德康醫療 (DXCM) 2013 Q2 法說會逐字稿

Welcome to the DexCom second-quarter 2013 earnings release conference call. My name is Richard, and I will be your operator for today's call.

歡迎參加 DexCom 2013 年第二季財報發布電話會議。我是 Richard，將擔任今天會議的接線員。

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.

此刻，所有與會者皆為僅收聽模式。稍後我們將進行問答環節。請注意，本次會議將被錄音。

I will now turn the call over to Mr. Terry Gregg. Mr. Gregg, you may begin.

我現在把電話交給 Terry Gregg 先生。Gregg 先生，您可以開始了。

Thank you, Richard, and thanks to the audience for joining us today for our second-quarter 2013 investor conference call.

謝謝你，Richard，也感謝各位聽眾今天加入我們的 2013 年第二季投資人電話會議。

I am going to have Steve Pacelli read our Safe Harbor statement. Steve?

我將請 Steve Pacelli 宣讀我們的安全港聲明。Steve？

Thanks, Terry.

謝謝你，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. 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, or 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.

我們在今天電話會議中所做的部分陳述，可能構成前瞻性陳述。這些陳述反映管理層對未來事件、營運計畫與績效的預期，且僅以本日為準。此等前瞻性陳述涉及多項風險與不確定性。可能導致實際結果與任何此等前瞻性陳述所明示或暗示者存在重大差異之因素清單，已於我們的 Form 10-K 年報或 Form 10-Q 季報以及其他向美國證券交易委員會（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公開更新或修訂此等前瞻性陳述之義務。

Additionally, we will discuss certain financial information that has not been prepared in accordance with GAAP with respect to our cash operating loss. This non-GAAP information is provided to enhance your overall understanding of our current financial performance. The presentation of this additional information should not be considered in isolation, or as a substitute for results, or superior to results prepared in accordance with GAAP.

此外，我們將討論若干未依 GAAP 編製之財務資訊，涉及我們的現金營運虧損。提供此非 GAAP 資訊旨在增進您對我們目前財務表現的整體理解。此額外資訊之呈現不應被孤立看待，亦不應作為依 GAAP 編製之結果的替代，或被視為優於依 GAAP 編製之結果。

Terry?

Terry？

Thanks, Steve. Joining me today are Kevin Sayer, our President and Chief Operating Officer; Jess Roper, our Chief Financial Officer; and you just heard from 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：我們的總裁兼營運長 Kevin Sayer；財務長 Jess Roper；以及您剛剛聽到的策略與企業發展執行副總裁 Steve Pacelli。

Before I turn the call over to Kevin for our customary financial review and operations update, I would like to comment briefly on our Q2 performance, and a couple of exciting operating milestones reached during the quarter. Obviously, the commercial introduction of G4 Platinum continues to exceed our expectations. Our pipeline of new patient opportunities remains very robust, and our sensor reorders are stronger than ever. Our financial results speak for themselves. During the second quarter, we achieved record sales, record margins, and our best operating results ever.

在我把電話交給 Kevin 進行我們慣例的財務回顧與營運更新之前，我想先簡要評論一下我們第二季的表現，以及本季達成的幾項令人振奮的營運里程碑。顯然，G4 Platinum 的商業導入持續超出我們的預期。我們的新病患機會管線仍然非常強勁，而感測器的再訂購量也比以往任何時候都更強。財務結果不言自明。第二季我們創下銷售新高、毛利率新高，以及歷來最佳的營運成果。

From an operations perspective, I am pleased to report that in late July, we filed a PMA supplement with the Food and Drug Administration seeking approval of our DexCom Share system, a remote monitoring system developed to address the unique challenges faced by caregivers in assisting people with Type 1 diabetes. As a reminder, the DexCom Share system is a docking station for the G4 Platinum receiver, which enables wireless transmission of glucose information, such as the patient's trend graph and alert notifications, from the G4 Platinum to designated recipients, allowing the recipient to view the patient's data on their smart phone. We view DexCom Share as the first of many steps in bringing CGM to mobile devices, and couldn't be more excited about this opportunity.

從營運角度來看，我很高興報告，我們於 7 月下旬向美國食品藥物管理局（FDA）提交了 PMA 補充申請，尋求核准我們的 DexCom Share 系統；這是一套遠端監測系統，旨在因應照護者在協助第一型糖尿病患者時所面臨的獨特挑戰。提醒各位，DexCom Share 系統是一個 G4 Platinum 接收器的底座，可讓葡萄糖資訊（例如病患的趨勢圖與警示通知）從 G4 Platinum 以無線方式傳送給指定接收者，使接收者能在智慧型手機上查看病患資料。我們將 DexCom Share 視為把 CGM 帶到行動裝置上的眾多步驟中的第一步，對此機會感到無比興奮。

We are also pleased to announce that just last week we were awarded a $4 million grant from the Leona M. and Harry B. Helmsley Charitable Trust to accelerate the development of our Gen 6 sensor technology. A goal of the Helmsley Charitable Trust is to advance the accuracy and reliability of CGM devices, and develop artificial pancreas systems for people with Type 1 diabetes. The funding is milestone based, and is contingent on our meeting specific development milestones over the next several years. The grant has been structured to allow the Trust to recoup and redeploy a portion of any eventual proceeds from the successful commercialization of the Gen 6 sensor.

我們也很高興宣布，就在上週，我們獲得 Leona M. 與 Harry B. Helmsley 慈善信託基金會提供的 400 萬美元補助，用以加速我們第六代（Gen 6）感測器技術的開發。Helmsley 慈善信託基金會的目標之一，是提升 CGM 裝置的準確性與可靠性，並為第一型糖尿病患者開發人工胰臟系統。該資金採里程碑制，並以我們在未來數年達成特定開發里程碑為前提。此補助的架構亦允許信託基金會在 Gen 6 感測器成功商業化後，回收並重新部署部分最終收益。

To that end, we have agreed with the Trust that on successful commercialization of our Gen 6 sensor in the US, we will pay a royalty of up to $2 million per year for four years, or at our option, a one-time payment of $6 million. We are extremely excited to engage in this collaboration, as it provides us with the opportunity to accelerate the development of more accurate, effective sensor technologies to improve the outcomes and quality of life of people with diabetes.

為此，我們已與該信託基金會達成協議：若我們的 Gen 6 感測器在美國成功商業化，我們將支付每年最高 200 萬美元、為期四年的權利金；或由我們選擇一次性支付 600 萬美元。我們非常期待參與此合作，因為這讓我們有機會加速開發更精準、更有效的感測器技術，以改善糖尿病患者的治療成效與生活品質。

With that, I would like to turn the call over to Kevin for a financial and operational update.

接下來，我想把電話交給 Kevin，請他進行財務與營運更新。

Thanks, Terry.

謝謝你，Terry。

I will start with the financial update. DexCom generated $35.5 million in product revenue for the second quarter 2013, compared to $21.5 million for the same quarter in 2012 -- a $14 million, or 65% increase. Sequentially, product revenue for Q2 of 2013 increased 28% from the prior quarter. We note that in the second quarter we recognized approximately $1.3 million in higher than expected revenue attributed to royalties from sales of the Animas 5 system in Europe, and revenues related to our first product sales of GlucoClear sensors to Edwards Lifesciences. We do not expect this level of Animas royalty or GlucoClear sensor sales in subsequent 2013 quarters.

我先從財務更新開始。DexCom 於 2013 年第二季的產品營收為 3,550 萬美元，相較於 2012 年同季的 2,150 萬美元，增加 1,400 萬美元，或 65%。按季比較，2013 年第二季產品營收較前一季成長 28%。我們指出，第二季我們認列了約 130 萬美元高於預期的營收，主要來自歐洲 Animas 5 系統銷售的權利金，以及我們首次向 Edwards Lifesciences 銷售 GlucoClear 感測器所帶來的收入。我們不預期 2013 年後續季度仍會有此水準的 Animas 權利金或 GlucoClear 感測器銷售。

Total revenue for the second quarter of 2013 was $35.8 million, compared to $23.4 million during the same quarter in 2012. Our product gross profit totaled $21.8 million, generating a product gross margin of 61% for the second quarter, compared to product gross profit of $10.6 million, and a product gross margin of 49% for the same quarter in the prior year.

2013 年第二季總營收為 3,580 萬美元，相較於 2012 年同季的 2,340 萬美元。我們的產品毛利合計 2,180 萬美元，使第二季產品毛利率達 61%；相較之下，前一年同季產品毛利為 1,060 萬美元，產品毛利率為 49%。

Some final thoughts on our product revenues, and our gross profits during Q2. Our split between consumable and durable revenues was again slightly more heavily weighted to durables in Q2, due primarily to existing patients upgraded to the G4 Platinum, with approximately 30% of our product revenue generated by sales of G4 Platinum hardware, and approximately 70% generated by the sales of sensors, primarily G4 Platinum.

