Steve。今天與我一同出席的有我們的財務長 Jess Roper，以及我們的策略與企業發展執行副總裁 Steve Pacelli。

Sticking with our usual format, Steve will view our second-quarter 2016 financial results, and I will follow with our customary operations update and offer some concluding thoughts before opening the line for questions. But, before I turn over the call to Steve, I want to take a few minutes to discuss a couple of key recent milestones.

依照我們一貫的流程，Steve 將回顧我們 2016 年第二季的財務結果，接著我會進行例行的營運更新，並在開放提問前做一些結語。不過，在我把電話交給 Steve 之前，我想先花幾分鐘談談近期幾個重要里程碑。

First, I will comment on the implications of the landmark meeting of the FDA's clinical chemistry and clinical toxicology devices panel that was held just over a week ago. We have always believed that CGM provides much better information for making an insulin dosing decision in a single finger stick, particularly as we look at the accuracy, performance, and features of our current system with Software 505 algorithm.

首先，我將評論一週多前召開的 FDA 臨床化學與臨床毒理裝置小組（devices panel）里程碑式會議所帶來的意涵。我們一直相信，相較於單次指尖採血（finger stick），CGM 能為胰島素劑量決策提供更好的資訊，特別是考量到我們現行系統搭載 Software 505 演算法的準確度、效能與功能。

After nearly 18 months of productive discussions with the agency, we made the decision to seek approval to claim that our T5 mobile system can be indicated to support diabetes treatment decisions without confirmatory fingersticks. We filed a PMA supplement with the FDA for this indication, and our submission remains under review.

在與主管機關進行近 18 個月富有成效的討論後，我們決定尋求核准，主張我們的 T5 行動系統可在無需以指尖採血確認的情況下，用於支援糖尿病治療決策。我們已就此適應症向 FDA 提交 PMA 補充申請（PMA supplement），目前仍在審查中。

Earlier this year, the FDA notified us that our PMA supplement will be subject to review by an advisory committee, which was conducted on July 21 and concluded with the panel recommending that the DexCom G5 continuous glucose monitoring system is both safe and effective for making diabetes treatment decisions and that the benefit of doing so outweigh the risks.

今年稍早，FDA 通知我們，我們的 PMA 補充申請將交由諮詢委員會審查；該審查已於 7 月 21 日進行，並以小組建議作結：DexCom G5 連續血糖監測系統用於糖尿病治療決策既安全且有效，且其效益大於風險。

We are obviously quite pleased with the results of the advisory committee. We have said for many years that we aim to replace fingersticks, and this is our first step. I will talk more about the ramifications of the non-injunctive claim later.

我們對諮詢委員會的結果顯然非常滿意。多年來我們一直表示目標是取代指尖採血，而這是我們的第一步。我稍後會進一步談談「無需指尖採血」主張的影響。

Another important highlight from the quarter was the release of preliminary data from our DIaMonD study at the American Diabetes Association's annual scientific sessions held in June. Previous CGM outcome studies have had a very limited number of subjects using multiple daily injections or MDI. DIaMonD is initially comprised entirely of MDI patients, and we saw a full 1.0% gross reduction in A1C in the CGM group during the first phase. Furthermore, all secondary endpoints in this phase support a benefit of CGM use, and benefits were seen in all subgroups analyzed, most notably a reduction in time spent in hypoglycemia and hyperglycemia in the study group.

本季另一項重要亮點，是我們在 6 月美國糖尿病協會（American Diabetes Association）年度科學會議上發布 DIaMonD 研究的初步數據。過去的 CGM 結果研究中，使用每日多次注射（MDI）的受試者人數非常有限。DIaMonD 初期受試者完全由 MDI 病患組成，我們在第一階段看到 CGM 組的 A1C 下降幅度達 1.0%（總降幅）。此外，本階段所有次要終點皆支持使用 CGM 的效益，且在所有分析的子群中均觀察到益處，最顯著的是研究組在低血糖與高血糖狀態所花費時間的減少。

We remind you that this first data set only included type 1 patients. The cohort with type 2 diabetes will complete study activities by the end of the third quarter with analysis and publication to follow.

提醒各位，這第一批資料僅包含第一型糖尿病患者。第二型糖尿病的隊列將於第三季末完成研究活動，後續將進行分析並發表。

As we enter into the final phase of the DIaMonD study, a portion of the CGM MDI patients will transition to an insulin pump in an effort to measure the benefit of a more sophisticated and expensive insulin delivery system compared to the benefits of CGM and MDI. That data will not be available until next year.

隨著 DIaMonD 研究進入最後階段，部分使用 CGM 且採 MDI 的病患將轉換為胰島素幫浦，以衡量更精密且更昂貴的胰島素輸注系統，相較於 CGM 與 MDI 所帶來效益的差異。該數據要到明年才會取得。

I will now turn the call over to Steve.

現在我把電話交給 Steve。

Thanks, Kevin. DexCom reported revenue of $137 million for the second quarter of 2016 compared to $93 million for the same quarter in 2015, a $44 million or 47% increase.

謝謝你，Kevin。DexCom 2016 年第二季營收為 1.37 億美元，較 2015 年同期的 9,300 萬美元增加 4,400 萬美元，增幅 47%。

Sequentially, revenue for Q2 was up approximately 18% from the prior quarter. To put this into perspective, we generated nearly the same amount of revenue in the first six months of 2016 as we did in all of 2014. Our second-quarter gross profit was $86 million, generating a gross margin of 62% compared to a gross profit of $66 million and a gross margin of 71% for the same quarter in the prior year.

以季比季來看，第二季營收較上一季約成長 18%。為了提供一些背景，我們在 2016 年前六個月創造的營收幾乎與 2014 年全年相當。第二季毛利為 8,600 萬美元，毛利率 62%；相較之下，去年同期毛利為 6,600 萬美元、毛利率 71%。

Our gross margin in Q2 was affected primarily by increased warranty expense, as well as a write-down of access and obsolete inventory of approximately $3.5 million related to our receiver recall. We do not expect any additional substantive excess and obsolete inventory write-downs related to the receiver recall.

我們第二季毛利率主要受到保固費用增加的影響，此外亦包含約 350 萬美元的存貨跌價損失（超額與呆滯存貨沖銷），與我們的接收器召回相關。我們預期不會再因接收器召回而產生任何額外的重大超額與呆滯存貨沖銷。

Additionally, we anticipate warranty costs as a percentage of sales will begin to decline in Q3 and should normalize by the end of the year. The increase in warranty costs relates again to our receiver recall and heightened awareness related to this recall and to a lesser extent typical new product performance issues related to the launch of the G5 transmitter. We expect our gross margin to be in the mid to upper 60% range for the second half of the year and in the mid-60s% for the full-year 2016.

此外，我們預期保固成本占銷售額的比例將自第三季開始下降，並應於年底前回歸正常水準。保固成本上升同樣與接收器召回及因召回而提高的關注度有關，另有一部分則是與 G5 發射器上市相關的典型新產品效能問題。我們預期今年下半年毛利率將落在 60% 中段至高段區間，而 2016 全年毛利率約在 60% 中段。

In order to address the receiver situation and our increased warranty expenses, we are implementing several corrective actions. We have received FDA approval for a more robust speaker for the current receiver and are in the process of planning production of this newly configured receiver. We filed our next generation touch screen receiver with the FDA during Q2, and we believe this receiver will not only be more durable, but will also greatly improve the patient experience. And, during Q2, we submitted for a firmware update on the transmitter and a software update for our mobile app that will enhance the performance and reliability of the G5 mobile transmitter.

為了解決接收器問題及我們增加的保固費用，我們正在推動多項矯正措施。我們已取得 FDA 核准，為現行接收器採用更堅固的喇叭，並正規劃生產此一新配置的接收器。我們在第二季向 FDA 提交了下一代觸控螢幕接收器，我們相信該接收器不僅更耐用，也將大幅改善病患使用體驗。此外，在第二季，我們也提交了發射器韌體更新與行動 App 軟體更新申請，以提升 G5 行動發射器的效能與可靠性。

Some final thoughts on our revenues and our gross profits. Our mix between durable and consumable products was within our normal historical range in Q2 at approximately 30% durable and 70% consumable. Sensor pricing remains within an ASP range of $70 to $75 per sensor and can fluctuate subject to payer and distribution mix. The ASP for our hardware has remained stable.

最後談談我們的營收與毛利。我們第二季在耐久財與耗材產品之間的組合，維持在歷史正常區間，約為 30% 耐久財、70% 耗材。感測器定價仍落在每個感測器 70 至 75 美元的平均售價（ASP）區間，並可能因付款方與通路組合而波動。我們硬體的 ASP 仍維持穩定。

Finally, our international business showed strong year-over-year growth generating $18 million in revenue during the quarter, up 45% from last year.

最後，我們的國際業務年增表現強勁，本季營收達 1,800 萬美元，較去年成長 45%。

Research and development expense totaled $36 million for Q2 of 2016 compared to $24 million in Q2 of 2015 with the increase due primarily to additional payroll-related costs and expenses related to work on our near-term product pipeline, focusing primarily upon our next generation insertion system. We also incurred significant expense related to our advanced product pipeline, particularly expenses associated with our Verily partnership.

2016 年第二季研發費用合計 3,600 萬美元，較 2015 年第二季的 2,400 萬美元增加；增加主要來自額外的人事相關成本，以及與近期產品線研發相關的費用，重點主要放在我們的下一代植入（插入）系統。我們也在先進產品線方面發生顯著費用，特別是與我們 Verily 合作夥伴關係相關的支出。

Selling, general and administrative expense totaled $69 million in Q2 of 2016, compared to $45 million during the same quarter in 2015, with the increase due primarily to year-over-year increases in headcount and our customer support organizations, as well as a ramp in our patient-focused marketing expenses, higher IT costs, and investments in our OUS expansion efforts.

2016 年第二季的銷售、一般及行政費用合計為 6,900 萬美元，相較於 2015 年同季的 4,500 萬美元；增加主要來自員工人數與客戶支援組織的年增，以及以病患為導向的行銷費用提升、更高的 IT 成本，並投入我們在美國以外（OUS）擴張工作的投資。

A couple of highlights during the quarter were an acquisition of our distributor, Nintamed, in Germany, Austria and Switzerland, and the establishment of a targeted direct team in the UK.

本季有幾項重點，包括在德國、奧地利與瑞士收購我們的經銷商 Nintamed，以及在英國成立一支鎖定目標的直營團隊。

In Germany, we are very pleased with GBA's recent announcement to provide reimbursement for CGM. And, while we were still early in finalizing the details of this coverage, we expect to see a benefit from this milestone beginning in 2017.

在德國，我們對 GBA 近期宣布將提供 CGM 給付感到非常振奮。雖然我們仍在早期階段、尚在敲定此項給付的細節，但我們預期自 2017 年起將可從這項里程碑中受益。

Let us remind you that GBA defines CGM as a system with alerts, alarms and real-time trends. Systems without those features will not be covered. We anticipate our investment in our international operations to continue to scale up, particularly as we obtain expanded reimbursement outside the US.

