德康醫療 (DXCM) 2012 Q3 法說會逐字稿

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

歡迎參加第三季財報發布電話會議。我是 Christine，將擔任今天會議的接線員。目前所有與會者皆為僅收聽模式。稍後我們將進行問答環節。請注意，本次電話會議將被錄音。

I will now turn the call over to Terry Gregg. You may begin.

我現在把電話交給 Terry Gregg。您可以開始了。

Thank you, operator, and thanks for joining us today on our third quarter earnings call for 2012. I'm going to ask Steve Pacelli to initiate our call with a Safe Harbor statement. Steve.

謝謝，接線員，也感謝各位今天參加我們 2012 年第三季財報電話會議。我將請 Steve Pacelli 以「安全港」聲明開場。Steve。

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 hereof.

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，且僅截至本聲明日期有效。

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 filed with the SEC.

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之結果出現重大差異的因素清單，已在我們的 Form 10-K 年度報告、Form 10-Q 季度報告以及向 SEC 提交的其他報告中的「風險因素」及其他章節中詳述。

We undertake no obligation to update publically or revise these forward-looking statements for any reason. Terry.

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。

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

謝謝你，Steve。今天與我一同出席的有：我們的總裁 Kevin Sayer；我們的財務長 Jess Roper；以及當然還有我們策略與企業發展執行副總裁 Steve Pacelli。

Our agenda for today's call is fairly typical. I will provide a brief update on our G4 PLATINUM approval and launch activities. Kevin will review our third quarter 2012 financial results and provide our customary operations update and then I will offer some concluding thoughts.

今天會議的議程相當典型。我將就我們 G4 PLATINUM 的核准與上市活動提供簡要更新。Kevin 將回顧我們 2012 年第三季的財務結果並提供例行的營運更新，接著我會做一些結語。

So, as most of you are aware, on October 5th, 2012 we received approval from the Food and Drug Administration to begin commercially marketing the DexCom G4 PLATINUM continuous glucose monitoring system, our fourth generation CGM system. We received approval for a full PMA in just under 180 days, a credit to the outstanding work of our clinical and regulatory teams and a testament to the collaborative working relationship we have established with FDA over the past several years.

那麼，如各位多數人所知，我們於 2012 年 10 月 5 日獲得美國食品藥物管理局（FDA）核准，開始商業化行銷 DexCom G4 PLATINUM 連續血糖監測系統，也就是我們第四代 CGM 系統。我們在不到 180 天內即取得完整 PMA 核准，這歸功於我們臨床與法規團隊的傑出工作，也證明了過去數年我們與 FDA 建立的協作工作關係。

We believe G4 PLATINUM sets a new standard for performance. It is the most accurate and reliable continuous glucose sensor ever commercialized and we believe this sensor system will create an extraordinary patient experience and will drive category adoption of CGM.

我們相信 G4 PLATINUM 為效能樹立了新的標準。它是迄今商業化的最精準且最可靠的連續血糖感測器；我們相信此感測器系統將創造卓越的病患體驗，並推動 CGM 類別的採用。

As we mentioned during our G4 PLATINUM approval conference call, we began building both hardware and sensor inventories in the third quarter in anticipation of approval. We began taking orders for G4 PLATINUM immediately. I am pleased to report that we completed our initial G4 PLATINUM shipments to patients in the US late last week and have commenced full scale order fulfillment this week.

如同我們在 G4 PLATINUM 核准電話會議中提到的，我們在第三季即開始建立硬體與感測器庫存，以因應核准。我們也立即開始接受 G4 PLATINUM 訂單。我很高興報告，我們已於上週稍晚完成在美國對病患的首批 G4 PLATINUM 出貨，並於本週開始全面履行訂單。

Our initial focus has been processing orders for new patients, although we expect to begin to upgrade existing SEVEN PLUS users who desire to move to the G4 PLATINUM starting this month. We are working to complete all of our upgrades by the end of 2012.

我們初期的重點是處理新病患的訂單，雖然我們預期將自本月起開始為希望升級至 G4 PLATINUM 的既有 SEVEN PLUS 使用者提供升級。我們正努力在 2012 年底前完成所有升級。

The US launch of G4 PLATINUM has generated a higher level of excitement at DexCom than any of our previous commercial launches. As I stated on our call in early October, patient, partner and physician response at the Berlin meeting of the ASD in early October was exceptional. Growth in our international markets truly reflects this excitement.

G4 PLATINUM 在美國的上市，於 DexCom 內部引發的興奮程度高於我們以往任何一次商業上市。如同我在 10 月初的電話會議中所說，10 月初在柏林舉行的 ASD 會議上，病患、合作夥伴與醫師的反應都非常熱烈。我們國際市場的成長確實反映了這股熱度。

As one would expect, our pipeline of new patient opportunities is at the highest level in the history of the Company. The number of daily calls into our customer service organization is up over 50% when compared to pre-launch; and while it is too early to determine whether this call volume will be sustained, we're certainly keeping busy processing orders for G4 PLATINUM. In fact, call volume has been so high that our team has had little time to actually process all of the orders.

如同預期，我們新病患機會的管線已達公司史上最高水準。與上市前相比，每日打進我們客服組織的來電數增加超過 50%；雖然現在判斷此來電量是否能持續仍為時過早，但我們確實忙於處理 G4 PLATINUM 的訂單。事實上，來電量高到我們團隊幾乎沒有時間實際處理所有訂單。

Contrast that excitement with the operational challenges of launching a product in the same month that we received approval. For example, we could not even begin to print user guides until we received final approval from FDA and yet we immediately announced approval knowing full well that all new SEVEN PLUS kit sales would come to a complete halt while we assembled final G4 PLATINUM kits.

將這份興奮與我們在取得核准同月推出產品所面臨的營運挑戰相比。例如，在收到 FDA 最終核准之前，我們甚至無法開始印製使用者指南；然而我們仍立即宣布核准，因為我們非常清楚，在我們組裝最終的 G4 PLATINUM 套件期間，所有新的 SEVEN PLUS 套件銷售將完全停滯。

Fortunately our pre-launch planning activities ensured that we will have sufficient inventories to meet patient demand during the quarter, a task made particularly challenging now that we offer multiple color receivers and need to forecast the appropriate build of colors.

所幸，我們上市前的規劃活動確保本季將有足夠庫存以滿足病患需求；而現在我們提供多種顏色的接收器，且必須預測各顏色適當的生產組合，使這項任務更具挑戰。

Aside from patient and clinical and clinician excitement, the G4 PLATINUM approval has created much stronger interest than we have ever experienced with potential clinical trial partners.

除了病患、臨床與臨床醫師的興奮之外，G4 PLATINUM 的核准也讓我們在潛在臨床試驗合作夥伴方面，獲得前所未有的更強烈興趣。

While we have been providing blinded product for clinical trial use for the past several years, we now believe that the clinical segment represents a meaningful business opportunity. For example, a number of pharmaceutical companies have recently suggested to us that CGM is an important tool to demonstrate the effectiveness of future diabetes compounds. However, they've expressed a strong dissatisfaction with competitive CGM used in prior trials to the point that they had ceased using CGM in their studies.

雖然過去數年我們一直提供盲測產品供臨床試驗使用，但我們現在相信臨床領域代表一個具實質意義的商機。舉例來說，近期有多家製藥公司向我們表示，CGM 是用來證明未來糖尿病化合物有效性的重要工具。然而，他們對先前試驗中使用的競品 CGM 表達強烈不滿，以致於已停止在研究中使用 CGM。

We believe our G4 PLATINUM system combined with our sweet-spot cloud-based data management capabilities and QUALCOMM communications platform will operate very robust solution to these potential partners and we will be gearing up for this opportunity next year.