關於第二季的產品營收與毛利，我再補充幾點。我們在第二季的耗材與耐用品營收組合，再次略偏向耐用品，主要因既有病患升級至 G4 Platinum；約 30% 的產品營收來自 G4 Platinum 硬體銷售，約 70% 來自感測器銷售，主要為 G4 Platinum 感測器。

ASP for sensors has stayed consistent at approximately $70 per sensor, and the ASP for hardware continued at approximately $800 to $850 per starter kit. Our international business performed very well, remaining consistent in Q2 and continues to represent between 5% and 10% of our total product revenue. Research and development expense totaled $11.1 million for Q2 of 2013, which was up by $1.1 million compared to Q2 of 2012, with the increase due primarily to additional payroll related costs, completion of our work on DexCom Share, and other near-term product launches. Sequentially, R&D expense was up 19%, with the increase related to the same factors. We expect that R&D expense for the full year will be slightly up versus 2012.

感測器的平均銷售價格（ASP）維持一致，約為每個感測器 70 美元；硬體 ASP 亦持續約為每套入門套組 800 至 850 美元。我們的國際業務表現非常好，第二季維持一致，並持續占我們產品總營收的 5% 至 10%。2013 年第二季研發費用合計 1,110 萬美元，較 2012 年第二季增加 110 萬美元；增加主要來自額外的人事相關成本、完成 DexCom Share 的工作，以及其他短期產品上市計畫。按季比較，研發費用增加 19%，增幅原因亦相同。我們預期全年研發費用將較 2012 年略為增加。

Selling and general administrative expense totalled $20.7 million in Q2 of 2013, compared to $15.9 million during the same quarter in 2012. Of the $4.8 million increase, $900,000 is non-cash share-based compensation. The remaining increase was primarily related to expanded headcount in our sales organization and other growth-related expenses.

2013 年第二季銷售與一般管理費用合計 2,070 萬美元，相較於 2012 年同季的 1,590 萬美元。增加的 480 萬美元中，有 90 萬美元為非現金的股份基礎給付薪酬。其餘增加主要與我們銷售組織擴編及其他成長相關費用有關。

We will always consider adjusting our spending to take advantage of strategic development opportunities. A couple of examples -- one important opportunity for us is clinical data. It has become obvious to us that we need more clinical data, and we are in the early planning phases for studies that we believe will unequivocally support our position of CGM first, from both the clinical and economic perspective. Another important opportunity is advanced technology development. As Terry mentioned in his introductory remarks, we are very pleased to be working with the Helmsley Charitable Trust to accelerate development on our Gen 6 sensor. With the $4 million Helmsley grant, we will increase our internal spend on the Gen 6 project as well, in order to accelerate commercialization of this transformative technology.

我們將一向考量調整支出，以把握策略性開發機會。舉兩個例子——對我們而言，一個重要機會是臨床數據。我們已清楚意識到需要更多臨床數據，目前正處於規劃初期，準備進行我們相信能從臨床與經濟角度明確支持「CGM 優先」立場的研究。另一個重要機會是先進技術開發。如 Terry 在開場致詞中提到的，我們非常高興能與 Helmsley 慈善信託基金會合作，加速 Gen 6 感測器的開發。在 Helmsley 提供的 400 萬美元補助下，我們也將提高 Gen 6 專案的內部投入，以加速這項具變革性技術的商業化。

To paraphrase commentary by a member of senior management from another diabetes company during a recent presentation at a conference, the reason DexCom sensors are so good, is that sensors are the only thing they do. We couldn't agree more, and we intend to retain our position as the leader in sensor technology.

在最近一次會議簡報中，另一家糖尿病公司的一位高階管理層成員曾評論（意譯）指出：DexCom 感測器之所以如此出色，是因為感測器是他們唯一在做的事。我們完全同意，並且我們打算維持我們在感測器技術領域的領導地位。

Our net loss for the second quarter of 2013 totaled $10.1 million. It included $9 million in non-cash expenses, centered in share-based compensation, depreciation and amortization. Absent these charges, our net loss would have been $1.0 million for Q2 2013. Compare this to a net loss of $7.6 million for Q2 2012. In other words, of the $14 million increase in Q2 sales, year over year $6.5 million, or close to 50%, has dropped through to our cash phase financial results. Our business model continues to mature very nicely. Our loss per share for the quarter was $0.14. With respect to our balance sheet, we ended the second quarter with $4.6 million in cash and marketable securities, an increase of $1.1 million from the end of Q1 2013.

我們 2013 年第二季的淨損失合計為 1,010 萬美元。其中包含 900 萬美元的非現金費用，主要來自股份基礎給付、折舊與攤銷。若不計入這些費用，我們 2013 年第二季的淨損失將為 100 萬美元。相較之下，2012 年第二季的淨損失為 760 萬美元。換言之，在第二季銷售額年增 1,400 萬美元之中，有 650 萬美元（約接近 50%）已反映到我們以現金為基礎的財務結果中。我們的商業模式持續非常良好地成熟。本季每股虧損為 0.14 美元。就資產負債表而言，我們在第二季末持有 460 萬美元的現金及有價證券，較 2013 年第一季末增加 110 萬美元。

We note that we received $2.3 million in proceeds related to the exercised employee stock options during the quarter, slightly higher than in previous quarters. We also had a very strong quarter in terms of working capital performance. Our DSOs are less than 45 days, and inventory levels are approximately the same as they were at the end of Q2 2012. All this during a period of 65% growth, with no periods of product back order. One last balance sheet note -- last year, we entered into a term loan and revolving line of credit agreement with Silicon Valley Bank. And under terms of the original agreement, we were required to draw the remaining $13 million under the term loan during a three-month window commencing June 1, 2013. Silicon Valley Bank has agreed to move our draw down window to the three-month period commencing January 1, 2014.

我們注意到，本季因員工股票選擇權行使而取得的款項為 230 萬美元，略高於前幾季。我們在營運資金表現方面也有非常強勁的一季。我們的應收帳款週轉天數（DSO）少於 45 天，存貨水位約與 2012 年第二季末相同。所有這些都發生在 65% 成長期間，且沒有任何產品缺貨待補（back order）的情況。資產負債表最後補充一點——去年我們與矽谷銀行（Silicon Valley Bank）簽訂了定期貸款與循環信用額度協議。依原始協議條款，我們必須在自 2013 年 6 月 1 日起算的三個月期間內，提用定期貸款剩餘的 1,300 萬美元。矽谷銀行已同意將我們的提用期間延後至自 2014 年 1 月 1 日起算的三個月期間。

The combination of cash available under the term loan, and under our receivables-based line of credit offer the Company approximately $28 million in additional available capital. With approximately $40 million in cash on hand at the end of Q2, our debt availability, and most importantly, our operating performance improvements for the first half of 2013, we remain very comfortable with our commitment not to raise additional equity funds in the near term.

定期貸款可用現金與以應收帳款為基礎的信用額度合計，為公司提供約 2,800 萬美元的額外可用資金。加上第二季末約 4,000 萬美元的現金在手、我們可動用的債務額度，以及最重要的——2013 年上半年營運表現的改善，我們仍然非常有信心履行我們在短期內不再募集額外股權資金的承諾。

Finally, we will take the opportunity to update our product revenue guidance for 2013, from a range of $120 million to $130 million, to an expected range of $130 million to $140 million. I note that, consistent with our prior practices in issuing product revenue guidance, we will target the midpoint of our range. I also note that historically, sequential product revenue growth from the second to third quarter is much more modest than the sequential growth from the first to the second quarter, rarely exceeding 10%.

最後，我們將把 2013 年產品營收指引由 1.2 億至 1.3 億美元，上調至預期 1.3 億至 1.4 億美元。我也要指出，依照我們過去發布產品營收指引的一貫作法，我們將以區間中點作為目標。我也要補充，歷史上第二季到第三季的產品營收季增幅通常遠低於第一季到第二季的季增幅，且很少超過 10%。

Now to the business update. As we mentioned during our previous earnings call, during Q1, we filed a PMA supplement with the Food and Drug Administration seeking a pediatric indication for the G4 Platinum. With respect to our US pediatric submission, similar to our previous filings, we continue to have a regular open dialogue with the FDA. At this point, our discussions with the FDA for the pediatric indication center on appropriate labeling of the product specifically for children. By way of background, we performed a clinical study requested by the FDA for the indicated use in patients ranging from 2 to 17 years of age. Due to the wide age range of these patients, the pediatric study was not designed or powered to produce data comparable to our adult G4 Platinum clinical study.