我們也提醒各位，GBA 將 CGM 定義為具備提示（alerts）、警報（alarms）與即時趨勢（real-time trends）的系統。不具備這些功能的系統將不在給付範圍內。我們預期對國際營運的投資將持續擴大，特別是在我們於美國以外取得更廣泛給付之際。

Our net loss for the second quarter of 2016 totaled $20 million, which included $31 million in non-cash expenses, centered primarily in non-cash share-based compensation expense across all functional areas of our business. Our net loss was slightly higher than expected, primarily due to the increased warranty expense in inventory write-down we outlined earlier.

2016 年第二季我們的淨損合計為 2,000 萬美元，其中包含 3,100 萬美元的非現金費用，主要為涵蓋公司各職能領域的非現金股份基礎給付（share-based compensation）費用。我們的淨損略高於預期，主要是因為先前提到的保固費用增加與存貨減記。

We would also like to remind investors that our operating expenses this quarter included increasing spend on the four strategic investments that we outlined at the beginning of the year, namely our Verily relationship, building out our data analytics capabilities, international expansion, and, finally, our new manufacturing facility in Arizona. These investments are ramping up to the $40 million of incremental strategic expense that we projected for 2016 at the beginning of the year.

我們也想提醒投資人，本季的營業費用包含對年初所提出四項策略性投資的支出增加，亦即我們與 Verily 的合作關係、建置資料分析能力、國際擴張，以及最後在亞利桑那州的新製造設施。這些投資正逐步增加，朝向我們在年初對 2016 年所預估的 4,000 萬美元策略性增量費用。

Absent non-cash charges, non-GAAP cash-based net income was $11 million for Q2. Our GAAP loss per share for the quarter was $0.24.

扣除非現金費用後，第二季非 GAAP、以現金為基礎的淨利為 1,100 萬美元。本季 GAAP 每股虧損為 0.24 美元。

With respect to our balance sheet, we ended the second quarter with $116 million in cash and marketable securities, an increase of $10 million over the first quarter. And, during the quarter, we replaced our prior credit facility with a new $200 million revolving line of credit with favorable terms.

就資產負債表而言，我們在第二季末持有現金及有價證券 1.16 億美元，較第一季增加 1,000 萬美元。此外，本季我們以條件更有利的新 2 億美元循環信用額度（revolving line of credit）取代先前的信貸融資安排。

With respect to our 2016 revenue guidance, we take this opportunity to increase our range to $550 million to $575 million in revenue for the year.

關於 2016 年營收指引，我們藉此機會將全年營收區間上調至 5.5 億至 5.75 億美元。

With that, I will turn the call back over to Kevin for a business update.

接下來我把電話交回給 Kevin，請他進行業務更新。

Thank you, Steve. We are obviously very pleased with our continued growth during the second quarter. In fact, by our estimates, we have added in excess of 2% of the US type 1 population to our installed base during the first half of this year. That is a big number -- 2%. And it is very important that this technology continued to penetrate that market.

謝謝你，Steve。我們對第二季持續成長顯然非常滿意。事實上，依我們估算，今年上半年我們的裝機基礎（installed base）新增了超過美國第一型糖尿病人口的 2%。這是個很大的數字——2%。而且這項技術持續滲透該市場非常重要。

With respect to our financial performance, we have experienced some growing pains in our hardware manufacturing and our customer service organization, and we continue to invest strategically on a number of fronts.

就財務表現而言，我們在硬體製造與客戶服務組織方面經歷了一些成長陣痛，同時我們也持續在多個面向進行策略性投資。

That being said, we have not lost our long-term focus on leverage, and in fact, our day to day operating expenses are in line with the levels we projected. Specifically with respect to customer operations, I am pleased to report that, as of the end of July, we have returned to and, in some cases, surpassed the levels of customer service that the DexCom patient community expects of us. We have seen major improvements in all of our call wait times, length of calls, number of calls answered per day, et cetera.

即便如此，我們並未失去對長期槓桿效益（leverage）的聚焦；事實上，我們日常營運費用與先前預估的水準一致。特別就客戶營運而言，我很高興報告，截至 7 月底，我們已恢復，且在某些方面已超越 DexCom 病患社群對我們所期待的客戶服務水準。我們在所有來電等待時間、通話時長、每日接聽通話數等方面都看到顯著改善。

Our net promoter score related to our customer service and technical support functions is back up to 70%, getting us back to best in industry standards. We told our patients that we were committed to making this right, and we are certainly well on our way.

與客戶服務及技術支援職能相關的淨推薦值（net promoter score）已回升至 70%，使我們回到業界最佳標準。我們曾向病患承諾會把這件事做好，而我們確實正穩步達成。

Now I would like to provide an update on a product pipeline. The most pressing factor in discussing our product pipeline relates to the non-injunctive claim. We are now beginning to work with the FDA to nail down exactly what this means. For example, the FDA mentioned during the panel meeting that the establishment of performance standards for non-injunctive CGM should be a function of this process. We have had discussions and submitted proposals regarding such standards, but nothing is yet finalized. The level of training and education required for non-injunctive product will certainly be different than our current level of support. We will work with FDA to finalize these education plans for patients and healthcare professionals across the board.

接下來我想就產品研發管線提供更新。在討論產品管線時，最迫切的因素與「非需處方（non-injunctive）」主張相關。我們現在開始與 FDA 合作，以釐清這究竟代表什麼。例如，FDA 在專家小組會議中提到，建立非需處方 CGM 的性能標準應是此流程的一部分。我們已就此類標準進行討論並提交提案，但目前仍未定案。非需處方產品所需的訓練與教育程度，必然會不同於我們目前的支援水準。我們將與 FDA 合作，為病患與醫療專業人員全面敲定這些教育計畫。

It was also recommended by the panel that a post-market study would be appropriate. We have yet to arrive at the final size and scope of such a study with the FDA. All of these matters need to be resolved as we look at our future product pipeline, but they bring to light some very interesting questions. For example, what is the future of injunctive CGM technology now that a non-injunctive standard will be established? Or another question, what level of education, training, and recommendations moves into the practice of medicine and is outside our product scope?

專家小組也建議進行上市後研究（post-market study）是合適的。我們尚未與 FDA 就此研究的最終規模與範圍達成一致。當我們檢視未來產品研發管線時，這些事項都需要解決，但也凸顯了一些非常有意思的問題。例如，一旦建立非需處方標準後，需處方（injunctive）CGM 技術的未來會是什麼？又或者，教育、訓練與建議到什麼程度會進入醫療行為（practice of medicine）而超出我們產品範疇？

Please understand that these are the most exciting questions we could ever be addressing. The FDA has been very transparent and interactive with us throughout this entire process. With this potential label, we are redefining glucose measurement and glucose management. And let's not forget the importance of this labeling with respect to Medicare coverage. Every day, 10,000 people in the United States turn 65, and we need to get CGM to these patients that so desperately need it.

請理解，這些是我們所能面對最令人振奮的問題。FDA 在整個流程中對我們一直非常透明且互動密切。透過這個潛在標示（label），我們正在重新定義血糖量測與血糖管理。也別忘了，這項標示對於 Medicare 給付的重要性。在美國，每天有 10,000 人滿 65 歲，而我們需要把 CGM 提供給那些迫切需要的病患。

Non-injunctive labeling provides us the opportunity to accelerate our efforts for Medicare approval, and we will do so at the appropriate time.

非需處方標示讓我們有機會加速推動 Medicare 核准的工作，我們也會在適當時機採取行動。

Turning to other product pipeline developments, we continue to make progress on several enhancements to our G5 mobile platform. As Steve mentioned earlier, we filed a new version of the iOS G5 mobile app and a new transmitter firmware configuration during the second quarter. We will file our Android G5 mobile app in Q3. The US Android launch is dependent upon the transmitter firmware revision that we filed in Q2. So we expect the US Android launch to happen in late 2016 or early 2017, but we do plan to launch Android this fall in several key international markets. We continue to work on several other enhanced versions of our G5 mobile app to provide for additional features and functionality, including the incorporation of insulin data and several mobile platform retrospective analysis reports. The new G5 insertion system and transmitter will be filed within the next few weeks. This filing has been somewhat delayed due to the resources that we expended on the recent panel meeting.

再談其他產品管線進展，我們持續在 G5 行動平台的多項強化上取得進展。如 Steve 先前提到，我們在第二季提交了新版 iOS 的 G5 行動 App，以及新的發射器（transmitter）韌體配置。我們將在第三季提交 Android 的 G5 行動 App。美國 Android 上市取決於我們在第二季提交的發射器韌體修訂版本。因此，我們預期美國 Android 上市將在 2016 年底或 2017 年初，但我們確實計畫在今年秋季於數個關鍵國際市場推出 Android。我們也持續開發其他強化版本的 G5 行動 App，以提供更多功能與特性，包括整合胰島素資料以及多項行動平台的回溯分析報告。新的 G5 置入系統與發射器將在未來幾週內提交。由於我們在近期專家小組會議上投入了資源，這次提交時程有所延後。

With respect to G6, our ID application has been approved. We have completed a number of pre-pivotal studies in anticipation of the pivotal trial, and the data looks very promising. We will commence a pivotal study as soon as possible. This will be the largest pivotal study that we have ever executed with pediatric and adult patients included in one combined study of approximately 300 subjects. Patients will be required to spend three in-clinic days to measure the accuracy of our system, similar to our other studies.

就 G6 而言，我們的 ID 申請已獲核准。我們已完成多項關鍵性試驗（pivotal trial）前的研究，以為關鍵性試驗做準備，數據看起來非常有前景。我們將儘快啟動關鍵性研究。這將是我們迄今執行過規模最大的關鍵性研究，兒科與成人病患將納入同一項合併研究，約 300 名受試者。病患需在診所內待三天以量測系統準確度，與我們其他研究類似。

We are also working with several of our artificial pancreas partners to incorporate G6 into their research and clinical studies to gather more valuable data on the system.

我們也正與數個人工胰臟合作夥伴合作，將 G6 納入其研究與臨床試驗，以蒐集更多關於該系統的寶貴數據。

As a reminder, the G6 sensor will have a reduced calibration scheme, one per day after startup, driven by a completely new advanced algorithm platform. We will have the ability to block [acetamin] interference, a labeled indication of up to 10 days of sensor life, and a number of other features that will make the CGM experience better for our patients. Overall performance should be consistent with the G5 mobile system, even with reduced calibration scheme in an extended wear.

提醒各位，G6 感測器將採用降低校正（calibration）的方案：啟用後每天校正一次，這是由全新的先進演算法平台所驅動。我們將具備阻擋 [acetamin] 干擾的能力、標示可達 10 天的感測器使用壽命，以及多項其他功能，讓病患的 CGM 使用體驗更佳。整體表現應可與 G5 行動系統一致，即使在延長配戴且校正次數降低的情況下亦然。

The G6 product will also leverage our new applicator and receiver technologies.

G6 產品也將運用我們新的貼附器與接收器技術。

Turning to our partnership with Verily, our collaboration to develop simple, low-cost, disposable sensor systems remains on track. We believe the products we develop in our Verily partnership will drive entry into the non-insulin using type 2 market, but we will also expand CGM use in the type 1 market. As we continue to do research into this type 2 market, it has become more and more evident that, when we talk about fingerstick replacements, we are talking about all fingersticks. We believe the information from our system provides to a type 2 patient exceeds anything that they can learn from the tools that they use today. We believe the first product developed in the collaboration with Verily will be commercialized in 2018, and we expect that the smaller bandage-like sensor could be available as early as 2020.