我們相信，我們的 G4 PLATINUM 系統結合我們 sweet-spot 雲端資料管理能力與 QUALCOMM 通訊平台，將為這些潛在合作夥伴提供非常強健的解決方案，我們將在明年為此機會做好準備。

It is important to keep in mind that this is the first new product launched by DexCom in over three years, so our field sales force is extremely excited about demonstrating the product to healthcare providers and I am pleased to hear from numerous physicians and educators that they have been eagerly anticipating the G4 PLATINUM in their practices.

重要的是要記住，這是 DexCom 三年多來首次推出的新產品，因此我們的外勤銷售團隊對向醫療照護提供者展示產品感到非常興奮；我也很高興從多位醫師與衛教人員那裡聽到，他們一直熱切期待在其診所導入 G4 PLATINUM。

Above all I would like to acknowledge the hard work of the people at DexCom who have made this launch possible.

最重要的是，我要肯定 DexCom 團隊的辛勤付出，正是他們讓這次上市成為可能。

Finally, our revenue guidance for 2012 has been $85 million to $92 million for the year and while we don't have a crystal ball for the balance of Q4, in light of what we've seen so far with patient interest in the G4 PLATINUM System, we expect our full-year product revenue to land at about the midpoint of our range.

最後，我們對 2012 年的營收指引為全年 8,500 萬至 9,200 萬美元。雖然我們無法精準預測第四季剩餘期間的情況，但就目前我們所看到的病患對 G4 PLATINUM 系統的興趣而言，我們預期全年產品營收將落在該區間的中點附近。

With that, I would like to turn the call over to Kevin Sayer.

接下來，我想把電話交給 Kevin Sayer。

Thanks, Terry. I'll start with the financial update. DexCom generated $21.1 million in product revenue for the third quarter of 2012 compared to $16.7 million for the same quarter in 201l, a $4.4 million or 27% increase.

謝謝，Terry。我先從財務更新開始。DexCom 於 2012 年第三季創造 2,110 萬美元的產品營收，相較於 2011 年同季的 1,670 萬美元，增加 440 萬美元或 27%。

During our G4 PLATINUM approval conference call in early October we stated that we expected product revenue for Q3, 2012 to be approximately $22.2 million prior to any adjustments related to our G4 PLATINUM launch and subject to completion of our closing processes. After internal analyses and review by our independent auditors, it was determined that we should reserve an additional $1.2 million for sales returns related to our 30-day money back guarantee on DexCom hardware.

在 10 月初的 G4 PLATINUM 核准電話會議中，我們表示在未計入任何與 G4 PLATINUM 上市相關的調整、且仍須完成結帳流程的前提下，我們預期 2012 年第三季產品營收約為 2,220 萬美元。經內部分析並由我們的獨立審計師審閱後，判定我們應就 DexCom 硬體 30 天退款保證所產生的銷售退貨，額外提列 120 萬美元準備。

As we discussed during the G4 PLATINUM approval call, DexCom has always maintained a 30-day full refund policy on our hardware. As part of our G4 PLATINUM launch, we elected to extend this offer for patients who purchased SEVEN PLUS hardware from September 1st to our G4 PLATINUM announcement date of October 5th.

如同我們在 G4 PLATINUM 核准電話會議中討論的，DexCom 一直對我們的硬體維持 30 天全額退款政策。作為 G4 PLATINUM 上市的一部分，我們決定將此優惠延伸至在 9 月 1 日至我們於 10 月 5 日宣布 G4 PLATINUM 期間購買 SEVEN PLUS 硬體的病患。

While historically very few patients have returned products under the terms of our 30-day money back guarantee, we expect a significant number of patients to take advantage of the offer to exchange for G4 PLATINUM. This $1.2 million reserve resulted in a dollar for dollar reduction in product revenue for the quarter.

雖然歷史上在我們 30 天退款保證條款下退貨的病患非常少，但我們預期將有相當數量的病患會利用此優惠換購 G4 PLATINUM。這 120 萬美元的準備金，導致本季產品營收等額（逐美元）減少。

Our product revenue growth for Q3, 2012 over Q3, 2011 would have been 34% without this increase in the returns reserve. It is also important to note that we plan to recognize most of this reserve as product revenue during the fourth quarter of 2012 as we ship G4 PLATINUM hardware to these patients.

若未因退貨準備增加而調整，2012 年第三季相較 2011 年第三季的產品營收成長本應為 34%。同時也必須注意，我們計畫在 2012 年第四季，於向這些病患出貨 G4 PLATINUM 硬體時，將此準備金中的大部分認列為產品營收。

Sequentially product revenue for Q3, 2012 decreased 2% from the prior quarter. However, excluding these additional sales returns reserves, product revenue would have increased 3% sequentially. As we stated in our G4 PLATINUM approval call, we believe that many purchase decisions during Q3 were deferred as patients and healthcare providers anticipated the G4 PLATINUM approval and introduction.

2012 年第三季的產品營收較前一季環比下降 2%。然而，若排除上述額外的銷售退貨準備金，產品營收本應環比成長 3%。正如我們在 G4 PLATINUM 核准電話會議中所述，我們認為第三季期間，許多購買決策被延後，因為病患與醫療照護提供者在等待並預期 G4 PLATINUM 的核准與上市。

Total revenue for the third quarter of 2012 was $23.1million compared to $18.3 million during the same quarter in 2011.

2012 年第三季總營收為 2,310 萬美元，較 2011 年同期的 1,830 萬美元增加。

Our product gross profit totaled $7.7 million generating a gross margin of 36% for Q3, 2012 compared to a gross profit of $7.4 million and a gross margin of 45% for the same quarter in the prior year.

我們的產品毛利合計為 770 萬美元，2012 年第三季毛利率為 36%；相較之下，前一年度同期毛利為 740 萬美元、毛利率為 45%。

As we discussed during the G4 PLATINUM approval call, we have recorded a number of one-time charges that have negatively affected our gross profit and gross margin for the quarter. Specifically, we recognize approximately $500,000 in cost of goods sold from SEVEN PLUS hardware we shipped in September although we recognized no revenue related to those shipments due to the increased sales returns reserve discussed previously.

如同我們在 G4 PLATINUM 核准電話會議中討論的，我們認列了多項一次性費用，對本季毛利與毛利率造成不利影響。具體而言，儘管因前述提高的銷售退貨準備金而未就 9 月出貨認列任何營收，我們仍就 9 月出貨的 SEVEN PLUS 硬體在銷貨成本中認列約 50 萬美元。

We also wrote off approximately $2.5 million in excess and obsolete inventory related both to the SEVEN PLUS and the SEVEN PLUS upgradable product we discussed during the G4 PLATINUM call that we no longer expect to sell. And we shortened the useful life of and recorded additional depreciation expense of approximately $600,000 related to certain fixed assets used for SEVEN PLUS manufacturing and testing.

我們亦沖銷約 250 萬美元與 SEVEN PLUS 以及我們在 G4 PLATINUM 電話會議中提及之 SEVEN PLUS 可升級產品相關的過剩及呆滯存貨，因為我們已不再預期能出售。此外，我們縮短了用於 SEVEN PLUS 製造與測試之部分固定資產的耐用年限，並認列約 60 萬美元的額外折舊費用。

Absent these one-time charges, our product gross profit would have been $11.9 million generating a product gross margin of approximately 54%.