接著是業務更新。如同我們在上一次財報電話會議中提到的，在第一季我們向美國食品藥物管理局（FDA）提交了 PMA 補充申請，尋求 G4 Platinum 的兒科適應症。就我們在美國的兒科申請而言，與先前的申報類似，我們持續與 FDA 保持定期且開放的對話。目前，我們與 FDA 就兒科適應症的討論，主要聚焦在針對兒童的產品適當標示（labeling）。背景說明：我們依 FDA 要求，針對 2 至 17 歲患者的適應用途進行了一項臨床研究。由於受試者年齡範圍很廣，該兒科研究在設計或統計效力上，並非為了產出可與成人 G4 Platinum 臨床研究相當的數據。

While the FDA has indicated that the study we performed includes enough data for approval, due to labeling nuances, we believe that we will be required to create a separate pediatric product offering with labeling specific to children. We will be prepared to launch this product at the soonest possible date, and remain hopeful that we will receive approval prior to year end. We remain extremely excited about the prospects of a pediatric indication, as it not only significantly expands the number of endocrinologists we can call on in the US, we expect to be able to recommend this product to a wide range of patients, all the way down to two years of age.

雖然 FDA 已表示我們所進行的研究包含足夠的核准數據，但由於標示上的細微差異，我們認為可能需要建立一個獨立的兒科產品方案，並採用專為兒童設計的標示。我們將做好準備，在最早可行的日期推出該產品，並仍然希望能在年底前取得核准。我們對兒科適應症的前景仍感到極為振奮，因為這不僅能大幅擴大我們在美國可拜訪的內分泌科醫師數量，我們也預期能將此產品推薦給更廣泛的患者族群，年齡可一路下探至 2 歲。

We continue to make progress with respect to our reimbursement and distribution model, and have had two significant wins since our last conference call. First, we have been awarded a position on Express Scripts' national preferred prescription drug formulary. DexCom is the only CGM on this formulary. The contract will allow us to offer DexCom CGM as a pharmacy benefit to all ESI plans. Over 40% of prescriptions filled in the United States are processed through Express Scripts, and payors who process through Express Scripts will now have the opportunity to treat DexCom CGM as a pharmacy benefit, enabling them to better track utilization, outcomes, and costs. While we don't expect an immediate impact to our business, over time this relationship has the potential to increase accessibility of CGM to more patients in the diabetes community, and create a much more efficient distribution model for DexCom.

我們在給付（reimbursement）與通路分銷模式方面持續取得進展，自上次電話會議以來也拿下兩項重大成果。第一，我們已獲得 Express Scripts 全國優先處方藥給付名冊（national preferred prescription drug formulary）的一席之地。DexCom 是該名冊中唯一的連續血糖監測（CGM）產品。此合約將使我們能以藥局給付（pharmacy benefit）的形式，向所有 ESI 計畫提供 DexCom CGM。在美國，超過 40% 的處方配藥是透過 Express Scripts 處理；而透過 Express Scripts 處理的保險支付方（payors），如今將有機會把 DexCom CGM 視為藥局給付，從而更好地追蹤使用情況、結果與成本。雖然我們不預期會對業務立即產生影響，但隨著時間推進，這段合作關係有潛力提升糖尿病社群中更多患者取得 CGM 的可近性，並為 DexCom 建立更有效率的分銷模式。

Second, we are pleased to report that Humana, a payor covering approximately 6.7 million lives, has expanded their existing CGM policy to include coverage for all insulin-using Type 2 patients. As we stated many times in our prior calls, over 98% of Type 1 patients with private insurance have access to CGM, with much more limited coverage for Type 2 patients. So we are very pleased to see Humana's leadership in opening up CGM access to such an important patient group.

第二，我們很高興報告，Humana（涵蓋約 670 萬名受保人）已擴大其既有的 CGM 政策，將所有使用胰島素的第二型糖尿病患者納入給付。如同我們在先前多次電話會議中所述，擁有私人保險的第一型糖尿病患者中，超過 98% 可取得 CGM，但第二型患者的給付範圍則相對有限。因此，我們非常樂見 Humana 在為如此重要的患者族群開放 CGM 可近性方面展現領導力。

Turning to our future CGM product offerings, we remain focused on replacing finger sticks as our primary long-term objective. In the near term, to achieve that goal, we will focus on four things -- improved sensor performance, patient convenience, expanded connectivity, and cost improvement. DexCom Share is the first step in what will be a number of iterative steps accumulating in what we call our Gen 5 system. Gen 5 is actually a series of system innovations that will include a new transmitter, new applicator, mobile platform user interface, combined with continued algorithm evolution. We are not currently planning any changes to the sensor and related membranes for Gen 5. We expect this Gen 5 system will be rolled out in several stages over the next two years.

談到我們未來的 CGM 產品方案，我們仍專注於以取代指尖採血（finger sticks）作為我們長期的主要目標。短期內，為了達成該目標，我們將聚焦四件事——提升感測器效能、提升患者便利性、擴大連線能力，以及改善成本。DexCom Share 是我們所稱 Gen 5 系統的一系列迭代步驟中的第一步。Gen 5 實際上是一系列系統創新，將包含新的發射器、新的施用器（applicator）、行動平台使用者介面，並結合演算法的持續演進。我們目前並未規劃在 Gen 5 對感測器及相關膜材做任何變更。我們預期該 Gen 5 系統將在未來兩年內分階段推出。

As Terry mentioned in his opening remarks, with the funding from the Helmsley Charitable Trust, we will also accelerate our work on the Gen 6 system. The primary goal of the Gen 6 is to achieve labeling as a replacement for finger sticks, and we will do this primarily to enhance membrane and algorithm development.

如同 Terry 在開場致詞中提到的，藉由 Helmsley Charitable Trust 的資助，我們也將加速 Gen 6 系統的研發工作。Gen 6 的主要目標是取得可作為指尖採血替代方案的標示（labeling），而我們將主要透過強化膜材與演算法開發來達成。

Shifting to our integration partnerships, as mentioned during our last conference call, Animas has filed a PMA with the FDA seeking approval of the Animas Vibe system in the US. Animas very recently received written questions from the FDA regarding the Vibe, and the Animas regulatory team is currently in the process of evaluating those questions and formulating a response. We continue to work diligently with Tandem Diabetes Care to incorporate the G4 Platinum into a next-generation version of Tandem's t-slim, and we remain on track to assist Tandem in filing a PMA with the Food and Drug Administration before the end of this year.

接著談整合合作夥伴。如同我們在上次電話會議中提到的，Animas 已向 FDA 提交 PMA，尋求 Animas Vibe 系統在美國的核准。Animas 最近剛收到 FDA 就 Vibe 提出的書面問題，Animas 的法規團隊目前正評估這些問題並擬定回覆。我們也持續與 Tandem Diabetes Care 勤勉合作，將 G4 Platinum 整合至 Tandem t-slim 的下一代版本中；我們仍按計畫在今年年底前協助 Tandem 向美國食品藥物管理局提交 PMA。

I would now like to turn the call back over 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. While the second quarter was obviously a great quarter for DexCom, we continue to execute on all aspects of our business, and our message of CGM first is resonating well beyond the endocrinology specialists, as we routinely see prescriptions for the G4 Platinum system from primary care physicians. We have been referred to in the past as a one-product company, but you can see from our discussion today, the intel inside philosophy is on the cusp of reaping huge benefits from our own internal programs and products, as well as our partnerships.

謝謝你，Kevin。雖然第二季對 DexCom 而言顯然是非常出色的一季，我們仍持續在業務的各個面向落實執行，而我們「CGM 優先」的訊息也已遠遠超出內分泌專科醫師的範疇、引發良好共鳴，因為我們經常看到基層照護醫師也會開立 G4 Platinum 系統的處方。我們過去曾被稱為單一產品公司，但從今天的討論你可以看到，「intel inside」的理念正處於即將收穫巨大效益的關鍵時點，這些效益將來自我們內部的研發計畫與產品，以及我們的合作夥伴關係。

I would like to acknowledge the hard work of our DexCom team, who all worked tirelessly to grow this category each and every day, and bring us another step closer to establishing DexCom CGM as the standard of care for all people with diabetes. Our future remains very, very bright.

我想肯定 DexCom 團隊的辛勤付出；他們每天不懈努力推動這個品類成長，讓我們更接近把 DexCom CGM 建立為所有糖尿病患者的照護標準。我們的未來依然非常、非常光明。

And with that, I will turn it over for question and answers.

接下來，我把時間交給問答環節。

(Operator Instructions)

（接線員指示）

Thom Gunderson from Piper Jaffray.