談到我們與 Verily 的合作，我們共同開發簡單、低成本、一次性使用感測器系統的計畫仍按進度推進。我們相信，在 Verily 合作中開發的產品將推動我們切入第 2 型（非胰島素使用）市場，但我們也將擴大 CGM 在第 1 型市場的使用。隨著我們持續針對第 2 型市場進行研究，愈來愈明顯的是，當我們談到以指尖採血取代時，我們談的是取代所有的指尖採血。我們相信，我們系統所提供給第 2 型患者的資訊，超越他們從目前使用的工具中所能學到的任何內容。我們相信，與 Verily 合作開發的第一項產品將於 2018 年商業化，且我們預期較小、如繃帶般的感測器最早可於 2020 年推出。

In fact, the first feasibility study of the bandage like sensor will take place this fall.

事實上，這款如繃帶般感測器的第一項可行性研究將於今年秋季進行。

With respect to our pump partners, Animas and Tandem continue to report positive results from their integrated pump offerings with G4 Platinum, and we believe Animas, Tandem, and Insulet are each making excellent progress on the development of more advanced systems, utilizing our G5 and G6 technologies.

就我們的幫浦合作夥伴而言，Animas 與 Tandem 持續回報其與 G4 Platinum 整合式幫浦產品的正面成果；我們也相信 Animas、Tandem 與 Insulet 皆在利用我們的 G5 與 G6 技術開發更先進系統方面取得了極佳進展。

We're also seeing some excellent work conducted by the teams at companies like Bigfoot Biomedical and Beta Bionics, who seem to be taking truly novel approaches to the development of automated insulin delivery systems.

我們也看到 Bigfoot Biomedical 與 Beta Bionics 等公司的團隊做出一些非常出色的工作，他們似乎正以真正新穎的方法來開發自動化胰島素輸送系統。

Finally, we continue to make progress beyond our pump partnerships as we explore opportunities in connectivity with smart insulin pens, as well as other interconnected diabetes management platforms.

最後，除了幫浦合作夥伴關係之外，我們也持續取得進展，並探索與智慧胰島素筆的連線機會，以及其他互聯式糖尿病管理平台。

In conclusion, the growth in this business over the past five years has been unprecedented. And when I boil it down and look at the second quarter, there are really four major takeaways. First, again, we have increased CGM penetration in the US type 1 population by more than 2% in the first six months of this year. When you combine that with the growth of our patient base this year -- the growth of our patient base this year with the growth of our patient base in the second half of 2015, our US type 1 penetration has increased by 4%.

總結來說，過去五年這項業務的成長前所未見。若我將其濃縮並聚焦在第二季，確實有四個主要重點。第一，如同先前所述，今年前六個月我們在美國第 1 型族群的 CGM 滲透率提高了超過 2%。若再加上我們今年的患者基礎成長——將今年患者基礎的成長與 2015 年下半年患者基礎的成長合併計算，我們在美國第 1 型的滲透率已提高了 4%。

Second, the DIaMonD study demonstrates what we already knew, that CGM has a major impact for MDI patients representing very cost effective diabetes treatment model with excellent outcomes. Along those lines, while in past years we have told you that 60% of our patient base use insulin pumps, we're pleased to note that of our direct new patient additions during this quarter, greater than 60% of them were MDI patients. Our CGM first message is resonating with patients and healthcare professionals.

第二，DIaMonD 研究證實了我們早已知道的事：CGM 對 MDI 患者具有重大影響，代表一種非常具成本效益且成效優異的糖尿病治療模式。基於此，過去幾年我們曾告訴各位，我們的患者基礎中有 60% 使用胰島素幫浦；我們很高興指出，本季我們直接新增的新患者中，超過 60% 為 MDI 患者。我們「CGM 優先」的訊息正在引起患者與醫療專業人員的共鳴。

Third, the FDA panel's positive recommendations have the potential to permanently change the CGM landscape, and we're pleased to be blazing this trail with the FDA.

第三，FDA 委員會的正面建議有潛力永久改變 CGM 的格局，我們也很高興能與 FDA 一起開創這條道路。

And then, finally, we continue to invest in the future and plan on being the choice of diabetes management for type 1, type 2, non-insulin using patients with diabetes and beyond. Diabetes is one of the largest markets in healthcare, and we compete with incumbents that have very, very deep pockets. We need to continue to be aggressive in our product development efforts of our future platforms and our commercial approach. We believe we are in a very enviable position and expect to capitalize on our technological leadership over the next several years.

最後，我們持續投資未來，並計畫成為第 1 型、第 2 型、非胰島素使用之糖尿病患者以及更廣泛族群的糖尿病管理首選。糖尿病是醫療保健中最大的市場之一，而我們的競爭對手是資金非常、非常雄厚的既有業者。我們必須在未來平台的產品開發工作與商業策略上持續保持積極。我們相信我們處於非常有利的位置，並預期在未來幾年充分運用我們的技術領先優勢。

With that, we will open up the line for Q&A.

接下來，我們將開放電話進行問答。

(Operator Instructions) Ben Andrew, William Blair.

（接線員指示）Ben Andrew，William Blair。

Jess, can you quantify the warranty expense that stayed in gross margin for us?

Jess，你能量化一下保固費用在毛利率中所占的比例嗎？

It was a little over 5% for Q2. Typically, it is about 2% -- it has averaged 2% almost every quarter for the last two years. We would expect the warranty costs over the next few quarters to come down more towards that historical rate.

第二季略高於 5%。通常大約是 2%——過去兩年幾乎每一季平均都是 2%。我們預期未來幾季的保固成本會下降，回到更接近歷史水準。

Okay. And, Kevin, maybe talk about how the label change is going to play out and how you can position the Company differently with a replacement claim here going forward.

好的。那 Kevin，也許談談標示變更將如何發展，以及未來在「替代性宣稱」方面你們如何能以不同方式定位公司？

Well, certainly positioning us with a replacement claim will help us in the marketplace because we will be the first with that claim and patients won't have to stick their finger to make those decisions. And I think it will position us very strongly with Medicare.

嗯，當然，以「替代性宣稱」來定位將有助於我們在市場上的表現，因為我們將是第一個擁有該宣稱的業者，患者也不必再扎手指來做出那些決策。我認為這也會讓我們在 Medicare 方面具備非常強的定位。

I got to the question a bit in my prepared remarks about also what does this mean going forward once we have a replacement claim sensor. Do we have other sensors that are not replacement claim? I think what we really have is the opportunity to change the landscape and set standards that will position us to be the leader in this space for quite some time.

我在事先準備的談話中也稍微提到這個問題：一旦我們有了具替代性宣稱的感測器，這對未來意味著什麼？我們是否還會有不具替代性宣稱的其他感測器？我認為我們真正擁有的是改變格局並制定標準的機會，這將使我們在相當長一段時間內成為這個領域的領導者。

Okay. And then, maybe talk a little bit about the international expansion. Obviously, the revenue was strong in the quarter. How do we think about the guidance, what is baked in there from international for the balance of this year, and at what point does that start to really take off for you? You mentioned 2017, but how should we think about that ramp?

好的。接著也許談談國際擴張。顯然本季營收表現強勁。我們該如何看待你們的財測指引——今年剩餘期間國際業務在其中納入了多少？以及在什麼時間點它會真正開始加速？你提到 2017 年，但我們應該如何看待那個爬坡？

This is Steve. I will take this one. We are not going to break out in our full-year revenue guidance what portion we are attributing to international. I mean, it has been running around that 15% range. Don't expect that to materially change until we really see the impact of reimbursement, and as we kind of mentioned, we don't think that we are still working through details in Germany. We do not think that we are going to start to see a meaningful impact until sometime next year. The hope, though, is we could see some additional -- we have talked before about potential for reimbursement in France and potential for reimbursement in the UK, if we can see some movement there in the back half of this year, then we may be able to get some impact and some contribution in 2017 from more meaningful contribution for those countries as well.

我是 Steve。我來回答這題。我們不會在全年營收指引中拆分出歸因於國際的部分。我的意思是，它一直大約在 15% 左右。在我們真正看到給付（reimbursement）的影響之前，不要預期這個比例會有實質變化；而且如同我們提到的，我們仍在處理德國的細節。我們認為要到明年某個時候才會開始看到有意義的影響。不過，我們的希望是能看到一些額外進展——我們之前談過法國可能的給付，以及英國可能的給付；如果今年下半年這些地方能有一些進展，那麼我們或許能在 2017 年看到一些影響與貢獻，且這些國家也可能帶來更具意義的貢獻。

Great. Thank you.

很好。謝謝。

Mike Weinstein, JPMorgan.

Mike Weinstein，JPMorgan。

Kevin, you made the comment about MDI percentage of new patient starts, but I don't think you actually said what new patient starts did this quarter.

Kevin，你提到新啟用患者中 MDI 的比例，但我想你其實沒有說本季新啟用患者的數量是多少。

We didn't. (multiple speakers)

我們沒有。（多位講者）

Now is your opportunity.

現在就是你的機會。

Mike, we did say that over the past six months, we have added 2% to the type 1 population as far as market penetration in the US. So you guys can take type 1 population estimates, multiply 2%, and you can figure out what we have done over the past six months.

Mike，我們確實說過，在過去六個月，我們在美國第 1 型族群的市場滲透率增加了 2%。所以你們可以用第 1 型族群的估計值乘以 2%，就能算出我們過去六個月的成果。

Okay. Let me ask you about your guidance update. You grew 47% this quarter, 52%, 53% in the first half of the year. Your guidance for the second half implies basically 26% to 36%. Tell us why that is the right guidance range?

好的。我想問你們更新後的財測指引。本季你們成長 47%，上半年成長 52%、53%。你們對下半年的指引隱含的成長大約只有 26% 到 36%。請告訴我們為什麼這是合適的指引區間？

Well, as we sat and looked at it, we typically are not overly aggressive on our guidance as all of you know for right now. And as we look at the second half of the year, we looked at one number just to get to the low end of our range is about $300 million, which is a lot of sales and a lot of sensors for us.

嗯，當我們坐下來檢視時，如各位所知，我們通常不會在指引上過度進取。當我們看今年下半年時，我們看了一個數字：要達到區間下緣大約需要 3 億美元，這對我們而言是非常大量的銷售與非常大量的感測器。

Could there be upside? There could be. This guidance that we gave you is very typical and very consistent with what we have done in the past. To get to $575 million from the $250 million, (inaudible) again, that is a huge number. So we are sticking within our range. We have always said that our sustainable growth rate is 35% to 40%. To the extent we achieve over that, absolutely fantastic. And if we do, great.

會不會有上行空間？有可能。我們給出的這份指引非常典型，也與我們過去的作法非常一致。要從 2.5 億美元到 5.75 億美元，（聽不清）再說一次，那是一個非常龐大的數字。所以我們會維持在這個區間內。我們一直都說，我們可持續的成長率是 35% 到 40%。如果我們能達到更高，當然非常棒；如果做到了，那很好。

Eventually, the law of large numbers, unless we continue to add mega, mega groups in the new patient ads and we continue to do that now and we hope to do that going forward, obviously, but eventually the law of larger numbers, even if we had a ton of new patients, growth rates are going to come down a little bit. And we are seeing large numbers, even this quarter.