若不計入上述一次性費用，我們的產品毛利本應為 1,190 萬美元，產品毛利率約為 54%。

Sequentially our product gross profit decreased $2.9 million on decreased sales of $400,000 over the prior quarter and our gross margin decreased 13 margin points. However, excluding the charges we discussed our product gross profit would have increased $1.3 million and our corresponding gross margin would have increased approximately five margin points over the prior quarter.

就環比而言，由於銷售額較前一季減少 40 萬美元，我們的產品毛利減少 290 萬美元，毛利率下降 13 個百分點。然而，若排除我們所討論的費用，我們的產品毛利本應增加 130 萬美元，相應毛利率亦將較前一季提高約 5 個百分點。

Some final thoughts on our revenue and gross profits during Q3; our split between consumable and durable revenues was again between 70% and 75% consumables and between 20% to 30% durables and the ASP for sensors remained constant, while the ASP for our durables was affected slightly by our rebate program for SEVEN PLUS, which was offered only during the month of September.

關於第三季營收與毛利的最後幾點：我們的耗材與耐用品營收占比再次維持在耗材約 70% 至 75%、耐用品約 20% 至 30%；感測器的平均銷售單價（ASP）維持不變，而耐用品的 ASP 則因 SEVEN PLUS 的回饋（rebate）方案而略受影響，該方案僅於 9 月提供。

Our international business continued to perform well in Q3 accounting for just under 10% of our product revenue in the quarter.

我們的國際業務在第三季持續表現良好，本季占產品營收比重略低於 10%。

On the domestic distributor front our revenue split between direct and distributor business remained consistent with the prior quarter.

在國內經銷商方面，我們的直銷與經銷業務之營收占比與前一季一致。

And with respect to Q4, we expect sales and gross margins to be affected by a number of additional factors related to our G4 PLATINUM launch including the impact of reversing our sales return reserve, the impact of our $399 in-warranty upgrade programs and our manufacturing scale-up activities.

至於第四季，我們預期銷售與毛利率將受到多項與 G4 PLATINUM 上市相關的額外因素影響，包括回轉銷售退貨準備金的影響、我們 399 美元保固內升級方案的影響，以及製造產能擴增活動的影響。

Research and Development expense totaled $10.6 million for Q3 of 2012 compared to $8.2 million in Q3 of 2011, the increase primarily resulting from cost associated with our sweet-spot platform, expenses related to our G4 PLATINUM pediatric trial, G4 PLATINUM scale-up costs and continued investment in our next generation products.

2012 年第三季研發費用合計為 1,060 萬美元，較 2011 年第三季的 820 萬美元增加；增加主要來自 sweet-spot 平台相關成本、G4 PLATINUM 兒科試驗相關費用、G4 PLATINUM 量產擴增成本，以及對下一代產品的持續投資。

Sequentially R&D expense remained relatively flat.

就環比而言，研發費用大致持平。

Selling, general administrative expense totaled $15.5 million in Q3 of 2012 compared to $13.2 million during the same quarter in 2011. The increase primarily related to sales, marketing and information technology costs to support revenue growth. $600,000 of this year-over-year increase is centered in non-cash share based compensation.

2012 年第三季銷售、一般及行政費用合計為 1,550 萬美元，較 2011 年同期的 1,320 萬美元增加。增加主要與支援營收成長所需的銷售、行銷及資訊科技成本有關。其中約 60 萬美元的年增額來自以股份為基礎之非現金薪酬。

Sequentially, SG&A expense remain relatively flat.

就環比而言，SG&A 費用大致持平。

Our net loss for the third quarter of 2012 totaled $17.3 million and included $6.9 million in non-cash expenses centered in share based compensation, depreciation and amortization, as well as $4.2 million in non-cash charges and reserve discussed previously.

2012 年第三季淨損合計為 1,730 萬美元，其中包含 690 萬美元的非現金費用，主要為以股份為基礎之薪酬、折舊與攤銷，以及前述討論的 420 萬美元非現金費用與準備金。

Absent all of these non-cash charges, our net loss for the quarter, for the third quarter of 2012, would have been $6.1 million. Our loss per share for the quarter was $0.25 and again absent our one-time charges our loss per share for the quarter would have been $0.19.

若不計入所有這些非現金費用，2012 年第三季本季淨損本應為 610 萬美元。本季每股虧損為 0.25 美元；同樣地，若不計入一次性費用，本季每股虧損本應為 0.19 美元。

We ended the quarter with $53.4 million in cash and marketable securities and had working capital of $55.2 million.

本季期末我們持有現金及有價證券 5,340 萬美元，營運資金為 5,520 萬美元。

One additional note regarding the balance sheet, today we entered into a loan and security agreement with Silicon Valley Bank at Oxford Finance that provides a $15 million revolving line of credit and up to a $20 million term loan to be used for general corporate purposes. The revolving line of credit is an interest only financing that bears interest -- that bears an interest rate equal to the prime rate plus 0.5% and requires repayment of principal at the maturity date in November of 2015.

關於資產負債表另補充一點：今天我們與 Silicon Valley Bank 及 Oxford Finance 簽訂貸款與擔保協議，提供 1,500 萬美元的循環信用額度，以及最高 2,000 萬美元的定期貸款，用於一般公司用途。循環信用額度為僅付息融資，利率為最優惠利率（prime rate）加 0.5%，並要求於 2015 年 11 月到期日償還本金。

Under the term loan arrangement, $7 million will be advanced on the funding date and up to $13 million in additional funds will be available upon our request from June 1st, 2013 to September 30th, 2013. The term loan bears a fixed interest rate equal to the three-year treasury rate at the time of the advance plus 6.94% and requires payment of interest only for the first year and amortized payments of principle and interest thereafter through the maturity date in November 2016.

依定期貸款安排，將於撥款日先行撥付 700 萬美元，並可於 2013 年 6 月 1 日至 2013 年 9 月 30 日期間，依我們要求再動用最多 1,300 萬美元的額外資金。定期貸款採固定利率，利率等於撥款時的三年期美國公債利率加 6.94%，並要求第一年僅付利息，其後至 2016 年 11 月到期日止，以攤還方式支付本金及利息。

There are no conversion features or warrants associated with this facility. Now I'll turn to the business update.

此融資安排不包含任何轉換條款或認股權證。接下來我將進入業務更新。

Regarding our product pipeline, I am pleased to report that we had completed our pediatric clinical trial and we expect to file a PMA supplement in the US and update our CE mark in the EU to obtain an expanded indication for G4 PLATINUM before year end.

關於我們的產品研發管線，我很高興報告我們已完成兒科臨床試驗，並預期在年底前於美國提交 PMA 補充申請，並在歐盟更新 CE 認證，以取得 G4 PLATINUM 擴大適應症。

We are especially excited about the prospects of a pediatric indication. That is not only significant -- as it not only significantly expands the number of endocrinologists we call on in the US, we expect to be able to recommend our technology to patients as young as two years old, which would be a first for CGM.

我們對兒科適應症的前景尤其感到振奮。這不僅意義重大——因為它將大幅擴增我們在美國拜訪的內分泌科醫師數量——我們也預期能將我們的技術推薦給最小至 2 歲的病患，這將是 CGM 領域的首例。

On the international front, we have recently received approval on Australia and we expect approval in Canada and India within the next six months. We're actively exploring opportunities in China and Japan and other Asian geographies.

在國際方面，我們近期已取得澳洲核准，並預期在未來六個月內取得加拿大與印度的核准。我們也正積極探索在中國、日本及其他亞洲地區的機會。

We continue development of the GEN5 system working on an improved applicator combined with a mobile phone interface.

