德康醫療 (DXCM) 2014 Q2 法說會逐字稿

Welcome to the DexCom Second Quarter 2014 Earnings Release and Conference Call. My name is Bakeeba and I will be your operator for today's call.

歡迎參加 DexCom 2014 年第二季財報發布與電話會議。我叫 Bakeeba，將擔任今天電話會議的接線員。

(Operator Instructions)

（接線員指示）

Please note that this conference is being recorded. I would now turn the call over to Terry Gregg. Terry, you may begin.

請注意，本次電話會議將被錄音。現在我將把電話交給 Terry Gregg。Terry，您可以開始。

Thank you very much. Welcome to DexCom's second quarter 2014 conference call. I will ask Steve Pacelli to read our Safe Harbor statement.

非常感謝。歡迎參加 DexCom 2014 年第二季電話會議。我將請 Steve Pacelli 宣讀我們的安全港聲明。

Thanks, Terry. Some of the statements that we will make in today's call may constitute forward-looking statements. These statements reflect Management's expectations about future events, operating plans, and performance and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties.

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，且僅截至本日有效。這些前瞻性陳述涉及若干風險與不確定性。

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

可能導致實際結果與任何此等前瞻性陳述所明示或暗示者存在重大差異的因素清單，已在我們的 Form 10-K 年度報告、Form 10-Q 季度報告，以及其他向 SEC 提交的報告中的風險因素與其他章節中詳述。我們不承擔因任何原因公開更新或修訂這些前瞻性陳述的義務。

Additionally, in today's call, we will discuss certain financial information that has not been prepared in accordance with GAAP with respect to our cash operating performance. 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. Terry?

此外，在今天的電話會議中，我們將就現金營運表現討論若干未依 GAAP 編製的財務資訊。提供此等非 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 編製結果的替代，或被視為優於依 GAAP 編製之結果。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. Today's call will be largely a financial update, with Kevin reviewing our second quarter 2014 financial results and providing our traditional business update. I will then follow with some concluding thoughts.

謝謝，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。今天的電話會議將主要為財務更新，由 Kevin 回顧我們 2014 年第二季財務結果並提供我們一貫的業務更新。我之後將做一些結語。

Before I turn the call over to Kevin, I'd like to comment briefly on our Q2 performance. Our financial results speak for themselves. During the second quarter, we achieved record sales, record margins, and our best operating results ever with cash-based net income of over $8 million for the quarter. Our pipeline of new patient opportunities remains very robust and sensor orders are stronger than ever.

在把電話交給 Kevin 之前，我想簡要評論我們第二季的表現。我們的財務結果不言自明。第二季我們創下銷售新高、毛利率新高，並以本季超過 800 萬美元的現金基礎淨利，達成史上最佳營運成果。我們的新病患機會管線仍非常強勁，感測器訂單也比以往任何時候都更強。

The continued commercial success of G4 PLATINUM reinforces our long-held belief that sensor performance, in terms of both accuracy and reliability, is paramount. With that, I'll turn the call over to Kevin.

G4 PLATINUM 持續的商業成功，再次印證我們長期以來的信念：就準確度與可靠性而言，感測器效能至關重要。接下來我把電話交給 Kevin。

Thank you, Terry. First, I'll provide our financial update. DexCom generated $58.2 million in product revenue for the second quarter of 2014 compared to $35.5 million for the same quarter in 2013; a $22.7 million or 64% increase.

謝謝你，Terry。首先，我將提供我們的財務更新。DexCom 2014 年第二季產品營收為 5,820 萬美元，較 2013 年同期的 3,550 萬美元增加 2,270 萬美元，增幅 64%。

Sequentially, product revenue for Q2 of 2014 increased 25% from the prior quarter. Total revenue for the second quarter of 2014 was $58.8 million compared to $35.8 million during the same quarter in 2013.

按季比較，2014 年第二季產品營收較上一季成長 25%。2014 年第二季總營收為 5,880 萬美元，較 2013 年同期的 3,580 萬美元增加。

Our product gross profit totaled $39.5 million, generating a product gross margin of 68% for the second quarter of 2014 compared to product gross profit of $21.8 million and a product gross margin of 61% for the same quarter in the prior year. Sequentially, product gross margin in Q2 2014 was up 4 points, due primarily to increased sales volumes and to a lesser extent, increased average selling prices for our products.

我們的產品毛利合計 3,950 萬美元，使 2014 年第二季產品毛利率達 68%，相較於前一年度同期產品毛利 2,180 萬美元、產品毛利率 61%。按季比較，2014 年第二季產品毛利率提高 4 個百分點，主要由於銷售量增加，並在較小程度上受益於產品平均售價上升。

Some additional thoughts on our product revenue and gross profits: during Q2 2014, our revenue mix between durable and consumable products was approximately 30% durable and 70% consumable. ASP for sensors was slightly higher in the second quarter at approximately $72 per sensor, and the ASP of our hardware was also slightly higher at approximately $885 per starter kit.