Piper Jaffray 的 Thom Gunderson。

I guess the patients like Gen 4, huh?

我想病患很喜歡第四代（Gen 4），對吧？

Yes.

是的。

So what is next, what's next is maybe pediatric, maybe Share, questions on both. On Share, help us handicap what you're looking for from the FDA? I am assuming no claims, that this is just a broadcast of information through another medium, and there isn't really anything there to do except check accuracy of that transfer? Is that close?

那接下來是什麼？下一步可能是兒科、也可能是 Share，我對兩者都有問題。關於 Share，能否幫我們評估一下你們希望從 FDA 得到什麼？我猜應該不會有任何宣稱（claims），這只是透過另一種媒介廣播資訊，除了確認傳輸的準確性之外，似乎沒有太多需要做的？我這樣理解接近嗎？

Tom, we very deliberately structured the Share product to make sure that the receiver remains the primary medical device, and the phone is a secondary display on the receiver, so that is exactly as you described it. We did submit a rather large filing that shows we did all the validation and verification of the software necessary to make sure that signal gets through, and is pushed through on a timely basis, and warnings are what they claim to be.

Tom，我們非常刻意地設計 Share 產品，確保接收器仍是主要醫療器材，而手機只是接收器的次要顯示器，所以就如你所描述的那樣。我們確實提交了一份相當大型的申報資料，證明我們已完成必要的軟體確認與驗證（validation and verification），以確保訊號能夠傳遞並及時推送，且警示功能符合其宣稱。

The alarms on our Share system, the people you share your signal with can set their own alarms. They don't have to follow the alarms on the receiver. So, we had to show that all of those features work. But, we took this as a very deliberate step, so we could get something that we could approve, a basic infrastructure that we can use in all our future product offerings hereafter.

在我們的 Share 系統中，與你共享訊號的人可以自行設定警報；他們不必跟隨接收器上的警報。因此，我們必須證明所有這些功能都能正常運作。不過，我們把這視為一個非常審慎且刻意的步驟，目的是先取得一個可獲核准的產品——一個基本的基礎架構，供我們未來所有產品提供使用。

Okay. On pediatric, I think I get this, but is, in my view a separate product would be a different package, maybe with a picture of a kid on it, and a different insert, but the actual sensor and receiver would be essentially the same? Is that right?

好的。關於兒科，我想我大概理解，但在我看來，獨立的產品可能只是不同的包裝——也許上面有小孩的圖片——以及不同的說明書插頁，但實際的感測器和接收器基本上會是一樣的？對嗎？

It will certainly be the same hardware. The final product configuration of packaging, and IFU, and all those things is still in the middle of being determined.

硬體當然會是相同的。至於最終的產品配置，包括包裝、使用說明（IFU）以及其他事項，目前仍在規劃與決定中。

Right, but you don't have to have a separate line?

了解，但你們不需要另外開一條獨立產線？

No. No separate manufacturing line at all.

不需要。完全不需要獨立的製造產線。

Got it. And then, last question, and that is, I assume you are in Philadelphia, can you tell us any local color as far as AADE and how the educators are looking at the products?

明白了。最後一個問題：我猜你們人在費城？能否分享一些 AADE 的現場觀察，教育者對產品的看法如何？

We are in San Diego today. Our Philadelphia team has told us that we, again, received the same response on G4 Platinum as we're receiving from the investors on this call.

我們今天在聖地牙哥。我們費城的團隊告訴我們，大家對 G4 Platinum 的反應，和這通電話上投資人給我們的反應一樣。

Okay, thank you guys.

好的，謝謝各位。

Bill Plovanic from Canaccord

Canaccord 的 Bill Plovanic。

Congratulations on a phenomenal quarter. Not a lot to ask. I'm just going to try to drill down a little. You mentioned a couple of things, one that your durable consumable mix was 30%/40% with, obviously, the durable, was it at 30% or above 30%?

恭喜你們創下非常亮眼的一季。其實沒太多要問的，我只是想再深入一點。你提到幾件事，其中一個是你們耐用設備與耗材的組合是 30%/40%——呃，顯然耐用設備那部分，是 30% 還是高於 30%？

It is 30% durable, 70% disposables.

是 30% 為耐用設備，70% 為拋棄式耗材。

Okay. And then do you include that $1.3 million that you picked up from Edwards and international in that number?

好的。那你們是否把從 Edwards 和國際業務取得的那 130 萬美元也算在這個數字裡？

It is Edwards and from the royalties, it's in product revenues, but it's not in that 70%/30% mix. That would be a separate calculation.

那筆是來自 Edwards 以及權利金（royalties），會列在產品營收（product revenues）中，但不包含在 70%/30% 的組合裡；那需要另外計算。

Okay. And I know I am splitting hairs here, but is there any upgrade revenues in the quarter, anything? I know you've picked some up over the last couple of quarters. I'm curious if that contributed?

好的。我知道我是在吹毛求疵，但本季是否有任何升級（upgrade）收入？我知道你們過去幾季有一些，我想了解這季是否也有貢獻？

We were talking about that before we met. Our upgrade percentage, in the percentage of hardware sales, is probably around one-third or close to that. That number has come down steadily since the fourth quarter of last year. That number of where we are today is really not a whole lot different than what we used to have for Seven Plus. So, business remains pretty consistent as far as new patients versus upgrade. And then also understand, Bill, my data is a bit limited because if somebody bought their first receiver from a distributor, and their second receiver from us, or vice versa, we don't have everything. But, those are approximations as we sit here today.

我們在會前也討論過。我們的升級占比（在硬體銷售中的占比）大概約三分之一或接近這個水準。自去年第四季以來，這個數字一直穩步下降。我們目前的水準其實與過去 Seven Plus 時期差不多。因此，就新病患與升級之間的結構而言，業務仍相當一致。另外也請理解，Bill，我的資料有些限制，因為如果有人第一台接收器是向經銷商購買、第二台向我們購買，或反過來，我們不會掌握全部資訊。但以目前來看，這些是我們的概略估計。

And given that the total revenues were up, the 65% year over year, can we assume that's what your new patients were up year over year? I mean and that's what I'm trying to get at. Because, I mean, all the forward of the model is built on the new patients, and if your new patients were up 65%, I think that is well past expectations. So, I'm just trying to get a mix between that, and what might have been utilization creeping back up or any of that. And that's really what I'm trying to get at, thanks.

那既然總營收年增 65%，我們是否可以假設你們的新病患年增也是 65%？我的意思是，我想釐清這點，因為模型往前推主要是建立在新病患上；如果新病患年增 65%，那就遠超預期。所以我想了解其中的組成：新病患成長占多少、以及是否有使用量回升（utilization creeping back up）或其他因素。這就是我想問的，謝謝。

You know what, Bill, I think it is a combination of all of it. Sensor utilization is clearly up. Based on all internal metrics, what we are seeing is patients are buying and using more sensors, both existing patients and new patients, as they sign up. New patient growth is good. But, when you look at the dollar growth in the model, the 70%/30%, those sensor numbers are pretty staggering, even if we added a bunch of new patients. So, it is really a combination of both.

Bill，我認為是多種因素的組合。感測器使用量（sensor utilization）確實明顯上升。根據我們所有內部指標所見，病患正在購買並使用更多感測器——不論是既有病患，或是新加入的病患。新病患成長不錯。但當你看模型中的金額成長、以及 70%/30% 的結構時，那些感測器的數字相當驚人，即使我們新增了很多新病患也是如此。所以確實是兩者共同作用。

All right, great. Again, congratulations, phenomenal quarter.

好的，很棒。再次恭喜，真是非常出色的一季。

Ben Andrew from William Blair

William Blair 的 Ben Andrew。

So, I want to talk a little bit about the Express Scripts relationship, Terry, first. Over what timeframe do you think that starts to move the needle in terms of patient access, if it is not a near-term event?

我想先談談 Express Scripts 的合作關係，Terry。你認為在什麼時間範圍內，這件事會開始在病患可近性（patient access）上產生實質影響？如果不是短期事件的話。

Well, I think it's going to take at least another 18 to 24 months, as other payer systems look at that, and then begin to have opportunities utilize the Express Scripts. Our number one priority from a managed care going forward has been to move at least the disposable component into the pharmacy benefit out of DME. There's a lot of benefit on both sides of the equation, transactional costs, so on and so forth. From a patient standpoint, greater access. I think it just takes time. These organizations tend to be built in silos. And so each one, the DME silo, pharmacy benefits silo, have to be addressed. But, this is the first time that we can begin to move the needle in that. But, it's not going to happen overnight.