我們持續開發 GEN5 系統，致力於改良施用器並結合手機介面。

We continue to have discussions with the FDA on this front and we believe that DexCom is in a very strong position to become the first Class III medical device to communicate directly to a mobile platform. We have already seen several early phase mobile-based systems in many of the artificial pancreas programs that display our data on a mobile computing platform and remain very encouraged on this front.

在此方面我們持續與 FDA 討論，並相信 DexCom 具備非常有利的條件，成為第一個可直接與行動平台通訊的第三類醫療器材。我們已在多個人工胰臟計畫中看到若干早期階段的行動式系統，能在行動運算平台上顯示我們的資料，對此我們仍深受鼓舞。

Shifting to our integration partnerships, Animas continues to commercialize the Animas Vibe system in Europe and it was made abundantly clear to us by the European physician community at AASD in Berlin last month that system is being very well received by patients and physicians in the EU. With regards to filing for US approval of the Animas Vibe, the work required to modify the system to accommodate G4 PLATINUM in the US is taking slightly longer than expected, but we believe we will complete all development and system testing and be in a position to file early next year.

轉到我們的整合合作夥伴關係，Animas 持續在歐洲商業化 Animas Vibe 系統；上個月在柏林舉行的 AASD 會議上，歐洲醫師社群也非常明確地向我們表示，該系統在歐盟受到病患與醫師的高度肯定。至於 Animas Vibe 在美國的核准申請，為了在美國導入 G4 PLATINUM 而需對系統進行修改的工作，所需時間略長於預期，但我們相信將完成所有開發與系統測試，並可望於明年初提出申請。

We are pleased to note that our newest partner, Tandem Diabetes Care, recorded their first commercial shipments during Q3. We're actively working with Tandem to accelerate our development efforts and are nearing completion of feasibility assessment of incorporating G4 PLATINUM into the Tandem System. We are optimistic that feasibility will be successful and hope to be in a position to define our path forward with G4 PLATINUM before the end of the year.

我們也很高興指出，我們最新的合作夥伴 Tandem Diabetes Care 已於第三季完成首次商業出貨。我們正積極與 Tandem 合作以加速開發工作，並接近完成將 G4 PLATINUM 納入 Tandem 系統的可行性評估。我們對可行性結果持樂觀態度，並希望在年底前能就 G4 PLATINUM 明確界定後續推進路徑。

Finally, on the Edward's front, work on the second generation in hospital glucose monitoring system is near complete and, as Edwards mentioned in the recent earnings call, they expect to obtain a CE mark for the second generation glucose clear system before the end of 2012.

最後，在 Edwards 方面，第二代院內血糖監測系統的研發已接近完成；正如 Edwards 在近期的財報電話會議中提到的，他們預期在 2012 年底前取得第二代 Glucose Clear 系統的 CE 認證。

I would now like to turn the call back to Terry for some concluding remarks.

我現在想把電話會議交回給 Terry，請他做一些結語。

Thanks, Kevin. We created the G4 PLATINUM CGM system with the customer in mind through a series of customer surveys and regular CRM outreach and dialogue. One could consider approach akin to crowd sourcing from people with diabetes with a focus on the consumer experience influencing our design. It is certainly a sleek, slim design for discretion and portability to meet an active lifestyle.

謝謝你，Kevin。我們透過一系列客戶調查，以及定期的 CRM 外聯與對話，以客戶為核心打造了 G4 PLATINUM CGM 系統。可以說，我們採取了一種類似群眾外包的方式，向糖尿病患者蒐集意見，並以消費者體驗來影響我們的設計。它的設計確實俐落、纖薄，兼顧低調與可攜性，以符合活躍的生活型態。

We incorporated customized tones and melodies for alerts of glucose levels and increased the wireless transmission distance by some 4x to improve data capture, particularly around the house. But we are glucose sensor technologists and the best in the world. We improved the over accuracy by approximately 20% and by 30% in the hypoglycemia range.

我們為血糖警示加入可自訂的提示音與旋律，並將無線傳輸距離提升約 4 倍，以改善資料擷取，特別是在家中。但我們是血糖感測器技術專家，而且是世界上最頂尖的。我們將整體準確度提升約 20%，在低血糖範圍內則提升約 30%。

Hypo detection, sensor precision and sensor longevity were all improved resulting in exceptional sensor stability and accuracy over time so that from start to finish sensor-to-sensor our customers can expect extremely consistent performance.

低血糖偵測、感測器精準度與感測器壽命皆有所提升，帶來卓越的感測器穩定性與長期準確度，因此從開始到結束、不同感測器之間，我們的客戶都可期待極為一致的表現。

Initial customer reactions to wearing the product has been or exceeded our expectations. The blogs are filled with positive comments regarding the accuracy, durability, convenience and user friendliness of the G4 PLATINUM.

客戶對於配戴本產品的初步反應已達到或超出我們的預期。各大部落格充滿了對 G4 PLATINUM 在準確性、耐用性、便利性與易用性方面的正面評論。

We are now replacing the SEVEN PLUS systems with G4 PLATINUM in the artificial pancreas trials so you should expect to see those results as early as next week at the Diabetes Technology Meeting in Bethesda.

我們目前正以 G4 PLATINUM 取代人工胰臟試驗中的 SEVEN PLUS 系統，因此你們最快可能在下週於貝塞斯達（Bethesda）舉行的糖尿病科技會議上看到相關結果。

I said it before the launch and I'm more convinced than ever that the G4 PLATINUM is transformational in the utilization, understanding and uptake of CGM as a critical component of diabetes care. We are truly answering the promise of CGM.

我在上市前就說過，而現在我比以往更確信：G4 PLATINUM 將在 CGM 的使用、理解與採用上帶來變革，使其成為糖尿病照護的關鍵組成。我們真正兌現了 CGM 的承諾。

Thank you and, operator, we'll turn it over for question and answer.

謝謝各位；接下來，接線員，我們將進入問答環節。

Thank you. We will now begin the question and answer session. (Operator Instructions). And our first question is from Ben Andrew of William Blair.

謝謝。我們現在開始問答環節。（接線員指示）。第一個問題來自 William Blair 的 Ben Andrew。

Terry, I think I missed the number on the upgrade number in timing that you gave early on. Could you repeat that and kind of talk through how quickly you think you can get everybody upgraded that perhaps wants to in the first phase?

Terry，我想我漏聽了你一開始提到的升級數量與時程。你能再重複一次嗎？也請談談在第一階段，你認為能多快讓所有想升級的人完成升級？

Yes the upgrade, we didn't give you an actual upgrade number but our -- we are starting to identity that now and begin to ship out. Our goal then is to complete that by the end of this year, so by the end of December.

是的，關於升級，我們沒有提供一個具體的升級數量，但我們——我們現在開始辨識這些需求並開始出貨。我們的目標是在今年年底前完成，也就是 12 月底前。

And do you have a sense of what percentage of patients are likely to do that? I know that's what you're trying to figure out but that would be awfully aggressive to get seven plus mostly shut down by the end of the year wouldn't it?

那你是否大概知道會有多少比例的病患可能會這麼做？我知道這也是你們正在釐清的，但若要在年底前讓 SEVEN PLUS 大多數都停掉，這看起來會非常積極，不是嗎？

Well, no, no this is upgrades so you've got to look at those. The upgrade program is for those patients who are in warranty and we provide them an upgrade for $399. Then the next group are patients that are out of warranty and they would be responsible for the whole initial new starter kit. So we've just looked at this so the number is not as big as you think it is from that standpoint.