關於產品營收與毛利的補充說明：2014 年第二季，我們在耐用品與耗材產品之間的營收組合約為 30% 耐用品、70% 耗材。第二季感測器 ASP（平均售價）略高，約為每個感測器 72 美元；我們硬體的 ASP 也略高，約為每套入門套組 885 美元。

Increases in ASP were due to a favorable payor mix during the quarter, including several new payor and distributor contracts with improved pricing, and the impact of moving our business to the pharmacy channel. We will continue to target ASPs in the range of $70 to $75 per sensor and a range of $850 to $900 per starter kit going forward.

ASP 的上升源於本季較有利的付款方組合，其中包括數個新的付款方與經銷商合約，定價更佳，以及我們將業務轉移至藥局通路所帶來的影響。未來我們將持續以每個感測器 70 至 75 美元、每套入門套組 850 至 900 美元的 ASP 區間為目標。

Finally, our international business continued to exceed our expectations in Q2 with international revenues almost doubling year-over-year. International revenues represented approximately 13% of product revenue during the quarter.

最後，我們的國際業務在第二季持續超出預期，國際營收幾乎較去年同期倍增。國際營收約占本季產品營收的 13%。

Turning to our expenses, our total operating expenses for the second quarter were $45.7 million compared to total operating expenses of $31.8 million during Q2 2013 and $42.1 million for the preceding quarter. As we discussed during our Q1 earnings call, the major component of this increase relates to non-cash share-based compensation expense.

接著談費用，第二季總營運費用為 4,570 萬美元，較 2013 年第二季的 3,180 萬美元以及上一季的 4,210 萬美元為高。如同我們在第一季財報電話會議中所討論，這項增加的主要構成與非現金的股份基礎補償費用有關。

During Q2 2014, our non-cash share-based compensation expense was $13.2 million, up approximately $4.5 million sequentially and $6.8 million over Q2 2013. We expect share-based compensation expense of at least this level through the first quarter of 2015.

2014 年第二季，我們的非現金股份基礎補償費用為 1,320 萬美元，較上一季約增加 450 萬美元，較 2013 年第二季增加 680 萬美元。我們預期至少在 2015 年第一季之前，股份基礎補償費用將維持在不低於此水準。

Share-based compensation is computed based upon the amortization of shares issued under our equity plans. The majority of these shares vests over a three-year period.

股份基礎補償係依據我們股權計畫下所發行股份的攤銷計算。此等股份多數在三年期間內歸屬。

The primary reason for the sequential and year-over-year increase in share-based compensation is the significant increase in the DexCom stock price over the past three years. For example, shares granted in 2011 were granted at prices ranging from $7.78 to $15.75 per share. The majority of the 2011 share grants finished vesting in Q1 2014 and the compensation expense related to these shares has been completely recognized.

股份基礎補償按季與年增的主要原因，是過去三年 DexCom 股價大幅上升。例如，2011 年授予的股份，其授予價格介於每股 7.78 美元至 15.75 美元。2011 年授予股份的大部分已於 2014 年第一季完成歸屬，與這些股份相關的補償費用也已全數認列。

Share-based compensation expense for the shares granted in late Q1 2014 is computed based upon a share price of $47.42 with these shares vesting through 2017. So obviously, our 2011 share grants created a much lower overall share-based compensation expense than our 2014 grants, which will now be recognized through 2017. Moving on to research and development expense, it totaled $14.8 million for Q2 of 2014 compared to $11.1 million in Q2 of 2013 and $14.5 million in Q1 2014.

2014 年第一季末授予股份的股份基礎補償費用，是以每股 47.42 美元的股價計算，且這些股份將歸屬至 2017 年。因此很明顯，我們 2011 年的股份授予所產生的整體股份基礎補償費用遠低於 2014 年的授予，而後者將一路認列至 2017 年。接著談研發費用，2014 年第二季研發費用合計 1,480 萬美元，較 2013 年第二季的 1,110 萬美元以及 2014 年第一季的 1,450 萬美元為高。

The year-over-year increase in R&D expense includes an $800,000 increase in non-cash equity-related expenses. The remaining increase relates to continued investments in the product pipeline focusing upon increased accuracy, improved connectivity, patient convenience, and lower cost with ultimate goal of replacing finger sticks altogether.

研發費用的年增包含 80 萬美元的非現金股權相關費用增加。其餘增幅與我們持續投資產品管線有關，重點在於提升準確度、改善連線能力、提升病患便利性並降低成本，最終目標是完全取代指尖採血。

Sequentially, R&D expense was flat with a decrease in non-cash expense related to our SweetSpot acquisition, offset by higher incremental non-cash share-based compensation expense. Selling, general, and administrative expense totaled $30.9 million in Q2 of 2014 compared to $20.7 million in the same quarter of 2013, an increase of $10.2 million. The year-over-year increase in SG&A relates primarily to additional headcount for our commercial infrastructure, as we scale the business for continued revenue growth, and also includes a $3.8 million increase in non-cash share-based compensation expense.

