德康醫療 (DXCM) 2010 Q4 法說會逐字稿

Please stand by for realtime transcript.Welcome to the DexCom earnings call. My name is Monica 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 answer session. Please note that this conference is being recorded. I would now like to turn the call over to Terry Gregg. You may begin.

請稍候以取得即時逐字稿。歡迎參加 DexCom 財報電話會議。我是 Monica，將擔任今天會議的接線員。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，本次會議將被錄音。現在我想把電話交給 Terry Gregg。您可以開始了。

Thank you operator and thank you audience for joining us on our fourth quarter conference call. Joining me today for the call, Steve Pacelli, our Chief Operating Officer and Jess Roper, Chief Financial Officer of the Company. Our agenda will include a financial review by Jess, followed by commercial update, looking at our clinical and regulatory update on our Gen4 sensor technology, our insulin pump partnerships, and our Edwards collaboration. Then we will entertain a question-and-answer period following our prepared remarks. First, Mr Pacelli, will you please take care of our Safe Harbor statement?

謝謝接線員，也謝謝各位聽眾參加我們的第四季電話會議。今天與我一同出席的有：營運長 Steve Pacelli，以及公司財務長 Jess Roper。我們的議程將先由 Jess 進行財務回顧，接著是商業進展更新，並說明我們 Gen4 感測器技術的臨床與法規進度、我們的胰島素幫浦合作夥伴關係，以及與 Edwards 的合作。之後在我們的準備發言結束後，將進行問答環節。首先，Pacelli 先生，請您宣讀我們的安全港聲明，好嗎？

Sure. Thanks, Terry. Some of the statements that we will make in today's call may constitute forward-looking statements. These statements reflect managements expectations about future events, operating plans and performance and speak only 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 10-K, our quarterly reports on Form 10-Q and our other reports as filed with the SEC. We undertake no obligation to update publicly or revise these forward-looking statements for any reason. Terry?

好的。謝謝你，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。這些陳述反映管理階層對未來事件、營運計畫與績效的預期，且僅以本次會議當日為準。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 SEC 提交之報告中的「風險因素」及其他章節詳述。我們不承擔因任何原因而公開更新或修訂這些前瞻性陳述的義務。Terry？

Thank you. Jess, why don't you get into it and let's talk about the quarter.

謝謝。Jess，你就開始吧，我們來談談本季表現。

Thank you, Terry. DexCom finished the year strong, generating $13.6 million in product revenue for the fourth quarter of 2010, compared to $6.6 million for the same quarter in 2009, an increase of 105%. Sequentially product revenue for Q4 increased 26% from the prior quarter. During Q4, we shipped approximately 4,850 systems, representing a 24% over the prior quarter. Sequentially, sensor revenues were up 27%. Year-over-year, product revenue grew by 123% and totaled $40.2 million for 2010, compared to $18 million in 2009.

謝謝你，Terry。DexCom 以強勁表現結束本年度，2010 年第四季產品營收為 1,360 萬美元，較 2009 年同期的 660 萬美元成長 105%。以季比季來看，第四季產品營收較前一季成長 26%。第四季期間，我們出貨約 4,850 套系統，較前一季增加 24%。以季比季來看，感測器營收成長 27%。以年比年來看，產品營收成長 123%，2010 年合計達 4,020 萬美元，較 2009 年的 1,800 萬美元增加。

Total revenue for the fourth quarter of 2010 was $15.6 million, compared to $11.7 million in Q3 and included $2 million in development, grant, and other revenue from our development and collaboration agreements. Included within the $2 million was $1 million in milestone revenue that we earned following completion of a development milestone and our collaboration with Animas. Our product gross margin totaled $5.9 million, or 44% for Q4, compared to $3.8 million, or 35% sequentially from the prior quarter. We continue to see an improved product margin with the increase in the volume of product sales.

2010 年第四季總營收為 1,560 萬美元，較第三季的 1,170 萬美元增加，其中包含來自我們開發與合作協議的 200 萬美元開發收入、補助金及其他收入。在該 200 萬美元中，包含我們在與 Animas 的合作中完成一項開發里程碑後所取得的 100 萬美元里程碑收入。第四季產品毛利為 590 萬美元，毛利率 44%，相較前一季的 380 萬美元、毛利率 35% 有所提升。隨著產品銷售量增加，我們持續看到產品毛利率改善。

As discussed on our last conference call, we expected to see a small incremental improvement in product margin during Q4 as we increased both hardware inventory levels in anticipation of Flextronics, our contact manufacturer, relocating our product line to China. And also increased sensor inventory levels to account for shut down for internal sensor manufacturing lines for approximately 2 weeks during Q1 of 2011 to perform upgrades and maintenance. And we also expected a slight softening of our margin in Q1 of 2011 as these inventory levels are managed down. The increase in inventory during Q4 had a nominal, favorable impact of approximately 1% on product margins. We still expect a small negative impact to margins in Q1 of 2011 as we curtail inventory levels.

如同我們在上次電話會議中所討論的，我們預期第四季產品毛利率會有小幅增量改善，原因是我們提高了硬體庫存水位，以因應我們的代工製造商 Flextronics 將產品線移轉至中國；同時也提高了感測器庫存水位，以因應 2011 年第一季我們內部感測器製造線將停機約兩週以進行升級與維護。我們也預期在 2011 年第一季，隨著這些庫存水位逐步回落，毛利率會略有走弱。第四季庫存增加對產品毛利率帶來名目上的正面影響，約為 1%。我們仍預期在 2011 年第一季，隨著我們抑制庫存水位，毛利率將受到小幅負面影響。

Sequentially research and development expense increased 12% and totaled $6.9 million for Q4, compared to $6.2 million for the quarter -- for the prior quarter 2010. R&D costs increased sequentially as we incurred more consulting expenses and higher salaries relating to increased efforts towards developing our next generation ambulatory products. During 2011 we expect quarterly R&D expense to remain relatively flat compared to our Q4 2010 R&D expense as we move our fourth generation system and partnership products through the regulatory process to commercialization, and we continue to make progress on our fifth generation system.

以季比季來看，研發費用增加 12%，第四季合計為 690 萬美元，較 2010 年前一季的 620 萬美元增加。研發成本季增，主要因我們產生較多顧問費用，以及因加大投入開發下一代可攜式產品而帶來的薪資增加。2011 年期間，隨著我們推進第四代系統與合作夥伴產品通過法規流程並邁向商業化，同時持續推進第五代系統，我們預期各季研發費用相較 2010 年第四季將大致持平。

Sequentially, selling, general and administrative expense fell 4% and totaled $10.0 million in Q4 of 2010, compared to $10.4 million in the prior quarter. The decrease in expenses was primarily due to lower tradeshow and marketing related costs. For full-year 2011, we expect SG&A expense to increase by approximately 20% compared to full-year 2010 as we continue to expand our sales and customer support efforts to support our revenue growth.

以季比季來看，銷售、一般及行政費用（SG&A）下降 4%，2010 年第四季合計為 1,000 萬美元，較前一季的 1,040 萬美元降低。費用下降主要由於展會及行銷相關成本較低。就 2011 全年而言，隨著我們持續擴大銷售與客戶支援投入以支撐營收成長，我們預期 SG&A 費用將較 2010 全年增加約 20%。

Quarter to quarter, our net loss declined 27% and totaled $9.8 million for the fourth quarter 2010, compared to $13.4 million during the third quarter of 2010. Our net loss for Q4 included $3 million in non-cash expenses, centered primarily on share-based compensation. The loss per share for the quarter was $0.16. Our net loss for the full year 2010 was $55 million, or $0.97 per share, and included $22 million in non-cash expenses centered primarily on share-based compensation and debt conversion costs.