嗯，不，不，這是升級，所以你得從升級的角度來看。升級計畫是針對仍在保固期內的病患，我們提供他們以 399 美元升級。接下來一群是已過保的病患，他們就需要負擔完整的全新入門套組費用。所以我們剛看過，從這個角度來看，數量沒有你想的那麼大。

We certainly have a number of immediate requests of those patients wanting to upgrade for $399 in particular. We're addressing first the brand new patients and that was my number of increase in calls in of over 50% versus our pre-launch number of patient calls coming in but, again, our goal is to address obviously both of those segments but first the new patients followed by the upgrade patients.

確實有不少病患立即提出需求，特別是想以 399 美元升級的那些。我們目前優先處理新病患；我先前提到的數字是來電量較上市前增加超過 50%。但同樣地，我們的目標是同時服務這兩個族群，只是先新病患、再升級病患。

Okay do you have any better sense of what chunk of existing patients are going to want to switch to this? I know your goal is ultimately to get people over there but is the timing -- do you have a timing in mind, a time frame in mind when you want to get people off of SEVEN PLUS one way or the other?

好的，那你對於現有病患中有多少比例會想換到這個產品，有沒有更清楚的概念？我知道你們最終目標是讓大家都轉過去，但在時程上——你們是否有一個時間框架，想用某種方式讓大家逐步離開 SEVEN PLUS？

Yes our time frame would be as soon as possible so we could shut down the SEVEN PLUS line. I don't have the optics. I remind the audience we've been now shipping for less than two weeks. Our phones are ringing off the hook and there's a lot of moving parts right now. Obviously we'll try to give clarity as soon as we can but right now we don't have the kind of optics that I think you're looking for.

是的，我們的時間框架是越快越好，這樣我們就能關掉 SEVEN PLUS 產線。我目前沒有那麼清楚的能見度。我也提醒各位，我們出貨還不到兩週。電話一直響個不停，現在有很多事情同時在動。當然我們會盡快提供更清楚的資訊，但目前還沒有你所期待的那種能見度。

Okay and then, Terry, any -- you gave some good commentary on the pediatric indication and maybe that was commented on but did you update the timing there or is that still on track for kind of mid 2013?

好的，另外，Terry，關於兒科適應症——你提供了一些很好的評論，可能也有提到——你有更新那邊的時程嗎？還是仍然按計畫在 2013 年年中左右？

Well, it -- our belief is it's on track for that mid 2013. The commitment that we made to the organization and actually the team made to FDA in a face-to-face meeting recently was that we would file that with the agency before the end of the year. Like any PMA supplement statutorily, they have 180 days to review and complete. We're hopeful that based on the fact that this is a supplement to data that they're really looking at the clinical aspects of it, obviously not the degree of numbers of the more than 9,000 matched pair points that we had with the adult trial and we're not doing the rigor of having to do intravenous blood sampling of these patients, that they should be able to look at that in straight order. And I know that they are very interested in expediting this. They were very happy when we told them that the trial was complete.

嗯，我們相信仍按計畫在 2013 年年中左右。我們對公司所做的承諾——其實也是團隊最近在與 FDA 面對面會議中所做的承諾——是在今年年底前向主管機關遞交申請。依照任何 PMA 補充申請的法定規定，他們有 180 天進行審查並完成。我們希望，基於這是既有資料的補充，他們主要會看臨床面向；當然不像成人試驗那樣有超過 9,000 個配對點的龐大數據，而且我們也不需要對這些病患進行靜脈採血那種嚴謹流程，因此他們應該能按正常程序審查。我也知道他們非常有興趣加速這件事。當我們告訴他們試驗已完成時，他們非常高興。

Okay and then finally, Kevin, any new learnings relatively to manufacturing as you start ramping more aggressively with the new product or things are on track there? Thanks.

好的，最後，Kevin，隨著你們開始更積極地擴產、導入新產品，在製造方面有沒有新的學習或發現？還是都在軌道上？謝謝。

Every day there are new learnings towards manufacturing but yields are getting better on a weekly basis on our central lines. We turned everything on full blast. Literally we talked about during the call full scale as we were getting approval so we learn a bit every day but things are going well.

每天在製造方面都有新的學習，但我們主要產線的良率每週都在改善。我們把所有產能都開到最大。真的，就像我們在電話會議中提到的，在取得核准時我們就已經全速運轉，所以每天都會學到一些，但整體進展良好。

I guess one of the more learning -- interesting learning experience, Terry talked about the mix of colors, figuring out how many people wanted to buy our receiver that's called Tickled Pink has been a learning experience for us. We've had pretty good demand on the color front so it's been good, Ben, no major surprises.

我想其中一個更——有趣的學習經驗是，Terry 提到的顏色組合：要估算有多少人想買我們那款名為 Tickled Pink 的接收器，對我們來說是個學習過程。就顏色而言需求相當不錯，所以很好，Ben，沒有什麼重大意外。

Great thank you.

很好，謝謝你。

Thomas Gunderson, Piper Jaffray.

Piper Jaffray 的 Thomas Gunderson。

I'm still getting my notes down on Tickled Pink; hang on a second. The same kind of question Ben asked on Animas, you said slight delay and early 2013. Do you think there's still a reasonable possibility or probability that you could have this by -- finished by ADA?

我還在把 Tickled Pink 的筆記記下來；等我一下。跟 Ben 問 Animas 的問題類似，你提到稍有延遲、會在 2013 年初。你覺得在 ADA 之前完成，仍有合理的可能性或機率嗎？

Yes, Thom, this is Steve again. You know, with that 180-day time frame I think the answer is possibility probably not probability I would say. If we get this filed very early in the first quarter of next year, I think there's still an outside chance. I think it's definitely what we've committed to previously was second half of next year was a stretch of both trying to get to ADA and I think that's still our plan. We just, you know, as without re-hashing all the old details, as we move from the old what was Gen4 to the G4 PLATINUM, we had to do some systems' upgrading on their side and we just have to get through the final systems validation, verification testing and literally have just been get the paperwork done.

是的，Thom，我是 Steve。你知道，以 180 天的時程來看，我會說「有可能」但大概不是「很高機率」。如果我們能在明年第一季非常早期就完成遞交，我認為仍有一線機會。我們先前承諾的是明年下半年；要趕上 ADA 本來就有點勉強，但我想那仍是我們的計畫。我們只是——不再重提所有舊細節——當我們從原本的 Gen4 轉到 G4 PLATINUM 時，他們那邊需要做一些系統升級；我們也必須完成最後的系統驗證、確認測試，基本上就是把文件作業完成。

Got it and then on Tandem I think the original agreement was for Gen5 to go along with Tandem and you were talking about Gen4. Where -- do you think they'll -- is that something that we should plan on or is that still in the negotiations stage?

了解。那關於 Tandem，我記得原始協議是 Gen5 會與 Tandem 搭配，但你剛剛談的是 Gen4。那——你覺得他們會——這是我們應該納入規劃的事嗎？還是仍在協商階段？

It's actually from a business perspective there is no real negotiation. We've already agreed with Tandem that if we collectively can prove that it's feasible -- what I mean by that is you'll remember the Gen5 architecture is much simpler to integrate with potential partners because all of the intelligence resides in the transmitter so with Gen4 the partner is required to actually put some additional hardware into their handheld or in this case the durable pump. Word is that the final stages of feasibility testing to make sure, for example, that the transmitter can communicate appropriately from, you know, send and receive the RF signal for -- as the best example.