按季比較，研發費用持平：與我們 SweetSpot 收購案相關的非現金費用下降，但被較高的新增非現金股份基礎補償費用所抵銷。銷售、一般及行政費用（SG&A）在 2014 年第二季合計 3,090 萬美元，較 2013 年同期的 2,070 萬美元增加 1,020 萬美元。SG&A 的年增主要與我們商業基礎設施擴編所需的新增人力有關，以因應業務規模擴大並支持持續的營收成長；其中亦包含 380 萬美元的非現金股份基礎補償費用增加。

SG&A expense for the preceding quarter was $27.6 million. The sequential increase of $3.3 million includes $2.4 million in non-cash share-based compensation expense and commercial expenses to support our 25% sequential growth. Our net loss for the second quarter of 2014 totaled $6 million and included $14.2 million in non-cash expenses centered in share-based compensation, depreciation, and amortization.

上一季 SG&A 費用為 2,760 萬美元。按季增加 330 萬美元，其中包含 240 萬美元的非現金股份基礎補償費用，以及為支持 25% 的按季成長所需的商業費用。我們 2014 年第二季淨損為 600 萬美元，其中包含 1,420 萬美元的非現金費用，主要來自股份基礎補償、折舊與攤銷。

Absent these charges, our net income would have been approximately $8.2 million for Q2 2014. Obviously, we are quite pleased with our cash-based operating results, as this compares quite favorably to a cash base net loss for Q2 2013 of $1.1 million, and our cash base results for Q2 exceed our cash base net income for the entire year of 2013. Our basic loss per share for the quarter was $0.08.

若不計入這些費用，2014 年第二季淨利約為 820 萬美元。顯然，我們對以現金為基礎的營運成果感到相當滿意，因為相較之下，2013 年第二季的現金基礎淨損為 110 萬美元；且我們第二季的現金基礎成果也超過 2013 年全年的現金基礎淨利。我們本季基本每股虧損為 0.08 美元。

With respect to our balance sheet, we ended the second quarter with $61.3 million in cash and marketable securities, up almost $4 million sequentially, and we remain quite comfortable with our cash position. Finally, consistent with past practices, we'll take the opportunity to update our full-year revenue guidance. We now expect product revenue for the full year to fall within the range of $220 million to $235 million.

就我們的資產負債表而言，第二季結束時我們持有現金及有價證券共 6,130 萬美元，較前一季增加近 400 萬美元，我們對目前的現金部位仍感到相當安心。最後，依循以往作法，我們也藉此機會更新全年營收指引。我們目前預期全年產品營收將落在 2.20 億美元至 2.35 億美元的區間。

I'll now move to the business updates. As many of you know, the Annual Scientific Sessions of the American Diabetes Association was held in San Francisco in June and the show was nothing short of remarkable for DexCom. First, on the eve of ADA, we issued a joint press release with Insulet announcing that our upcoming mobile data app platform will integrate data from Insulet's next generation OmniPod handheld.

接下來我將說明業務更新。如各位所知，美國糖尿病協會（ADA）年度科學會議於 6 月在舊金山舉行，而對 DexCom 而言，這場展會可說是非常出色。首先，在 ADA 前夕，我們與 Insulet 發布聯合新聞稿，宣布我們即將推出的行動資料 App 平台將整合 Insulet 下一代 OmniPod 手持裝置的資料。

This will be the first insulin delivery device to be integrated into our Gen5 mobile platform, which we designed to aggregate glucose and other diabetes-related data from patient's devices and display the integrated data on a smartphone. It also marks the smart of open architecture approach to diabetes-related data, which will include an, authorized by DexCom, mark to indicate the compatibility of devices and apps integrating DexCom CGM data.

這將是第一款整合至我們 Gen5 行動平台的胰島素輸注裝置；我們設計 Gen5 的目的，是彙整患者裝置中的葡萄糖及其他與糖尿病相關的資料，並在智慧型手機上呈現整合後的資訊。這也標誌著我們在糖尿病相關資料上採取開放式架構方法的開端；該方法將包含一個（經 DexCom 授權的）標記，用以指示整合 DexCom CGM 資料之裝置與 App 的相容性。

Next, on Saturday morning, we formally kicked off the ADA with publication of a late-breaking poster entitled, CGM is not the limiting factor in artificial pancreas systems, in which we shared in-clinic data from 51 patients who wore a version of Gen4 PLATINUM with an approved algorithm dubbed G4AP. We demonstrated that our next gen CGM accuracy is approaching finger stick accuracy, with an overall G4APMRD versus YSI at an impressive at 9% compared to a finger stick MARD of 5.6% versus YSI.