最終，受限於規模效應，除非我們持續在新增患者中加入非常、非常大型的群體——我們現在確實在做，也希望未來能持續——但最終隨著基數變大，即使我們新增了大量患者，成長率也會稍微下降。而我們即使在本季也已經看到基數變大的影響。

Our first quarter of 2015 was a number that started with a 7, and our second quarter of 2015 was a number that started with a 9. And so we are growing off a much larger base from the year before.

我們2015年第一季的數字是以7開頭，而2015年第二季的數字是以9開頭。因此，我們是在比前一年大得多的基期上成長。

So, as we looked at this, we are comfortable with what we gave, and if we overachieve, that is great. And if we overachieve $575 million to $600 million, that $25 million is only 3% to 4% overachievement, and we decided it wasn't worth running higher than that. So those were our thoughts.

所以，當我們檢視這件事時，我們對我們給出的指引感到放心；如果我們超標，那很好。即便我們在5.75億到6.00億美元之上超標，這2,500萬美元也只是3%到4%的超額達成，我們判斷不值得把目標訂得比那更高。以上就是我們的想法。

Okay. Let me come back to the question on OUS because I tend to think the Germany opportunity and then we will see how timing of France and improved reimbursement in the UK, but I tend to think in Germany and in total Europe is probably a bigger opportunity and more impactful in 2017, 2018 than probably the Street is thinking right now. So could you spend just a minute to talk about Germany particularly and what you're going to do to prepare for reimbursement?

好的。讓我回到海外（OUS）的問題，因為我傾向於先看德國的機會，接著再看法國的時程以及英國報銷改善的進展；但我傾向認為，德國以及整體歐洲的機會，可能在2017、2018年比華爾街目前想的更大、影響也更顯著。你能否花一分鐘談談德國，特別是你們將如何為報銷做準備？

Well, in Germany, the first step we did to prepare for reimbursement was to acquire a distributor that is a very nice company over there and somebody we are very familiar with and who is very instrumental in working with the reimbursement already to get this approval. So we needed infrastructure.

嗯，在德國，我們為報銷做準備的第一步，是收購一家經銷商；那是一家很不錯的公司，我們對他們非常熟悉，而且他們在與報銷端合作、推動取得這項核准方面已經非常關鍵。所以我們需要基礎建設。

Obviously, we need to see what the rates are. We are very pleased with how the group defined CGM by saying it had to have alert to alarms and real-time trends, so our product is right in the sweet spot. We are developing a -- really an expansion plan over the last half of this year, determining how many field people we will add in anticipation of this.

顯然，我們需要看看費率會是多少。我們對該小組對CGM的定義感到非常滿意，他們表示必須具備警示/警報以及即時趨勢，因此我們的產品正好落在甜蜜點。我們正在制定——其實是在今年下半年制定一個擴張計畫，評估為了因應這件事，我們要增加多少前線人員。

We see Germany as a market in general where diabetes is quite well-controlled. So, if this product is available, in that market, we think we can have a very good impact. It can be a very good growth engine for us.

我們認為德國整體而言是一個糖尿病控制得相當好的市場。因此，如果這個產品在那個市場可取得，我們認為可以帶來非常好的影響，對我們而言也可以成為很好的成長引擎。

The flip side of that -- and in the other countries the same. UK, France, anyplace we can get approval, we can see this thing taking off and doing well for us as we have been doing in Sweden where we have very good reimbursement.

另一方面——其他國家也一樣。英國、法國，任何我們能取得核准的地方，我們都能看到這項產品快速起飛並為我們帶來良好表現，就像我們在瑞典所做的一樣，那裡我們有非常好的報銷。

The flip side of that is to continue to grow at the rates we are growing at and the growth that we project. We have to have wins like this. They just have to happen. So we plan for them and we plan around them and things fall into place, but that is how we look at it for now. We are very optimistic about it. Not much for the rest of this year, but kicking into next year, we think Germany can be very big.

另一方面是，若要持續以我們目前的成長率、以及我們所預期的成長來成長，我們就必須要有像這樣的勝利；這些事情就是必須發生。所以我們會為它們做規劃、也圍繞它們做規劃，然後事情就會逐步到位；但目前我們就是這樣看待的。我們非常樂觀。今年剩下的時間不會有太多貢獻，但進入明年後，我們認為德國可能會非常大。

Okay. Perfect. Thank you. I will let someone else jump in.

好的。完美。謝謝。我讓其他人接著問。

Jayson Bedford, Raymond James.

Raymond James 的 Jayson Bedford。

I guess to follow on the last one, the reimbursement in Germany, is it broad, meaning for those type 1 and type 2 insulin-dependent diabetics?

我想接續上一題，德國的報銷範圍是廣泛的嗎？也就是涵蓋第一型與第二型、且依賴胰島素的糖尿病患者？

It is, but there is still a couple of procedurals, but first it needs to be ratified by the German government, and then we need to negotiate pricing, and we still don't have a price attached to the system. We then actually still need to go -- much like the regional Medicare payers, we need to go region by region to negotiate -- my understanding is to negotiate individualized contracts. So that is why we are not suggesting that this is a flip of the switch immediately, even if we get the pricing established and get the formal approval. It is going to take some time to get the infrastructure put in place.

是的，但仍有幾個程序要走。首先需要德國政府核准（ratify），接著我們需要談判定價，而我們目前仍未為這套系統確定價格。然後我們其實還需要——很像美國各地區的Medicare支付方——必須逐區去談；據我了解，是要談個別化合約。因此，即使我們把價格訂出來並取得正式核准，我們也不認為這會是立刻「一鍵切換」就完成的事。要把基礎建設建置到位，仍需要一些時間。

Fair. I felt like the receiver recall kind of strained operations a bit in the first quarter. You mentioned the impact on gross margin, but did it have any impact on Q2, meaning either from a sales or even an OpEx?

了解。我覺得接收器召回在第一季多少讓營運有點吃緊。你提到對毛利率的影響，但它對第二季有任何影響嗎？例如銷售端，甚至是營業費用（OpEx）？

From an OpEx standpoint, not so much. I think on the sales side, we talked about our customer service and our tech support issues on our call last quarter. In all candor, with patients coming with product problems, on top of that not being able to get their calls answered, we created the perfect storm over the last half of the first quarter and even early into the second quarter as we resolve these issues.

從營業費用（OpEx）的角度來看，影響不大。我想在銷售端，我們在上一季的電話會議中談到客服與技術支援的問題。坦白說，病患帶著產品問題打來，再加上電話打不進來、沒人接，我們在第一季後半段、甚至到第二季初在解決這些問題的過程中，形成了完美風暴。

And so, as Steve said in his remarks, part of our return rate and part of the warranty rate is due to increased patient awareness because of the recall. But there is also increased awareness because we didn't answer the phones, and we were not as good as we needed to be in getting back to people. We think we have overcome those operational issues. I would tell you, kudos to our salesforce for getting through all that and being able to deliver the new patient numbers that we have and keep us on track with what we are doing.

因此，如Steve在他的發言中所說，我們的退貨率與保固率的一部分，是因為召回提高了病患的認知。但也有一部分是因為我們沒有接電話、也沒有把回覆做得如我們應該做到的那麼好，因而提高了認知。我們認為我們已經克服了那些營運問題。我會告訴你，要稱讚我們的銷售團隊撐過這一切，仍能交出我們目前的新病患數，並讓我們維持在既定軌道上。

So it did put a strain on us, Jayson, and it was kind of felt all throughout the organization. We think we are past it at this point in time, and now in operations we will move on, build our new configuration receiver and resolve that warning letter with the FDA over the next few months and get past it completely.

所以這確實讓我們承受壓力，Jayson，而且幾乎整個組織都感受得到。我們認為目前已經走過那段時間；接下來在營運上，我們會繼續推進，打造新的配置接收器，並在未來幾個月內解決FDA的警告信，然後把這件事徹底翻篇。

Okay. And then, maybe just the last one for me. There are certainly a lot of folks who were at the DIaMonD data presentation at ADA. It has been a little over a month now. Do you expect this to have an impact on your business over the next few quarters? Just this data.

好的。那最後一題。ADA上有很多人參加了DIaMonD數據的發表，現在也過了一個多月。你預期這些數據在接下來幾季會對你們的業務產生影響嗎？就這份數據而言。

We need to get it published first, and we are respectfully waiting for the authors to -- I know they are drafting papers, and we are going to get this in a journal at some point in time. We think it will have a very big impact. When we go to payers and present the payers here is a very, very reasonable cost alternative for the intensive management of diabetes. We can take costs out of your system, using MDI and CGM. We can also take it to physicians who may be able to believe that a patient requires an insulin pump to be sophisticated enough to use CGM.

我們需要先把它發表（published）出來，我們也尊重作者——我知道他們正在撰寫論文——我們會在某個時間點把它刊登在期刊上。我們認為它會帶來非常大的影響。當我們去找支付方（payers）並向他們呈現：各位支付方，這是一個用於糖尿病強化管理、非常合理的成本替代方案。我們可以透過MDI與CGM，幫你們的體系降低成本。我們也可以把它帶給醫師，因為有些醫師可能認為病患必須使用胰島素幫浦，才夠「進階」到能使用CGM。

When I first went in the field when I came here, that is what I heard in every doctor's office I went into. I wouldn't put a patient on your system unless they are on a pump. If they can't do a pump, they can't do CGM.

我剛到這裡、第一次到第一線跑市場時，我在每一家診所都聽到同樣的話：除非病患在用幫浦，否則我不會讓病患用你們的系統。若他們做不到用幫浦，他們也做不到用CGM。

We don't hear that anymore, but now we have data that supports, as I said in my remarks, what we already knew, that you can use CGM and take shots and manage your diabetes very, very, very well.

我們現在已經不太聽到這種說法了，但如今我們有數據支持——如我在發言中所說——我們早就知道的事：你可以使用CGM、同時用注射打針，並把糖尿病管理得非常、非常、非常好。

So I think it can very much have a benefit. I think it will help us with payers. I think it will help us with healthcare professionals. I think it will help us across the board.

所以我認為它確實能帶來很大的助益。我認為它會幫助我們面對支付方。我認為它會幫助我們面對醫療專業人員。我認為它會在各方面幫助我們。

Okay. That's helpful.

好的。這很有幫助。

Doug Schenkel, Cowen and Company.

Cowen and Company 的 Doug Schenkel。

My first one is just going back to some of the commentary you provided on the market penetration. You mentioned that 2% of type 1 -- 2% of the type 1 population was added to the installed base in the first half of the year. Any chance you say exactly what you are using for denominator? I know you said there is a lot of estimates out there, but what we think are 1.5 million type 1 in the US. There are a pretty wide range of estimates. What do you believe? And, I guess, as a follow-up to this, what does your guidance imply for how much of a market you will expect to penetrate at year-end?

我第一個問題是回到你們對市場滲透率的一些評論。你提到今年上半年第一型糖尿病族群中有2%被加入到裝機基礎（installed base）。你能否說明你們分母（denominator）到底用的是什麼？我知道你說外界有很多估算，但我們認為美國第一型糖尿病大約有150萬人；估算範圍其實很大。你們相信的數字是什麼？另外作為追問，你們的指引隱含到年底你們預期會滲透多少市場？

I've got to be honest with you, we really can't hear you very well here. I don't know what phone you are using. Can you get to another phone because you have kind of broken in half for us here?