其實從商業角度來看，沒有什麼真正的協商。我們已經與 Tandem 達成共識：如果我們能共同證明其可行性——我的意思是，你會記得 Gen5 的架構更容易與潛在合作夥伴整合，因為所有智慧都在發射器端；而在 Gen4 的情況下，合作夥伴需要在他們的手持裝置（此處是耐用型幫浦）中加入一些額外硬體。目前的消息是，可行性測試已進入最後階段，以確認例如發射器能否適當通訊、能否——以最好的例子來說——正確地發送與接收 RF 訊號。

We're very, very close to kind of final sign off from both engineering teams that the G4 PLATINUM system will work inside the Tandem pump. We've actually built prototype, actual prototype pumps, and we're testing them today so I think the answer is it's a high likelihood. I don't want to tell you for sure but it's a high likelihood that Tandem will move to the Gen4, really because they're looking to accelerate their entrée into CGM.

我們已經非常、非常接近由雙方工程團隊完成最終核准，確認 G4 PLATINUM 系統可以在 Tandem 的幫浦內運作。我們其實已經做出原型機、真正的原型幫浦，而且今天正在測試，所以我想答案是：可能性很高。我不想跟你保證一定，但 Tandem 很有可能會轉向 Gen4，主要是因為他們希望加速切入 CGM。

Thanks. One more partner question and then a quick customer service question and that would be on the partner side, Steve, any update on Insulet and combining Gen4 with their next generation?

謝謝。再問一個合作夥伴的問題，然後再快速問一個客戶服務的問題。合作夥伴方面，Steve，Insulet 把 Gen4 與他們下一代產品結合，有沒有任何最新進展？

Yes not really an update, there's nothing, at this point nothing going on there.

是的，沒有什麼更新；目前那邊沒有任何進展。

Okay and then, Terry, the customer service question, when you say 50% increase from pre-launch post-launch, can you give me a sense of that because you also said that maybe people were waiting for Gen4 so I am maybe customer service calls were lesser in advance of this. What kind of calls were you getting relative to what you're set up for and the second part of that question would be do you need to temporarily boost labor there to handle the calls?

好的。接著，Terry，關於客戶服務的問題：你提到上市前到上市後增加了 50%，你能不能讓我了解一下這代表什麼？因為你也說可能有人在等 Gen4，所以我想在此之前客服來電可能比較少。相較於你們原本的配置，你們接到的電話量是什麼狀況？第二部分是：你們是否需要暫時增加人力來處理來電？

Well, my comment of 50% was greater than an average of what we were experiencing. There was, although we believe that there was a decision by physicians and patients -- not that there was a belief, we actually were told that by both constituents that they were waiting. We certainly, if you just look at the growth of the business, we have continued to build that customer base in anticipation all along.

嗯，我所說的 50% 是高於我們過去平均所經歷的水準。雖然我們相信醫師與病患確實做了某種決定——其實不只是相信，我們確實從這兩個族群都被告知他們在等待。我們當然，如果你只看業務成長，我們一直在持續擴大客戶基礎，並且一路以來都在為此做準備。

So we didn't see any dramatic fall off from that customer call pattern and we continue as part of that call pattern to -- on customer service to fulfill the sensor orders as well. And that, you know, the more starter kits we put in the market, the more sensors that we also put into the market. So I would say that this 50% increase was truly a dramatic increase. That's the first part. The second part.

所以我們沒有看到客戶來電模式有任何戲劇性的下滑；而且在這個來電模式中，我們的客服也持續負責履行感測器訂單。你知道，市場上投放的入門套組越多，我們同時投放到市場的感測器也越多。所以我會說，這次 50% 的增加確實是非常顯著的成長。這是第一部分。第二部分。

The second part, I don't -- and I've tried to caution the audience by saying we're not sure if that's going to be sustainable or not. We've not seen any big drop off but, again, we're really three weeks into this and so we don't know. We just don't have the optics on what November is going to look like as an example and then of course we, again, we go into December, which is always our largest month regardless and that's kind of a DME experience for all parties in that world.

第二部分，我不——而且我也試著提醒各位，我們不確定這是否能持續。我們沒有看到明顯的回落，但同樣地，我們才進行到第三週，所以我們還不知道。我們只是還看不清楚，例如 11 月會是什麼樣子；當然接著進入 12 月，不管怎樣 12 月一向是我們最大的月份，這在那個領域對所有參與者而言都算是一種 DME 的常態經驗。

Your third question regarding do we need to staff up, we're monitoring that. We do have the ability to do some shifting and if you look at kind of the way we train people, we like to have expansive training in the customer service so patients, for the patient level we can shift resources as necessary, even involving tech services. One of the beauties of the seven plus is that we've seen the number of calls to tech services go down over the year and we certainly expect that to further decrease in tech services because Gen4 is a better product and so we can shift some of those resources if necessary. So I think we certainly don't want to add to it unnecessarily in terms of the cost component. But we literally monitor the number of ops coming in every single day and make adjustments for the next day.

你第三個問題是我們是否需要增員，我們正在監控。我們確實有能力做一些人力調度；如果你看我們訓練人員的方式，我們希望客服訓練面向很廣，讓我們在病患端可以視需要調整資源，甚至包含技術服務。seven plus 的一個優點是，我們看到技術服務的來電數在一年內下降，而我們也預期技術服務的來電會進一步下降，因為 Gen4 是更好的產品，所以必要時我們可以調度部分資源。因此我想，我們當然不希望在成本面不必要地增加人力。但我們確實每天都在監控進線量，並為隔天做調整。

Thank you.

謝謝你。

Bill Plovanic, Canaccord.

Bill Plovanic，Canaccord。

Just a couple of questions; one, you gave an update on Edwards. I think you talked about did you say the Gen2 is near completion and CE before year-end '12? Is that -- were you referring to the US as well when you say the Gen2 is complete?

我有幾個問題；第一，你提到 Edwards 的最新狀況。我想你說 Gen2 接近完成，並且在 12 年底前取得 CE？是這樣嗎——你說 Gen2 完成時，也是在指美國那邊嗎？

No that's -- well, the product is complete. The time line for approval is just for CE mark approval before the year end.

不是——嗯，產品本身已完成。核准時程只針對在年底前取得 CE 認證。

And any update on the US for Edwards?

那 Edwards 在美國方面有任何更新嗎？

We don't have an estimate for the US time line at this point. Quite frankly we're still somewhat waiting on the FDA to weigh in as to what the acceptable approval criteria would be in terms of performance for the system and that's something, that's going to be a 2013 discussions with the Agency is my guess.

目前我們對美國的時程沒有估計。坦白說，我們仍在某種程度上等待 FDA 表態，針對系統性能而言可接受的核准標準會是什麼；我猜這會是 2013 年與主管機關討論的議題。

Okay and then just as you kind of move through these one-time charges, I don't think you quantified any for Q4. I was wondering if you could do that and then will all of this have been washed through as we complete 2012?

好的。接著，當你們逐步處理這些一次性費用時，我想你們沒有量化第四季的任何項目。我想問你是否可以量化一下？另外，當我們完成 2012 年時，這些是否都會完全反映完畢？

Bill, we don't see any one-time charges coming in Q4. We believe we dealt with everything now and that was our plan and so we believe it will all wash through and, as Terry said earlier, it's our goal to get all those upgrades in the system on the in warranty program and also those in the 30 days that we exchange to try and get all that out of the system in the fourth quarter as well so we can get any effect on margins washed out with that here in Q4 and move forward with a clean slate.

Bill，我們預期第四季不會再有任何一次性費用。我們相信現在已經把所有事情都處理完了，這也是我們的計畫；因此我們相信都會反映完畢。而且如 Terry 先前所說，我們的目標是在保固內升級計畫中把所有升級都完成，另外也把 30 天內換貨的部分在第四季盡量處理完，讓對毛利的任何影響在第四季就能被沖刷掉，之後以乾淨的基礎繼續往前走。

Given that we're moving over to the new product, what -- I mean, can you provide any color on what you think Q4 gross margins will be?