接著，在週六上午，我們以一張最新突破性海報正式揭開 ADA 序幕，題為「CGM 並非人工胰臟系統的限制因素」。在該海報中，我們分享了 51 位患者於院內配戴搭載核准演算法（稱為 G4AP）的 Gen4 PLATINUM 版本之資料。我們證明下一代 CGM 的準確度正逼近指尖採血的準確度：整體 G4AP 的 MARD 相對於 YSI 為令人印象深刻的 9%，而指尖採血的 MARD 相對於 YSI 為 5.6%。

We believe the data represent an important next step on our path to obtaining an insulin dosing claim and the potential for factory calibration; again, consistent with our ultimate goal of replacing finger sticks altogether. Finally, on Sunday evening, Dr. Steven Russell shared top line results from the Bionic Pancreas Summer Camp and Beacon Hill studies, which were simultaneously published online and in the New England Journal of Medicine. The results were quite impressive, leading Dr. Russell to conclude that, as compared with an insulin pump alone, a wearable automated, bihormonal, bionic pancreas improved mean glycemic levels with less frequent hypoglycemic episodes among both adults and adolescents with Type 1 diabetes.

我們相信，這些資料代表我們在取得「胰島素劑量給藥」主張以及工廠校準潛力之路上的重要下一步；再次強調，這與我們最終目標——完全取代指尖採血——一致。最後，在週日晚上，Steven Russell 醫師分享了仿生胰臟夏令營（Bionic Pancreas Summer Camp）與 Beacon Hill 研究的主要結果，並同步於《新英格蘭醫學期刊》線上及紙本發表。結果相當亮眼，使 Russell 醫師得出結論：與單獨使用胰島素幫浦相比，可穿戴的自動化、雙荷爾蒙仿生胰臟能在第一型糖尿病成人與青少年中，以較少的低血糖發作頻率改善平均血糖水準。

Turning to our future CGM product offerings, we remain focused on increased connectivity and convenience as a near-term goal and replacing finger sticks as our primary long-term objective, as we continue to work on both Gen5 and Gen6 in an effort to achieve these goals. We are pleased to report that the Food and Drug Administration has formally advised us that our DexCom SHARE system is approvable, subject to our submission of additional documentation related to our contract manufacturer. We believe we have submitted all information requested by the agency and hope to launch this product prior to the end of the year.

談到我們未來的 CGM 產品供應，我們仍以提升連線能力與便利性作為短期目標，並以取代指尖採血作為主要長期目標；為達成這些目標，我們持續推進 Gen5 與 Gen6 的開發。我們很高興報告，美國食品藥物管理局（FDA）已正式告知我們，DexCom SHARE 系統具備可核准性，惟須我們補交與合約製造商相關的額外文件。我們相信已提交主管機關要求的所有資訊，並希望能在年底前推出此產品。

We continue to be pleased with the progress of our peds launch and we're happy to report that between 25% and 30% of our new patient additions in the US during Q2 were pediatric patients. With respect to our professional CGM, we successfully launched the system within three days following approval and expect to continue to commercialize this product during the second half of 2014. While we don't expect revenues from the sale of professional CGM to be material, we do believe professional CGM will provide us with a strong platform to build category awareness for future patient growth.

我們對兒科（peds）上市進展仍感到滿意，也很高興報告第二季在美國新增的患者中，有 25% 至 30% 為兒科患者。就我們的專業用 CGM 而言，我們在獲准後三天內即成功上市，並預期在 2014 年下半年持續推動該產品商業化。雖然我們不預期專業用 CGM 的銷售收入會具重大性，但我們確實相信專業用 CGM 將為我們提供一個強而有力的平台，以提升品類認知並帶動未來患者成長。

Shifting to our integration partnerships, just yesterday, we announced that we've expanded our development efforts with Insulet, and have agreed to work with Insulet to develop a CGM-integrated personal diabetes manager to enable upload and display of our Gen5 CGM data into the next generation Insulet handheld. We're also pleased to report that Animas has submitted a comprehensive response to the FDA regarding the Animas 5 and is in regular dialog with the agency regarding the submission. We're gearing up for a commercial launch of 5 in the US, which could come before the end of this year.

轉向我們的整合合作夥伴關係，就在昨天，我們宣布已擴大與 Insulet 的開發工作，並同意與 Insulet 合作開發整合 CGM 的個人糖尿病管理器（personal diabetes manager），以便將我們的 Gen5 CGM 資料上傳並顯示於 Insulet 下一代手持裝置。我們也很高興報告，Animas 已就 Animas 5 向 FDA 提交完整回覆，並就該申請與主管機關保持定期對話。我們正為 Animas 5 在美國的商業上市做準備，上市時間可能在今年年底前。

Finally, I'm pleased to report that Tandem has submitted a PMA application to the FDA for the t-slim Gen4 insulin delivery system, which integrates Tandem's t-slim pump with our Gen4 PLATINUM. As mentioned during the Tandem earnings call, this submission is just the first step of the regulatory process and a product approval is at the discretion of the FDA, which Tandem is estimating will take approximately 12 to 18 months.

最後，我很高興報告 Tandem 已向 FDA 提交 t-slim Gen4 胰島素輸注系統的 PMA 申請，該系統將 Tandem 的 t-slim 幫浦與我們的 Gen4 PLATINUM 進行整合。如同 Tandem 財報電話會議所提及，這次提交僅是法規流程的第一步，產品是否核准由 FDA 裁量；Tandem 估計該流程約需 12 至 18 個月。

In connection with the filing, Tandem made a $1 million milestone payment to us in July. On the data management front, I'm pleased to announce that we recently entered into an agreement with Tidepool to allow retrospective data from our G4 PLATINUM system to be integrated into the Tidepool data aggregation platform. This integration is consistent with our open architecture approach to diabetes-related data and will also include an, authorized by DexCom, mark.

