德康醫療 (DXCM) 2009 Q3 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the DexCom's Third Quarter Earnings Release Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. Please note that this conference is being recorded. I will now turn the call over to Mr. Terry Gregg. Mr. Gregg, you may begin.

各位女士、先生，下午好，歡迎參加 DexCom 第三季財報發布電話會議。目前所有與會者皆處於僅收聽模式。稍後我們將進行問答環節。請注意，本次會議正在錄音。現在我將把電話交給 Terry Gregg 先生。Gregg 先生，您可以開始。

Thank you, Operator. Good afternoon and welcome to DexCom's third quarter investor conference call. Joining me today on the call are Steve Pacelli, Chief Administrative Officer, and Jess Roper, Chief Financial Officer. I will ask Steve to read our Safe Harbor Statement.

謝謝，接線員。各位下午好，歡迎參加 DexCom 第三季投資人電話會議。今天與我一同參與電話會議的有：首席行政官 Steve Pacelli，以及財務長 Jess Roper。我將請 Steve 宣讀我們的「安全港聲明」。

Thanks, Terry. Some of the statements that we will make in today's call may constitute forward-looking statements. These statements reflect management's expectations about future events, operating plans, and performance and speak only as of the date here of. These forward-looking statements involve a number of risks and uncertainties. A list of the factors that could cause actual results to be materially different from those expressed or implied by any of these forward-looking statements is detailed under risk factors and elsewhere in our annual report on Form 10K, our quarterly reports on Form 10Q, and our other reports filed with the SEC. We undertake no obligation to update publicly or revise these forward-looking statements for any reason. Terry?

謝謝，Terry。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、營運計畫與績效的預期，且僅以本日為準。這些前瞻性陳述涉及多項風險與不確定性。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存在重大差異的因素清單，已在我們的 Form 10-K 年報、Form 10-Q 季報，以及其他向美國證券交易委員會（SEC）提交的報告之「風險因素」及其他章節中詳述。我們不承擔因任何原因公開更新或修訂這些前瞻性陳述的義務。Terry？

Thanks, Steve. The agenda for the call today is as follows; Jess will provide you with a financial review of the third quarter and I'll follow-up with commentary on our commercial business, the Edwards collaboration, a brief update on our insulin pump partnerships, and a look at our future. We will close the session with the question and answer period. Jess?

謝謝，Steve。今天電話會議的議程如下：Jess 將為各位提供第三季的財務回顧，接著我將就我們的商業業務、與 Edwards 的合作、胰島素幫浦合作夥伴關係的簡要更新，以及對未來的展望進行說明。最後我們將以問答環節結束。Jess？

Thank you, Terry. Following positive momentum from the first and second quarters, DexCom continued the trend and generated product revenues of $4.6 million during the third quarter of 2009 compared to $1.9 million for the same quarter in 2008, an increase of 146%. Sequentially, product revenue for Q3 increased over 12% from the prior quarter.

謝謝，Terry。延續第一季與第二季的正向動能，DexCom 在 2009 年第三季持續此一趨勢，產品營收達 460 萬美元，較 2008 年同期的 190 萬美元成長 146%。按季比較，第三季產品營收較上一季成長逾 12%。

During Q3, we sold approximately 2,125 systems representing an increase of 10% over the prior quarter. Sequentially, revenues were up 17%. During the quarter, we generated a positive product gross margin. Total revenue for the third quarter of 2009 was $7.3 million compared to $1.9 million for the same quarter in 2008 and included $2.6 million in development grant revenue from our development and collaboration agreements. Cost of sales, including both product and non product total $6.4 million for the quarter. Product costs of sales totaled $4.6 million for Q3 compared to $3.6 million for the same quarter in 2008. With increased sales volumes and product revenues, we were able to achieve a positive product gross margin of $31,000 in Q3 compared to a product gross margin loss of $1.7 million for the same quarter in 2008.

第三季期間，我們約售出 2,125 套系統，較上一季增加 10%。按季比較，營收成長 17%。本季我們實現了正的產品毛利率。2009 年第三季總營收為 730 萬美元，較 2008 年同期的 190 萬美元增加，其中包含來自我們開發與合作協議的 260 萬美元開發補助收入。本季銷貨成本（包含產品與非產品）合計 640 萬美元。第三季產品銷貨成本合計 460 萬美元，較 2008 年同期的 360 萬美元增加。隨著銷售量與產品營收提升，我們在第三季達成 3.1 萬美元的正產品毛利，相較之下 2008 年同期產品毛利為虧損 170 萬美元。

Development cost of sales total $1.8 million for the third quarter of 2009 compared to $263,000 in 2008. The increase in development cost of sales was primarily due to costs related to our development of a hospital based continuous glucose monitoring system pursuant to our agreement with Edwards, originally entered into during Q4 of 2008. Sequentially, development cost of sales declined by $1.4 million from the prior quarter.

2009 年第三季開發銷貨成本合計 180 萬美元，較 2008 年的 26.3 萬美元增加。開發銷貨成本上升主要係因依據我們與 Edwards 的協議（最初於 2008 年第四季簽訂）所進行之院內連續血糖監測系統開發相關成本所致。按季比較，開發銷貨成本較上一季下降 140 萬美元。

Research and development expense decreased by approximately $1.9 million and totaled $3.5 million for the third quarter of 2009 compared to $5.4 million in 2008. Sequentially, R&D costs remain flat from the prior quarter. As a reminder, R&D costs associated with our development and collaboration agreements with Animas and Edwards are included within development cost of sales.

研發費用約減少 190 萬美元，2009 年第三季合計 350 萬美元，較 2008 年的 540 萬美元下降。按季比較，研發成本與上一季持平。提醒各位，與 Animas 與 Edwards 的開發與合作協議相關之研發成本，已包含在開發銷貨成本之中。

Selling, general, and administrative expense total $8.9 million in Q3 of 2009 compared to $6.7 million in 2008. The increase was primarily due to additional marketing, customer service, insurance reimbursement, and sales cost. Major components of increased SG&A expense included approximately $736,000 in higher salary and payroll related costs, $410,000 of higher commissions and $306,000 higher share based compensation costs. Sequentially, SG&A expense was flat as compared to the prior quarter.

2009 年第三季銷售、一般及行政費用（SG&A）合計 890 萬美元，較 2008 年的 670 萬美元增加。增加主要來自額外的行銷、客戶服務、保險給付（reimbursement）以及銷售成本。SG&A 費用增加的主要構成包括：約 73.6 萬美元較高的薪資與薪酬相關成本、41 萬美元較高的佣金，以及 30.6 萬美元較高的股份基礎給付成本。按季比較，SG&A 費用與上一季持平。

Our net loss decreased to $13.5 million for the third quarter of 2009 compared to $15.6 million during the same quarter of 2008. Sequentially, our net loss decreased $1.8 million as compared to the prior quarter. Our net loss for Q3 of 2009 included $4.2 million in non cash expenses centered primarily in share based compensation and the expense of our convertible debt discount. The loss per share for the quarter was $0.29. We ended the quarter with $40 million in cash, restricted cash, and marketable securities and we had working capital of $26 million.

我們的淨損在 2009 年第三季降至 1,350 萬美元，較 2008 年同期的 1,560 萬美元減少。按季比較，淨損較上一季減少 180 萬美元。2009 年第三季淨損包含 420 萬美元的非現金費用，主要為股份基礎給付以及可轉換債務折價攤銷費用。本季每股虧損為 0.29 美元。本季末我們持有 4,000 萬美元的現金、受限制現金及有價證券，營運資金為 2,600 萬美元。

Finally, you will note that we filed a form 8K today, furnishing updated financial information on our previously filed form 10K for the year ended December 31, 2008. This filing was required to reflect certain required accounting adjustments and reclassifications, resulting for our adoption of 8PB14-1 as it relates to our previously issued convertible debt.

最後，各位會注意到我們今天提交了一份 Form 8-K，提供我們先前已提交之截至 2008 年 12 月 31 日止年度 Form 10-K 的更新財務資訊。此一申報係為反映若干必要的會計調整與重分類，係因我們採用 8PB14-1（與先前已發行之可轉換債務相關）所致。

I would like to now turn it back to our President and CEO, Terry Gregg.