考量到我們正在轉換到新產品，你能否提供一些看法，第四季毛利率你認為會是什麼樣子？

Yes, as I said in my remarks, there's a whole bunch of things affecting them and as you walk through it, we've got $399 in warranty upgrade program for hardware. Obviously the margins on that, it's not going to be real good so that will affect it negatively. Conversely, we have a whole bunch of manufacturing volume going on that will affect it positively and we know Gen4 sensors cost less to build than seven plus sensors so to the extent we can shift over that, we'll have a positive impact. We've got a whole bunch of factors going every which direction, Bill, so I wouldn't give any more color than saying just it's going to be an interesting quarter.

可以。如我在談話中提到的，有一大堆因素在影響毛利率；你逐項看下來，我們有 399 美元的保固升級計畫（硬體）。顯然那部分的毛利不會太好，所以會帶來負面影響。相對地，我們有大量的製造產量，會帶來正面影響；而且我們知道 Gen4 感測器的製造成本比 seven plus 感測器更低，所以只要能轉換過去，就會有正面效果。Bill，有很多因素朝各個方向拉扯，所以我不會提供更多細節，只能說這會是一個很有意思的季度。

Okay so looking -- okay and then on--

好的，所以看起來——好的，然後關於——

Mostly good, I'll say that; I'll say mostly good and even the in-warranty upgrade program to the extent we sell $399 hardware, we're still selling sensors to those people at very positive margins, so we look for a good quarter, Bill, not for a bad one.

我會說大多是好的；我會說大多是好的。即便是保固內升級計畫，只要我們以 399 美元賣出硬體，我們仍會以非常好的毛利把感測器賣給那些人，所以我們預期會是個不錯的季度，Bill，不會是糟的。

Okay and then on the 10-day trial and labeling, where are you on that?

好的。那關於 10 天試用與標示（labeling），你們目前進度如何？

I think we're still in planning stages from what that should look like and, as I've said previously and I am sure Kevin and Steve have said previously at a variety of meetings so here's the landscape. As you remember, Gen4 PLATINUM is actually taking the membrane from Gen5 and moving it backwards. That's why it was a brand new PMA. So, as we -- but we didn't stop all of the work on Gen5 from the hardware so in the Gen5 there's two new components.

我想我們仍在規劃階段，思考應該長什麼樣子；而且如我之前說過的，我相信 Kevin 和 Steve 也在各種會議上說過，所以整體情況是這樣：如你所記得，Gen4 PLATINUM 其實是把 Gen5 的薄膜拿來往回用。這也是為什麼它是一個全新的 PMA。也就是說——但我們並沒有停止 Gen5 在硬體方面的所有工作，所以在 Gen5 裡有兩個新的元件。

Basically one is a new applicator and one is putting the brains from the receiver into the transmitter so I think as you look at 10 days, they're going to marry up from a standpoint it's probably going to be a Gen5 moving forward with a 10-day trial. And part of it is these trials are not inexpensive so if you look at the Gen4 pivotal trial, it's probably $2.5 million and you add another pediatric portion to that and I don't know what that final number--

基本上，一個是新的施用器（applicator），另一個是把接收器的「大腦」放進發射器裡。所以我想當你看 10 天時，從整合角度來看，它們很可能會結合在一起，也就是未來推進 10 天試用的，可能會是 Gen5。部分原因是這些試驗並不便宜；如果你看 Gen4 的關鍵性試驗（pivotal trial），大概是 250 萬美元，再加上一個兒科部分，我不知道最後數字會是多少——

It's certainly over a $1 million.

肯定超過 100 萬美元。

Okay so you're looking at $3.5 million. We want to do that once, not twice so I think from that standpoint and the fact that in this Gen4 PLATINUM approval there was no requirement at this point from the Agency to cause patients to actually remove the transmitter for a restart and so they will use that as they so desire. We obviously would like them to use it at the labeled indication of seven days but we do have it in our 2013 planning schedule.

好的，所以你看大概是 350 萬美元。我們希望只做一次，不要做兩次。所以從這個角度，以及在這次 Gen4 PLATINUM 核准中，主管機關目前並沒有要求病患必須移除發射器才能重新啟動，因此他們可以依自己意願使用。我們當然希望他們依標示適應症使用 7 天，但我們確實已把它納入 2013 年的規劃時程中。

Okay so just in sum know that the whole concept of a longer label is going to be more focused on the Gen5 than the Gen4.

好的，總結來說，請了解「較長標籤」這整個概念將會更聚焦在 Gen5，而不是 Gen4。

Yes.

是。

Yes.

是。

Okay and then last question and I'm jumping off is you have the $15 million revolver, the $20 million term loan; I think the commentary was on the term loan you gave us the interest rate, no warrants. Was there any warrants on the revolver?

好的，最後一個問題，我問完就下線：你們有 1,500 萬美元的循環信貸額度（revolver），以及 2,000 萬美元的定期貸款（term loan）；我記得你們對定期貸款的說明是給了我們利率、沒有認股權證。那循環信貸額度有沒有附帶任何認股權證？

No warrants, no dilution, Bill.

沒有認股權證，沒有稀釋，Bill。

No. no dilution on anything.

沒有，任何項目都沒有稀釋。

Okay so this definitely fills the coffers up and that's all I had. Thank you very much.

好的，所以這確實讓資金更充裕了；我就這些。非常感謝。

John Putnam, Capstone Investments.

John Putnam，Capstone Investments。

Terry, can you talk about the economics of those clients that are not under warranty going from seven plus to Gen4? What will it cost them to convert?

Terry，你能談談那些不在保固內、從 Seven Plus 升級到 Gen4 的客戶，其經濟性如何嗎？他們轉換需要花多少成本？

Well, basically they're going to -- my expectation is number one, they would use up their seven plus sensors so there's no new cost factor from that standpoint so what they're going to be looking at is an upgrade to the disposable -- I mean to the hardware durable, both the starter kit and the transmitter. As we've mentioned before, our average selling price is a little north of $800 so if they are within their whatever their plan is, and the majority of our patients have an 80/20 plan so from an out of pocket standpoint they're probably looking at under $200 out of pocket for the starter kit and then the standard of what they're paying relative to the sensors. There was no increase in the cost of sensors.

嗯，基本上他們會——我的預期是第一，他們會先把手上 Seven Plus 的感測器用完，所以從那個角度來看不會有新的成本因素；因此他們要面對的是一次性耗材——我是說硬體耐用品——的升級，也就是入門套件（starter kit）和發射器（transmitter）。如同我們先前提過，我們的平均售價略高於 800 美元，所以如果他們在其保險方案的範圍內，而我們大多數病患是 80/20 的方案，那麼就自付額而言，他們入門套件的自付額可能不到 200 美元，接著就是他們相對於感測器原本的標準支付金額。感測器成本沒有增加。

Okay so you don't believe that you'll have to incentivize them to convert.

好的，所以你不認為你們需要提供誘因讓他們轉換。

No I -- we're not expecting that to be a scenario. We -- in fact, even on the -- you know, those that were in warranty we long debated whether or not we should provide an upgrade but, again, part of our motivation and I think Kevin alluded to it, was the fact that we need to get patients into the Gen4 format sooner rather than later because if you just think about the growth of Gen4, we're making more margin on the sensors and that means that we're going to make less margin on the seven plus sensors as we go forward and so at some point we need to get everybody converted over.