配合此次申請，Tandem 於 7 月向我們支付 100 萬美元的里程碑款。在資料管理方面，我很高興宣布我們近期與 Tidepool 達成協議，允許我們 G4 PLATINUM 系統的回溯性資料整合至 Tidepool 的資料彙整平台。此整合與我們對糖尿病相關資料採取的開放式架構方法一致，並同樣將包含一個（經 DexCom 授權的）標記。

Finally, on the litigation front, we are pleased to report that on July 2, 2014, we entered into a settlement and license agreement with Abbott Diabetes Care to settle all pending patent infringement legal proceedings brought by Abbott against us back in 2005. The settlement agreement does not obligate us to pay any royalties or any other form of financial compensation and provides for a cross-license of certain of our patents and certain Abbott patents.

最後，在訴訟方面，我們很高興報告：2014 年 7 月 2 日，我們與 Abbott Diabetes Care 達成和解與授權協議，以解決 Abbott 自 2005 年起對我們提起的所有尚未結案之專利侵權法律程序。該和解協議不要求我們支付任何權利金或其他形式的財務補償，並規定就我們部分專利與 Abbott 部分專利進行交互授權。

In addition, we have agreed not to sue each other for patent infringement, based upon each of our respective continuous monitoring products, until March 31, 2021. I'll now turn the call back over to Terry for some concluding remarks.

此外，我們同意在 2021 年 3 月 31 日之前，基於彼此各自的連續監測產品，不互相提起專利侵權訴訟。接下來我把電話交回 Terry，請他做一些結語。

Thanks, Kevin. Each year in July, people with diabetes, parents, grandparents, siblings, loved ones, and friends gather in Orlando at Friends for Life, a conference hosted by Children with Diabetes to provide education and support for children with diabetes and their families. We were fortunate enough to sponsor Friends for Life this year and never, in my career at DexCom, was I more proud of our accomplishments as a Company.

謝謝你，Kevin。每年 7 月，糖尿病患者、父母、祖父母、兄弟姊妹、親友與朋友們會齊聚奧蘭多參加 Friends for Life；這是一場由 Children with Diabetes 主辦的會議，旨在為糖尿病兒童及其家庭提供教育與支持。我們很榮幸今年能贊助 Friends for Life，而在我於 DexCom 的職涯中，從未像此刻一樣為公司所取得的成就感到自豪。

Friends for Life is a chance, sometimes the only one all year, for children with Type 1 diabetes to hang out with children just like themselves to get to feel normal. I was inspired by the whole experience.

Friends for Life 提供一個機會——有時甚至是一整年唯一的一次——讓第一型糖尿病的孩子能與和自己一樣的孩子相處，感受到自己也能很正常。我從整個經歷中深受啟發。

Kevin talked about our pediatric growth in Q2. 16% of our US revenues and between 25% and 30% of our new patient additions were pediatric. We firmly believe this is a large untapped market opportunity for us, both on the professional and the patient side.

Kevin 談到了我們第二季的兒科成長。美國營收中有 16% 來自兒科，而新增患者中有 25% 至 30% 為兒科。我們堅信，這對我們而言是一個尚未充分開發的龐大市場機會，無論是在專業端或患者端皆然。

But as we all know, Type 1 diabetes does not discriminate by age. We know that approximately 500,000 people in the United States over the age of 65 are living with Type 1 diabetes. This is why obtaining Medicare coverage for CGM has become a key initiative for us here at DexCom.

但如同大家所知，第一型糖尿病不會因年齡而有所差別。我們知道在美國，約有 50 萬名 65 歲以上的人正與第一型糖尿病共存。這也是為什麼，為 CGM 取得 Medicare 給付已成為我們 DexCom 的一項關鍵倡議。

To that end, we are pleased to report that just last week, US Senators Susan Collins and Jeanne Shaheen, co-chairs of the Senate Diabetes Caucus, introduced legislation to ensure that seniors with Type 1 diabetes who are Medicare-eligible have access to continuous glucose monitors. The bill is entitled the Medicare CGM Access Act of 2014 and was largely the result of coalition efforts led by JDRF, the Endocrine Society, and the American Association of Clinical Endocrinology, with assistance by the American Association of Diabetes Educators, as well as industry representation by DexCom, Medtronic, and Johnson & Johnson. To date, CMS has indicated it will not issue a positive coverage decision for CGM because CMS believes that our FDA adjunctive claim indicates that CGM does not constitute a medical necessity.