我必須坦白說，我們這邊真的聽不太清楚你的聲音。我不知道你用的是什麼電話。你能換一支電話嗎？因為你的聲音對我們來說有點斷斷續續。

Yes. I guess I was just asking -- sorry about that. The question was really what you guys are using for a denominator in terms of number of type 1s. We are at 1.5 million, but the estimates are pretty wide as you noted, and what is the assumption for percentage of the market that you will have penetrated by year-end, at least what is implied in guidance?

是的。我想我剛剛是在問——抱歉。問題其實是，你們在以第一型糖尿病患者人數作為分母時，用的是什麼數字。我們這邊是以150萬來看，但如你所說估計區間很大；另外，到年底你們假設能滲透市場的百分比是多少，至少從你們的財測指引中隱含的是什麼？

Yes, so we are not going to answer the latter. We use kind of a range between 1.3 to 1.5 million when we do our modeling.

是的，所以後面那個我們不打算回答。我們在建模時大致使用130萬到150萬之間的一個區間。

Okay. And then, on gross margin, thanks for all the detail. Just wondering if you could comment on yield for the G5 transmitter, and as you look out beyond 2016, do you expect to get back to your 70% gross margin target in 2017, or is this likely not until 2018 with the tailwind of the G6 launch?

了解。然後關於毛利率，謝謝你們提供這麼多細節。我想問你們能否評論一下G5發射器的良率；以及展望2016年之後，你們是否預期在2017年回到70%的毛利率目標，還是要等到2018年、在G6上市帶來順風之後才可能？

I think our yield on the G5 transmitter are fine. The issues and the launch issues we talked about really relate to better understanding Bluetooth communications and some of the power of the batteries we got out in the field and, again, just some things we learned that we think we have resolved with the firmware fix that we just filed with the FDA back in -- earlier in the second quarter.

我認為我們G5發射器的良率沒有問題。我們談到的那些問題與上市初期的問題，主要是更深入理解藍牙通訊，以及我們在現場看到的一些電池功率表現——同樣地，這些都是我們學到的事情；我們認為已透過韌體修正解決，而該修正我們在——第二季較早時——已向FDA提交。

With respect to margins going forward, the one element that has changed from our business in the past and I will let Jess kick in if there is anything to add here, Jess, is we are now selling two transmitters that cost as much as a single transmitter used to cost for the price of one with a three-year life. We do have cost reduction programs in place for that transmitter, but that is not really going to kick in until the last half of 2017 at the earliest. So we are going to lose a few margins and some margin overall on transmitter sales because of that 2 for 1 system that we build in order to power the Bluetooth radio.

至於未來的毛利率，有一個因素相較於我們過去的業務已經改變了——我也讓Jess補充看看是否還有要加的，Jess——就是我們現在以一個三年壽命、原本一個發射器的價格，賣出兩個成本相當於過去單一發射器的發射器。我們確實有針對該發射器的降本計畫，但最早也要到2017年下半年才會真正發揮效果。因此，因為我們為了驅動藍牙無線電而採用的這種「買一送一（2換1）」系統，發射器銷售的毛利率以及整體毛利率都會因此下滑一些。

The flip side of that is our mix may change over time as we get more patients, and maybe that 30%/70% split goes to 80% sensors, 20% hardware, they go back to the 70% level. I do agree with what you said earlier about the G6 sensor. Assuming we continue to build sensors per day with the payer groups, there is certainly a revenue opportunity that can enhance our margin performance greatly.

但另一方面，隨著病患數增加，我們的產品組合可能會隨時間改變；也許原本30%/70%的分布會變成80%感測器、20%硬體，毛利率就能回到70%的水準。我同意你先前提到的G6感測器。假設我們能持續與支付方（payer）團體推動每日感測器的使用量，確實存在能大幅提升我們毛利表現的營收機會。

So we will just kind of play this out over time. As we said on the call, we will get back up to the mid-60s% by the end of the year on an overall basis and should be mid to high 60s% over the last few quarters. And, Jess, do you have anything to add?

所以我們會隨時間把這件事推進。如同我們在電話會議上所說，我們在整體基礎上到年底會回到約中段60%毛利率，且在接下來幾個季度應該會落在中到高60%區間。Jess，你還有要補充的嗎？

I think the only other comment I would have is that when we moved to our G6 platform, the sensor becomes a 10-day sensor, and remember we bill our insurance companies on a per day basis. So we have some opportunity to pick up margin there. It gives us some negotiating leverage with the payers. So that can help as well.

我唯一想補充的是，當我們轉到G6平台時，感測器會變成10天感測器；而且請記得，我們是以「按天」為基礎向保險公司計費的。所以我們在那裡有一些提升毛利的機會，也讓我們在與支付方談判時多一些籌碼，因此也會有所幫助。

Yes.

是的。

Okay. Thanks, again, guys.

好的。再次感謝各位。

James Francescone, Morgan Stanley.

摩根士丹利的James Francescone。

I was wondering if you could comment on international results in the quarter. Obviously, quite strong on a year-over-year perspective, but actually down a little bit sequentially, which I think is not the trend that we typically have seen in that business. Anything worth noting just purely in terms of sequential trend in the international business?

我想請你們評論一下本季的國際業務表現。從年對年來看顯然相當強勁，但按季卻略有下滑，我認為這不是我們通常在該業務看到的趨勢。就國際業務的按季走勢而言，有沒有什麼值得注意的地方？

No. As you know, our international business is very much controlled by distributors, and distributor purchasing patterns can be somewhat choppy. And particularly, as you look at the end of the second quarter with the vacation schedule and such as what happens in July and August in Europe, we have seen similar patterns in the past. So we are not concerned about it.

沒有。如你所知，我們的國際業務很大程度上由經銷商所主導，而經銷商的採購節奏可能會有些起伏。尤其是你看第二季末，配合假期安排，以及歐洲在7月、8月的情況，我們過去也看過類似的模式，所以我們不擔心。

And, Jess, do you have anything?

Jess，你有要補充的嗎？

No.

沒有。

Okay. And maybe just on operating expenses, you framed your operating expense plan at the beginning of the year as including a 20% to 25% increase in cash OpEx on the core business, plus $40 million in spending on strategic goals. It seems like the strategic spending is in line where we thought. Is the 20% to 25% cash OpEx increase on the core business, is that still the plan for the year?

好的。那也許再問一下營業費用：你們年初把營業費用規劃描述為核心業務的現金OpEx增加20%到25%，再加上為策略目標投入4,000萬美元。看起來策略性支出符合我們原先的預期。那核心業務現金OpEx增加20%到25%這個計畫，今年仍然不變嗎？

Yes, it is as we sit here today. Understand, we do have some increases in -- again, the increases are typically as a percentage basis higher in the first half of the year because our revenue numbers are lower, and we do incur some of that spending up front. I would tell you, operationally, as we look at OpEx this quarter, we probably accelerated some of our expenditures on the customer service side with respect to headcount to take care of the issues we talked about previously. So some of that might be in, but it is not going to move the needle 10% or anything. It is just going to move 1% or 2%, and we should catch up with that into the third and fourth quarters.

是的，以我們目前的狀況來看仍是如此。請理解，我們確實有一些增加——再次強調，通常上半年因為營收數字較低，費用以百分比來看會較高，而且我們也會先行投入部分支出。我會告訴你，就營運面來看，我們本季在OpEx上，可能在客服端的人力編制方面加速了一些支出，以處理我們先前談到的那些問題。所以其中一部分可能已經反映進來，但不會讓數字變動10%之類的幅度；大概只會影響1%到2%，而我們在第三、第四季應該會把節奏追上。

The strategic spend in the goals should be higher over the last half of the year, but as revenues go up, our OpEx as a percentage, the other cash-based OpEx as a percentage of revenues should come in line. And as we look at the end of the year, we should finish quite nicely. We should be okay.

策略目標相關支出在下半年應該會更高，但隨著營收上升，我們的OpEx占比——其他以現金為基礎的OpEx占營收的比例——應該會回到合理水準。展望年底，我們應該會收得相當漂亮；我們應該沒問題。

Sounds good.

聽起來不錯。

Danielle Antalffy, Leerink Partners.

Leerink Partners的Danielle Antalffy。

Kevin or Steve, wondering if you could comment -- you mentioned progress with the artificial pancreas. Just wondering if you could comment on how soon you think a DexCom sensor will be involved in something that is competitive with Medtronic's local (inaudible) or some incremental steps forward on the artificial pancreas from a commercial perspective, or do you think the next step for you guys will be an actual artificial pancreas?

Kevin或Steve，我想請你們評論一下——你們提到人工胰臟方面的進展。我想知道你們認為DexCom感測器多久會被納入某個在商業上能與美敦力的本地（聽不清）競爭的方案，或是在商業化角度上人工胰臟會有哪些循序漸進的下一步？還是你們認為你們的下一步會是直接推出真正的人工胰臟？

It will be incremental steps, but I will tell you -- I mean, one positive note. Bigfoot put out a press release, I believe it was just last week, announcing that they have initiated clinical trials on their system. I would like to defer because Tandem and Insulet are both public companies, I kind of want to defer to them on their timelines because they speak to their timelines during our calls.

會是循序漸進的步驟。不過我想說——有個正面的消息：Bigfoot我相信就在上週發布新聞稿，宣布他們已啟動其系統的臨床試驗。至於Tandem和Insulet都是上市公司，我想把各自的時程留給他們來說，因為他們會在我們的電話會議中談他們的時程。

But I would comment broadly speaking that we believe our partners generally are making excellent progress, Animas included. And so without being specific, I think it is likely that the 6, 7 DG will be a commercialized product before one of our partners has something that is specifically competitive. But I think you'll be pleasantly surprised that it wouldn't be too far behind the Medtronic before at least one of them has something that is competitive out there.

但我可以更廣泛地評論：我們相信合作夥伴整體而言都在取得非常好的進展，Animas也包括在內。因此在不具體點名的情況下，我認為很可能在我們某個合作夥伴推出明確具競爭力的產品之前，6、7 DG會先成為商業化產品。不過我想你會驚喜地發現，至少其中一家要推出具競爭力的產品，距離美敦力也不會落後太久。

Okay. That's very helpful. And then, just a question on time for sensorware, and I know you guys have the capability today to shut the sensor off after a certain number of days. And I know this is a tough topic, given the fact that a lot of patients extend the wear of the sensor, but just given what is happening with the FDA and the potential for a non-adjunctive claim, how are you guys thinking about, over the next few generations of the device, potentially implementing an automatic shutoff of the system in a certain number of days and how you will sort of approach that with the patients?

好的，這很有幫助。接著想問一下感測器配戴時間（sensor wear）：我知道你們目前有能力在一定天數後把感測器關閉。我也知道這是個棘手的議題，因為很多病患會延長感測器的配戴時間；但考量FDA目前的動向以及非輔助（non-adjunctive）宣稱的可能性，你們如何思考在未來幾代裝置中，可能在特定天數後實施系統自動關閉，以及你們會如何與病患溝通與處理？

We have explored that possibility in a number of ways from a technological perspective, with respect to electronics, with respect to software, with respect to analyzing the membranes. And there is a number of ways we could, in fact, shut sensors off if they required that.