以季比季來看，我們的淨損下降 27%，2010 年第四季淨損為 980 萬美元，較 2010 年第三季的 1,340 萬美元減少。第四季淨損包含 300 萬美元非現金費用，主要為股份基礎給付。該季每股虧損為 0.16 美元。2010 全年淨損為 5,500 萬美元，或每股 0.97 美元，其中包含 2,200 萬美元非現金費用，主要為股份基礎給付及債務轉換成本。

We ended the year with $49 million in cash, restricted cash and marketable securities and we have working capital of $51 million. Note that our cash utilization in Q4 2010 was slightly higher than the past several quarters based on our increased inventory builds and certain one-time information technology and facilities costs associated with our new building. We expect our cash utilization to normalize going forward. I would like to now turn it back to our President and CEO, Terry Gregg.

我們在年底時持有 4,900 萬美元的現金、受限制現金及有價證券，營運資金為 5,100 萬美元。請注意，2010 年第四季的現金使用量較過去幾季略高，原因在於我們增加庫存建置，以及與新大樓相關的某些一次性資訊科技與設施成本。我們預期未來現金使用量將回歸正常。現在我想把電話交回給我們的總裁暨執行長 Terry Gregg。

Thanks, Jess. Certainly we are proud to report that we achieved another quarter of sequential growth during the fourth quarter 2010 as we again exceeded analyst consensus estimates for starter kit sales, product revenue and we achieved a positive product gross margin of 44% for the quarter. As we have discussed on numerous occasions, the fourth quarter is typically the strongest of the year for those in the durable medical equipment business as annual deductibles have generally been met, any patients can obtain the product for little or no out-of-pocket expense, and flexible spending account deadlines loom so patients who participate in these employer-sponsored programs must utilize any excess funds they have saved prior to year end.

謝謝你，Jess。我們當然很自豪地報告，2010 年第四季我們再次達成連續成長的一季，起始套件銷售、產品營收均再次超越分析師一致預期，且本季產品毛利率達到 44% 的正值。正如我們多次討論的，對耐用醫療設備產業而言，第四季通常是一年中最強勁的季度，因為年度自付額通常已達成，患者往往可以用很少或無自付費用取得產品；同時彈性支出帳戶（FSA）的截止期限將至，參與這些雇主贊助計畫的患者必須在年底前使用其先前儲蓄的任何剩餘資金。

We attribute our strong performance during the fourth quarter both to typical Q4 seasonality, as well as to our stepped up efforts to increase awareness and demand for our CGM products. Key metrics from the fourth quarter include the following. Total product revenue grew approximately 26% sequentially from Q3 2010 to Q4 2010, and was up 123% compared to the fourth quarter of 2009. We sold approximately 4,850 SEVEN PLUS starter kits in the fourth quarter. Equaling a 24% increase in starter kit sales compared to third quarter 2010, and up 70% compared to the fourth quarter of 2009. And sensor revenues grew 27% on a quarter to quarter basis as we continued to see growing patient adherence to CGM therapy.

我們將第四季的強勁表現歸因於典型的第四季季節性因素，以及我們加大提升對 CGM 產品認知與需求的努力。第四季的關鍵指標包括：產品營收自 2010 年第三季至第四季季增約 26%，且較 2009 年第四季年增 123%。我們在第四季售出約 4,850 套 SEVEN PLUS 起始套件，較 2010 年第三季起始套件銷售增加 24%，且較 2009 年第四季增加 70%。此外，隨著我們持續看到患者對 CGM 治療的依從性提升，感測器營收以季比季成長 27%。

Obviously our strong Q4 performance begs the question, what will our growth be in 2011? At the JPMorgan healthcare conference in January, we issued guidance of estimated full-year 2011 product revenue ranging from $67.5 million to $72.5 million and we remain comfortable with that guidance. With that said, I remind investors that the first quarter is traditionally a seasonally slow quarter in the durable medical equipment business as annual insurance deductibles reset. And this year in particular, patients are reporting sharp increases in the deductible amount as employers ask their employees to share the burden of increased health care costs.

顯然，我們第四季的強勁表現引出一個問題：2011 年我們的成長會是多少？在 1 月的摩根大通醫療健康大會上，我們發布指引，預估 2011 全年產品營收介於 6,750 萬至 7,250 萬美元之間，我們仍對該指引感到有信心。儘管如此，我要提醒投資人，對耐用醫療設備產業而言，第一季傳統上是季節性較疲弱的一季，因為年度保險自付額會重新計算。尤其在今年，患者回報自付額金額大幅上升，因雇主要求員工分擔增加的醫療保健成本負擔。

At this point, we are tracking towards a relatively flat first-quarter sequentially in terms of product revenue. Like the first quarter 2010, we saw in January and much of February this year, a short-term slowdown in patient's willingness to complete their purchases until such time as their deductibles were appropriately reduced. Fortunately, I do not believe we are lacking in demand as evidenced by our pipeline of new patient referrals as we close out the first quarter.

在此時點，就產品營收而言，我們正朝向第一季相較前一季大致持平的方向發展。如同 2010 年第一季，今年 1 月以及 2 月的大部分時間，我們看到病患在其自付額（deductibles）尚未適當降低之前，完成購買的意願出現短期放緩。所幸，從我們在第一季結束前的新病患轉介管線來看，我不認為我們的需求不足。

Looking out to the year ahead, among our highest priorities in 2011 is to continue to improve our patients experience with the DexCom SEVEN PLUS, thereby increasing their reliance on our system as a key component of their overall diabetes management. We dub 2010 the year of the patient and we expect more of the same in 2011 as we look to expand our direct to patient initiative, particularly in the social networking space, to move DexCom ever closer to that critical point where patients are demanding CGM and calling out our products by brand name when they visit their doctor.

展望未來一年，2011 年我們的最高優先事項之一，是持續改善病患使用 DexCom SEVEN PLUS 的體驗，藉此提高他們將我們的系統視為整體糖尿病管理關鍵組成的依賴程度。我們將 2010 年稱為「病患之年」，而在 2011 年，隨著我們擴大直接面向病患（direct to patient）的計畫，特別是在社群網路領域，我們預期仍將延續同樣的趨勢，讓 DexCom 更接近那個關鍵時點：病患開始主動要求使用 CGM，並在就醫時指名要我們的品牌產品。

Our fourth-quarter performance speaks well of our small but highly effective field sales force, which continues to grow more efficient as we compete effectively with our sales force of much larger entities. In order to expand coverage into areas we have identified as under served markets of opportunity, we have recently completed a modest expansion of our US field sales force. We will also continue to explore one or more partnership arrangements involving the promotion of our standalone CGM systems in order to supplement our direct sales force without significant additional expense. This strategy, coupled with greater awareness of CGM as an important tool, will continue to drive adoption.

我們第四季的表現充分反映出我們規模不大但極具效率的外勤銷售團隊之成效；在與規模更大的企業銷售團隊競爭時，我們的團隊持續提升效率並有效競爭。為了將覆蓋範圍擴展至我們所辨識的服務不足、具機會的市場區域，我們近期已完成美國外勤銷售團隊的小幅擴編。我們也將持續探索一項或多項合作夥伴安排，涉及推廣我們的獨立式 CGM 系統，以在不顯著增加額外費用的情況下補強我們的直銷團隊。此一策略，加上對 CGM 作為重要工具的更高認知，將持續推動採用。

Shifting to an update on clinical and regulatory affairs, we are very pleased to report that we have recently received CE Mark approval for our four generation ambulatory sensor. We expect the first commercial launch of this sensor to occur in Europe as part of an integrated system launch with Animas during the first half of 2011, subject to receive a CE Mark approval of the integrated system by Animas.