現在我想把電話交回給我們的總裁暨執行長 Terry Gregg。

Thanks, Jess. We were extremely pleased with our performance in the third quarter of 2009 as we delivered yet another quarter of sequential growth. We exceeded analyst consensus estimates for starter kit sales, product revenue, and net loss, and more importantly we achieve a positive product gross margin for the first time in the Company's history. We achieved these results in the midst of the continued slowdown in the market for traditional glucose monitoring products as witness by recently reported lower sales in the worldwide market for SMBG products.

謝謝，Jess。我們對 2009 年第三季的表現感到非常滿意，因為我們再次交出一季接一季的成長。我們在入門套件（starter kit）銷售、產品營收與淨損方面均超越分析師一致預期；更重要的是，我們在公司歷史上首次實現正的產品毛利。我們是在傳統血糖監測產品市場持續放緩的情況下達成這些成果，近期全球 SMBG 產品市場所報告的較低銷售額亦可為證。

On our second quarter call I cautioned that the third quarter is often a seasonally slow quarter and yet total product revenue grew approximately 12% sequentially from Q2 2009 to Q3 2009 and, as Jess mentioned, was up 146% compared to the third quarter of 2008. We sold approximately 2,125 starter kits for the SEVEN PLUS in the third quarter, amounting to a 10% increase in starter kit sales compared to Q2 2009 and up 178% compared to the third quarter of 2008. We posted an increase of approximately 17% in sensor revenues quarter to quarter.

在第二季電話會議中，我曾提醒第三季通常是季節性較慢的一季；然而，總產品營收仍自 2009 年第二季至第三季按季成長約 12%，且如 Jess 所提，較 2008 年第三季成長 146%。我們在第三季約售出 2,125 套 SEVEN PLUS 入門套件，較 2009 年第二季入門套件銷售增加 10%，較 2008 年第三季增加 178%。我們的感測器營收亦較上一季成長約 17%。

As we look to the balance of 2009, we will continue our blocking and tackling mode of building our business. We will continue to improve and begin to automate our back office systems and processing capabilities. We will continue to focus on the customer experience, recognizing that superior customer service is critical to our long-term success. And we will continue to push for progress on the reimbursement front. Particularly in terms of the adoption of more liberalized coverage policies for CGM which will not only ease the burden on our back office but will make the technology available to more patients.

展望 2009 年剩餘期間，我們將持續以「打好基本功」的方式建構我們的業務。我們將持續改善並開始自動化後台系統與處理能力。我們將持續聚焦客戶體驗，並認知到卓越的客戶服務對我們的長期成功至關重要。同時，我們也將持續推動保險給付（reimbursement）方面的進展，特別是推動對 CGM 採用更寬鬆的給付範圍政策；這不僅能減輕我們後台的負擔，也能讓更多病患取得這項技術。

We will introduce our technology outside the United States. We announced in early October that we received CE mark approval for the SEVEN PLUS. The CE mark enables us to commercialize the system in the European Union and the countries in Asia and Latin America that recognize the CE Mark. We have commenced a limited launch of the SEVEN PLUS through an established network of distributors in Europe and expect to expand our sales efforts in up to ten countries in the EU and Israel during the fourth quarter.

我們將把技術引進美國以外的市場。我們在 10 月初宣布，SEVEN PLUS 已取得 CE 認證核准。CE 認證使我們得以在歐盟以及亞洲與拉丁美洲中承認 CE 認證的國家將該系統商業化。我們已透過歐洲既有的經銷商網路啟動 SEVEN PLUS 的有限度上市，並預期在第四季將銷售推廣擴展至歐盟及以色列多達十個國家。

As we head into 2010, we'll begin to expand our sales and marketing efforts from a focus on the diabetes educator to a direct, targeted focus on the patient. Looking back, you'll recall we termed 2008 the year of the endocrinologist during which we spent the bulk of our sales and marketing efforts educating clinicians on the benefits of CGM as the best standard of care for glucose management and raising the awareness of DexCom among key opinion leaders to increase clinical adoption.

邁入 2010 年，我們將開始擴大銷售與行銷投入，從以糖尿病衛教師為主的重點，轉向直接且精準地聚焦病患。回顧過去，各位會記得我們將 2008 年稱為「內分泌科醫師之年」；當時我們將大部分銷售與行銷資源用於教育臨床醫師了解 CGM 作為血糖管理最佳照護標準的效益，並在關鍵意見領袖之間提升 DexCom 的知名度，以增加臨床採用。

2009 was the year of the educator with a focus on providing the educator community with the tools, training, and support necessary to help patients utilize CGM to change their behavior and accomplish their diabetes self management goals. The result of our efforts were clearly evidenced by the enthusiasm for continuous glucose monitoring we saw the American Association of Diabetes Educators annual meeting in September and particularly as reflected in Close Concerns' annual AADE survey.

2009 年是「衛教師之年」，重點在於為衛教師社群提供必要的工具、訓練與支援，協助病患運用 CGM 改變其行為並達成糖尿病自我管理目標。我們努力的成果，清楚反映在我們於 9 月美國糖尿病衛教師協會（AADE）年會所見到的連續血糖監測熱忱之中，並且特別體現在 Close Concerns 的年度 AADE 調查結果上。

In this year's survey, CDs estimated that in 2009 37% of their Type 1 patients are using CGM compared to only 7% in 2008; however, educators that said if CGM were widely available and reimbursed for the device and the healthcare provider time, they would put an average of 91% of their Type 1 patients and 58% of their Type 2 patients on CGM. This is markedly higher than in previous years. Last year, for example, educators said they would use CGM in 69% of Type 1s and 35% of Type 2s if reimbursed and at AADE 2007, educators indicated that they would use CGM in only 33% of the Type 1 patients under similar conditions with no mention of Type 2 utilization. This data clearly shows a trend of growing acceptance of CGM among CDEs.

在今年的調查中，CDs 估計其 2009 年第 1 型糖尿病患者中有 37% 正在使用 CGM，相較於 2008 年僅 7%；然而，教育者表示，若 CGM 能夠廣泛取得，且裝置費用與醫療照護提供者時間都能獲得給付，他們平均會讓 91% 的第 1 型患者與 58% 的第 2 型患者使用 CGM。這明顯高於過去幾年。例如去年，教育者表示若有給付，他們會在 69% 的第 1 型與 35% 的第 2 型患者中使用 CGM；而在 AADE 2007，教育者在類似條件下表示僅會在 33% 的第 1 型患者中使用 CGM，且未提及第 2 型的使用。這些數據清楚顯示 CDEs 對 CGM 的接受度正在提升的趨勢。

2010 will be the year of the patient. We will shift to a more of a direct to patient marketing strategy. Diabetes patients today are more informed than ever and franchised by wider access to health information. Patients are not shy about making demands of their healthcare providers regarding the patients they use. Obviously DexCom can ill afford the high powered media ad that has served the pharmaceutical industry so well but we will turn to the internet as the great equalizer.

2010 年將是病患之年。我們將轉向更偏向直接面向病患（direct to patient）的行銷策略。如今糖尿病患者比以往任何時候都更了解資訊，並因更廣泛取得健康資訊而更具主導性。患者不會羞於就其使用的產品向醫療照護提供者提出要求。顯然，DexCom 無力負擔長期以來讓製藥產業受益良多的高成本媒體廣告，但我們將轉向網際網路作為最重要的平衡力量。

I caution that we are not talking about direct consumer advertising which is about mass marketing. Our direct to patient initiatives are about building relationships that we believe will earn a significant return on investment over time and our goal is to get to the point next year where patients are calling out our product by brand name when they visit their doctor.

我提醒各位，我們談的不是直接面向消費者的廣告（direct consumer advertising），那是大眾化的 массов 行銷。我們的直接面向病患計畫，是在建立關係；我們相信這些關係將隨時間帶來可觀的投資報酬。我們的目標是在明年達到：病患在看診時會以品牌名稱指名我們的產品。

Finally, we believe there my be opportunity in 2010 to expand our reach through co-marketing or co-promotion relationships with other device and-or pharmaceutical companies focused on the diabetes space recognizing, of course, the significance of maintaining ownership of the patient relationship.

最後，我們相信 2010 年可能有機會透過與其他專注於糖尿病領域的醫療器材及／或製藥公司建立共同銷售（co-marketing）或共同推廣（co-promotion）關係，以擴大我們的觸及範圍；當然，我們也認知到維持對病患關係所有權的重要性。

Moving to our collaboration with Edwards Lifesciences, we were extremely pleased to announce earlier this week the receipt of CE mark approval for our first generation hospital based glucose monitoring system developed in collaboration with Edwards Lifesciences. I could not be more pleased with the progress we've made to bring our continuous glucose sensing technology to critical ill patients in the hospital environment.