我們從多個角度探索過這種可能性：從技術面、從電子元件、從軟體、以及從膜材分析等。我們確實有多種方式可以在需要時把感測器關閉。

Right now, the FDA has not required that from us, and I think as we learn more about the performance of the sensor with a non-adjunctive claim, we will revisit that with the FDA over time. The issue becomes quite simple, Danielle, and it is a very good question. If somebody is wearing a sensor on day 24 and they get a bad reading in dose insulin, whose fault is that? Is that ours, or is that the patients or who is responsible? And so there is a risk factor here.

目前FDA並未要求我們這麼做；我想隨著我們對於在非輔助宣稱下感測器表現的了解加深，我們會隨時間再與FDA重新討論。問題其實很簡單，Danielle，而且這是個非常好的問題：如果有人在第24天仍在配戴感測器，然後得到一個不良讀值並據此施打胰島素，責任在誰？是我們的責任，還是病患的責任，或是誰該負責？因此這裡存在風險因素。

Right now, we believe our sensor -- our patients are very adept at determining when the sensor isn't working to meet their specifications. So we have not been asked to shut it off at this point in time. We will evaluate it with future technologies, and we will be fair with the patients no matter what we do. If the FDA said you have to shut all these off in seven days, in all candor, we would figure out ways to make this right with the patients in our pricing models and make sure that they are not harmed tremendously either. We know how important it is to them, and we understand the cost of the technology as these guys manage the disease. It just never goes away.

目前，我們相信我們的感測器——我們的病患非常擅長判斷感測器何時無法符合他們的規格。因此，到目前為止，還沒有人要求我們把它關閉。我們會用未來的技術來評估，而且不論我們做什麼，都會公平對待病患。坦白說，如果 FDA 說你必須在七天內把這些全部關掉，我們會想辦法在定價模式中把這件事對病患補償到位，並確保他們也不會因此受到重大傷害。我們知道這對他們有多重要，也理解在他們管理疾病的過程中，這項技術的成本。這件事永遠不會消失。

So that is something we will always balance, but it is something we have been very thoughtful about and something we have given a great deal of thought to with our future products. As we look at a two-week sensor, quite honestly, there is not a whole lot of reasons not to turn a two-week sensor off and eliminate that liability. It is when you are at seven days and our patients -- many of them say these things last much longer than seven days. In fact, one of the investigators did a study that showed week two might be as good as week -- or better than week one for some of these patients. So we've been hesitant to do that at this point in time, but we will explore it in our discussions with the FDA, and we will consider it during our business analytics over the course of time.

所以這是我們永遠會去權衡的事情，但我們一直都非常審慎，也對未來產品投入了大量思考。當我們看兩週感測器時，老實說，並沒有太多理由不把兩週感測器關掉以消除那個責任風險。真正的問題是在七天時，我們的病患——很多人都說這些感測器能用遠超過七天。事實上，其中一位研究者做了一項研究，顯示對某些病患而言，第二週可能和第一週一樣好——甚至比第一週更好。因此我們目前一直對這麼做有所遲疑，但我們會在與 FDA 的討論中探索這件事，並且會在未來一段時間的商業分析中加以考量。

Got it. Thank you so much.

了解了。非常感謝。

Jeff Johnson, Robert Baird.

Jeff Johnson，Robert Baird。

Most of my questions have been answered, but, Steve, I just want to go back to something you talked about with your pump partners. I think a year or two ago, you guys were clearly maybe frustrated with the stepwise fashion some of those pump partners were moving in. I think more recently, it sounds like at least one or maybe a couple of the pump companies are starting to invest in Class III manufacturing, and they are putting frameworks in place to where they can maybe more efficiently push integrated updates to the field, whether it is G5 going into G6, something like that.

我大部分的問題都已經被回答了，不過 Steve，我想回到你談到與胰島素幫浦合作夥伴的那一點。我記得一、兩年前，你們顯然可能對某些幫浦夥伴以循序漸進的方式推進感到有點挫折。最近聽起來，至少有一家、也可能有幾家幫浦公司開始投資 Class III 製造，並建立一些架構，使他們能更有效率地把整合式更新推送到現場，例如從 G5 升級到 G6 之類的。

So I guess my question is, how broad is this trend at this point, and do you feel like most of the pump companies are now starting to invest in kind of these processes that are going to help your business as you make these upgrade pathways more accessible to patients on both the pump and CGM combined basis going forward?

所以我想問的是，這個趨勢目前有多普遍？你是否覺得大多數幫浦公司現在都開始投資這類流程，讓你們在未來把這些升級路徑更容易提供給病患（同時涵蓋幫浦與 CGM 的整體方案）時，能對你們的業務有所幫助？

Yes, I do. I think we are still a little (inaudible). Kudos to our R&D team who are able to innovate and iterate as quickly as they do. I think our sense of frustration somewhat comes from the fact that we are able to turn new products on a much more rapid basis than any of our partners. But I am pleasantly surprised at some of the progress that they have made, and I think we are going to see competitive offerings in the marketplace sooner rather than later.

是的，我覺得是。我想我們仍然有點（聽不清）。也要稱讚我們的研發團隊，能以那麼快的速度創新與迭代。我想我們的挫折感某種程度上來自於：我們能以比任何合作夥伴都更快的節奏推出新產品。但我對他們所取得的一些進展感到驚喜，我認為我們將會在市場上更早而不是更晚看到具競爭力的產品。

Fair enough. And then, Kevin, a question for you. I just want to make sure I understood some of your injunctive versus non-injunctive comments that you made. I don't think I am reading this correctly, but you were not trying to imply that you might go to market with a dosing claim sensor and then a non-dosing claim sensor, were you? You were just trying to draw the difference between the dosing claim and those sensors that won't have it?

可以理解。接著 Kevin，我有個問題想問你。我只是想確認我是否正確理解你剛才提到的「具（injunctive）主張」與「非（injunctive）主張」之間的評論。我想我可能讀錯了，但你並不是在暗示你們可能會同時推出一款具有 dosing claim 的感測器，以及一款沒有 dosing claim 的感測器吧？你只是想區分有 dosing claim 與沒有這項主張的感測器之差異？

I am just trying to light the question. Once we have a non-injunctive claim, are there injunctive sensors that are still out there? I mean, once strips has got an accuracy standard set, do we have other strips that are non-injunctive strips that you use in other strips to measure it to make sure the strip is right? I think we have some very interesting philosophical device and treatment issues that we need to discuss and work out with the agency over the next few months that we don't know the answer to at this point in time. But we will get there.

我只是想釐清這個問題。一旦我們有了非（injunctive）主張，外面是否仍然存在（injunctive）的感測器？我的意思是，一旦試紙有了既定的準確度標準，我們是否還會有其他非（injunctive）的試紙，然後你用其他試紙來量測、以確保那張試紙是正確的？我認為我們有一些非常有趣、在理念層面關於裝置與治療的議題，需要在接下來幾個月與主管機關討論並釐清，而目前我們還不知道答案。但我們會走到那一步。

All right. That's helpful.

好，這很有幫助。

Brooks West, Piper Jaffray.

Brooks West，Piper Jaffray。

This is Tom on for Brooks. Just wanted to ask about the transition to the pharmacy and if there are any updates you can give us. And then, along those lines, it sounds like ASPs are in that $70 to $75 range again. So just wondering at what point we might start to see some impact from the channel mix shift.

我是 Tom，代 Brooks 提問。想請教一下轉向藥局通路的進展，是否有任何更新可以分享？另外，延伸這點，聽起來 ASP 又回到每個 70 到 75 美元的區間。所以想問大概什麼時候我們會開始看到通路組合轉移帶來的影響？

We have been very deliberate in the contracts we have entered into. We have been very deliberate in the contracts with have entered into to protect our pricing position. Consequently, we haven't moved as much of our business to the pharmacy channel as we would like to because we do end up getting into some great detail pricing discussions. And in many payers, where we have a very good DME contract and we are paid nicely for sensors, it doesn't make a lot of sense to give up a whole bunch of pricing to our pharmacy. And so we are trying to find a way to strike that balance and maybe even strike a balance where our business model changes a bit over time or we might get into a subscription type model that is delivered through the drugstore.

我們在所簽訂的合約上一直非常審慎。我們在所簽訂的合約上一直非常審慎，以保護我們的定價地位。因此，我們把業務轉到藥局通路的速度沒有我們希望的那麼快，因為我們最後會進入非常細節的價格討論。而在許多支付方那裡，如果我們有非常好的 DME 合約，且感測器的給付價格也不錯，那麼放棄一大部分價格、轉到藥局通路其實沒有太大意義。所以我們正在嘗試找到一個方式來取得平衡，甚至可能在時間推移下讓我們的商業模式有所改變，或許會進入一種透過藥局交付的訂閱制模式。

We have a number of proposals out there that are very accretive with payers and very different than what we have done in the past. We just haven't -- we continue to discuss them all. But we haven't been willing to give up a lot of bunch of price.

我們提出了多個方案，對支付方而言都非常具增益性（accretive），而且與我們過去做法非常不同。我們只是還沒有——我們仍在持續討論它們。但我們一直不願意放棄很多價格。

Earlier, one of the analysts talked about the 10-day sensor -- and Steve spoke about that as well -- where we currently bill per day with the sensors. So right now, if the sensor is $70 to $75 for seven days, you can see it is between $10.00 and $10.75 a day on the average.

先前有位分析師提到 10 天感測器——Steve 也談到了——我們目前是以感測器按天計費。所以現在如果一個感測器 70 到 75 美元可用七天，你可以看到平均每天大約是 10.00 到 10.75 美元。

To the extent we go to a G6 sensor and we get 10 days, then we would be able to give a day back. Pricing wise, for example, that may be the time to really address what -- go after the pharmacy business and use our price as a leverage point. But today, we have not been able to leverage the business to give that up. So it has gone slower than we expected. We get warm reception. We have great meetings. But we have not been willing to give up a whole bunch of pricing so far.

如果我們轉到 G6 感測器並且能用 10 天，那麼我們就能在天數上回饋一天。以定價來說，例如，那可能就是一個真正去處理——去爭取藥局通路業務、並把我們的價格作為槓桿點的時機。但就今天而言，我們還無法運用這個業務來支撐我們放棄那部分價格。所以進展比我們預期慢。我們得到很熱烈的回應，我們有很棒的會議，但到目前為止我們仍不願意放棄很多定價。

Great. Thank you very much for that. And then, just one quick follow-up. Have you given your expectations for the timing of your other commensurate in the post market following the panel?

很好，非常感謝。再一個很快的追問：在 panel 會議之後，你們是否已經給出其他相應的上市後（post market）事項的時程預期？

No, we have not.

沒有，我們還沒有。

Okay. Thank you.

好的，謝謝。

Tao Levy, Wedbush.

Tao Levy，Wedbush。

Just a couple quick ones here. In terms of the penetration of the type 1 US population, where do you think the CGM market currently stands?

這裡有幾個簡短問題。就美國第一型糖尿病人口的滲透率而言，你認為 CGM 市場目前大概到什麼程度？

Steve, you take your shot. I am guessing somewhere maybe slightly under 20% of patients using between us and folks using the Medtronic system.

Steve，你來回答。我猜大概在 20% 略低一些，包含我們以及使用 Medtronic 系統的人。

I agree with that. Other 20%, probably over 15% at this point.