接著更新臨床與法規事務方面的進展，我們非常高興地報告，我們近期已取得第四代可攜式（ambulatory）感測器的 CE Mark 核准。我們預期此感測器的首次商業上市將於 2011 年上半年在歐洲進行，並作為與 Animas 的整合系統上市的一部分，惟須視 Animas 是否取得該整合系統的 CE Mark 核准而定。

With respect to our PMA supplement pending before the FDA for Gen4, we have had constructive discussions with the agency over the past couple of months and we believe we understand what the FDA will require of us in conducting an additional clinical trial to support the approval of Gen4. Of particular note, the FDA now deems the manipulation of the clinical trial subjects glucose levels during the trial to be a significant risk, therefore, requiring an approved IDE prior to conducting such a trial. Previously, these actions were deemed non-significant risks by the agency.

就我們針對 Gen4 向 FDA 提交、目前待審的 PMA 補充申請而言，過去幾個月我們與主管機關進行了具建設性的討論，並且我們相信已理解 FDA 在進行額外臨床試驗以支持 Gen4 核准方面對我們的要求。特別值得注意的是，FDA 現在認定在試驗期間操控受試者的血糖水平屬於重大風險，因此在進行此類試驗之前，必須先取得核准的 IDE。先前，主管機關將這些行為視為非重大風險。

In response, we have filed our clinical protocol with the FDA in a pre-ID submission and expect to file a formal IDE and reach agreement with the FDA on study design to enable us to commence the required trial within approximately 90 days. We believe this timing will keep us on track to complete the trial and file an amendment to our fourth-generation PMA supplement late Summer. Although we cannot predict the ultimate decision or timing for a decision by the FDA, we believe this amended fourth-generation submission will be incorporated into the current 180 day review cycle, give or take a few months. Accordingly, we continue to believe we will be in a position to launch yet another best in class CGM system late this year, or beginning of next year in the United States.

因此，我們已在 pre-ID 提交中向 FDA 遞交臨床試驗方案，並預期將提出正式 IDE，且與 FDA 就研究設計達成一致，使我們能在約 90 天內啟動所需試驗。我們相信此時程將使我們維持進度，在夏末完成試驗並就第四代 PMA 補充申請提交修正案。雖然我們無法預測 FDA 最終決定或作出決定的時間點，但我們相信此經修正的第四代提交案將被納入目前 180 天的審查週期，前後可能差幾個月。因此，我們仍相信我們將有能力在今年稍晚或明年年初於美國推出另一套同級最佳（best in class）的 CGM 系統。

Shifting to our combination products, the regulatory environment facing the insulin pump market remains uncertain. As we discussed during our last earnings call, this changing landscape has negatively impacted approval timelines in the US for our CGM enabled insulin pump systems with Animas and Insulet.

轉到我們的組合產品（combination products），胰島素幫浦市場所面臨的法規環境仍不明朗。如同我們在上次財報電話會議中所討論的，這個變動中的環境已對我們與 Animas 及 Insulet 的 CGM 整合胰島素幫浦系統在美國的核准時程造成負面影響。

With respect to our integrated system with Animas Corporation, which has now been branded the [BYB], we have had productive discussions with the FDA concerning the nature of a human factor study and associated technical information required by the FDA to support approval of the system. On a positive note, our application for CE Mark approval of the integrated system remains under review by the Animas notified body and we continue to expect that Animas will launch the combination product in Europe during the first half of this year.

就我們與 Animas Corporation 的整合系統而言，該系統現已以 [BYB] 為品牌，我們已就 FDA 為支持系統核准所要求的人因（human factor）研究性質及相關技術資訊，與 FDA 進行了富有成效的討論。正面的是，我們針對該整合系統的 CE Mark 核准申請仍由 Animas 的公告機構（notified body）審查中，我們仍預期 Animas 將於今年上半年在歐洲推出該組合產品。

Concerning the integrated system with Insulet, we have collectively decided with Insulet to withdraw our pending PMA submission seeking approval for a system that combines our SEVEN PLUS with Insulet's current commercial OmniPod system in favor of developing an integrated system that combines our fourth-generation system with Insulet's next-generation, smaller OmniPod system. While the teams have not yet established a detailed project plan for this next generation product, we roughly anticipate that an FDA submission could occur sometime in the first half of 2012.

關於與 Insulet 的整合系統，我們已與 Insulet 共同決定撤回目前待審的 PMA 申請；該申請原本尋求核准一套將我們的 SEVEN PLUS 與 Insulet 現行商用 OmniPod 系統結合的系統。我們改為開發一套整合系統，將我們的第四代系統與 Insulet 下一代、更小型的 OmniPod 系統結合。雖然團隊尚未建立此下一代產品的詳細專案計畫，但我們初步預期 FDA 送件可能會在 2012 年上半年某個時間點進行。

We also mentioned during our last earnings call that we had received requests from the FDA for additional clinical data in connection with our 510 K submission for GlucoClear, our first generation IV-based, continuous glucose monitoring system developed in collaboration with Edwards Lifesciences. This first-generation system received CE Mark approval in 2009 and Edwards commercialized GlucoClear on a limited market development basis, and a few markets in the EU during 2010. At this point, the path to regulatory approval of our 510 K submission for the first-generation GlucoClear system remains unclear. We expect to focus our development efforts going forward on the second-generation GlucoClear system with the intention of filing for CE Mark approval and supporting Edwards and launching that product in Europe early next year.

我們也在上次財報電話會議中提到，針對 GlucoClear（我們與 Edwards Lifesciences 合作開發的第一代、以靜脈（IV）為基礎的連續血糖監測系統）的 510 K 申請，FDA 已要求提供額外臨床數據。此第一代系統於 2009 年取得 CE Mark 核准，Edwards 並在 2010 年以有限的市場開發方式商業化 GlucoClear，並在歐盟的少數市場推出。就目前而言，我們第一代 GlucoClear 系統之 510 K 申請取得法規核准的路徑仍不明確。我們預期未來將把研發重點放在第二代 GlucoClear 系統，目標是申請 CE Mark 核准、支援 Edwards，並於明年初在歐洲推出該產品。

Additionally, we expect to work with the agency to better understand clinical protocols, systems testing and the like to meet the FDA's evolving requirements for glucose sensing in the hospital sector here in the United States. This regulatory environment is difficult and I remain extremely proud of our regulatory team and their continued ability to foster a cooperative relationship with the agency, even in this era of enhanced scrutiny and evolving regulation.

此外，我們預期將與主管機關合作，以更深入了解臨床試驗方案、系統測試等要求，以符合 FDA 對美國醫院領域葡萄糖感測日益演進的要求。此法規環境充滿挑戰，而我仍為我們的法規團隊感到非常自豪；即使在審查更為嚴格、法規持續演變的時代，他們仍能持續與主管機關建立並維持合作關係。

Although we are highly focused on moving the fourth-generation system and our partnership products through the regulatory process to commercialization, we continue to make progress on our fifth-generation sensor system as we believe it may serve as a platform for both an advanced ambulatory sensor, as well as a subcutaneous sensor for use in the hospital outside of critical care. We continue to conduct human feasibility trials on the Gen5 system, particularly in the step down environments and remain very enthusiastic by the accuracy of this technology and this challenging environment. As a Company, we cannot lose sight of the value of innovation to the development and growth of the CGM category, and as critical for us to maintain our technology advantage over our competition.