我認為至少還需要 18 到 24 個月，其他支付方（payer）體系才會觀察這件事，並開始有機會運用 Express Scripts。我們未來在管理式醫療（managed care）方面的首要任務，是把至少拋棄式耗材的部分，從 DME（耐用醫療設備）轉到藥局給付（pharmacy benefit）。這對雙方都有很多好處，例如交易成本等等；從病患角度來看，也能提高可近性。我認為這需要時間。這些組織往往是以孤島（silos）方式建立的，因此每一個孤島——DME 的孤島、藥局給付的孤島——都必須分別處理。但這是我們第一次能開始在這方面推動改變。不過，不會一蹴可幾。

Right, right. Okay. And I've got a mishmash of questions. But the Helmsley grant, maybe that's a question maybe more for Jess, but is that really an offset to the expense, which is why it took this on? Other than $4 million is $4 million. But you don't really need the money, per se, unless it helps you offset it on the P&L? Is that fair?

了解，了解。好，我有一堆雜七雜八的問題。Helmsley 的補助金（grant），這可能更適合問 Jess，但這是否其實是用來抵銷費用，所以你們才會接下來做？除了 400 萬美元就是 400 萬美元之外。因為你們其實不是真的缺錢，除非它能在損益表（P&L）上幫你們抵銷成本？這樣說合理嗎？

Well, there's a business reason, which Terry can go into, or Kevin, but really, in terms of the accounting for it, it is not a collaboration agreement like at Edwards, where we would record development grant revenue, and then the expense. It would be a net offset to the P&L. So, as we get milestone payments, let's say $1 million, we put that on the balance sheet as a liability, and then we would offset the current period R&D expense just related to the work, as it is outlined in the agreement.

嗯，這裡面有商業上的原因，Terry 或 Kevin 可以補充；但就會計處理而言，它不像 Edwards 那種合作協議（collaboration agreement），我們會認列開發補助收入（development grant revenue），再認列費用，最後在損益表上做淨額抵銷（net offset）。在這裡，當我們收到里程碑款（milestone payments），例如 100 萬美元，我們會先在資產負債表上列為負債，然後再依照協議所界定的工作內容，去抵減當期與該工作相關的研發費用（R&D expense）。

Okay.

好的。

For this year we would expect, basically, the P&L would be offset, it would be neutral.

就今年而言，我們基本上預期損益表（P&L）會相互抵銷，整體會是中性。

And then Terry, what is the business reason, if you would maybe detail your thoughts on that?

然後 Terry，從商業角度來看，原因是什麼？你是否可以更詳細說明一下你的想法？

Well, sure. Our goal is to get profitable. And so we have had this Gen 6 technology as part of our long-term expectation in an R&D pipeline. We chatted, obviously, numerous times with the Helmsley Charitable Trust. They have seen what we have been able to do with Gen 4 Platinum in the [AP] programs, which I would tell you, although regulatorily our labeling says that our MARD, mean absolute relative difference is 13.2%, and we are seeing reports of sub-11% MARD with the G4 Platinum today. Obviously, they see that, they are very attuned to that. When we recognized what we can do with the Gen 6, they came to us and asked us what they could do to help us accelerate that in our project schedule. Therein lies the $4 million grant to put a dedicated team focused on accelerating that development of that new sensor technology.

好的，當然。我們的目標是達到獲利。因此，Gen 6 技術一直是我們長期研發（R&D）管線預期的一部分。我們顯然已多次與 Helmsley Charitable Trust 討論過。他們看到了我們在 [AP] 計畫中使用 Gen 4 Platinum 所能做到的成果；我會告訴你，雖然在法規層面我們的標示寫的是 MARD（平均絕對相對差）為 13.2%，但我們目前看到的報告顯示，今天的 G4 Platinum MARD 低於 11%。很明顯地，他們看到了這點，也非常關注。當我們意識到 Gen 6 能做到什麼時，他們主動來問我們，他們能做些什麼來協助我們加速專案時程。於是就有了這筆 400 萬美元的補助金，用來成立一個專責團隊，聚焦加速這項新感測器技術的開發。

Okay. And then sorry to change gears yet again, but on the ped side, it's a six-month delay in terms of expectations on the approval. If it is really a labeling issue, and packaging, is that really the lead time for you all to prepare the packaging as well as the insert? Or is there something else FDA wants that is dragging this process out?

好的。然後很抱歉又要再換個話題，但在兒科（peds）方面，你們對核准的預期似乎延後了六個月。如果真的只是標示與包裝的問題，這真的是你們準備包裝以及說明書（insert）所需要的前置時間嗎？還是 FDA 還想要其他東西，才讓流程拖得這麼久？

Well, first of all, it is not a six-month delay. We have always said that it was, at the very least, a 180 day review, which we are still within that timeframe, since we submitted it. So, please characterize it appropriately. Right now, look at the landscape of diabetes. FDA is doing everything in their power to ensure that products produced across the spectrum of diabetes, be they be pumps, everybody has pretty much had a pump recall, be it glucose monitoring, all the meter companies have had some degree of recall. So, you can understand there is a heightened scrutiny from the FDA to ensure, because people are making life decisions based on some of this technology.

首先，這不是六個月的延後。我們一直都說，至少會是 180 天的審查期，而自我們提交以來，目前仍在這個時間範圍內。所以，請適當地描述。現在看看糖尿病領域的整體情況：FDA 正盡其所能確保糖尿病全光譜的產品——不論是幫浦，幾乎每家都發生過幫浦召回；或是血糖監測，所有血糖機公司也都曾有不同程度的召回——都符合要求。所以你可以理解，FDA 的審查更為嚴格，因為人們會根據這些技術做出攸關生命的決策。

I think that whole heightened sense is part of this. We did the pivotal trial in adults, and we were able to have patients come back for an extended period of time on three different days, and we actually decreased their level of glucose by giving them insulin. We can't do that with a two year old. And so, the study really is fundamentally different, and although we would like to have everything match up from two years of age beyond, all the way into adults, we've got to segment these into different buckets.

我認為這種整體提高警覺的氛圍是其中一部分。我們在成人做了關鍵性試驗（pivotal trial），能讓受試者在三個不同的日子回診並延長觀察時間，而且我們實際上透過給予胰島素來降低他們的血糖。我們不可能對兩歲的小孩這樣做。因此，研究在本質上就不同；雖然我們希望從兩歲以上一路到成人都能完全一致，但我們必須把這些分成不同的類別來處理。

And I think that is where the discussion comes in. It really gets down, the devil is in the details, obviously, but how you look at alert charts and various things in labeling that are very, very distinct. But both sides are trying to understand and, of course, we look at even site to site differences in the clinical trial. All of that, it just has to be gone through. I think Kevin outlined the critical point that we certainly don't need to do any more clinical trial work. It is now about how we characterize the results, and put it in a proper format for instructions for use as part of the package.

我想討論就是從這裡開始的。歸根結底，細節決定成敗，這點很明顯；例如你如何在標示中呈現警示圖表（alert charts）以及各種非常、非常不同的內容。但雙方都在努力理解；當然，我們甚至也會看臨床試驗各中心之間的差異。所有這些都必須逐一檢視。我認為 Kevin 已經點出關鍵：我們確實不需要再做更多臨床試驗工作。現在重點在於我們如何描述結果，並以適當格式放入包裝中的使用說明（instructions for use）。

And Ben, just from a historical perspective, we got final approval on the Gen 4 Platinum labeling October 5 of last year, and were shipping October 21. We'll be ready.

Ben，從歷史經驗來看，我們在去年 10 月 5 日拿到 Gen 4 Platinum 標示的最終核准，並在 10 月 21 日開始出貨。我們會準備好的。

Okay. So, I mean so you'd filed the PMA supplement on peds, was it in February, I'm sorry?

好的。所以我的意思是，你們針對兒科提交了 PMA 補充文件（PMA supplement），是在二月嗎？抱歉我確認一下。

We didn't identify the actual month, it was towards the end of the quarter.

我們沒有指出確切月份，是在該季度接近尾聲的時候。

Okay. I had it in my head a little bit earlier in Q1. Okay, and then finally, the Edwards and the Animas royalties, can you maybe detail a little bit more what exactly that was coming out of Animas, and why, obviously it won't recur, but maybe just give us a little more flavor on that?

好的。我原本以為是在第一季稍早一些。好，最後一個問題：Edwards 和 Animas 的權利金（royalties），你能否再多說明一下，Animas 那邊到底是什麼項目？以及為什麼——很明顯它不會再發生——但能否再給我們一點背景說明？

Nope. Well basically, Ben, what we said is we had about $1.3 million more than we expect to recur in future periods. So, as you look at the total product revenue for the quarter, and as you guys try and model going forward, there are some recurring revenues that we don't expect to come back. There is a base level of Animas royalty revenues that we receive, a number we can't disclose due to our relationship with Animas, and our number was far beyond the base. And you combine that with the sensors that we sold to Edwards, and those are numbers we wouldn't want you guys to build into your models going forward. That is why we gave you that number.