談到我們與 Edwards Lifesciences 的合作，我們非常高興在本週稍早宣布：我們與 Edwards Lifesciences 合作開發的第一代院內（hospital based）葡萄糖監測系統已取得 CE 認證核准。我對於我們在將連續葡萄糖感測技術帶入醫院環境、服務重症患者方面所取得的進展感到無比欣慰。

This product has been a personal quest of mine for over 12 years and to be part of the group responsible for this first in class life saving device is truly rewarding. I have been genuinely impressed by the high level of enthusiasm, commitment, and persistence the members of both the DexCom and Edwards teams in pioneering this important category. As we've stated previously, Edwards will be responsible for the global sales and marketing of the system which is expected to begin on a limited market development basis in a few European clinical sites before the end of the year.

這項產品是我個人追尋超過 12 年的目標，而能成為負責這款同級首創、可挽救生命裝置的團隊一員，確實令人感到非常有成就感。我也真心對 DexCom 與 Edwards 兩個團隊成員在開創這個重要類別時所展現的高度熱忱、投入與堅持印象深刻。如同我們先前所述，Edwards 將負責該系統的全球銷售與行銷；預計在今年年底前，先於部分歐洲臨床據點以有限市場開發的方式開始推動。

A brief note on our insulin pump partnerships, we continue to make steady progress on the development of integrated insulin pump CGM systems with our pump partners Animas Corporation and Insulet Corporation and we remain committed to completing all development, clinical, and regulatory efforts on these joint development projects to enable us to launch first generation projects with Animas and Insulet next year.

簡要說明我們的胰島素幫浦合作夥伴關係：我們與幫浦合作夥伴 Animas Corporation 與 Insulet Corporation 在整合式胰島素幫浦 CGM 系統的開發上持續穩健推進；我們也仍致力於完成這些共同開發專案的所有研發、臨床與法規工作，以使我們能在明年與 Animas 及 Insulet 推出第一代產品。

Looking to the future, my marching orders to the organization are simple. Continue to remain laser focused on our near-term mission critical priorities, namely continued commercial growth of our approved ambulatory continuous glucose monitoring systems in the US and abroad, continued development and commercialization of our in-hospital platform in collaboration with Edwards Lifesciences and continued development of our integrated insulin pump CGM systems with our pump partners. We believe by focusing on this core business strategy we will drive the Company to profitability in the shortest period of time.

展望未來，我對組織下達的行動指令很簡單：持續以雷射般的專注聚焦於短期內攸關使命的關鍵優先事項，也就是：在美國及海外持續推動我們已核准之可攜式（ambulatory）連續葡萄糖監測系統的商業成長；與 Edwards Lifesciences 合作持續開發並商業化我們的院內平台；以及與幫浦合作夥伴持續開發整合式胰島素幫浦 CGM 系統。我們相信，聚焦於這項核心商業策略，將使公司在最短時間內達成獲利。

I point to Q3 as an example. We grew product revenues while our operating expenses remained flat quarter to quarter and our net loss declined by over $2 million. Nonetheless with our leadership role in CGM, I believe we should continue to invest in activities to grow the category and increase the acceptance and adoption of CGM as the best standard of care across all aspects of diabetes management. These are the activities that will maximize shareholder value over the long run.

我以第三季為例：我們的產品營收成長，而營運費用在各季之間維持持平，淨損也減少超過 200 萬美元。儘管如此，憑藉我們在 CGM 的領導地位，我認為我們仍應持續投資於推動類別成長的活動，並提升 CGM 作為糖尿病管理各面向最佳照護標準的接受度與採用率。這些活動將在長期最大化股東價值。

In addition to executing our primary strategies in the Type 1 market, I believe we have opportunities to extend our CGM leadership position in other areas, particularly continuous development of next generation interstitial sensor technologies for application in both the ambulatory and in-hospital settings such as the step down and telemetry wards. Expanded application of our core technology including utilization of CGM as a management tool in Type 2 patients on insulin and utilization of CGM as a diagnostic tool for drug titration in Type 2 patients. Utilization of CGM in prediabetes screening. Utilization of CGM in pregnancy including gestational diabetes and application of CGM into the obesity market.

除了在第 1 型市場執行我們的主要策略之外，我相信我們也有機會在其他領域延伸我們的 CGM 領導地位，尤其是持續開發下一代間質液（interstitial）感測器技術，以應用於門診與院內場景，例如下轉病房（step down）與遠距監測病房（telemetry wards）。擴大我們核心技術的應用，包括：將 CGM 作為使用胰島素之第 2 型患者的管理工具；將 CGM 作為第 2 型患者藥物劑量調整（drug titration）的診斷工具；將 CGM 用於糖尿病前期（prediabetes）篩檢；將 CGM 用於妊娠（包含妊娠糖尿病）；以及將 CGM 應用於肥胖市場。

Over the next several years, we expect to explore these and other growth opportunities, some on our own and other through licensing or partnership arrangements. To that end, today we filed a shelf registration statement with the Securities and Exchange Commission. Let me start by saying we have no immediate plans to raise capital. Together with our cash on hand at quarter end and the additional proceeds with expect to receive from Edwards and Animas through 2010, we believe we have the financial means to reach breakeven if we continue to grow product revenues as planned. That said, we believe it is prudent to provide the Company with maximum flexibility as we look to the future. We believe this is simply good corporate stewardship. Additionally, while we don't believe our convertible debt represents an overhang on the stock today, given recent unsolicited interest from a number of our note holders, we believe opportunities may arise to reduce our debt load in the near-term.

在未來幾年，我們預期將探索上述及其他成長機會，有些由我們自行推動，有些則透過授權或合作夥伴安排。為此，我們今天已向美國證券交易委員會（Securities and Exchange Commission）提交一份架構式註冊聲明（shelf registration statement）。我先說明：我們目前沒有立即募資的計畫。結合季末手上現金，以及我們預期在 2010 年前將自 Edwards 與 Animas 收到的額外款項，只要我們按計畫持續成長產品營收，我們相信具備達到損益兩平的財務能力。即便如此，展望未來，我們認為為公司提供最大的彈性是審慎之舉；我們相信這只是良好的公司治理與受託管理（corporate stewardship）。此外，雖然我們不認為可轉換債務目前對股價構成壓力，但鑑於近期多位票據持有人主動表達的興趣，我們相信短期內可能出現降低負債水位的機會。

To wrap up, we've had a very exciting year thus far. We've executed precisely as we said we would. We continued to deliver sequential quarterly growth both in terms of product revenue and starter kit sales. We continued to meet our operating milestone and we continued to exceed analyst expectations on a quarterly basis. I discussed earlier in the call survey data from the Close Concerns' annual AADE survey evidencing the growing acceptance of CGM among diabetes educators. What I failed to mention were two additional data points from the same survey which were particularly exciting for DexCom.

總結來說，今年迄今我們經歷了非常令人振奮的一年。我們精準地按照我們所說的方式執行。我們在產品營收與入門套組（starter kit）銷售方面，持續實現逐季成長。我們持續達成營運里程碑，並且每一季都持續超越分析師預期。我在電話會議前段提到 Close Concerns 年度 AADE 調查中的數據，顯示糖尿病教育者對 CGM 的接受度正在提升。我先前未提到的是，同一份調查中還有兩個額外數據點，對 DexCom 而言特別令人振奮。

Close Concerns asked respondents two questions; which of the diabetes companies are the most innovative and which have the biggest impact on the patients that use their products. In both cases respondents ranked DexCom number one. We have accomplished what many other larger and better resourced companies have failed to do and I could not be more proud of the DexCom team.

Close Concerns 問受訪者兩個問題：哪些糖尿病公司最具創新性，以及哪些公司對使用其產品的患者影響最大。在這兩項問題中，受訪者都將 DexCom 排名第一。我們完成了許多規模更大、資源更充足的公司都未能做到的事，我對 DexCom 團隊感到無比自豪。

Thank you. We'll turn it over for question and answer.

謝謝。接下來我們進入問答。

(Operator Instructions) Our first question comes from Amy Sullivan from Piper Jaffrey. Please, go ahead.

（接線員指示）我們的第一個問題來自 Piper Jaffrey 的 Amy Sullivan。請開始。

Hi, guys.