我同意。低於 20%，但目前可能已經超過 15%。

Yes. I would expect it to be over 15%, given how quickly you guys have been adding patients. In terms of -- you made the comment during the prepared remarks, when we think about the non-injunctive claim that it might require additional training of patient, of the clinician, caregiver, does that imply maybe a slower ramp initially than we might have seen before? Is that something you can control?

是的，考量到你們新增病患的速度，我預期會超過 15%。另外——你在事先準備的發言中提到，當我們思考非（injunctive）主張時，可能需要對病患、臨床醫師、照護者進行額外訓練；這是否意味著一開始的爬坡速度可能會比我們之前看到的更慢？這是你們能控制的嗎？

We don't believe it will be a slower ramp-up. We believe it is something we can control. The key is you will hear is just finding the parameters around the training, and I will give you an example. This was discussed at the panel meeting, actually, when a patient sees a number with double arrows up, there are a number of ways that patient could be trained. There are several models that have been built that suggest if you have a number in double arrows up and you are going to get yourself a bolus, you multiply it by -- instead of your typical insulin dose, you multiply it by a multiplier like 1.2 or 1.3 or 1.1.

我們不認為會有較慢的爬坡。我們相信這是我們可以控制的。關鍵在於你會聽到的，就是找出訓練的參數。我舉個例子：這其實在 panel 會議上有討論到，當病患看到一個數值並伴隨雙箭頭向上時，病患可以被訓練用多種方式來應對。有幾個已建立的模型指出，如果你看到雙箭頭向上的數值，且你要給自己一個追加劑量（bolus），你可以把——不是用你一般的胰島素劑量，而是乘上一個乘數，例如 1.2、1.3 或 1.1。

The question is there, from that example, do we give that type of recommendation, or is that the physician's recommendation to give? And where and how do we train patients, or do we train physicians to give that type of recommendation and get it out of the way?

問題在於，從那個例子來看，我們是否要給出那種類型的建議，還是應該由醫師來給出那樣的建議？以及我們要在何處、如何訓練病患，或者我們是否要訓練醫師來給出那種類型的建議，並把這件事處理好？

We don't believe it is going to require a whole lot. It is going to slow us down, but we do need to get this training material really knocked out and revised before we can launch in that manner. But that is the type of question that we are doing dealing with.

我們不認為這會需要非常多。它會讓我們的進度變慢，但在我們能以那種方式推出之前，確實需要把這些訓練教材真正完成並修訂好。不過，這就是我們正在處理的那類問題。

And the other one -- and I can shed a little more detail on FDA discussions here -- do we have more specific training materials for our various subsets of patients -- for seniors, for pediatric patients, for adults, however do they need to be trained differently. Combined with, as this technology expands, we can certainly have a training material set for endocrinologists and diabetes educators, but as we get into general practitioners, because this will expand to general practitioners, how do we train them, and what type of materials and programs to we provide for those guys, or do we take over the whole patient training for somebody who comes through that channel? Those are the things that we are discussing about training, and we presented our ideas, and we are having a very open dialogue with the FDA on the matter.

另外一個——我也可以在這裡多補充一些與 FDA 討論的細節——我們是否要為不同病患子族群提供更具體的訓練教材——例如高齡者、兒科病患、成人，他們是否需要不同的訓練方式。再加上，隨著這項技術擴展，我們當然可以為內分泌科醫師與糖尿病衛教師準備一套訓練教材；但當我們進入一般科醫師（因為這將會擴展到一般科醫師）時，我們要如何訓練他們？我們要為他們提供什麼樣的教材與計畫？或者，對於透過那個通路進來的病患，我們是否要接手完整的病患訓練？這些就是我們在訓練方面正在討論的事情；我們也提出了我們的想法，並且就此與 FDA 進行非常開放的對話。

Perfect. And then just lastly, when do you expect -- I don't know if you mentioned it earlier on, but when do you expect to get the app that also includes the ability to measure how much insulin is either in the pump or on board?

很好。最後再問一下，你們預期何時——我不確定你之前是否提過——你們預期何時能推出也包含可量測幫浦內或體內（on board）尚有多少胰島素能力的 app？

We will file our next version of the app before the end of the year, and that app will be capable of receiving insulin data. The question becomes, then, what devices can communicate with that, or does the patient enter that on their own? But that app will be filed before the end of the year.

我們會在年底前提交下一版 app，而那個 app 將能接收胰島素資料。接下來的問題是，哪些裝置能與它通訊，或是病患是否要自行輸入。但那個 app 會在年底前送件。

So, in order for the pump to communicate, the pump would have to have Bluetooth for that, I assume?

所以，若要讓幫浦能通訊，我想幫浦必須具備藍牙，對嗎？

Or have some way to communicate (multiple speakers).

或者要有某種通訊方式（多位講者）。

Some way to communicate to the pump.

要有某種方式能與幫浦通訊。

Okay. Great.

好的。太好了。

(technical difficulty).

（技術問題）。

Maybe, Kevin or Steve, just to go back to the competitive landscape. After the July 21 panel, and if we look ahead, if there is a situation where you do receive the non-injunctive label claim, what do you think this actually does to the competitive landscape? Is it safe to assume we can run scenarios of share gains for G5 and future sensors in the absence of competitors actually having that label claim?

Kevin 或 Steve，也許回到競爭態勢來看。7 月 21 日的委員會會議之後，往前看，如果出現你們確實拿到非輔助（non-injunctive）標示主張的情況，你認為這實際上會如何改變競爭態勢？是否可以安全地假設，在競爭對手尚未取得該標示主張的情況下，我們可以推演 G5 與未來感測器的市占提升情境？

Then, you also mentioned training manuals. I mean, that has to be out there, too. So it seems like a lot of infrastructure is being put in place here, and I am just wondering what your high-level thoughts are on the competitive landscape after these events? And then I have just two quick housekeeping questions.

另外你也提到訓練手冊。我的意思是，那也必須到位。所以看起來這裡正在建立很多基礎建設，我只是想知道你對這些事件之後的競爭態勢有什麼高層次的看法？然後我還有兩個簡短的例行問題。

Well, I will start, Steve, Jess, anybody want to jump in. From a market share perspective, based on the independent data we read, we already have 70% share. So that is a pretty good healthy position as we sit here today, and we don't have a fully integrated pump that can regulate insulin delivering to attack the rest of that marketplace.

我先開始，Steve、Jess，有人想補充也可以。就市占角度而言，根據我們讀到的獨立數據，我們已經有 70% 的市占。所以以我們今天的狀態來看，這是相當健康的位置；而且我們還沒有一個能調節胰島素輸送、去攻下其餘市場的完全整合式幫浦。

So we feel we are in a very good market share place as we sit here today. What we really hope to drive is continued market expansion and continued use of CGM.

所以我們覺得，以今天的狀態來看，我們的市占位置非常好。我們真正希望推動的是市場持續擴大，以及 CGM 的持續使用。

With respect to infrastructure, there is going to be a lot more -- there is going to be more put in place. But, please understand, we have been laying the ground for this -- groundwork for this for quite some time. And, for example, with the G5 mobile system, the user guide is part of the app. And so you still, even though there is going to be training, you still don't have to get that 600-page user guide in a box. You can go to the app and you can touch a screen and you can get help on what you need, including access to training videos that can talk to you and tell you exactly what to do with the system.

就基礎建設而言，會有更多——會有更多東西要建置。但請理解，我們為此鋪路——打基礎——已經有一段時間了。舉例來說，在 G5 行動系統中，使用者指南就是 app 的一部分。因此即使會有訓練，你仍然不需要在盒子裡拿到那本 600 頁的使用者指南。你可以到 app 裡，點一下螢幕，就能取得你需要的協助，包括可存取訓練影片，影片會引導你並告訴你系統該怎麼操作。

So the groundwork is in place. It is going to be different training and different education than medical devices have experienced in the past, and we are pretty excited to be at the front of this.

所以基礎已經到位。這將會是與過去醫療器材不同的訓練與教育方式，而我們對能站在這個領域的前端感到相當興奮。

Yes, the only thing I would add is on the -- would be on the Medicare front from a competitive respect that Medicare today is telling us they are requiring a non-injunctive claim before they will cover the products to the extent we have obtained a non-injunctive claims and we have some period of time where we might gain Medicare access without -- in the absence of competition, that could certainly give us an opportunity to capture some patients that no one else will be able to capture.

是的，我唯一要補充的是——從競爭角度看 Medicare 這一端——目前 Medicare 告訴我們，他們要求必須有非輔助（non-injunctive）主張才會在一定程度上給付這些產品。若我們已取得非輔助主張，並且在一段時間內能在沒有競爭者的情況下取得 Medicare 的可及性，那確實可能給我們一個機會，去吸引一些其他人無法吸引到的病患。

Helpful. And, just the two follow-ups would be, if you could provide any update on patient dropouts following the receiver recall, if there are any out there and any updates on state Medicaid contracts? Thanks.

很有幫助。再兩個追問：你們能否提供接收器召回後病患流失的任何更新（如果有的話），以及各州 Medicaid 合約的最新進展？謝謝。

We are not going to give you a specific attrition rate, but I don't think we have seen any meaningful uptick in attrition as it relates to the receiver recall issue.

我們不會提供具體的流失率，但我不認為我們看到任何有意義的流失上升，且這與接收器召回議題相關。

On the Medicaid side, quite frankly, the last numbers I have heard is we are somewhere north of 25 states, but honestly I did not -- somewhere right in that range. I haven't updated with our folks in several weeks now. So let's go with around 25 states.

在 Medicaid 方面，坦白說，我最後聽到的數字是我們在 25 個州以上，但老實說我沒有——大概就在那個範圍。我已經好幾週沒有跟我們的同仁更新了。所以就先以大約 25 個州來看。

Okay.

好的。

Kyle Rose, Canaccord.

Canaccord 的 Kyle Rose。

A couple quick ones here. One, given the amount of new patients added in the first half of the year, I just wanted to see if you could characterize the type of patients you are seeing and any changes in underlying utilization. It sounds like attrition is stable, but any way that -- anything you have learned over the first six months of the year that would impact what we have seen prior based on patient utilization and dropout trends.

這裡有幾個簡短問題。第一，鑑於上半年新增病患數量不少，我想看看你能否描述你們看到的病患類型，以及底層使用情況是否有任何變化。聽起來流失率很穩定，但在今年前六個月，你們是否學到任何會影響我們先前所見（基於病患使用與流失趨勢）的事情？

I think these have been relatively consistent. I did enjoy the question about the receiver recall issue. I would tell you, with respect to the patient behavior there, in reality what we got more of angry patients who couldn't use the system than we got patients who dropped off and they were very happy as we solve the problem.

我認為這些都相對一致。我很喜歡你問到接收器召回的問題。我會告訴你，就那裡的病患行為而言，實際上我們遇到更多的是因為無法使用系統而生氣的病患，而不是流失的病患；而且當我們解決問題後，他們也非常滿意。

I think utilization continues to be a mixed bag, but it is not really consistent. For example, people -- there are many people with great insurance who would gladly their insurance company would replace their sensor every seven days who still wear it for 14 days. There are others who can barely get seven out of them. I think people use it as long as they can.