不。基本上，Ben，我們說的是有大約 130 萬美元高於我們預期未來期間會重複出現的水準。因此，當你看本季的總產品營收，並且你們嘗試建立未來模型時，有一些我們不預期會再回來的經常性收入。Animas 的權利金收入有一個我們會收到的基礎水準，因為我們與 Animas 的關係，這個數字我們不能揭露，而本季的數字遠高於該基礎水準。再加上我們賣給 Edwards 的感測器，這些都是我們不希望你們在未來模型中納入的數字。這就是我們提供那個數字的原因。

Yes, just let me give a little bit of color on the Edwards. As Mike has said from the Edwards side, they initiated this early market introduction of the GlucoClear product, so they needed product in order to do that, but as part of a clinical experience as they introduce this in limited fashion in Europe. And they will continue to enroll these patients through the end of this year, and then look for a more formal launch in 2014. So, that's not going to be a repetitive type of build and use for the remainder of the next two quarters.

是的，我再補充一些 Edwards 的背景。如 Mike 所說，Edwards 方面啟動了 GlucoClear 產品的早期市場導入，因此他們需要產品來進行，但這是作為臨床使用經驗的一部分，因為他們在歐洲以有限方式導入。他們會持續收案到今年年底，然後在 2014 年尋求更正式的上市。因此，在接下來兩個季度剩餘期間，這不會是那種會反覆建立與使用的需求。

Okay, thank you.

好的，謝謝。

(Operator Instructions)

（接線員指示）

Danielle Antalffy from Leerink Swann

Leerink Swann 的 Danielle Antalffy

Congrats on the really awesome quarter, well done. I just wanted to talk about what changed this quarter versus last, where you had strong growth last quarter, but the growth this quarter was phenomenal. And just wondering if you could give some color on where the growth is coming from? Are you getting into new -- are new endos prescribing? The device? Is it just existing patients wearing more sensors per month? Can you give a little bit of a breakdown on where the growth acceleration is coming from?

恭喜這一季表現非常出色，做得很好。我想談談本季相較於上一季有什麼改變：上一季成長已經很強，但這一季的成長非常驚人。想請問你們能否提供一些背景，成長主要來自哪裡？你們是否打入新的——有新的內分泌科醫師（endos）在開立處方嗎？是裝置本身？還是只是既有病患每月使用更多感測器？能否稍微拆解一下，成長加速的來源是什麼？

Well, Danielle, let's start with the physicians. It is a combination of everything. We monitor our high prescribing physicians on a regular basis. And what we would consider a high prescriber this year we will have more than twofold this year than we had last year. There are physicians who have really adopted Gen 4, and our CGM first philosophy, with their patients. So, we got more high prescribers. But, that isn't where it stopped. There are many thousand of physicians and healthcare professionals who prescribed the G4 Platinum system. So we are seeing broader usage as well in the physician community, which means where you've got somebody who is prescribing the G4 Platinum for the first time; chances are some patients heard through word-of-mouth that, gee, I ought to have this, and they go and ask for it, and they get it.

Danielle，我們先從醫師端談起。這是各方面因素的組合。我們會定期監測高開立處方的醫師。我們認為今年的高開立者數量，將會是去年的兩倍以上。有些醫師已經真正採用 Gen 4，以及我們「CGM 優先」的理念，來與病患共同管理。因此，我們有更多高開立者。但成長不只如此。還有數以千計的醫師與醫療專業人員開立了 G4 Platinum 系統。因此，我們也看到醫師社群更廣泛的使用；這表示當有人第一次開立 G4 Platinum 時，很可能有些病患透過口耳相傳聽說『我也應該要有這個』，於是去要求，然後就拿到了。

With respect to patient numbers, every piece of it is growing. We're getting, while the percentage of upgrade versus new patients is a little higher, but not tremendously higher than it has been in the past, we are getting hardware revenue from both segments, new patients and patients who upgrade. And we're getting more sensor utilization from everybody. Our internal statistics would show that we have a much greater pace of patients who are wearing these things 24/7 and not taking them off. And that is where we have always wanted the model to go. So, accuracy matters, and people trust this product, and they use it to manage their lives. So, the growth is occurring in every single piece of the business. I didn't say it on the call, internationally, while still 5% to 10% of our revenue, our international business doubled this quarter.

就病患數而言，每一個環節都在成長。雖然升級相對於新病患的比例略高，但並沒有比過去高出太多；我們同時從新病患與升級病患兩個族群取得硬體營收。我們也從所有人身上看到更高的感測器使用量。我們的內部統計顯示，越來越多病患以更快的速度做到 24/7 配戴而不取下來。這一直是我們希望商業模式走向的方向。所以，準確度很重要，人們信任這個產品，並用它來管理生活。因此，成長發生在業務的每一個部分。我在電話會議上沒有提到的是：在國際市場方面，雖然仍只占我們營收的 5% 到 10%，但我們本季的國際業務翻倍成長。

Okay, great, so it is really, very broad-based.

好的，很棒，所以這真的是、非常廣泛的。

It's very broad-based.

非常廣泛。

Okay, great. And then I was hoping, just directionally, you could help us with 2014 a little bit. Tougher comps, obviously, year over year. But hopefully have pediatric and the Animas Vibe. How do we think about 2014 growth? And that is it for me, thanks so much.

好的，很棒。接著我希望就方向性而言，您能稍微幫我們談談 2014 年。顯然同比的比較基期更具挑戰。但希望能有兒科以及 Animas Vibe。那我們該如何看待 2014 年的成長？我這邊就這些，非常感謝。

We have been pretty consistent, and I'm seeing Steve and Terry smile at me, we've been pretty consistent over time saying it is our goal to grow this business 40% a year. And if we grow 40% a year, we double every two years, and there is a certain amount of growth the businesses can handle in a very efficient manner. We expect to stick with our plans, and it can comp out at 40% annual growth with Animas and peds. Next year, possibly a Tandem approval, with the Tandem filing late this year. With a Share approval next year. We see many opportunities to achieve that growth in 2014, and keep going, and go on from there. And so, 40% is our target internal number, and we are going to stick to that.

我們一直相當一致——我看到 Steve 和 Terry 對我微笑——我們長期以來一直相當一致地表示，我們的目標是讓這項業務每年成長 40%。如果我們每年成長 40%，每兩年就能翻倍，而企業在非常有效率的方式下也只能承受一定程度的成長。我們預期會依照既定計畫推進；在 Animas 與兒科的帶動下，年成長 40% 是可以達成的。明年可能還會有 Tandem 的核准，因為 Tandem 會在今年稍晚送件；明年也可能有 Share 的核准。我們看到在 2014 年有許多機會達成該成長，並持續前進、再往後延伸。因此，40% 是我們內部的目標數字，我們會堅持這個目標。

Jayson Bedford from Raymond James

Raymond James 的 Jayson Bedford

Good afternoon, and thanks for taking the questions, just a few here. In terms of the new reps added or converted earlier this year, where are they in terms of productivity, meaning are they 60%, 70% of the more tenured rep. And when will they be at parity?

下午好，謝謝讓我提問，我這邊幾個問題。就今年稍早新增或轉任的新業務代表而言，他們的生產力目前大概在哪個水準？也就是說，相較資深業務代表，他們是 60%、70% 嗎？什麼時候能達到同等水準？

Well, some of them are actually in our top 10 reps. So, they are all throughout the board. I think if you look at our rep rankings, you wouldn't be able to just pick out the new ones in any of the quartiles, they are spread all the way throughout. A lot of them had incredible success. We hired some very, very good people. And we believe they are all getting up to speed, and growing their businesses very well. But there are certain territories where our new reps are just blowing it out. And some of those are our internal people who we converted from our educational specialist to be sales reps. They have done a phenomenal job, so they are all doing very well.

嗯，其中有些其實已經在我們前 10 名業務代表之列。所以他們分布在各個層級。我想如果你看我們的業務排名，你不會只在某個四分位就能挑出新進的人；他們從上到下都有分布。很多人表現非常出色。我們聘用了非常、非常優秀的人才。我們相信他們都在快速上手，並且把各自的業務做得很好。不過也有一些區域，我們的新業務代表表現特別亮眼。其中一些是我們內部人員，從教育專員轉為業務代表。他們做得非常出色，所以整體而言都表現得很好。

And the incentive or the focus for these reps, is it getting more endos on board here, and just going wider or is it more deeper into existing accounts?