嗨，各位。

Hi, Amy.

嗨，Amy。

So, Terry, you were recently at EASD and they approved the CE mark on the in-hospital system. Curious if you can give us some sense of the enthusiasm you received from docs while you were there as far as how they're respond to the availability of the product?

所以，Terry，你最近在 EASD，他們也核准了院內系統的 CE 認證。我想了解一下，你在那裡從醫師那邊收到的熱度如何？就他們對產品可取得性（availability）的反應而言，你能否給我們一些感覺？

I think I heard two questions, one with regards to we were at EASD which we had received CE mark for the SEVEN PLUS system and then this week we received CE mark for the -- in conjunction with Edwards for the in-hospital system. Amy, if I may ask for clarification, which product line are you referring to?

我想我聽到兩個問題：一個是關於我們在 EASD，當時我們已取得 SEVEN PLUS 系統的 CE 認證；另一個是本週我們與 Edwards 合作的院內系統也取得 CE 認證。Amy，如果可以的話我想請你澄清一下，你指的是哪一條產品線？

Looking for more color on -- I imagine you were talking with a lot of docs on both products, but especially with regards to the in-hospital product, what sort of -- how you expect the response to be from docs based on those conversations to the new availability of that product?

我想多了解一些細節——我想你應該和很多醫師談過兩個產品，但特別是針對院內產品，根據那些對話，你預期醫師對這項新產品可取得性會有什麼樣的反應？

To be honest with you, the conversations at EASD were not centered around the in-hospital system at all. As you well know, even in the European sector, that is a product that is traditionally more used by intensives and less used by actual endocrinologists. So, the EASD is focused on the rank and file endocrinologists. So, we spent the bulk of the time there talking about the SEVEN PLUS. There wasn't really any flavor to speak of at EASD on the in-hospital system.

老實說，在 EASD 的對話完全沒有聚焦在院內系統上。如你所知，即使在歐洲市場，那類產品傳統上更多是由加護／重症醫療端使用，而較少由實際的內分泌科醫師使用。因此 EASD 的重點在一般內分泌科醫師。我們在那裡大部分時間都在談 SEVEN PLUS。就院內系統而言，在 EASD 並沒有什麼可特別分享的回饋。

Okay. Then as far as -- what are your current thoughts as far as when we might be looking for gen two of that system for more of a full launch of product.

了解。那麼就——你目前對於我們可能何時能看到該系統第二代、以便更全面推出產品（full launch）的看法是什麼？

I'm going to ask Steve to comment on that, Amy.

Amy，我會請 Steve 來回覆這個問題。

I think the expectation -- I would actually refer you to some of the guidance provided by Edwards in their recent earnings call, but we've completed a -- we basically have a two stage clinical effort for the gen one. We've completed the first generation -- the first stage of that clinical effort which enabled us to seek European approval and obtain that CE mark. We're currently undergoing the second stage and that will enable us to seek FDA approval some time early next year is what we'll guide. Then I think development efforts are already underway for that second generation system. The goal would be to have the second generation system into the market before the end of next year.

我認為就預期而言——我其實會請你參考 Edwards 在他們最近一次財報電話會議中提供的一些指引——但我們已完成一項……基本上針對第一代（gen one）有一個兩階段的臨床工作。我們已完成該臨床工作的第一代——也就是第一階段，這使我們得以申請歐洲核准並取得 CE 標誌。我們目前正在進行第二階段，依我們的指引，這將使我們能在明年年初某個時間點申請 FDA 核准。接著我認為第二代系統的開發工作也已經在進行中。目標是在明年年底之前讓第二代系統上市。

Okay. And then lastly, as far as international markets in the new CE mark with that product, can you give us more color as far as your strategy there?

好的。最後，關於國際市場以及該產品新取得的 CE 標誌，你能否就你們在那方面的策略提供更多細節？

Are you talking about the SEVEN PLUS? (inaudible)

你是在說 SEVEN PLUS 嗎？（聽不清）

I'm sorry. He answered you and he's looking at me. Yes. We have -- we spent the last year as you know that whole effort is headed up by Peter [Geheardson] who's got close to 30 years of experience in the European sector in diabetes. So, what we did was the focus was on securing appropriate relationships with distributors in the diabetes space. All of those are signed up and we're beginning with shipped product and we're beginning a launch in those countries. Many of them do not have formal reimbursement. So, part of the effort over the next 12 months is to introduce the product to the endocrinology centers and at the same time start meeting with the reimbursement folks in conjunction with our distributors. That's part of their responsibility as well and begin to seek reimbursement. There are countries, such as Sweden, as an example, that actually do provide reimbursement to some of the CGM products. So, that's really the goal for the next probably 15 months.

抱歉。他已經回答你了，然後他在看著我。是的。我們——如你所知，過去一年我們投入了……整個工作由 Peter [Geheardson] 主導，他在歐洲糖尿病領域有將近 30 年的經驗。因此，我們所做的是把重點放在與糖尿病領域的經銷商建立適當的合作關係。這些都已簽約，我們已開始出貨，並在這些國家展開上市推廣。其中許多國家沒有正式的給付（reimbursement）。因此，未來 12 個月的一部分工作，是把產品導入內分泌中心，同時與經銷商一起開始與給付/報銷相關單位會面。這也是他們的責任之一，並開始爭取給付。有些國家，例如瑞典，實際上確實對部分 CGM 產品提供給付。因此，這大概就是未來約 15 個月的目標。

Thank you.

謝謝你。

Our next question comes from Ben Andrew from William Blair. Please, go ahead.

下一個問題來自 William Blair 的 Ben Andrew。請說。

Good afternoon. Can you hear me, Terry?

下午好。Terry，你聽得到我嗎？

Yes. You're coming through clear.

是的。聽得很清楚。

Great. Thank you. Maybe just ask Steve to talk a little bit about progress on the reimbursement front? Obviously with the nice sequential uptick in patient starts in the quarter, productivity must be improving. But maybe just walk through what changed this quarter and what additional levers you've got to pull in the next couple quarters to keep that going?

很好，謝謝。也許請 Steve 談談在給付（reimbursement）方面的進展？顯然本季病患啟用數（patient starts）有不錯的連續成長，生產力一定在改善。不過能否帶我們走一遍：這一季有哪些改變？以及未來幾季你們還有哪些槓桿可以拉動以延續這個趨勢？

Sure. As you're aware, outside of Medicare, we have extremely broad coverage at this point, Ben. I would tell you it's broad but as you know, it's in many cases still very restrictive. That said, we're becoming much, much better in our back office. We did not speak too much in Terry's prepared remarks about the back office because frankly there's not that much to report other than every day is better than the previous day. We continue to get more efficient, we continue to process claims better, we continue the speed at which not only are we able to -- through the entire system, at which we're able to do what we call a benefits investigation where we qualify the patient for insurance coverage all the way through to the end until the claim is filed and we ultimately receive payment.

當然。如你所知，除了 Medicare 之外，我們目前的涵蓋範圍非常廣，Ben。我會說很廣，但如你所知，在許多情況下仍然非常嚴格。即便如此，我們的後勤/後台作業（back office）正在變得越來越好。我們在 Terry 的事先準備發言中沒有太多談到後台，坦白說也沒有太多可報告的，除了每天都比前一天更好。我們持續變得更有效率，持續更好地處理理賠（claims），也持續提升速度——不僅是在整個系統中——我們所謂的福利調查（benefits investigation），也就是確認病患是否符合保險給付資格，一直到最後提出理賠申請並最終收到款項。

Every day it's blocking and tackling. We're getting just that much better. One thing we did mention in the prepared remarks is that we will look to start automating some of the processes by the end of this year and really early into next year which I think will add some additional efficiency. But quite frankly, at this point, it's really just a matter of we're becoming better and better at what we do. The insurance companies are helping because they're becoming better and better at actually managing continuous glucose monitoring claims. That's been helpful. I think the next thing you'll see, it's really probably a 2010 exercise, is really starting to go back to some of these larger payers who have still today restrictive coverage policies and start to try to influence less restrictive polices.