為此，我們很高興報告，就在上週，美國參議員 Susan Collins 與 Jeanne Shaheen（參議院糖尿病核心小組共同主席）提出立法，以確保符合 Medicare 資格的第一型糖尿病高齡者能取得連續血糖監測器。該法案名為《2014 年 Medicare CGM 可近性法案》（Medicare CGM Access Act of 2014），主要是由 JDRF、內分泌學會（Endocrine Society）與美國臨床內分泌學會（American Association of Clinical Endocrinology）主導的聯盟努力成果，並在美國糖尿病教育者協會（American Association of Diabetes Educators）的協助下，以及 DexCom、Medtronic 與 Johnson & Johnson 等產業代表的參與下促成。迄今為止，CMS 表示不會就 CGM 作出正向給付決定，因為 CMS 認為我們在 FDA 的輔助性（adjunctive）主張顯示 CGM 不構成醫療必要性。

This, in spite of support for CGM from large randomized clinical trials, leading professional society position statements, and the fact that nearly all US commercial payers cover CGM for Type 1 and approximately 25% of payers cover for Type 2 insulin-using patients as well. It is well-documented that seniors with insulin-requiring diabetes are more susceptible to hypoglycemia and subsequent emergency services. In fact, recent data shows that 16% of elderly people with Type 1 diabetes experience low blood sugar seizures or loss of consciousness every year and costs for hypoglycemia inpatient admission averages over $17,000 per visit.

儘管大型隨機臨床試驗、主要專業學會的立場聲明皆支持 CGM，且美國幾乎所有商業保險給付方都為第 1 型糖尿病提供 CGM 給付，約 25% 的給付方也為使用胰島素的第 2 型患者提供給付，但情況仍是如此。已有充分文獻記載，需要胰島素治療的高齡糖尿病患者更容易發生低血糖，並因此需要後續的急診服務。事實上，最新數據顯示，每年有 16% 的第 1 型糖尿病長者會出現低血糖癲癇發作或失去意識，而因低血糖住院的平均費用每次就診超過 17,000 美元。

DexCom has thousands of patients that benefit from CGM use and we receive hundreds of letters from patients telling us that CGM has transformed their diabetes care and often saved their lives. While the legislative approach may take years, it is the first step to providing CGM to a patient population in much need.

DexCom 有數以千計的患者因使用 CGM 而受益，我們也收到數百封患者來信，告訴我們 CGM 如何改變了他們的糖尿病照護，且往往救了他們的命。雖然立法途徑可能需要數年，但這是向極度需要的患者族群提供 CGM 的第一步。

Also recently, AACE and the Endocrine Society recommended a code change to the AMACPT editorial panel to increase physician reimbursement for real-time CGM. This continues to reinforce the importance of real-time CGM for diagnostic use, and with the only real-time professional system on the market, we intend to further expand on this opportunity.

此外，AACE 與內分泌學會近期向 AMACPT 編輯委員會建議進行代碼變更，以提高醫師在即時 CGM 方面的給付報酬。這持續強化即時 CGM 作為診斷用途的重要性；而我們擁有市場上唯一的即時專業系統，並打算進一步擴大這項機會。

So as I look at our results for the quarter, our R&D pipeline and external factors developing around us, I continue to be very impressed by our performance. Product revenue is up 64% year-over-year and 25% sequentially.

因此，當我檢視本季的業績、我們的研發管線，以及周遭正在發展的外部因素時，我仍對我們的表現印象深刻。產品營收年增 64%，季增 25%。

Gross margins were 68% for the quarter, up 4 margin points. Absent non-cash charges, our net income would have been $8.2 million.

本季毛利率為 68%，提高了 4 個毛利率百分點。若不計非現金費用，我們的淨利將為 820 萬美元。

There have been those who question our ability to leverage the commercial side of our business. Well, we increased product revenues year-over-year by $22.7 million and we added only $6.2 million of cash-based SG&A expense.

有人質疑我們是否有能力在商業端發揮槓桿效益。嗯，我們的產品營收年增 2,270 萬美元，而以現金為基礎的銷售、一般及行政（SG&A）費用僅增加 620 萬美元。

I'm pretty sure that's leverage. While many companies are issuing warnings about their second half revenue expectations, we are increasing our guidance to a range of $220 million to $235 million in product revenue.

我很確定這就是槓桿效益。當許多公司都在對下半年營收預期發出警訊時，我們則將指引上調至產品營收 2.20 億至 2.35 億美元的區間。

In conclusion, we are very pleased with our second quarter financial performance. Our product revenue growth is unparalleled. Average year-over-year quarterly product revenue growth has been 66% since the launch of the G4 PLATINUM.

總結而言，我們對第二季的財務表現非常滿意。我們的產品營收成長無與倫比。自 G4 PLATINUM 上市以來，平均每季產品營收年增率為 66%。

We continue to make significant investments in our commercial infrastructure and our product pipeline to position DexCom for its long-term objectives. We are proving our business model as our cash-based profitability continues to improve. Thank you, and we'll now open it up for questions.

我們持續在商業基礎建設與產品管線上進行重大投資，以使 DexCom 能達成其長期目標。隨著以現金為基礎的獲利能力持續改善，我們正在驗證我們的商業模式。謝謝，接下來我們開放提問。

(Operator Instructions)

（接線員指示）

Ben Andrew, William Blair.