不——我們不預期會是那樣的情況。我們——事實上，即便是——你知道，那些仍在保固內的客戶，我們也曾長時間討論是否應該提供升級；但同樣地，我們的動機之一（我想 Kevin 也提到過）是，我們需要讓病患儘早進入 Gen4 的規格，因為如果你只要想想 Gen4 的成長，我們在感測器上的毛利更高，而這也意味著未來我們在 Seven Plus 感測器上的毛利會更低；所以在某個時間點，我們需要讓所有人都完成轉換。

Right thanks very much.

了解，非常感謝。

(Operator Instructions). Ben Haynor, Feltl & Company.

（接線員指示）。Ben Haynor，Feltl & Company。

Thanks for taking my questions. First off, how -- what percentage of the people who were eligible for the 30-day return policy have taken advantage of it now?

謝謝讓我提問。首先，符合 30 天退貨政策資格的人當中，目前有多少百分比已經使用了這項政策？

We're not going to disclose that. Some have filed. We haven't shipped anything to those patients yet but what we did, Ben, is we came up with an estimate of how many we thought would based upon what we've experienced in the past and that's the reserve that we've recorded so nobody has got a thing yet. We have had quite a few people request it but not all of them and certainly not close to what we provided for in our reserves yet.

我們不會揭露那個數字。有些人已經提出申請。我們還沒有向那些病患出貨任何東西；但我們做的是，Ben，我們根據過去的經驗估算可能會有多少人申請，並依此提列了準備金，所以目前還沒有人拿到任何東西。我們確實收到不少人提出申請，但不是全部，當然也遠低於我們目前準備金所涵蓋的水準。

Okay that's understandable and then kind of a big picture question, you guys mentioned that the blog post that we picked on our surveys as well, increasing discussion on CGM, particularly your Gen4, where do you believe that US penetration is at currently and then I am wondering where you think or how close we are to that tipping point where you really see the adoption accelerate?

好的，可以理解。接著是一個比較宏觀的問題：你們提到我們在調查中也注意到的那篇部落格文章，關於 CGM 的討論增加，特別是你們的 Gen4。你認為目前美國的滲透率大概在哪裡？另外我也想知道，你覺得我們距離那個真正看到採用加速的「臨界點」還有多近？

Yes I, you know, I still think we're in that 6% to 7% penetration as a category. I do believe now that well reach that whatever that magical point is. I've always said it's around 8% or 9% within the next 12 months. Based on -- in fact, I've been pleasantly surprised more than I thought I would be with the Gen4. We knew from a technological standpoint that it was an advance sensor, accuracy, things of that nature.

是的，我——你知道，我仍然認為以整個品類來看，滲透率大約在 6% 到 7%。我確實相信我們現在會在未來 12 個月內達到那個不管是什麼「神奇點」。我一直說大概在 8% 或 9% 左右。根據——事實上，Gen4 的表現讓我比原先預期更驚喜。我們從技術角度就知道它是更先進的感測器，在準確度等方面都有提升。

What I think we didn't or we underestimated, didn't anticipate the -- some of the features and benefits that would be highly desirable by patients and that may, in fact, drive it to a greater degree and faster. Based on some of the comments that we're getting back from our field sales people of their ability to get into accounts and drive some of the interest at accounts that were somewhat resistant for -- you know, it's cumbersome and things of that nature that the slimness and things of that nature of the receiver, as an example, or extended connectivity are really attributes that are more desirable at the consumer level than we anticipated.

我認為我們沒有——或是我們低估、沒有預期到的是——某些功能與效益對病患而言會非常有吸引力，而這可能確實會在更大程度上、也更快地推動採用。根據我們從第一線業務人員回饋的部分評論，他們更能進入客戶帳戶並帶動一些原本有些抗拒的帳戶的興趣——你知道，覺得笨重之類的——例如接收器的纖薄外型，或是延伸的連線距離等，這些特性在消費者層面上比我們預期更受青睞。

Okay great that's helpful and then just one more and I'll jump off; what's the most popular color?

好的，很棒，這很有幫助。最後再問一個我就下線：最受歡迎的顏色是什麼？

Oh it's still black.

喔，還是黑色。

It's still black, (inaudible) and right now I think we're running 50/25/25.

還是黑色，（聽不清楚），而且目前我想我們的比例大概是 50/25/25。

Okay great. Thank you very much.

好的，很棒。非常感謝。

Thank you. We have no further questions at this time. I will now turn the call back over to Terry Gregg.

謝謝。目前沒有其他問題。我現在把電話交回給 Terry Gregg。

Thank you and I'd like to close with a couple of real life experiences with the G4 PLATINUM just over the last couple of weeks that have come into us and this is from both the healthcare sector as well as from patients. As an example, we've had one resistant physician whose only objection to our CGM was lack of integration with the pump and that's not uncommon. But upon seeing the receiver and accuracy of the G4 stated integration doesn't matter anymore and gave our sales rep a list of 10 patients to initiate contact with regarding CGM. So we look at that and we say imagine the day when we are able to transmit directly to a smartphone with our next generation.

謝謝。最後我想用過去幾週我們收到的、關於 G4 PLATINUM 的幾個真實案例作結，這些回饋同時來自醫療照護領域以及病患。舉例來說，我們有一位原本抗拒的醫師，他對我們 CGM 唯一的反對點是沒有與胰島素幫浦整合，這並不罕見。但在看到 G4 的接收器與準確度之後，他表示整合已經不再重要，並給了我們的業務代表一份 10 位病患名單，讓我們就 CGM 與他們開始接觸。所以我們看到這點就會想像：當我們下一代產品能夠直接傳輸到智慧型手機時，會是什麼樣的一天。

We truly open the opportunities. And we've also heard from both patients and physicians that G4 will enable them to use CGM first before moving to pumps if they move to pumps at all. And this has been our philosophy and our marketing message so it is nice to see that kind of traction.

我們確實打開了更多機會。我們也同時從病患與醫師那裡聽到，G4 會讓他們先使用 CGM，再考慮是否轉向使用幫浦（如果他們最後真的要用幫浦的話）。這一直是我們的理念與行銷訊息，所以看到這樣的進展令人欣慰。

And finally from a parent with a family member playing a soccer game, the highlight of the game was his ability to hold his son's monitor the entire game and keep track of his glucose due to the extended range of connectivity. He added, "There is a helplessness of watching your kid play an innocent game worrying if he got his insulin correct." And these are the things that I was just talking with Dan about that these are some of the intangibles that are really tangible in terms of driving market awareness and adoption. So this is the power of the G4 PLATINUM and these experiences validate what we're trying to achieve and particularly over the next three years, as you see this innovation move into a consumer world of how we view the glucose monitoring world.

最後是一位家長的例子：他的家人在踢足球比賽時，整場比賽的亮點是他能夠全程拿著兒子的監測器，因為連線距離延伸，他可以持續追蹤兒子的葡萄糖數值。他補充說：「看著孩子玩一場天真的比賽，卻擔心他胰島素打得對不對，那種無助感。」這些正是我剛才和 Dan 討論的：有些無形的因素，其實在推動市場認知與採用方面是非常「有形」的。所以這就是 G4 PLATINUM 的力量，這些經驗也驗證了我們想達成的目標，特別是在接下來三年，當你看到這項創新進入消費者世界、以及我們如何看待葡萄糖監測世界的方式。

So with that, I'll close and say thank you very much for your participation today.

因此，我就此結束並再次感謝各位今天的參與。

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。今天的電話會議到此結束。感謝各位參與。您現在可以掛線。