每天都在做基本功、把細節做好。我們就是一點一滴變得更好。我們在事先準備發言中提到的一件事是，我們會在今年底、以及明年初開始把部分流程自動化，我認為這會帶來額外的效率。但坦白說，就目前而言，主要就是我們在自己擅長的事情上越做越好。保險公司也在幫忙，因為他們在管理連續血糖監測（CGM）的理賠上也越來越熟練，這很有幫助。我認為你接下來會看到的——這大概會是 2010 年的工作——是回到一些目前仍有嚴格給付政策的大型付款方（payers），並開始嘗試影響他們採取限制較少的政策。

We said before it's pretty early. We're really only into the first 12 months of kind of broad based coverage, so it's a little bit early for us to go back and try to put pressure on the payers with the more restrictive coverage policies at risk of them potentially changing their mind and adopting a non coverage or a negative coverage policy would be the worst thing for us. So, we kind of walk on eggshells there. But I can see as we move out into 2010 and certainly 2011, it will be time for us and certainly we'll lean on some of our advocacy groups to help us in influencing these payers to adopt more liberal coverage policies. That will certainly help the efficiency.

我們之前說過，現在還算早。我們真正進入這種廣泛涵蓋（broad based coverage）大概也才前 12 個月，所以我們現在就回頭去對那些採取較嚴格給付政策的付款方施壓，可能還太早；因為最糟的情況是，他們可能改變主意，轉而採取不給付（non coverage）或負面給付（negative coverage）政策，這對我們會是最糟的結果。所以我們在這方面會如履薄冰。但我可以預見，隨著我們進入 2010 年、當然也包括 2011 年，將會是我們的時機；而且我們也會倚重一些倡議團體（advocacy groups）協助我們影響這些付款方採取更寬鬆的給付政策。那將確實有助於提升效率。

Terry, you mentioned two other kind of intriguing things about '10. One would be sort of DTC approach to patients who -- what sort of patient -- would that be leveraging patient advocacy groups, purely a DexCom initiative? And then in a similar vein you talked about the potential co promote or co market with a variety of different players. Maybe just talk a little bit more about that and how far that can take you?

Terry，你提到兩個關於 2010 年相當耐人尋味的事情。其一是對病患採取某種 DTC（直接面向消費者）方式——那會是針對什麼樣的病患？會是借助病患倡議團體，還是純粹由 DexCom 主導？另外，你也談到可能與各種不同的夥伴共同推廣（co-promote）或共同行銷（co-market）。能否再多談一些，以及那能把你們帶到多遠？

Sure. With regards to the communication, obviously there are a number of advocacy groups that directly communicate to patients and patient's families with diabetes and certainly we need to up our internet activity with and co promotion with those types of advocacy groups. Certainly our relationship with JDRF, ADA, we're expanding our relationship with them with under the guise now with Larry Hausner being the new CEO. David Kendall, who I have a long relationship with as the new Chief Medical Officer. So, we're looking at ways in which we can do more things with ADA on a broader basis. So, that, really aggressive the first part.

當然。就溝通而言，顯然有許多倡議團體會直接與糖尿病病患及其家屬溝通，而我們確實需要提升我們的網路活動，並與這類倡議團體進行共同推廣（co-promotion）。當然，我們與 JDRF、ADA 的關係——在 Larry Hausner 成為新任 CEO 的架構下——我們正在擴大與他們的合作；而新任首席醫療官 David Kendall，我與他也有長期的合作關係。因此，我們正在尋找能與 ADA 在更廣泛層面做更多事情的方法。所以，這是第一部分，會非常積極。

The second part is interesting because we've been approached by a number of both device and pharma companies who now are beginning to recognize what they believe to be the next great space in diabetes. As they look at their portfolio pipelines of what they've got coming down the pathway, that CGM is going to be ever important because all of their products, which we've stated multiple times previously, are all about the reduction of glycemic variability. No matter what you do, the billions of dollars that are spent today on a wide variety of drugs and those for the future are all about trying to get patients in better control. So, I think they're now recognizing, although traditionally, as you well know, probably as well or better than I do that device and drug companies don't necessarily do well together. A few have done well, but most jettisoned their device divisions long ago.

第二部分很有意思，因為有不少醫療器材公司與製藥公司主動找上我們，他們現在開始認知到他們所相信的糖尿病下一個重大領域。當他們檢視其產品組合與研發管線中即將推出的產品時，CGM 會變得愈來愈重要，因為他們所有的產品——我們之前多次提到——都與降低血糖波動（glycemic variability）有關。不論你做什麼，今天在各式各樣藥物上投入的數十億美元，以及未來的投入，都是為了讓病患控制得更好。所以我認為他們現在也意識到，雖然傳統上——如你所知，可能跟我一樣甚至更清楚——器材公司與藥廠不一定能合作得很好。有少數合作成功，但多數早就把器材部門剝離了。

But there are these partnership potentials about co promotion and potential extending beyond that. And we're in early stage discussion as to how that would look but it certainly would leverage the size when they have commas in their sales force size and we still have basically 50 sales people in the field. So, we're excited about the opportunity and obviously if and when it comes about, we would announce it on a more formal basis.

但確實存在這些合作的可能性，包括共同推廣（co-promotion），甚至可能延伸到更進一步的合作。我們目前正處於早期討論階段，探討那會是什麼樣貌；但它確實能利用對方龐大的規模——他們的銷售團隊規模是以逗號分隔的數字來算——而我們目前外勤銷售基本上只有 50 人左右。所以我們對這個機會感到興奮，當然如果、以及一旦成形，我們會以更正式的方式對外宣布。

Great. Thank you.

很好，謝謝。

Our next question comes from Bill Plovanic from Canaccord Adams. Please, go ahead.

下一個問題來自 Canaccord Adams 的 Bill Plovanic。請說。

Thank you. Good evening. Couple more questions for you here. First of all, how much have you stated for the Edwards milestone tied to the CE mark and when would you expect to receive that?

謝謝。晚安。這裡再問幾個問題。首先，與 CE 標誌掛鉤的 Edwards 里程碑款你們提列了多少？以及你們預期何時會收到？

It's $1 million and we should receive that kind of any time at this point.

是 100 萬美元，我們應該在這個時間點隨時都可能收到。

It turns out the US FDA approval for that first gen Edwards product, is that -- that carries like a $12.5 million milestone?

那麼，Edwards 第一代產品在美國取得 FDA 核准時——那是不是會帶來大約 1,250 萬美元的里程碑款？

$2.5 million, Bill.

250 萬美元，Bill。

$2.5 million. Okay.

250 萬美元。好的。

For the gen one. Remember, it was a total of about $13 million to $13.5 million in total milestones between two generations and approval between both US, OUS, including a Japanese approval for the gen two system.

針對第一代。記得總里程碑款大約是 1,300 萬到 1,350 萬美元，涵蓋兩代產品，以及美國與美國以外（OUS）的核准，還包括第二代系統在日本的核准。

Okay. Then you said 2010 for the US approval of the gen one?

好的。那你說第一代在美國的核准是在 2010 年？

Yes.

是的。

Roughly when in 2010? Mid year? Early? What does it look like at this point?

大概在 2010 年的什麼時候？年中？年初？目前看起來如何？

I would expect first half for gen one and latter half of 2010 for gen two is my expectation.

我預期第一代會在上半年，第二代則預期在 2010 年下半年。

Is the 510K already been submitted for the gen on in the US?

第一代在美國的 510(k) 已經送件了嗎？

It is not. That's what I commented on in response to Amy's question with respect to the two prongs or two layers of clinical trials we're completing. We've completed the first stage of the clinical trial. The second stage is still ongoing. That's the clinical trial that we need to complete before we can file for FDA. We expect to file that if not by the end of this year, early, early next year. And then you go through the 510K waiting period which is anywhere between 90 to 180 days.

還沒有。這就是我在回應 Amy 的問題時提到的、關於我們正在完成的兩個分支或兩個層次的臨床試驗。我們已完成臨床試驗的第一階段。第二階段仍在進行中。那是我們在向 FDA 送件前必須完成的臨床試驗。我們預期最晚在今年底、若不是的話就是明年非常非常早的時候提出申請。接著會進入 510(k) 的等待期，大約介於 90 到 180 天。

Got you. And then just more clarity on your pump CGM combo products. Your handling the PMAS filing on the Insulet one and its Animas controlling theirs? Is that how that works?

了解。然後我想再更釐清一下你們的幫浦與 CGM 組合產品。Insulet 那個是由你們負責處理 PMAS 申報，而 Animas 則自行處理他們的申報？運作方式是這樣嗎？

No. We would be -- both filing will be PMA Supplement filings by DexCom.