Ben Andrew，William Blair。

Good afternoon. Thank you for taking the questions.

下午好。謝謝讓我提問。

Can you talk, first, about the breakdown of the hardware? You said it was about 13% in the quarter, again, consistent with what you've seen. What is your estimate of which part of that is new patients versus kind of replacement hardware for existing patients?

我想先談硬體的拆分。你提到本季大約是 13%，同樣與你們先前看到的情況一致。你們估計其中有多少是新患者、多少是既有患者的替換硬體？

Well, yes, it's 30% hardware and 70% consumables. Consistent with our prior calls, we're not going to disclose our breakdown between new patient and existing patients. You can't keep growing at 60% without adding a whole lot of new patients. When we consider that our business is evolving to the point, we're not going to be able to provide that number on a timely basis.

是的，硬體占 30%，耗材占 70%。如同我們先前的電話會議所說，我們不會揭露新患者與既有患者之間的拆分。若沒有新增大量新患者，不可能維持 60% 的成長。當我們考量到業務演進到某個程度時，我們將無法及時提供那個數字。

Give you a couple of examples. As we stated in our remarks, 13% of our revenues are international. We don't know if those are to new or existing patients. Animas buys transmitters for Vibes in Europe, and soon they'll be buying them in the US. But in Europe in particular, we don't know if those are new or existing patients either.

我舉兩個例子。如同我們在發言中提到的，我們 13% 的營收來自國際市場。我們不知道那些是來自新患者還是既有患者。Animas 在歐洲為 Vibe 購買發射器，很快也會在美國購買。但特別是在歐洲，我們同樣不知道那些是新患者還是既有患者。

Finally, we're moving to a pharmacy distribution model where a patient will be able to walk into a drugstore and pick up a starter kit. We don't know if that's a new patient or existing one, either.

最後，我們正轉向藥局通路的配銷模式，患者將能走進藥局並領取入門套組。我們也無法判斷那是新患者還是既有患者。

So at the ends of the day, until we have Gen 5 streaming into the cloud, we won't know if those are new or existing patients. So at the end of the day, we're not going to give a whole lot more than we given. Our business is moving too fast.

所以歸根結底，在第 5 代（Gen 5）能把資料串流到雲端之前，我們不會知道那些是新患者還是既有患者。因此，總之，我們不會提供比目前更多的資訊；我們的業務變化太快了。

By breaking out hardware sales and ASPs, we think we've provided you enough information to estimate patient numbers given basic utilization and attrition rates.

透過拆分硬體銷售與平均銷售價格（ASP），我們認為已提供足夠資訊，讓你在給定基本使用率與流失率的前提下估算患者數。

Okay. Great, that's helpful. Thank you.

了解。這很有幫助，謝謝。

There was a comment at ADA relative to timeline disruption from the new software algorithm with G4. Terry, can you comment on the ability to push that algorithm out to existing patients with the current system versus would you wait for G5? And talk about when that could happen. I know you've got Share coming by year end; but just update us on the algorithm, please.

在 ADA 會議上有人提到，G4 的新軟體演算法可能會影響時程。Terry，你能否談談：在現有系統下，是否能把該演算法推送給既有患者，還是會等到 G5？以及可能的時間點？我知道 Share 會在年底前推出；但請更新一下演算法的進度。

Yes, it's difficult to estimate when or what we're going to do with that because it is a timing issue. And it's in the hands of the Food and Drug Administration. And so if you look at the iteration of products, as we've indicated, we expect to file Gen 5 before the end of the year. And it becomes a timing issue of what is most appropriate for the patient population and what's most appropriate for DexCom.

是的，這很難估計我們何時或會怎麼做，因為這牽涉到時程問題，而且掌握在美國食品藥物管理局（FDA）手上。因此，如果你看我們產品迭代的節奏，如同我們所指出的，我們預期在年底前提交第 5 代（Gen 5）申請。接著就會變成：對患者族群而言什麼最合適、對 DexCom 而言什麼最合適的時程取捨問題。

Quite frankly, at this point, without greater visibility of when that may get approved, we've refrained from making a decision on which version that we will introduce the new algorithm. And when we make that decision, of course, everybody will know of that decision. Now, from a standpoint of how we will implement it, we do, as you know, we have the ability to upgrade software through the internet.

坦白說，在目前尚未更清楚掌握何時可能獲准之前，我們暫時不做決定要以哪個版本導入新演算法。當我們做出決定時，當然大家都會知道。至於如何實施，如你所知，我們具備透過網際網路升級軟體的能力。

That is one mechanism that is available to us, much like you would upgrade software on a laptop or a PC, which we issue a code, you put it in, and we have confirmation that you uploaded it correctly. But stay tuned. That is the best I can give you at this point.

這是我們可用的一種機制，就像你在筆電或 PC 上升級軟體一樣：我們發出一組代碼，你輸入後，我們會確認你已正確上傳。不過請持續關注；目前我能提供的就到這裡。

Okay. Last quick question for me.

好的。我最後一個簡短問題。

Obviously, the peds is growing very, very quickly right out of the box. Was there any indication of an impact on the adult ads? It doesn't seem like there was, but just wanted to ask. Thank you.