儘管我們高度專注於推動第四代系統及我們的合作夥伴產品通過法規流程並實現商業化，我們在第五代感測器系統上也持續取得進展；我們相信它可作為平台，同時支援先進的可攜式（ambulatory）感測器，以及用於醫院非重症照護（outside of critical care）的皮下感測器。我們持續進行 Gen5 系統的人體可行性試驗，特別是在下轉照護（step down）環境中，並且對此技術在這個具挑戰性的環境下所展現的準確度感到非常振奮。就公司而言，我們不能忽視創新對 CGM 類別發展與成長的價值，且這對我們維持相對競爭對手的技術優勢同樣至關重要。

We believe by focusing on the core business strategy outlined above, we will continue to drive CGM closer to becoming the standard of care in diabetes management. In November, we completed a follow on public offering of our common stock raising net proceeds of approximately $33 million. We believe we have appropriately addressed any remaining balance sheet concerns and together with our cash on hand at year end and the additional proceeds we expect to receive from Edwards and Animas over the course of this year and next, we believe we have sufficient resources to take us to profitability.

我們相信，透過聚焦於上述核心業務策略，我們將持續推動 CGM 更接近成為糖尿病管理的照護標準（standard of care）。11 月，我們完成普通股後續公開發行（follow on public offering），募集淨收益約 3,300 萬美元。我們相信已適當解決任何剩餘的資產負債表疑慮；再加上年末手頭現金，以及我們預期在今年與明年期間將自 Edwards 與 Animas 取得的額外款項，我們相信我們擁有足夠資源邁向獲利。

We continue to see the role of CGM expanding as an integral tool in the armamentarium of tools to help patients with diabetes achieve better control of their glucose levels. At the recent ATTD conference last month, the major symposium focused on CGM and its benefit in improving outcome. More than 1,400 healthcare professionals from 77 countries in attendance at ATTD attests to the desire to acquire greater knowledge of this key technology. We have made great progress in simplifying the educational and training requirements for our technology, clearly demystifying some earlier beliefs about CGM. Our core message of convenience, performance and simplicity continues to resonate extremely well with patients and healthcare providers.

我們持續看到 CGM 的角色正在擴大，成為協助糖尿病患者更好控制血糖水平之工具組合（armamentarium）中的重要工具。在上個月最近的 ATTD 會議上，主要研討會聚焦於 CGM 及其在改善結果方面的效益。ATTD 共有來自 77 個國家的 1,400 多位醫療專業人士與會，證明了人們渴望獲得更多關於這項關鍵技術的知識。我們在簡化本技術的教育與訓練要求方面已取得重大進展，並清楚地消除了一些早期對 CGM 的迷思。我們以便利性、效能與簡易性為核心的訊息，持續在病患與醫療照護提供者之間引起極佳共鳴。

Our net promoters score, a customer loyalty metric obtained by asking a simple question, how likely is it that you would recommend our Company to a friend or colleague is the highest in the industry. And independent survey data reveals that DexCom patients wear our sensors longer and more frequently than our competition, thus gaining the true benefit of CGM as demonstrated in multiple, randomized clinical trials.

我們的淨推薦值（net promoters score）——一項透過詢問一個簡單問題所取得的客戶忠誠度指標：「您有多大可能向朋友或同事推薦我們公司？」——為業界最高。此外，獨立調查數據顯示，DexCom 病患配戴我們的感測器時間更長、頻率更高，勝過競爭對手，因此能獲得 CGM 的真正效益；這一點已在多項隨機臨床試驗中得到證明。

I think it goes without saying the US regulatory environment is evolving and is certainly challenging. We continue to work cooperatively and aggressively with the agency in an effort to move our technology to commercialization in a timely manner. Every day we improve the lives of people with diabetes. We present incidences of hypo and hyperglycemia. We save lives and we empower patients to have greater control of their glucose levels which translates into better outcomes. It is extremely rewarding to receive e-mails and letters from patients and their loved ones thanking DexCom for giving them back their lives and allowing them a world of near normalcy.

我想不言而喻，美國的監管環境正在演變，且確實充滿挑戰。我們持續以合作且積極的方式與主管機關合作，力求及時將我們的技術推向商業化。每天，我們都在改善糖尿病患者的生活。我們呈現低血糖與高血糖的發生事件。我們拯救生命，並賦能患者更有效掌控其血糖水準，進而帶來更佳的治療結果。能收到患者及其親友寄來的電子郵件與信件，感謝 DexCom 讓他們重拾生活、並得以回到近乎正常的世界，這令人感到無比欣慰。

In the ICU in the European sector, we have witnessed an improvement in patients outcomes from moving patients out of the ICU more quickly to identifying sepsis at an earlier stage so that appropriate treatment can be initiated. This is groundbreaking technology that we believe will improve outcomes and decrease costs in both non-diabetic and diabetic patients. We remain extremely committed to advancing our technology and expanding its use around the world so that the pain and suffering of diabetes can be lessened. I remind our staff daily, this is a marathon, not a sprint. We must stay the course. Thank you. I will entertain questions now.

在歐洲地區的加護病房（ICU），我們已見證患者治療結果的改善，從更快讓患者離開 ICU，到在更早期辨識敗血症以便啟動適當治療。這是一項突破性的技術，我們相信它將改善非糖尿病與糖尿病患者的治療結果並降低成本。我們仍然極度致力於推進我們的技術並擴大其在全球的使用，以減輕糖尿病帶來的痛苦與折磨。我每天都提醒同仁：這是一場馬拉松，不是短跑。我們必須堅持到底。謝謝。現在我願意回答問題。

Thank you. We will now begin the question and answer session. (Operator Instructions)Our first question comes from Thom Gunderson.

謝謝。現在我們將開始問答環節。（接線員指示）我們的第一個問題來自 Thom Gunderson。

Hi, Terry, Steve, Jess. I guess my first question would be, on the guidance for 2011 on the product revenue, Terry, do you need to add any more sales people? Does that require signing a deal with a marketing partner? And is it dependent on Animas sales in Europe in the second half?

嗨，Terry、Steve、Jess。我想我的第一個問題是，關於 2011 年產品營收的指引，Terry，你們是否需要再增加銷售人員？這是否需要與行銷合作夥伴簽署協議？另外，是否取決於 Animas 在歐洲於下半年銷售的表現？

No, if you look at it, that 67 to 72 number, Thom, was based on what we consider to be our base business and that is assuming no additional levers of the unknowns, particularly signing an additional distribution agreement or with the approval through the CE process to have Animas pumps in the EU market later this year. No, that was just our base core business. What we feel we can achieve with what we've got on hand today.

不，如果你看那個 67 到 72 的數字，Thom，那是基於我們所稱的基本業務，也就是在不動用任何額外、未知的槓桿之下所做的假設，特別是不包含簽署額外的經銷協議，或是透過 CE 流程核准讓 Animas 幫浦在今年稍晚進入歐盟市場。沒有，那只是我們的核心基本業務。我們認為以目前手上現有的資源就能達成的目標。

Okay, thanks. And then you have been selling SEVEN PLUS for a while, it's starting to go, is there any change in the adoption patterns? Any change in the types of patients that you see coming in? Are we beyond early adopters? What are your thoughts on that?

好的，謝謝。接著你們銷售 SEVEN PLUS 已有一段時間，現在開始起量了，採用模式是否有任何改變？你們看到進來的患者類型有任何變化嗎？我們是否已經超越早期採用者？你們對此有何看法？

It is always hard to tell. We don't really survey the customers and ask them where they are at on the adoption curve. I would say, certainly just by virtue of where the patients are coming from, in addition to the traditional people that we call on as I've mentioned in the third quarter earnings call, we are continuing to see patients come from outside our range of call points. We are seeing patients come from non-endocrinology sources as well which gives you an indication that the adoption is moving broader than what you would consider to be in the traditional sense. Our survey patients continues to represent about 60% of them are on pumps, 40% on and MDI and that has remained consistent over the past, around 18 months. So, we are addressing both of those insulin using markets.