不是。我們會——兩個申報都會由 DexCom 以 PMA 補充申請（PMA Supplement）的形式提出。

And then when would you expect to file those PMASs?

那你們預期何時會提交這些 PMAS？

As you probably listened to the Insulet conference call, Insulet's committed to filing a PMA Supplement with a partner by the end of this year. I think we're supporting them in that effort. I think we would hedge just slightly and say we're going to try very hard to get in by the end of the year and I think we're on track. But if it slips it could be very early in the first part of next year that we would file that one. And Animas will probably come sometime in the first half of next year is the best I could guide you.

如同你可能有聽 Insulet 的電話會議，Insulet 承諾會在今年底前與合作夥伴一起提交 PMA 補充申請。我想我們正在支持他們完成這項工作。我們會稍微保守一點地說，我們會非常努力在年底前送件，而且我認為目前進度在軌道上。但如果有延後，也可能會在明年年初的前段時間提交那一件。至於 Animas，最好的指引是大概會在明年上半年某個時間點送件。

Okay. Have you completed the studies for both of those products or at least the Insulet product?

好的。你們已經完成這兩個產品的研究了嗎？或至少 Insulet 的產品？

The answer is no but the studies, we've met recently with the FDA on this issue and the studies are not as complex as you might think because really all we're doing is taking two approved products and combining them and really just eliminating the display functionality of our receiver and incorporating it into the handheld. I'm speaking in the case of Insulet now. And so the trial, this is not an extensive, not a huge N in terms of numbers of patients. It's a trial that can be conducted in a matter of a week or two. So, those will be conducted, with Insulet should be conducted certainly before the end of this year and Animas, again, will be first half of next year.

答案是否定的，但這些研究——我們最近就這個議題與 FDA 會面，而研究並不像你想的那麼複雜，因為我們基本上只是把兩個已核准的產品結合起來，實際上只是把我們接收器的顯示功能拿掉，並把它整合到手持裝置裡。我現在講的是 Insulet 的情況。因此這個試驗不會是很龐大、受試者數（N）也不會很大。這個試驗可以在一到兩週內完成。所以，這些試驗會進行；以 Insulet 來說，肯定會在今年底前完成；而 Animas 同樣會在明年上半年。

Okay. And then for the gen three upgrades, I don't know if you talked about the SEVEN PLUS, if Jess gave any color on that. Do you have any color on how many upgrades there were in the quarter?

好的。然後關於第三代升級，我不確定你們是否談到 SEVEN PLUS，Jess 是否有提供一些細節。你們能否說明本季有多少升級？

Yes. Since the launch we've had a little over 600 since March of 2009. So, we had very few in Q3. Most of those were in Q2.

可以。自從上市以來，從 2009 年 3 月起我們累計略多於 600 例。所以第三季非常少；大多數是在第二季。

Okay. Did the new disposables work with -- you don't have to upgrade to continue to use the disposable, correct?

好的。新的耗材是否可搭配——你不需要升級也能繼續使用該耗材，對嗎？

No. We're still supporting and selling sensors for the SEVEN system. That's right.

對。我們仍在支援並銷售 SEVEN 系統的感測器。沒錯。

And then to talk about -- I just have two questions here. I promise. You mentioned that the back office continues to improve. Has the backlog been completely wiped out from a bottleneck standpoint? And as they're coming in they're being serviced and working forward here?

然後再談一下——我這裡只有兩個問題，我保證。你提到後台作業持續改善。從瓶頸的角度看，積壓是否已經完全清除？也就是說，新進案件都能被處理並持續往前推進？

I would classify it, Bill, as we're keeping our head above water but the water's not going down. I think we're getting better but at the same time, as Steve mentioned, every day is better than the day before but at the same time, we're getting more patients into the system. I think the real beauty is everybody's getting greater experience on our side, on the payer side, that we're able to process patients more efficiently, also utilization of DME suppliers where appropriate. They're getting better in terms of from the time they get an order to the time they can process it.

Bill，我會這樣形容：我們能勉強讓頭露出水面，但水位並沒有下降。我認為我們確實在變好，但同時，如 Steve 提到的，每一天都比前一天更好；然而同時我們也把更多病患導入系統。真正的關鍵在於，我們這邊、以及付款方那邊，大家的經驗都在增加，使我們能更有效率地處理病患；也會在適當情況下運用 DME 供應商。他們也在進步，從收到訂單到能完成處理的時間都在縮短。

So, this whole thing is shifting. It's speeding up a bit. We still have, in my opinion, we still have a ways to go. I am happy, Steve mentioned, for the first time, and even in my remarks, we look at the beginning of automation of some of these that today and heretofore, we've been manually processing. You see even in Jess's comments some of the increase and our expenses have been directly related to having to build up some of that back office staff. Obviously as I look at 2010, we need to leverage that so that you don't see that continued ramp and the bulk of that increase has been on the reimbursement side, either in customer service, not so much tech services, a little bit there. But just the reimbursement and processing. So I think it is scalable and we're looking at the first signs of scalability as we look to 2010, what our expectations are there.

所以整體正在轉變，速度也加快了一些。但以我看來，我們仍有一段路要走。我很高興，Steve 提到這是第一次——我在我的發言中也提到——我們開始看到部分流程自動化的起點，而這些流程在今天以及過去一直都是人工處理。你也可以從 Jess 的評論中看到部分增加，我們的費用上升與必須擴編部分後台人員直接相關。顯然，當我看 2010 年時，我們需要把這些投入槓桿化，讓你不會看到費用持續大幅攀升；而那一大部分的增加都在報銷端，包含客服（不是那麼多在技術服務，雖然也有一點），主要是報銷與處理作業。因此我認為它是可擴展的，而在展望 2010 年、以及我們對那邊的預期時，我們也看到可擴展性的初步跡象。

Okay. I promise, one last question. That is with the direct to patients focus that you're going to have in 2010, does that impact your operating costs in any way? I think you said you're going to utilize the internet. I'm trying to get at, going forward, should we see flat operating expenses roughly as you build new patients on top?

好的。我保證最後一個問題。你們在 2010 年將更聚焦直接面向病患，這會以任何方式影響你們的營運成本嗎？我想你說你們會運用網路。我想問的是，往後在你們新增病患的同時，營運費用大致上是否應該維持平坦？

There's obviously going to be some expenses. But you're not going to see any huge ramp up in those types of expenses because of the utilization. But when you begin to partner there are developmental costs associated with building those types of internet connectivity and those programs. Obviously we use consultants. We don't do much of that work in house. But I would not see some dramatic increase in that expenditure.

顯然會有一些費用。但因為會運用（網路等）方式，你不會看到那類費用出現很大的跳升。不過當你開始合作時，建立那類網路連結與相關方案會有開發成本。當然我們會用顧問；我們不太在內部做那類工作。但我不預期那方面支出會有戲劇性的增加。

Great. Thank you very much.

很好。非常感謝。

(Operator Instructions) Our next question comes from Shawn Fitz from Stephens. Please, go ahead.

（接線員指示）下一個問題來自 Stephens 的 Shawn Fitz。請發問。

Hey, guys. Good afternoon and thanks for taking my question.

嗨，各位。下午好，謝謝讓我提問。

Hi, Shawn.

嗨，Shawn。

I guess first off, it looks like you all made some solid progress on the gross margin side of things and maybe you were ahead of the plan? I think my recollection is you guys talked about $5 million or so on product revenue to be at a positive gross margin. So, I guess what I'm trying to understand is maybe describing some of the things that are going on there that are driving the improvements in gross margin and then maybe describe how much additional room there is to improve that with the current generation and maybe where it can go with the next generation?

我想先問，從毛利率面來看，你們似乎取得了不錯的進展，可能也超前原本的計畫？我記得你們曾提到產品營收大約要到 500 萬美元左右才會達到正毛利。所以我想了解的是，能否描述一下目前有哪些因素在推動毛利率改善；另外也請談談在現有這一代產品下，毛利率還有多少改善空間，以及下一代可能會到什麼水準？

Yes. You kind of almost led me into that one. It's better ASPs had some impact on both the durables and actually the sensor ASP has remained basically flat but a little bit better ASP on the durables. That's largely a function of our cash business going away. We're largely a reimbursed, certainly with respect to individual patients as opposed to some of the clinics who buy equipment from us and sensors from us. We are largely reimbursed. Those prices tend to be better than our historical cash prices. And then just some efficiencies that we've realized, yield efficiencies, et cetera, that we've realized in our manufacturing operations. I would tell you that you've got the next question is what else can we expect on the gen three or the SEVEN PLUS? I think we're probably, in terms of yield efficiencies and things that we can do to control that here other than obviously additional absorption in terms of adding volume, there's not a whole lot else we can do and really we look to that next generation, that fourth generation sensor to really drive some additional cost out of the sensor itself. Again, that's probably an end of next year, early 2011 launch for that next generation sensor.