那這些業務代表的獎勵或重點，是讓更多內分泌科醫師加入、把覆蓋面做得更廣？還是更深入既有客戶？

Our reps, today, are compensated on the kits they place with patients, and they are incented on hitting quotas of kits they place, and it is up to them to develop their territory in the way to place the most possible kits. And what we have seen from the reps is largely what I described earlier. We've seen many of them dig deeper into some very good practices. We have also seen a broad smattering of more prescriptions, as well, by people who have not prescribed earlier. So, they are incented to place kits, and they manage their territories, and we track them very closely.

我們的業務代表目前的薪酬是依他們為病患配置的套件（kits）來計算，他們的激勵是達成配置套件的配額；至於如何在其轄區內發展、以配置最多的套件，則由他們自行決定。我們從業務代表身上看到的情況，大致如我先前所描述：很多人更深入一些非常優質的診所；同時我們也看到更多處方的廣泛分布，來自過去未曾開立處方的人。因此，他們的激勵是配置套件；他們管理各自的轄區，而我們也非常密切地追蹤。

I think a key metric is if we look at what we call champions, and these are prescribing physicians who hit a certain threshold. We won't tell you what the threshold is, but it is significant. If we look at the number this year in contrast, and this is just through the first six months of the year, in contrast to all of last year, the number of champions already reaching the goal is probably three or four times greater this year than last year. So, they are obviously going deeper within the accounts that they currently call on. I think the other interesting statistic, and Kevin mentioned it in terms of going outside of endocrinology,

我認為一個關鍵指標是我們所稱的「champions」，也就是達到某個門檻的開立處方醫師。我們不會告訴你門檻是多少，但它相當高。如果我們看今年的數字——而且這只是今年前六個月——相較於去年整年，已經達標的 champions 數量大概是去年的三到四倍。所以他們顯然是在既有拜訪的客戶中做得更深。我想另一個有趣的統計是，Kevin 也提到往內分泌科以外擴展，

I would tell you that the total number of prescribers in the first six months are -- there is about 3,000 active clinical endocrinologists that actually see patients on a daily or weekly basis in the United States. The number of physicians that actually prescribed product of CGM DexCom G4 in the first half of this year was closer to 6,000 total prescribers. Now, some of those are nurse practitioners or physicians assistants that have the right and the license to prescribe, but obviously more than a handful are also either internal medicine, primary care, general type physicians. So, we are seeing that expansion. Now, obviously, they are not at the champion level, or anywhere close, but they are being introduced to the product, which we believe is they are being introduced by patients, certainly not by our sales force.

我會告訴你，今年前六個月的處方開立者總數——美國大約有 3,000 位活躍的臨床內分泌科醫師，實際上每天或每週都在看診。可是今年上半年實際開立 DexCom G4 CGM 產品處方的醫師，總開立者數更接近 6,000。當中有些是具備合法處方權與執照的護理師（nurse practitioners）或醫師助理（physician assistants），但顯然也有不少是內科、基層醫療、一般科別的醫師。因此我們看到這樣的擴張。當然，他們還沒有達到 champion 的層級，甚至差得很遠，但他們正在接觸這個產品；我們相信他們是由病患介紹而來，當然不是由我們的銷售團隊介紹。

That is helpful. Terry, you mentioned that 6,000 number. Do you have any idea of what that number was last year?

這很有幫助。Terry，你提到 6,000 這個數字。你知道去年大概是多少嗎？

I would say that number was probably not even close to half of that.

我會說那個數字大概連現在的一半都不到。

Okay, very helpful. In terms of the new algorithm, what is the timing on filing the supplement for that?

好的，非常有幫助。就新演算法而言，補充申請（supplement）的送件時程是什麼？

We are working on that as we speak. Our primary goal with the FDA is to get our peds labeling straightened out, and get that product out as soon as possible. Pediatric indication for the new algorithm weighs directly into any clinical study we have to do for it. So, we're going to sequentially take these steps to execute our plan in the most efficient order possible. So, we are waiting on that for right now.

我們正在進行中。就 FDA 而言，我們的首要目標是把兒科標示（peds labeling）釐清，並盡快把產品推出。新演算法的兒科適應症會直接影響我們必須為其進行的任何臨床研究。因此，我們會依序採取這些步驟，以最有效率的順序來執行計畫。所以目前我們先暫緩那一部分。

Okay. Just last one for me, and then I will let someone else have a shot. You mentioned doing more studies earlier in the call, what do you have in the works? Are these more comparative versus other products out there? Are these economic studies? What do you think you need to produce here to keep this growth up?

好的。我最後一個問題，然後我就讓其他人提問。你在電話會議前面提到要做更多研究，你們目前有哪些在進行中？這些是與市面上其他產品的比較研究嗎？是經濟學研究嗎？你們認為需要產出什麼，才能維持這樣的成長？

Sure. I think the most compelling study that we have before us, outside of those that are required for regulatory submissions, but one in particular, we have been very, very successful with CGM first, changing the behavior patterns of physicians, who would naturally migrate to some other technology first. But, based on that, what we really want to do is a combination of both the role of CGM, and an economic component to it, then using CGM first. And be it with injection therapy, which still represents about 70% of the population in the US that receive insulin do so through injections versus pump. We think that CGM first with injections can be a very effective tool, both from a clinical outcome standpoint, obviously, there's never been any study to demonstrate that it is not as effective as pump and CGM. So, that is number one, demonstrate for once and for all, that that exists.

當然。我認為我們接下來最具說服力的研究——不包含法規送件所要求的那些——其中有一項特別重要：我們在「先用 CGM」方面非常、非常成功，改變了醫師的行為模式；醫師原本可能會先轉向其他技術。但基於此，我們真正想做的是把 CGM 的角色與其經濟面向結合起來，來支持「先用 CGM」。無論是注射治療——在美國接受胰島素治療的人口中，仍約有 70% 是以注射而非幫浦——我們認為在注射治療下先用 CGM，從臨床結果角度來看會是非常有效的工具。當然，從未有研究證明它不如幫浦加 CGM 有效。所以第一點，就是一勞永逸地證明這件事確實成立。

And then secondly, it's from an economic benefit to the payer system, CGM first will cost that system a lot less. And as we look at going forward, and the healthcare economic challenges, we believe that is going to have a play in all of this, as payers look to utilize the most effective tools, and those that are cost-effective as well.

第二點，從對支付方體系的經濟效益來看，先用 CGM 對該體系的成本會低得多。展望未來，面對醫療經濟的挑戰，我們相信這會在整體中扮演角色，因為支付方會尋求使用最有效、同時也具成本效益的工具。

That is helpful, thank you.

很有幫助，謝謝。

Steven Lichtman from Oppenheimer

Oppenheimer 的 Steven Lichtman

Hi guys, this is Rosemary in for Steve. Just a quick question on the FDA update with Vibe. Based on these most recent questions, and then speaking with Animas, do you guys still think Vibe is still on track for approval around year-end timeframe?

嗨各位，我是 Rosemary，代 Steve 提問。關於 Vibe 的 FDA 最新進度，我有個簡短問題。根據最近這些問題，以及你們與 Animas 的溝通，你們是否仍認為 Vibe 仍可望在年底左右的時間點獲得核准？

We had initially said year end would be best case, or first part of next year. Again, these questions just came in from the FDA, and we are collectively still in the process of reviewing them. So, depending on how quickly we can we turn the responses, it's really in Animas' court to turn the responses. Most of the questions, as we have seen, really relate to the pumping side of the system, not the CGM aspects of the system.

我們一開始說年底是最佳情境，或是明年年初。再次強調，這些問題是 FDA 最近才送來的，我們目前仍在共同審閱中。因此，取決於我們能多快回覆——實際上是由 Animas 來回覆——時程會有所不同。就我們目前看到的，大多數問題其實與系統的幫浦端相關，而不是系統的 CGM 面向。

So, it's somewhat incumbent upon Animas to respond. I mean, you need to also keep in mind that the diabetes franchises, if you will, of J&J, Roche, and the finger-stick guys, they are all reeling right now. I mean we are seeing reports of headcount reductions across Roche, across J&J, et cetera. And these guys, they are all really struggling internally. So, Animas, as a separate company, is really remaining focused on this. But I can tell you all their businesses are struggling right now.

所以，Animas 某種程度上有責任做出回應。我的意思是，你也需要記住，若你所稱的 J&J、Roche，以及指尖採血那幫人的糖尿病事業群，目前都正遭受重創。我是說，我們看到有報告指出 Roche、J&J 等公司都在縮減人力。而這些公司內部都真的在苦苦掙扎。所以，Animas 作為一家獨立公司，確實仍然專注在這件事上。但我可以告訴你，他們所有業務現在都在掙扎。

Okay, got it, thanks that's helpful. Also, I noticed your sensor ASP is a little bit stronger this quarter at around $70 versus, I think you guys said $65 to $70 last quarter. Is this a good price to assume going forward? And is there further upside from here?