這一直很難判斷。我們並沒有真正去調查客戶，問他們在採用曲線上處於哪個位置。我會說，當然，僅從患者來源來看，除了我們傳統拜訪的族群之外——如我在第三季財報電話會議中提到的——我們持續看到患者來自我們既有拜訪點範圍之外。我們也看到患者來自非內分泌科的來源，這顯示採用正在擴大到更廣的範圍，而不僅是傳統意義上的族群。我們的調查顯示，患者中約 60% 使用幫浦，40% 使用多次每日注射（MDI），而這個比例在過去約 18 個月一直保持一致。因此，我們同時服務這兩個使用胰島素的市場。

Okay. Last question about tipping point and market penetration. Do you still believe the tipping point being in this 7% to 8% range and do you think that we get there in 2011?

好的。最後一個問題是關於臨界點與市場滲透率。你仍然認為臨界點在 7% 到 8% 這個區間嗎？你覺得我們在 2011 年能達到嗎？

I certainly think it is in that range, looking at do we achieve that this year, it is always hard, my crystal ball is not that clear at this point, but certainly I think we are moving closer to that and we will be there closer to the end of the year. I think one of the challenges in that is DexCom has been the leader of talking about CGM and pushing that ball down the field. We have often commented that sure would have been nice to have help from the competition to spend more efforts to build in the product category. That didn't happen. So, we are really shouldering the burden of that effort. Hopefully there'll be others that will help us drive that and that is really what it has got to take as a category to get more commercial muscle moving towards that end. I do see signs of that by the competition and I am certainly glad to see those efforts.

我確實認為是在那個區間。至於今年是否能達到，總是很難說，我的水晶球目前也沒那麼清楚；但我確信我們正逐步接近，並且在接近年底時會更接近那個水準。我認為其中一個挑戰是，DexCom 一直是談論連續血糖監測（CGM）並推動這個領域向前發展的領導者。我們常說，如果競爭對手也能投入更多資源來建立這個產品類別，那會更好，但並沒有發生。因此，這項努力主要由我們承擔。希望之後會有其他人協助我們推動，因為要讓這個類別走向那個目標，確實需要更多商業動能。我確實從競爭對手那邊看到一些跡象，也很高興看到他們的努力。

Thanks, guys. That is it for me.

謝謝，各位。我這邊就這些。

Our next question comes from Bill Plovanic.

我們的下一個問題來自 Bill Plovanic。

Great. Thank you. Good evening guys.

很好，謝謝。各位晚上好。

Hi, Bill.

嗨，Bill。

I'm going to ask a couple of detailed questions so I can get to the broader picture was.On pricing for starter kits and for disposables, where were you in the quarter?

我會問幾個比較細節的問題，這樣我才能看到更大的全貌。關於入門套組（starter kits）以及耗材（disposables）的定價，本季你們的水準在哪裡？

We are still maintaining that $750 to $800 range for the kits. I think in this quarter in particular, we were a little bit on the high side of that range and then sensors, again just slightly above $60 on average.

我們仍維持套組 750 到 800 美元的區間。我想本季特別是落在該區間的偏高端；至於感測器，平均價格同樣是略高於 60 美元。

Okay. The reason I ask that, it looks like utilization continues to pick up very nicely. Any thoughts on that? By our math, we are burning about a little over two sensors a month at this point.

好的。我之所以問，是因為看起來使用量持續相當不錯地提升。你們對此有什麼看法嗎？按我們的計算，目前每月大約消耗略高於兩個感測器。

I think that is fair, I think we have seen a nice trend as we have talked about, post 2009 quite frankly from the time period where we entered the reimbursed era. Continue to see sensors used by patients -- patients go on the system, continue to use sensors. Again, your math suggests that patients are probably using sensors longer than the labeled indication of seven days and I think we find that to be true. We don't have a way to track that, but I think anecdotally you are right, I think we are seeing an increase in stickiness and sensor utilization across our patient base.

我認為這樣的說法合理。我想我們如先前所談到的，確實看到一個不錯的趨勢，坦白說是從 2009 年之後、也就是我們進入可獲得給付（reimbursed）時期開始。持續看到患者使用感測器——患者一旦開始使用系統，就會持續使用感測器。同樣地，你們的計算顯示患者可能使用感測器的時間超過標示適應症的 7 天，我們也認為確實如此。我們沒有方法追蹤，但從經驗與回饋來看，你說得對；我想我們在整體患者基礎上看到黏著度與感測器使用量的提升。

Switching gears, you talked about some milestones from Edwards and Animas coming through to help increase the cash for you guys. Two things, one, did you have to change or was there a change in the Edwards contract at all considering that you're going to push towards the Gen2 focused in the US and bypass the Gen1? And then if you could just help us out with any timing we could expect on those. I think if I recollect, there is a milestone payment on CE Mark approval from Animas and then some Edwards timelines, but just any help with that timing would be great.

換個話題，你提到 Edwards 和 Animas 將達成一些里程碑來幫助你們增加現金。有兩點：第一，考量你們將在美國推進以 Gen2 為重點並略過 Gen1，Edwards 的合約是否需要或是否已經有任何變更？第二，能否協助我們了解這些款項可能入帳的時間點？如果我沒記錯，Animas 在取得 CE Mark 核准時有一筆里程碑款，另外 Edwards 也有一些時間表；若能提供任何時間上的指引會很有幫助。

Let me just clarify and start with Animas and spare you some of the details.We bifurcated. We initially had a $5 million payment on receipt of CE Mark. We actually bifurcated that when we went down the revised transmitter path that you guys will recall. So, $1 million of that came in on completion of the transmitter, that came in in the fourth quarter, so that was the $1 million Jess referred to.

我先釐清一下，從 Animas 開始，並省略一些細節。我們做了拆分（bifurcated）。最初在取得 CE Mark 時有一筆 500 萬美元的付款。當我們走向你們會記得的那條修訂版發射器（transmitter）路徑時，我們實際上把那筆款項拆分了。因此，其中 100 萬美元是在完成發射器時入帳的，該款在第四季入帳，也就是 Jess 提到的那 100 萬美元。

We are due another $4 million that Terry mentioned on receipt of CE Mark for the total of five from Animas. And then on the Edwards side, we have got about $12 million of outstanding milestone payments. We have not today revised that contract, but I will tell you, we are working aggressively with Edwards to figure out the appropriate path forward with Gen2 which will include, at some point, a revision to the way we have structured the milestone payments. That will be forthcoming, I would say probably before the end of the first half of this year.

我們還將在取得 CE Mark 時收到 Terry 提到的另外 400 萬美元，使 Animas 的總額達到 500 萬美元。至於 Edwards 方面，我們尚有約 1,200 萬美元的未收里程碑款。截至目前我們尚未修訂該合約，但我可以告訴你，我們正積極與 Edwards 合作，釐清以 Gen2 為主的適當推進路徑；這在某個時間點將包含對里程碑付款架構的修訂。我會說，這應該會在今年上半年結束前出爐。

Should we expect the Edwards milestones will probably be 2012 type of event given where you are with the product?

就你們目前的產品進度而言，我們是否應該預期 Edwards 的里程碑款大概會是 2012 年才會發生的事件？

I would say by and large, yes, there could be some small portion that we receive in 2011 depending on how we restructure the deal and how we are compensated for our deliverables and that is some of the discussion we have going on with Edwards now. But I would assume that the bulk of those milestones would be in 2012.