是的，你幾乎把我帶到那個答案了。較好的 ASP 對耐用品有一些影響；而感測器的 ASP 基本上維持持平，但耐用品的 ASP 稍微好一些。這主要是因為我們的現金（自費）業務正在消退。我們現在大多是走報銷模式，尤其是針對個別病患；相對地，仍有一些診所會向我們購買設備與感測器，但整體而言我們主要是報銷。這些價格通常比我們過去的現金價格更好。再來就是我們在製造營運上實現了一些效率，例如良率效率等等。至於你下一個問題：在第三代或 SEVEN PLUS 上還能期待什麼？我認為就良率效率以及我們在此能做的成本控制而言，除了透過增加產量帶來更多吸收（absorption）之外，我們能做的其實不多；我們真正期待的是下一代、第四代感測器，能在感測器本體上再帶出一些額外的成本下降。同樣地，那大概會在明年年底或 2011 年初推出下一代感測器。

Thanks, Steve. And then, as we think about the volume driver in that equation, is there a certain volume level that once you guys get to that you see a really nice step up in terms of the efficiencies of the plant of is it going to be a pretty linear process as we go forward on the production side?

謝謝，Steve。然後，當我們思考那個等式中的量能驅動因素時，是否存在某個產量門檻，一旦達到你們就會在工廠效率上看到很明顯的跳升？還是說，未來在生產端會是一個相當線性的過程？

It's pretty linear, actually. I think the guidance that we've given really, we haven't guided you along that path, but I would say it's fairly linear until you get to that million sensors a year number, a little North of million sensors a year. And you start to see the kind of gross margins that you'd like to see in a disposable medical device. That 65% ish range.

其實相當線性。我想我們給的指引——我們並沒有沿著那條路徑逐步引導你，但我會說在你達到每年 100 萬顆感測器、略高於 100 萬顆感測器之前，基本上都相當線性。當你到那個水準時，你就會開始看到你希望在一次性醫療器材上看到的那種毛利率，大約 65% 左右的區間。

Thanks, Steve. And then, Terry, just as we think -- I know you guys don't formally disclose the days usage per sensor. We try to make a guess on that front. Is there any reason to think that as you guys get more patients with insurance coverage and so forth that that number doesn't come down mostly over time? Or should we just assume on a go forward basis that it stays pretty stable?

謝謝，Steve。然後，Terry，當我們思考——我知道你們不會正式揭露每顆感測器的使用天數。我們會試著在那方面做推估。是否有任何理由認為，隨著你們有更多病患取得保險給付等等，那個數字不會隨時間大致下降？還是我們應該假設未來它會相當穩定？

I would say just whatever your modeling is probably pretty stable. One of the things we've discovered, we certainly thought originally that patients would be more motivated to change out at seven day intervals if they didn't have that out of pocket expense component. And in reality what we've found even in those that pay absolutely nothing out of pocket, they get 100% reimbursement, they're using the product beyond the labeled indication.

我會說，你的模型假設大概會相當穩定。我們發現的一件事是，我們原本確實以為，如果病患不需要負擔自付額，他們會更有動機在 7 天的週期更換。實際上我們發現，即使是完全沒有自付、獲得 100% 報銷的人，他們也會在超過標示適應症（labeled indication）的時間範圍內繼續使用產品。

The real reason -- two reasons. One, I think most importantly it's not unusual for the product beyond seven days to be at its best if you look at some of the data that has been published and presented by physicians and key opinion leaders that out at day ten we're still going very strong. And their patients' attitude is if it's going strong, why do I want to change it regardless of what the economic situation is? I think secondly to that is just the mechanical procedure of removing gone and inserting another, as simple as we have made it and we're extremely simple, but that fact is again of all the other things they have to do, this is not one of the things that if they don't have to, they're inclined to do so. I would use the same numbers going forward.

真正的原因——有兩個原因。第一，我認為最重要的是，如果你看看一些由醫師與關鍵意見領袖所發表與呈現的數據，產品在超過七天後達到最佳狀態並不罕見；在第十天時我們仍然表現非常強勁。而病人的態度是：如果它運作得很好，無論經濟情況如何，我為什麼要更換？第二點是，移除舊的並插入新的這個機械性程序；我們已經把它做得很簡單，而且我們確實非常簡單，但事實是，在他們必須做的所有其他事情之中，這並不是一件如果不必做就會想去做的事。我會在未來沿用相同的數字。

Okay. So, Terry, just as we think about kind of the strategic possibility you have there, I guess you all could have the sensor basically go dead at seven days? You already have a life that is well beyond the competition. Or is there an opportunity for you guys to basically take that 12, 13, 15 days of usage possibly and use that in the marketplace to drive incremental volumes because some of the limitations you just described?

好的。所以，Terry，當我們思考你們那邊的策略可能性時，我想你們其實可以讓感測器在七天時就基本失效？你們的使用壽命已經遠超競爭對手。或者，你們是否有機會把 12、13、15 天的使用情況拿到市場上去運用，藉此推動增量銷量，因為你剛才描述的那些限制？

We certainly debate that internally all the time. Obviously sequential generations of sensors in our belief system, all are going to get better. And I would assume that our competition is working on those types of improvements in their sensors as well. There was a published study by Dr. Gard that demonstrated ten day use. Certainly a number of physicians have pressed on trying to get that labeled indication. Right now our attitude is the product is performing at the highest level of this category.

我們內部確實一直在辯論這件事。顯然，在我們的信念體系中，感測器的連續世代都會變得更好。我也會假設競爭對手同樣在他們的感測器上做這類改進。有一項由 Gard 醫師發表的研究顯示可使用十天。當然，也有不少醫師一直推動希望能取得那樣的標示適應症。就目前而言，我們的態度是：本產品在此類別中表現處於最高水準。

The next generation, we have even greater hopes. Steve mentioned the discussion with regards to the cost factors associated with that sensor. I would tell you although the numbers are not large in terms of the human testing, but we've been in a number of humans, the performance of the sensor is remarkable and certainly better than what we're seeing with the SEVEN PLUS if that's possible. Everybody's excited about that as well. And so is that -- can we get a longer sensor and get it through the regulatory process? I don't know the answer to that. I know we can get a longer behaving sensor more accurate than everybody that has sensors out today including us, but whether or not the agency will allow a 14 day sensor or a 10 day sensor or whatever utilization is remains to be seen. Right now I don't want to give the indication to our patient population that they should be doing anything or expecting anything differently than what we're doing today.

下一代產品，我們抱有更高的期待。Steve 提到與該感測器相關的成本因素討論。我可以告訴你，雖然人體測試的樣本數不大，但我們已在多位受試者身上測試過，感測器的表現非常出色，甚至可以說比我們在 SEVEN PLUS 上看到的還要更好（如果這是可能的話）。大家也都對此感到興奮。所以問題是——我們能否做出更長效的感測器並通過法規審查？我不知道答案。我知道我們可以做出一個更長時間運作、且比目前市面上所有感測器（包括我們自己）都更準確的感測器，但主管機關是否會允許 14 天感測器、10 天感測器或任何使用天數，仍有待觀察。現在我不想讓我們的病患族群以為他們應該做任何事，或期待與我們今天所做的不同。

Great. Last question, Terry. Just if we step back and kind of broadly think about the accuracy of all kind of the glucose measuring mechanisms that are in the marketplace, I guess we're hearing that the ISO standard could be progressing to maybe a 15-15 type of goal from 20-20. Could you talk about the opportunities or threats that presents for your business? And then maybe talk about on the MARD front, where you guys are now, maybe where you could go with future generation devices and at what point -- where would MARD have to go for your guys to actually be able to dose -- use that measurement as a dosing point?