好的，了解，謝謝，這很有幫助。另外，我注意到你們本季感測器的 ASP（平均銷售單價）稍微強一些，大約在 70 美元左右，相較於我記得你們上季說的 65 到 70 美元。未來可以假設這是一個合理的價格嗎？而且從這裡還有進一步上行空間嗎？

$70 is an approximation. These contracts we have with payers on our sensors are set for quite some period of time. So $70 is a good number to model. We don't see it going up significantly in the near term, though.

70 美元是一個約略值。我們與付款方就感測器簽訂的合約，價格會固定相當長一段時間。所以用 70 美元作為模型假設是個不錯的數字。不過短期內我們不認為它會顯著上升。

Okay. And finally for me, can you just quickly provide an update on where you are in China? And that's it, thanks guys.

好的。最後一個問題，你能否快速更新一下你們在中國的進展？就這樣，謝謝各位。

Yes, I mean we are still evaluating the path of entering both China and Japan. Quite frankly, it is really turning, in both countries, for different reasons on the appropriate regulatory pathway. In China in particular, one of the key challenges is you need to have an FDA approval before you file a particular product in China. And then once you file, that triggers somewhere between a 2 to 2.5 year regulatory review cycle. So, you have seen, over the past several years, how quickly it even, as we mentioned some of the product iterations on this call, how quickly we iterate product. The key question for us internally is at what point do we put pencils down and file the appropriate approved product in the US. So, we are still evaluating that. Still something that is very important on the radar over the next several years, but I wouldn't characterize it as a near-term source of new revenue for us.

是的，我們仍在評估進入中國與日本的路徑。坦白說，在這兩個國家，因為不同原因，關鍵都在於選擇合適的法規申報途徑。特別是在中國，其中一個主要挑戰是：你必須先取得 FDA 核准，才能在中國申報某個特定產品。而一旦申報，就會啟動大約 2 到 2.5 年的法規審查週期。所以你也看到，過去幾年我們的產品迭代速度有多快——就像我們在這通電話中提到的一些產品版本更新一樣，我們迭代非常快。對我們內部而言，關鍵問題是：我們要在什麼時間點「停筆」並在美國以適當的已核准產品進行申報，然後用該產品去中國申報。因此我們仍在評估。這在未來幾年仍是雷達上的重要事項，但我不會把它描述為我們短期新增營收的來源。

(Operator Instructions)

（接線員指示）

Anthony Petrone from the Jefferies Group

Jefferies Group 的 Anthony Petrone

Thanks, gentlemen, Anthony in for Raj. Just a couple of questions, one on Animas and Tandem. As those products are rolled out, eventually as we look into 2014, 2015, just wondering how that plays out in the model? Is it that you are selling inventory to those companies and they are manufacturing the integrated product and then handling all marketing? Just want to get how those relationships will play out over time?

謝謝，各位先生，Anthony 代 Raj 提問。我有幾個問題，其中一個關於 Animas 和 Tandem。隨著這些產品推出，最終當我們看到 2014、2015 年時，想請問在模型中會如何呈現？是你們把庫存賣給那些公司，由他們製造整合後的產品並負責所有行銷嗎？我只是想了解這些合作關係隨時間會如何運作。

I would tell you, it is a work in progress. We don't currently have the commercial framework put in place with Tandem. We do have a commercial framework put in place with Animas, but as we have said on a couple of prior calls, we're looking to potentially modify that. The current structure with Animas would have Animas manufacturing and selling the Vibe system, and handing the patient off to us to process and supply transmitter and sensors to the patient. We are looking at modifying that to make it more seamless to the patient. Don't really want to comment further, until we get something put in writing with Animas. But, assuming we are successful putting that framework in place with Animas, my guess is Tandem would fall in line into the same sort of business model.

我會說，這仍在進行中。我們目前尚未與 Tandem 建立商業合作架構。我們已與 Animas 建立商業合作架構，但如同我們在前幾次電話會議中所說，我們可能會尋求修改。目前與 Animas 的架構是：Animas 負責製造並銷售 Vibe 系統，然後把病患交由我們處理，並向病患提供發射器與感測器。我們正在考慮修改，使病患端的流程更無縫。在我們與 Animas 把內容白紙黑字寫下來之前，我不想進一步評論。不過，假設我們成功與 Animas 建立那樣的架構，我猜 Tandem 也會跟進採用類似的商業模式。

And marketing?

那行銷呢？

The marketing for the system will be done primarily by the pump partner. Our sales force will not be carrying the pump. Again, we have multiple partners, we have to remain somewhat neutral in terms of recommending one pump versus another pump. Our mission is to be, as Terry mentioned in his concluding remarks, the Intel inside. So we are going to provide pump partners with best in class CGM technology to enable them, frankly, to complete more effectively with Medtronic. But, our sales force will have, to the extent Animas or Tandem provide us with marketing literature, for example, that we could hand off to the endocrinologist, we would be, certainly, happy to help on that front. But, you won't see the DexCom sales force carrying an insulin pump in the bag.

系統的行銷主要會由胰島素幫浦合作夥伴來做。我們的業務團隊不會攜帶幫浦。再說一次，我們有多個合作夥伴，因此在推薦某一款幫浦優於另一款方面，我們必須保持某種程度的中立。我們的使命是——如 Terry 在結語中提到的——成為「Intel inside」。所以我們會向幫浦合作夥伴提供同級最佳的 CGM 技術，坦白說，讓他們能更有效地與 Medtronic 競爭。不過，我們的業務團隊在某種程度上，如果 Animas 或 Tandem 提供我們行銷資料（例如可交給內分泌科醫師的文宣），我們當然很樂意在這方面協助。但你不會看到 DexCom 的業務把胰島素幫浦放在包包裡帶著跑。

Great, great. And then a couple of follow-ups. It doesn't seem, certainly, your business is not directly impacted by this, but any high level comments on the new CMS rates for home diabetic supplies? How that plays out?

很好，很好。接著有幾個追問。看起來當然你們的業務不會直接受到影響，但對於新的 CMS 居家糖尿病用品費率，有沒有任何高層次的看法？會如何發展？

It really doesn't impact us. Number one, we are a class III medical device, so we are not subject to competitive bidding. We have no actual technology assessment by CMS, so we are not covered by CMS. As Kevin said, more than 98% of our patients have some form of insurance coverage, that 1.5% or 2% that don't tend to be those patients, unfortunately, that are Medicare, so they have to pay out-of-pocket. So, I don't see that as being impactful, other than downstream when we will replace finger sticks entirely, is what our stated goal has been as a company. But, outside of that, I don't see anything.

這其實不影響我們。第一，我們是第三類（Class III）醫療器材，所以不適用競標制度。我們也沒有接受 CMS 的實際技術評估，因此 CMS 不給付我們。如 Kevin 所說，我們超過 98% 的病患都有某種形式的保險給付；那 1.5% 或 2% 沒有的病患，遺憾的是通常是 Medicare 的病患，所以必須自費。因此我不認為這會造成影響，除了在更下游、當我們最終完全取代指尖採血時——這一直是我們公司宣示的目標——才可能相關。但除此之外，我看不到任何影響。

All right, great, thanks.

好的，很好，謝謝。

And at this time, I see we have no further questions. Please continue with any final remarks.

此時，我看到沒有進一步的問題。請繼續進行任何最後的結語。

Sure. Diabetes is, unfortunately, growing at unprecedented rates both in the type 1 and type 2 population. And although billions are being spent trying to correct that, trying to cure it, trying to do all these things, it is an insurmountable task at this point. Obviously, the G4 Platinum system is extremely effective, and I would just close this with you, the audience, you know somebody in your family, your sphere of influence that has diabetes. And you owe it to them to introduce them to CGM and introduce them to the DexCom G4. You will certainly improve the quality of their life, and you may, in fact, save it. And I will close with that.

好的。不幸的是，第一型與第二型糖尿病人口都正以空前的速度成長。雖然投入了數十億資金試圖改善、試圖治癒、試圖做所有這些事情，但在此刻這是一項難以克服的任務。顯然，G4 Platinum 系統非常有效。我最後想對各位聽眾說：你一定認識你家人或你影響圈中某個有糖尿病的人。你有責任向他們介紹 CGM，並介紹 DexCom G4。你肯定能改善他們的生活品質，而且你甚至可能真的救他們一命。我就以此作結。

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

謝謝各位女士、先生。今天的會議到此結束。感謝各位參與，您現在可以斷線。