我會說大體上是的。視我們如何重整交易以及如何就我們的交付項目獲得補償，2011 年可能會收到一小部分；這也是我們目前與 Edwards 正在討論的一部分。但我會假設大部分的里程碑款會落在 2012 年。

I'm going to ask one more question and then I'll jump back into queue. I was wondering if you could just give us a feel for the total number of customers that are active at the end of 2010 and then maybe an update on attrition rates?

我再問最後一個問題，然後我就回到排隊等候。我想請教一下，您是否可以讓我們大致了解一下截至2010年底活躍客戶的總數，並且也許更新一下客戶流失率？

We have never previously given that information. You can go quarter by quarter and kind of sum up the total for whatever attrition rate you would like to do on your own, Bill, and I think that's the numberBut nice try.

我們以前從未提供過那項資訊。你可以逐季查看，然後把你想用的任何流失率大概加總起來，Bill，你自己就能算出那個數字——不過你這招不錯。

Thank you.

謝謝。

Our next question comes from Mimi Pham.

下一個問題來自 Mimi Pham。

Good afternoon. In terms of the integrated J&J timeline in the US, did you actually mention a time frame for updates you mentioned? I think the last time you gave a goal was mid-2011.

午安。就美國整合式 J&J 的時程而言，您剛才提到的更新是否有實際給出一個時間範圍？我記得上次你們給的目標是2011年年中。

I would only say from that standpoint, as we have indicated previously, we want to have the Gen4 on file with the agency and then the Animas file would be post that filing of the Gen4 since it is an integrated system and it is predicated on the Gen4 being the sensor. So, it happened sometime after the Gen4 was filed. I think at this point it would be speculative on our part to try to pin that down anymore than that. From a standpoint that now that we have moved into this grayer area with regards to now having this Gen4 considered a significant risk device and having to go through a pre-IDE and IDE, the whole time sequence is not nearly as concise as it was in the first three generations of sensors that we put on the market.

我只能說，從那個角度來看，正如我們先前所指出的，我們希望先把 Gen4 向主管機關提交（on file），然後 Animas 的申報會在 Gen4 申報之後，因為它是整合式系統，而且前提是 Gen4 作為感測器。因此，它會發生在 Gen4 申報之後的某個時間點。我想在目前這個階段，我們若再更精確地釘死時間點，對我們而言就屬於推測。就目前而言，因為我們已經進入這個較為灰色的地帶——也就是現在 Gen4 被視為重大風險器材，必須走 pre-IDE 與 IDE 的流程——整體時間序列就不像我們前面三代感測器上市時那樣明確。

In terms of the integrated product in Europe, when you say you are going to launch in first half 2011, does that mean the reimbursement is in place for the combined pump CGM product in your target international markets?

就歐洲的整合式產品而言，當你們說會在2011年上半年推出時，是否表示在你們鎖定的國際市場中，針對結合式幫浦與 CGM 產品的給付（reimbursement）已經到位？

No, I think that is on a country by country basis and I don't have the specifics of which countries cover the sensor integrated product. I know that we met with our counterparts in London last month at the ATTD meeting and they have full scale launch plans in place. They were meeting with all of their distributors while we were in Europe last month, so they're committing a lot of their resources to that launch.

不是，我認為那是逐國而定，而且我沒有各國是否涵蓋感測器整合式產品的具體細節。我知道我們上個月在 ATTD 會議時與倫敦那邊的對口團隊會面，他們已經有完整的上市計畫。我們上個月在歐洲時，他們也正在與所有經銷商會面，所以他們正投入大量資源來推動這次上市。

Do they sell, J&J, do they sell the standalone Gen4 then which just got CE Mark or they only sell the integrated Gen4?

那 J&J 會販售剛拿到 CE Mark 的獨立版 Gen4 嗎？還是他們只賣整合式 Gen4？

They will only sell the combined system, the integrated or at the present time, we sell the SEVEN PLUS in Europe through a series of independent distributors.

他們只會販售組合式系統，也就是整合式的；而目前我們在歐洲是透過一系列獨立經銷商販售 SEVEN PLUS。

So, for now, will remain -- the Gen4 standalone with remain through your independent distributors?

所以目前獨立版 Gen4 會先透過你們的獨立經銷商繼續販售嗎？

Again, right now, we are only selling the SEVEN PLUS, so as we move to the Gen4, J&J will have a non-exclusive distribution agreement in place so that they can sell sensors to their constituents who buy the integrated product. Our standalone system will continue to go through independent distributors.

再說一次，目前我們只在販售 SEVEN PLUS；當我們轉向 Gen4 時，J&J 會有一份非獨家（non-exclusive）的經銷協議，使他們能向購買整合式產品的客戶販售感測器。我們的獨立式系統仍會透過獨立經銷商銷售。

Then the last question regarding the ICU product, can you give us your take on the updated American College of Physicians recent guidelines on tight glycemic control and does that change your view of the market or change anything out there in terms of what the hospitals, which hospitals?

最後一個關於 ICU 產品的問題：你們如何看待美國內科醫師學會（American College of Physicians）近期更新的嚴格血糖控制指引？這是否改變你們對市場的看法，或改變醫院端（哪些醫院）在外部的任何作法？

Any time you get into a meta-analysis, and this was yet another meta-analysis, it is always hard. They are taking different studies and trying to make something of them. There was a response that was subsequent to that, that was in conjunction with ADA, ACE, and AED all came in and weighed in and said absolutely that the use of controlling glucose levels in the hospital is extremely important.

任何時候談到統合分析（meta-analysis），而這又是另一個統合分析，總是很難。他們把不同研究拿來試圖歸納出結論。之後也有一個回應，是與 ADA、ACE 以及 AED 一起提出的；他們都出面表態，明確指出在醫院中控制血糖水準的使用是極其重要的。

So, we get into this he said, she said scenario as to what is best and I think the problem with having academics do meta-analysis that don't actually treat patients, it is a problem. They can sit in the ivory tower and yet you have the practicing clinicians who actually treat patients say quite the contrary, that the control of glucose levels in terms of reduction of morbidity and mortality is extremely important. So, I think that debate will continue to rage on.

所以就會變成各說各話，爭論什麼才是最佳作法。我認為讓不實際治療病人的學者來做統合分析，本身就是個問題。他們可以坐在象牙塔裡；但實際臨床照護病人的醫師卻說恰恰相反——就降低罹病率與死亡率而言，控制血糖水準極其重要。因此我認為這場辯論還會持續延燒。

That is helpful, thank you so much.

很有幫助，真的非常感謝。

Our next question comes from [John Putnam].

下一個問題來自 [John Putnam]。

Thanks very much. Terry, I'm a little confused on the IDE process or what the FDA is really trying to achieve here. Can you clarify that for us?

非常感謝。Terry，我對 IDE 流程，或 FDA 在這裡究竟想達成什麼，有點困惑。你能幫我們釐清一下嗎？

Sure. Historically, when we ran these trials, they were considered and deemed non-significant risk by the Food and Drug Administration, therefore we did not have to submit an IDE and receive approval. Upon approval of the protocols by the Institutional Review Boards, which have jurisdiction on the significant risk nature of the device and the trial, we could move forward. Now the FDA has taken a turn and says, no, if you are moving glucose up and down, we now consider this a significant risk to these patients and therefore, we want you to submit a formal IDE for our approval before you start the trial. So, that has been quite a change in that term and we are now engaged in that.