很好。最後一個問題，Terry。若我們退一步、從更宏觀的角度來看市面上各種血糖量測機制的準確度，我想我們聽到 ISO 標準可能會從 20-20 推進到類似 15-15 的目標。你能談談這對你們業務帶來的機會或威脅嗎？另外也請談談在 MARD 方面，你們目前的水準、未來世代裝置可能達到的水準，以及在什麼點——MARD 必須到什麼程度，你們才真的能夠用該量測結果來做劑量調整——把那個量測當作給藥依據？

There's actually three questions in there that I'll have answer for. The first one with regards to the ISO requirements going to 15-15, if we look at the hospital sensor as an example, we're already far beyond that in terms of accuracy versus YSI. It has no bearing and in fact if anything it's more of a yahoo because we are so much better than the current commercial sensors that are used in the hospital setting in that comparison.

你這裡其實有三個問題，我都會回答。第一個，關於 ISO 要求走向 15-15，如果以醫院用感測器為例，我們相對於 YSI 的準確度早已遠遠超過那個標準。這對我們沒有影響；如果真要說，反而更像是一個「好消息」，因為在那樣的比較下，我們比目前醫院環境中使用的商用感測器好太多了。

If you remember, we were 95% within ISO standards and 100% in zone A even using the Clarke Error Grid. So, that's one issue. Now expanding to the ambulatory sensor, it really doesn't have much impact. I think if you really look at the testing mechanism done by most of the SMBG companies -- Johnson & Johnson, Roche, Abbott, Beyer, if you look at their data, they're probably all on the bench top meet 15-15. I think what happens is in the hands of the user and we've certainly seen that, that you start stacking variables on top and that becomes more of a user situation than it does actually the technology itself. So, I don't even think that has a huge amount of bearing on what we're doing.

如果你還記得，我們有 95% 符合 ISO 標準，且即使使用 Clarke Error Grid 也有 100% 落在 A 區。這是一個面向。接著擴展到院外（ambulatory）感測器，其實影響不大。我認為如果你真的去看多數 SMBG 公司的測試機制——Johnson & Johnson、Roche、Abbott、Beyer——看他們的數據，他們在實驗台（bench top）上大概都能符合 15-15。我認為真正發生的是，在使用者手上——我們也確實看到了——你會把各種變數疊加上去，這就更像是使用者情境的問題，而不是技術本身的問題。所以我甚至不覺得這對我們正在做的事情有很大的影響。

The third, in your question with regards to MARD as it relates to insulin dosing, I think, Shawn, all you have to do is demonstrate that -- I say all you have to do. Easily said. Harder done. But all you have to do is demonstrate sufficient improvement and lack of problems associated with dosing off of ISF. We know today and I don't know what the percentage of our patients, we routinely are told that by physicians, by patients themselves, that once they've gotten to a degree of being comfortable with ISF glucose from a CGM product that they will at times dose off of that. That's not our recommendation. Our recommendation is always to do a confirmatory finger stick measurement before you make an insulin dose adjustment. But that said, the reality is something different. I'm sure the FDA is well aware of that and that may be some of the impetus to get more refinement. I would also say that in that vein, look, you're getting a measurement every five minutes or an output from a measurement that goes on continuously versus episodic measurement from even if it is required to be more accurate, we're giving a lot more information to the patient to make better decisions. I think we have to do definitive clinical trials that generate empirical data to demonstrate that we do no harm. I think the agency has made it pretty clear to companies.

第三個，你問到 MARD 與胰島素給藥的關係，我想，Shawn，你要做的就是證明——我說「要做的就是」。說起來容易，做起來更難。但你要做的就是證明：相較於以 ISF 進行給藥，準確度有足夠的改善，且不會帶來與以此給藥相關的問題。我們知道今天——我不知道我們病患的比例是多少——我們經常從醫師與病患本人那裡聽到，一旦他們對 CGM 產品提供的 ISF 血糖值達到一定程度的熟悉與信任，他們有時會直接依此調整劑量。這不是我們的建議。我們的建議一向是在調整胰島素劑量前，先用指尖採血做確認性量測。但即便如此，現實情況並不相同。我相信 FDA 很清楚這點，而這也可能是推動更精細化的一些動力。我也想說，在這個脈絡下，你看，我們每五分鐘就提供一次量測值——或是來自持續量測的輸出——相較於間歇式量測，即便後者被要求更精準，我們仍然提供給病患更多資訊來做更好的決策。我認為我們必須做明確的臨床試驗，產生實證數據來證明我們不會造成傷害。我想主管機關已經對各家公司說得很清楚了。

Where can we go? We certainly believe that this technology can get to single digit MARD on a routine basis. We obviously see that with the hospital sensor. We have future generations that we have talked about previously that incorporate the best aspects of the hospital sensor with the best aspects of our ambulatory sensor so you can logical derive out of that that we believe or have demonstrated in at least an N of one that we are down in that level that we believe the agency would approve. Getting it from an R&D project to a commercial enterprise with the type of manufacturing, nothing in the manufacturing environment is ever linear, unfortunately. So, something that you do in an R&D lab does not automatically translate to the manufacture ability on a grander scale. I think everybody, all the companies in this space, have experienced those challenges and certainly I did when I was at that other Company and we saw Abbott have that problem earlier and DexCom from STS-3 to STS-7 had their challenges as well. It remains to be seen. We're certainly working on it and I've got to assume that Actronic and Abbott and others that are known or unknown in this space are all working to that same degree.

我們能走到哪裡？我們確實相信這項技術可以在常態情況下達到個位數的 MARD。我們在醫院用感測器上顯然已經看到了。我們也有先前談過的未來世代，會把醫院用感測器的最佳特性與我們院外感測器的最佳特性結合起來，所以你可以合乎邏輯地推導出：我們相信——或至少在 N=1 的情況下已經證明——我們已經降到那個我們認為主管機關會核准的水準。把它從研發專案推進到商業化企業、並具備那種製造規模的製造能力，製造環境裡沒有任何事情是線性的，遺憾的是。也就是說，你在研發實驗室做到的事情，不會自動轉換成可在更大規模下製造。我想這個領域的所有公司都經歷過這些挑戰；我在之前那家公司時也確實如此。我們也看到 Abbott 早期遇到那個問題，而 DexCom 從 STS-3 到 STS-7 也有他們的挑戰。結果如何仍有待觀察。我們當然正在努力，我也必須假設 Actronic、Abbott，以及這個領域裡已知或未知的其他公司，都在以同樣的程度努力。

Okay, Terry. Great. Thanks, you guys, for the time.

好的，Terry。很好。謝謝你們撥冗。

You bet.

不客氣。

We have no further questions at this time. Mr. Gregg, do you have any final remarks?

目前沒有進一步的問題。Gregg 先生，您有任何最後的補充嗎？

I do, Operator. Again, thanks for joining us on today's call. Obviously we're excited about the first three quarters of the year. We're even more excited about the fourth quarter as word gets out. We continue to see the utilization of CGM grow not only in the traditional endocrinology diabetology space, but for the first time we're actually experiencing early support in primary care as the benefits of CGM are reaching a much broader audience. DexCom will continue to drive the concept of convenience, performance, and simplicity in its current and future product platforms. I have touched on some of the areas we believe CGM can positively impact. Our philosophy is very simple. Malglycemia or the inability to maintain a person's glucose levels within an acceptable range often results in complications. The risks associated with exposure to malglycemia effect more than those with Type 1 diabetes and we are committed to driving awareness of our CGM technology as both a behavior modification tool as well as a leading continuous glucose monitoring system. Thank you.

有的，接線員。再次感謝各位參加今天的電話會議。顯然，我們對今年前三季的表現感到振奮。隨著口碑傳開，我們對第四季更是更加期待。我們持續看到 CGM 的使用量成長，不僅在傳統的內分泌與糖尿病學領域，而且首次在基層醫療（primary care）也開始出現早期支持，因為 CGM 的效益正在觸及更廣泛的受眾。DexCom 將持續在現有與未來的產品平台上推動「便利性、效能與簡易性」的概念。我已提到一些我們相信 CGM 能帶來正面影響的領域。我們的理念非常簡單：Malglycemia，或無法將個人的血糖維持在可接受範圍內，往往會導致併發症。暴露於 malglycemia 的相關風險，影響的不僅是第一型糖尿病患者；我們致力於提升對我們 CGM 技術的認知，使其既是行為改變工具，也是領先的連續血糖監測系統。謝謝。

Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for participating. You may all disconnect.

謝謝。各位女士、先生，今天的會議到此結束。感謝各位參與。各位現在可以掛線。