使用情況仍然是好壞參半，但並不是真的一致。舉例來說，有很多保險很好的使用者，即使保險公司願意每七天更換一次感測器，他們仍會戴到 14 天。也有其他人幾乎撐不到七天。我想大家都是能用多久就用多久。

With respect to new patient characteristics, the one thing we can give you is what we gave you earlier in the call. We felt it was very important to flip the patient base and the new patients from predominantly pumpers to predominantly MDI patients because that really reflects the type 1 market. And, again, saying that over 60% of our direct new patients are multiple daily injection users shows that we have been very successful with this message and that CGM first is truly resonating with everybody.

至於新病患特徵，我們能提供的一點就是我們在電話會議前面提過的：我們認為把病患基礎與新病患從以幫浦使用者為主，轉為以 MDI（每日多次注射）病患為主非常重要，因為那才真正反映第一型糖尿病市場。而且再說一次，超過 60% 的我們直接新增病患是每日多次注射使用者，顯示我們在這個訊息上非常成功，而「CGM 優先」確實正在引起所有人的共鳴。

Great. I appreciate that additional color. And then just lastly, and I will hop off, is you have put a longer-term perspective as you think about going to -- in the broader diabetes population, whether that be through the general practitioner channel or other ways. Just how do you envision your sales channel changing and the type of investments that would be required to help do that?

很好。我很感謝這些額外的說明。最後一個問題，我問完就下線：你們從更長期的角度來看，當你們思考進入更廣泛的糖尿病族群——不論是透過一般科醫師通路或其他方式——你們如何想像銷售通路會改變？以及為了做到這點需要投入哪些類型的投資？

We are studying that right now, and I don't have a perfect answer for you. Some of the options have been presented to us as partners. Some of the options we have considered are a totally separate sales organization -- contract sales organizations. We have considered a number of options, and we will continue to explore that as we get these products ready.

我們現在正在研究這件事，我沒有一個完美的答案。有些選項以合作夥伴的形式向我們提出。有些選項是我們考慮過的，例如完全獨立的銷售組織——委外的合約銷售組織。我們考慮了多種方案，並且會在我們把這些產品準備就緒的過程中持續探索。

The one thing that we have learned and what we have spent most of our efforts on in the type 2 market over the past several months is just seeing how this technology will work. And let me tell you, type 2 patients, even though those not using insulin, when given this feedback, learn what to do with their health and learn how to take care of their diabetes. It is a win. If we can get the cost structure the way we want to and the product we want to configure with our partners at Verily, we think this is a home run.

我們在過去幾個月於第 2 型市場學到的一件事，以及我們投入最多心力在做的，就是觀察這項技術將如何運作。我可以告訴你，第 2 型患者，即使是不使用胰島素的患者，在獲得這些回饋後，也會學會如何管理自己的健康，並學會如何照顧自己的糖尿病。這是雙贏。如果我們能把成本結構調整到我們想要的樣子，並與 Verily 的合作夥伴一起把產品配置成我們想要的形式，我們認為這會是一記全壘打。

So the distribution will be every bit as tricky as the technology. We are getting the technology there first. That is kind of how we roll here at DexCom.

因此，通路分銷會和技術一樣棘手。我們會先把技術做到位。這大概就是我們在 DexCom 的做事方式。

Great. Thanks for taking the question.

很好。謝謝讓我提問。

Erik Shoger, Northcoast Research.

Erik Shoger，Northcoast Research。

Two questions for you. One, just a follow-up on the pharmacy channel question. I am curious, when you originally started talking about that, you kind of painted it as a requirement, really, to enable you to grow at the high rates that you have been. I guess, one, do you think that is still the case, and, two, what ultimately flips the switch to get more and more patients onto the pharmacy channel? Is it something like DIaMonD study, or is it just kind of those bareknuckle negotiations that you are talking about?

我有兩個問題。第一個是關於藥局通路問題的追問。我很好奇，當你們一開始談到這件事時，你們把它描繪成一項要求，確實是為了讓你們能以你們一直以來的高成長率持續成長。我想問：第一，你們是否仍然認為情況如此？第二，最終是什麼因素會「按下開關」，讓越來越多患者轉到藥局通路？是像 DIaMonD 研究這樣的因素，還是就是你們所說那種硬碰硬的談判？

It is a combination of all of them, Eric. I think the DIaMonD study will be very helpful. We have not rolled the DIaMonD study out in mass to the payers yet because we are waiting for publication, and we want to get the type 2 results in there as well because if we can get the insulin using type 2 patients, that will also help our business. But we are going to have to show, ultimately, that this system saves a payer more money than it costs them, when it is all said and done. And I have been on a couple of payer calls recently, personally, because I better want to understand this dynamic. And our team is very, very good, but it is interesting, got thrown three curveballs and one last Friday, and I turned to them after we were done, I said, is this how this works? And they go, pretty much every time.

Eric，這些因素是綜合在一起的。我認為 DIaMonD 研究會非常有幫助。我們尚未把 DIaMonD 研究大規模推向付款方，因為我們在等正式發表，而且我們也希望把第 2 型的結果納入其中，因為如果我們能拿下使用胰島素的第 2 型患者，這也會有助於我們的業務。但最終我們必須證明，整體算下來，這套系統為付款方省下的錢會多於他們為此付出的成本。我最近也親自參加了幾通付款方的電話會議，因為我想更了解這個互動關係。我們的團隊非常、非常優秀，但很有意思的是，最近被丟了三個曲球，上週五又來了一個；會後我轉頭問他們：事情就是這樣運作的嗎？他們說：幾乎每次都是。

So nothing is simple. I personally believe it is a requirement to make getting CGM easier for our patients, and I would love to do that with the pharmacy model. We will explore other models as I mentioned on the call if we can come up with the DME model that is a subscription-based model. That would be great. I can tell you there are some payers -- I won't name them all, but there are two or three of them were we have a DME relationship and it is clockwork. We get a patient's name, and they are on the system in a matter of a week. We have others that can drag this out for two or three months.

所以沒有任何事是簡單的。我個人相信，讓患者更容易取得 CGM 是一項必要條件，而我很希望能透過藥局模式來做到這點。如同我在電話會議中提到的，如果我們能在 DME 模式下提出一種訂閱制模式，我們也會探索其他模式。那會很棒。我可以告訴你，有些付款方——我不會全部點名，但其中有兩三家，我們有 DME 合作關係，流程就像時鐘一樣準。我們拿到患者姓名後，一週內就能讓他們上系統。也有其他的付款方會把流程拖到兩三個月。

In DME we have some of our pharmacy contracts that happen very quickly. Your prescription goes into the drugstore and you get the product. We have others that go through pre-op that take a lot of time as well.

在 DME 方面，我們有些藥局合約也能很快完成。你的處方送到藥局，你就能拿到產品。但也有一些需要走事前核准（pre-op）的流程，會花很多時間。

Ultimately, it is the consistency of the approval process and reimbursement process that is most important to us, and we felt two years ago that the most consistent way we could do this was through to the drugstore. And I would tell you, I probably still feel that way as does the rest of our team. Because this is a product that patients use every day, and they should be able to go get it without the hassle they go through now.

最終，對我們而言最重要的是核准流程與給付流程的一致性。兩年前我們認為，最一致的做法是透過藥局。我可以告訴你，我大概仍然這麼認為，我們團隊其他人也一樣。因為這是患者每天都要使用的產品，他們應該能夠去取得它，而不必承受現在這些麻煩。

Conversely, we have to manage our finances and we have to manage our top line and we have to -- we have got a business to run to offset that with. And we haven't been willing to give up a whole bunch of price to make a mass move over to pharmacy. Because where we have a direct contract with the payer, they have a price for our product, and we start from there and oftentimes they want to go down. And so we kind of held the line study.

反過來說，我們也必須管理財務、管理營收（top line），而且我們——我們有一門生意要經營，必須在兩者之間取得平衡。我們一直不願意為了大規模轉向藥局通路而在價格上讓步太多。因為在我們與付款方有直接合約的情況下，他們對我們產品有一個價格，我們就從那裡開始談，而他們往往還想再往下壓。所以我們某種程度上是守住底線。

Over time, G6 will help us lower cost. Electronics will help us. Disposable transmitters will help us. Hopefully, the thing going straight to the phone and avoiding the (inaudible) together can help us. We have initiatives all throughout our product pipeline that will be very helpful in this regard. And so I don't doubt that we can get there. I think it is just taking more time than we planned.

隨著時間推進，G6 會幫助我們降低成本。電子元件會幫助我們。一次性發射器也會幫助我們。希望直接連到手機、避免把（聽不清）組在一起，也能幫助我們。我們在整個產品管線中都有相關的計畫，對這方面會非常有幫助。所以我不懷疑我們能做到。我認為只是比我們原先規劃的花更久時間。

Yes. Okay. Fair enough. And then, one quick one, maybe for you, Steve, as it relates to the OUS business.

是的。好，合理。接著還有一個很快的問題，可能是給你，Steve，關於 OUS 業務。

As you understand things now, particularly as you get into the negotiations in Germany, how do you expect the sensor ASP to change going forward, if at all?

以你目前的理解，特別是當你們開始在德國進入談判時，你預期感測器 ASP（平均銷售單價）未來會如何變動（如果會的話）？

I don't even want to speculate because we are not at that point of negotiation yet.

我甚至不想推測，因為我們還沒進到那個談判階段。

Okay. I mean, is there any reason to believe that it would be drastically lower?

好的。我是說，有沒有任何理由相信它會大幅降低？

No. I mean, I guess typically European pricing can be slightly lower, but our pricing today on a cash fee basis and even pricing, for example, in Sweden where we have reimbursement is quite positive.

沒有。我的意思是，一般來說歐洲定價可能會稍微低一些，但我們目前以自費（cash fee）計價的價格，甚至例如在瑞典我們有給付的定價，其實都相當正面。

Okay. Fair enough.

好的。合理。

The only other comment I would make there is remember that the revenue at DexCom as we go directly in some of these markets like Germany, we are cutting out the middleman having a distributor. So, from a contribution perspective, it is way better for us.

我在這裡唯一想補充的是，請記得，DexCom 在像德國這類市場採取直營時，我們就省去了中間商（經銷商）。因此從貢獻度（contribution）的角度來看，對我們好很多。

Yes. For sure. Great.

是的。確實。很好。

We have reached the end of our question and answer session. At this time, I will turn the call back to Kevin for closing remarks.

我們的問答環節到此結束。接下來我會把電話交回 Kevin 作結語。

You know what? As you can tell by this call, things are very busy here these days, and we continue to believe that we are merely scratching the surface of the opportunity and progress with this technology to change lives. Many of you heard the testimonials at the recent FDA panel meeting. They moved everybody in the room nearly to tears. This device changes lives, and that is what inspires us to come to work and do what we do each and every day.

你知道嗎？從這通電話你也看得出來，我們最近非常忙碌，而我們仍然相信，我們只是剛開始觸及這項技術在改變人生方面的機會與進展。你們許多人在最近的 FDA 專家小組會議上聽到了見證分享，那幾乎讓在場每個人都感動到落淚。這個裝置改變人生，而這正是激勵我們每天來上班、日復一日做我們所做之事的原因。

Thanks for listening and taking the time, and we will talk to you next quarter.

謝謝各位收聽並撥冗參與，我們下個季度再談。

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.

謝謝各位女士、先生。今天的會議到此結束。感謝各位參與。您現在可以掛線。