當然可以。過去我們進行這些試驗時，食品藥物管理局（FDA）會認定其為非重大風險（non-significant risk），因此我們不需要提交 IDE 並取得核准。在機構審查委員會（Institutional Review Boards, IRBs）核准試驗方案後——IRB 對器材與試驗是否屬重大風險具有管轄權——我們就可以往前推進。現在 FDA 轉變立場，表示：不，如果你讓血糖上下波動，我們現在認為這對病人屬於重大風險，因此在你開始試驗之前，我們要你提交正式的 IDE 供我們核准。這在定義上是很大的改變，而我們目前也正在因應並投入其中。

So, rather than throw in, obviously we have had a series of discussions with the agency over the last few months trying to determine what it is they are actually looking for in terms of a clinical trial. We believe we have a good idea, but rather than run the risk of formally submitting something in an IDE and then by statutory law, they have to respond within 30 days. It is better for us to file it as a pre-IDE, gain their comments from the standpoint, and then file the IDE.

因此，我們在過去幾個月與主管機關進行了一系列討論，試圖釐清他們在臨床試驗方面究竟在尋找什麼。我們相信自己已經有不錯的理解，但與其冒著正式以 IDE 提交某些內容的風險——因為依法他們必須在30天內回覆——我們更適合先以 pre-IDE 方式提交，從他們的角度取得意見，之後再提交 IDE。

On the other hand, there is more regulatory certainty in an IDE that at the end of the protocol, assuming that you have met your primary endpoint, that there is less vagueness associated with the outcome analysis that once you have a more formal IDE in place. If we go back to the Gen4 pivotal trial, that was PMA supplemental trial that was really a manufacturing improvement from Gen3 to Gen4. We filed that as a PMA supplement. We conducted a pivotal trial that was identical to the pivotal trial that we had conducted for the SEVEN PLUS system, but because we didn't have to file an IDE, we didn't think there was any vagueness to that, particularly since it was just a manufacturing change and deemed by the FDA PMA supplement.

另一方面，IDE 也帶來更高的法規確定性：在試驗方案結束時，假設你達成主要終點（primary endpoint），相較之下，當你有更正式的 IDE 在位，對結果分析的模糊空間會更小。回到 Gen4 的關鍵性試驗（pivotal trial），那其實是 PMA 補充申請（PMA supplemental）的試驗，主要是從 Gen3 到 Gen4 的製造改良。我們以 PMA supplement 方式提交。我們進行的關鍵性試驗與我們為 SEVEN PLUS 系統所做的關鍵性試驗完全相同，但因為不需要提交 IDE，我們不認為會有任何模糊性，特別是它只是製造變更，且被 FDA 認定為 PMA supplement。

So, as they have constricted some of their requirements, we are now caught in this, so I think there is a much greater degree of specificity from the agency. We just want to make sure we understand exactly what it is. I think, yes, it is time-consuming and it does extend the potential commercialization here in the United States, but at the same time, I think you get to a level of rigor that both the agency and the Company have a better understanding of the potential outcome and the pathway going forward.

因此，隨著他們收緊部分要求，我們現在就卡在這個情況裡；我認為主管機關的要求明確性高了很多。我們只是想確保自己完全理解其具體內容。我想，是的，這很耗時，也確實會拉長我們在美國潛在商業化的時程；但同時，我認為你會達到一個更嚴謹的程度，使主管機關與公司雙方都能更清楚理解潛在結果以及後續推進的路徑。

Okay. Relative to your comments last quarter, it sounds like things are still very difficult with the agency. Is that a fair statement?

了解。相較於你們上季的評論，聽起來與主管機關之間仍然非常困難。這樣說公平嗎？

I think if you open up the newspaper and look at what anybody says, not necessarily DexCom, I would say that this is an evolving regulatory agency. Dr. Hamburg certainly believes that more regulatory science is necessary because of technology in general, both in the pharmaceutical, biopharmaceutical and device world has changed so dramatically. We are trying to understand what their requirements are so that we can be better prepared to deal with those.

我想如果你翻開報紙看看任何人的說法——不一定是 DexCom——我會說這是一個正在演變中的監管機關。Hamburg 博士顯然認為，隨著整體科技在製藥、生物製藥以及醫療器材領域都發生了如此劇烈的變化，需要更多的監管科學（regulatory science）。我們正試著理解他們的要求，好讓我們能更充分準備來因應。

But outside of that, I would say that our relationship with the agency, particularly at the reviewer level, is about as good as it is going to get and I think we are blessed with the fact that our reviewers are very interactive with us. We have got the same reviewers we have had dating all the way back to 2005. They are very helpful in trying to assist us. They are marching to a new set of instructions as well and trying to help us migrate through this new maze that we find ourselves in.

除此之外，我會說我們與主管機關的關係——特別是在審查人員（reviewer）層級——已經好到不能再好了；而且我們很幸運，我們的審查人員與我們互動非常頻繁。我們從2005年一路以來都是同一批審查人員。他們非常願意協助我們。他們也同樣在遵循一套新的指示，並試著幫助我們穿越我們目前所處的這個新迷宮。

Thanks very much for your comments.

非常感謝您的意見。

Our next question comes from [Jonathan Locke].

我們的下一個問題來自 [Jonathan Locke]。

Thanks and good afternoon. Terry, maybe the first one for you, you talked about an increase in SG&A of about 20% I believe in 2011. You mentioned some patient awareness initiatives. Can you maybe just talk to how you're going to allocate that spend, in other words, what is being devoted to awareness, social mean versus an increase of feet on the street if you would?

謝謝，午安。Terry，第一個問題可能想請教你。你提到 2011 年 SG&A 大約增加 20%（我記得是這個數字）。你也提到一些病患認知推廣的計畫。你能否談談你們將如何分配這筆支出？換句話說，有多少會用在提升認知、社群媒體，相較於增加外勤人員（feet on the street）？

I would say that the 20% is all revenue driven, that's feet on the street. There may be a few individuals in the back office to support the new feet on the street, but the increase in the marketing, which would then encompass any of the direct to patient activities is flat. So, that increase of 20% is strictly related to revenue growth.

我會說這 20% 全部都是由營收驅動的，也就是外勤人員（feet on the street）。可能會有少數後勤人員來支援新增的外勤人力，但行銷費用的增加（其中也包含任何直接面向病患的活動）是持平的。所以，這 20% 的增加完全與營收成長相關。

Got it.I believe last call you mentioned that Flex should be inspected by the FDA once you guys moved out over to China some time in the first quarter of 2011. So, has that taken place?

了解。我記得上次電話會議你提到，當你們在 2011 年第一季某個時間把 Flex 移到中國後，應該會接受 FDA 的查廠。所以，這件事已經發生了嗎？

That's a submission to the agency. Because it is a relatively small change, it does not require, to my knowledge, any FDA inspection in order to have the approval. We have basically taken the Milpitas facility and replicated it in China, so all of the equipment is a site location change, not a full-blown PMA submission.

那是向主管機關提交（submission）。因為這是一個相對小的變更，據我所知，取得核准並不需要 FDA 查廠。我們基本上是把 Milpitas 的廠複製到中國，所以所有設備屬於廠址變更（site location change），而不是完整的 PMA 申請。

The FDA actually -- the Flextronics facility in China is actually an FDA manufacturing facility, so it has already undergone inspection. It is not to say the FDA could not come in and inspect with respect to our move, but I don't expect that they will.

FDA 其實——中國的 Flextronics 廠本身就是 FDA 認可的製造廠，因此已經接受過查廠。這並不是說 FDA 不可能因為我們的搬遷而進來稽核，但我不預期他們會這麼做。

That is not a requirement for us to put those products online.

這不是我們讓這些產品上線生產的必要條件。

Understood. Maybe just one or two more, quickly. The FDA, like you said, scrutiny is increasing across the board, has that cramped any of your competitors?I don't know what Medtronics exact plans were for their six day, but there has been chatter for some time in fiscal year '12, so have you heard anything that may be holding up their next product on the sensor side?

了解。再快速問一兩個。FDA 如你所說，整體審查都在趨嚴，這有沒有讓你們的競爭對手受到影響？我不清楚 Medtronic 對他們六天產品的確切計畫，但市場上一直有傳聞說會在 2012 財年推出；所以你有沒有聽到任何可能拖延他們下一代感測器產品的消息？

It's a level playing field when it comes to the agency certainly and based on comments that they made last month in London, as well as earlier in the 2010 in November at the Bethesda JDRF meeting and diabetes technology, they are under the same type of scrutiny requirements that we are. I think one of their senior speakers talked about their next generation sensor, obviously launching in EU well before the United States for the same reasons that we will launch product in EU before the United States. So, I think we are all going through this exacting relationship with the agency and gaining a greater understanding to the same degree.

就主管機關而言，確實是一個公平的競爭環境。根據他們上個月在倫敦的發言，以及更早在 2010 年 11 月於 Bethesda 的 JDRF 會議與糖尿病科技會議上的評論，他們面臨的審查要求與我們相同。我想他們的一位資深講者談到他們的下一代感測器，顯然會先在歐盟推出、遠早於美國；原因也和我們會先在歐盟、再在美國推出產品相同。所以我認為大家都在經歷與主管機關之間這種嚴謹的互動，並在同樣程度上加深理解。

Great. And last one and I'll just follow up with you off-line. I know I'm not going to get attrition levels out of you guys, but could you talk directionally how that is going? Are you having success driving down attrition levels?

很好。最後一個問題，我之後再私下跟你追問。我知道你們不會透露流失率（attrition）水準，但你能否從趨勢方向談談目前情況？你們在降低流失率方面有成功嗎？

I think when Bill mentioned earlier talking about more sensor utilization and Steve responded about stickiness, that stickiness is, I think part and parcel to not only are they wearing it longer, they are wearing it more frequently. If you look at number of patients that go off our technology, it is actually decreasing nicely. Compared to other technologies that still more than 50% of their patients, according to them, according to our competitors, this is not a statement I am making, it is a statement I am parroting from one of their public statements that have gone off their product.

我想先前 Bill 提到更多的感測器使用量，而 Steve 回應了黏著度（stickiness）；我認為這種黏著度的一部分在於，他們不只是配戴時間更長，也更頻繁地配戴。如果你看停止使用我們技術的病患數量，實際上正在相當不錯地下降。相較之下，其他技術依他們自己所說、也就是依我們競爭對手所說，仍有超過 50% 的病患已停止使用他們的產品——這不是我做的陳述，而是我轉述他們某次公開聲明中的說法。

Understood. Thanks guys.

了解。謝謝各位。

Our next question comes from [Richard Lowe].

我們的下一個問題來自 [Richard Lowe]。

Thanks for taking my question. One quick one. Is there any update on the pediatrics trial with Gen4 with a new more rigorous FDA, do you know if you are going to have to go back and redo that now?

謝謝讓我提問。快速一個問題：Gen4 的兒科試驗有沒有任何更新？在 FDA 審查更嚴格的新情況下，你們知道是否必須回頭重新做一次嗎？

We will go back and redo that. I think the requirement remains the same with regards to completing an adult trial and then follow it up with a pediatric trial. I don't know if the requirements, Richard, will be to the same degree as the adult trial. It's hard at this point. There is a requirement under FDA statutes for least burdensome. So, under clinical trial requirements, the things that we know we have to do for the adult trial, I don't think would meet that criteria of least burdensome in a pediatric population, but that is still to be negotiated with the agency.

我們會回去重新做。我認為要求仍然是先完成成人試驗，然後再接著做兒科試驗。至於兒科的要求是否會與成人試驗同等嚴格，我目前不確定。Richard，FDA 法規下有「最小負擔（least burdensome）」的要求。因此，就臨床試驗要求而言，我們知道成人試驗必須做的那些事情，我認為在兒科族群中可能不符合「最小負擔」的標準，但這仍需要與主管機關協商。

Thank you.

謝謝。

Our next question comes from Bill Plovanic.

我們的下一個問題來自 Bill Plovanic。

Thanks. Two quick follow-ups. One, you talked about expanding the distribution channel, roughly how many sales reps do you have now?

謝謝。兩個快速追問。第一，你提到擴大通路，請問你們目前大約有多少名業務代表？

In the field we've got about 70 bodies in the field that are made up of sales reps. They are also made up of clinical education specialists, we've got managed care people in the field. As well as four regional sales directors, a director of managed care, and of course our VP of Sales.

在前線我們大約有 70 位人員，包含業務代表；也包含臨床教育專員；我們也有在前線的醫療保險（managed care）人員。此外還有四位區域業務總監、一位醫療保險總監，當然還有我們的銷售副總裁。

Okay. That is helpful. And then just last question, any data that we should look forward to over the next 12 months that you think might be enlightening or helpful?

好的，這很有幫助。然後最後一個問題：未來 12 個月有沒有什麼我們應該期待、你認為可能具有啟發性或有幫助的數據？

Yes, the real thing that we are looking for and we don't know where it is going to be published or when it is going to be presented is [Dr. Debergsky's] type two study in over 100 patients that were involved in it. Half of them on SMBG and half of them on CGM. As I have mentioned, we have seen a poster of data at six months which indicated 1.4% reduction in A1c, or the CGM group significant reduction in blood pressure and weight. If that is sustainable through the full year trial, this is a randomized prospective trial, I think that would be highly receptive. And when we go back out and talk to the payer system about the benefit of CGM in that population.

有。我們真正期待、但目前還不知道會在哪裡發表或何時呈現的是 [Dr. Debergsky] 的第二型糖尿病研究，納入了 100 多位病患；其中一半使用 SMBG，一半使用 CGM。如我先前提到，我們在六個月時看過一張海報數據，顯示 A1c 降低 1.4%，或 CGM 組在血壓與體重方面有顯著下降。如果這些效果在完整一年的試驗中仍可持續——這是一項隨機、前瞻性試驗——我認為市場會非常買單。並且當我們回頭與支付方體系（payer system）溝通 CGM 在該族群的效益時，這會很有幫助。

Great. Thanks, that's all I had.

很好，謝謝。我就這些。

We have no further questions at this time. I would now like to turn the call over back to the speakers for closing remarks.

目前沒有其他問題。我現在想把電話交回給講者做結語。

Well, thank you and thanks for joining us today. Obviously, 2010 was a fantastic year for DexCom. We are now -- it's in our history and we are now cleanly and clearly focused on 2011. Regardless of the environment that we operate in, we are growing the business dramatically. We are helping patients each and every day. Our goal is to expand the use of CGM on a global basis and utilize whatever distribution modalities that are available to us to achieve that goal. We are having fun and I think when you see the benefit to patients on a daily basis, that renews our faith and what we are here to do and we will continue to do that. So, thank you.

好的，謝謝，也感謝各位今天加入我們。顯然，2010 年對 DexCom 來說是非常出色的一年。現在——那已成為歷史，而我們現在清楚且明確地聚焦在 2011 年。不論我們所處的營運環境如何，我們都在大幅成長業務。我們每天都在幫助病患。我們的目標是在全球範圍擴大 CGM 的使用，並運用任何我們可用的通路模式來達成這個目標。我們做得很開心，而我想當你每天都看到病患獲益時，這會再次堅定我們的信念：我們為何在這裡、要做什麼；我們也會持續這麼做。所以，謝謝。

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。感謝您的參與。您現在可以掛線。