顯然，兒科（peds）一推出就成長非常、非常快。有沒有任何跡象顯示這對成人的新增（ads）有影響？看起來似乎沒有，但我想確認一下。謝謝。

No, Ben, everything is going according to plan. The patients buying second transmitters, the new patients that we're adding, and sensor reorders -- everything is right in line with what we expected.

沒有，Ben，一切都按計畫進行。患者購買第二個發射器、我們新增的新患者，以及感測器的再次訂購——所有項目都完全符合我們的預期。

Mike Weinstein, JPMorgan.

Mike Weinstein，JPMorgan。

I just wanted to follow up on Ben's last question on the pediatric comment that you made on the prepared remarks. Obviously, that's much more rapid than we were expecting in terms of the early response in pediatrics. Do you have any read on sustainability?

我想延續 Ben 最後一個問題，關於你在事先準備的發言中提到的兒科評論。顯然，就兒科早期反應而言，速度比我們預期快得多。你們對其可持續性有什麼看法嗎？

Do you think there was a bolus here that you got this quarter? Or do you have any sense that anything that you saw on the pediatric side this quarter isn't going to continue?

你認為本季是否有一次性的「脈衝」拉貨？或者你是否覺得本季在兒科端看到的任何情況，接下來不會延續？

I'll take it and then let Terry add some other comments. Based on what we've seen at the various meetings we've attended and our visits in the field with endocrinologists, if anything, we think the pediatric market is grossly underpenetrated. And this is not just a bolus. It's just the start of something that can be fabulous.

我先回答，然後再請 Terry 補充。根據我們參加的各種會議，以及我們在第一線拜訪內分泌科醫師所看到的情況，如果說有什麼結論，那就是我們認為兒科市場的滲透率嚴重不足。這不只是一次性的脈衝；這只是某件可能非常精彩的事情的開始。

Terry?

Terry？

I would echo Kevin's comments. We see the sustainability of this type of ramp. Obviously, clearly, a lot of unmet needs and parents, in particular, driving the adoption for their children. They will, of course, do anything possible to keep their children safe. And this is an extremely accurate, reliable tool. And it's a very well-educated population in terms of the parents, as well; and they communicate.

我同意 Kevin 的看法。我們認為這種爬坡成長具有可持續性。很明顯仍有大量未被滿足的需求，尤其是家長在推動孩子採用。他們當然會盡一切可能確保孩子安全。而這是一個極其精準、可靠的工具。此外，就家長而言，他們也是非常受過教育的族群，而且彼此會交流。

And so we've seen just this increase. If it's any indication, again, mentioning Children with Diabetes and Friends for Life meeting, we were quite pleased that we saw a lot of kids walking around with DexCom CGM and coming up and thanking us as teenagers or younger and certainly their parents thanking us. So we think there is still a lot of upside opportunity here.

因此我們看到這樣的成長。如果這能作為任何指標——再次提到 Children with Diabetes 與 Friends for Life 會議——我們非常高興看到許多孩子身上配戴 DexCom CGM，並走過來向我們致謝，無論是青少年或更年幼的孩子，當然他們的父母也向我們致謝。因此我們認為這裡仍有很大的上行機會。

Mike, I'd add one other thing. When we add connectivity to this mix for parents and pediatrics, then the show really starts.

Mike，我還想再補充一點。當我們把連線功能也加入到這個組合、面向家長與兒科時，整個局面才真正開始精彩起來。

Yes. Yes, understood.

是的。是的，了解。

Let me just make sure I'm clear on the latest timing thoughts. On G5 submission, do the partnerships and the timing of those impact at all your assumed submission? Are you still assuming that filing is maybe late this year, but more likely early part of 2015?

我想確認一下我對最新時程想法的理解是否正確。關於 G5 的送件（submission），合作夥伴關係以及其時程是否會對你們假設的送件時間造成任何影響？你們仍然假設可能在今年稍晚送件，但更可能是在 2015 年初嗎？

Yes, it will be late this year or early next year. We separate the Gen 5 filing from all the partnership activities. That is our development effort. The partners will file their systems. Tandem and Animas have filed with Gen 4.

是的，會在今年稍晚或明年初。我們把第 5 代（Gen 5）的送件與所有合作夥伴活動分開。那是我們自己的開發工作。合作夥伴會為他們的系統送件。Tandem 和 Animas 已經用第 4 代（Gen 4）送件了。

We will continue to support those companies and all their efforts with Gen 4 hardware. But we will file and move on to Gen 5 for ourselves when it gets approved. And then we'll go back and figure out how to integrate our technological upgrades with the pump partners as time goes on.

我們會持續以第 4 代硬體支援那些公司及其所有努力。但就我們自己而言，一旦獲准，我們就會送件並轉向第 5 代。之後，隨著時間推進，我們會再回頭研究如何把我們的技術升級與幫浦合作夥伴做整合。

Okay. As we think about the goal of finger stick replacement, is the thought process based on the data you've got from what we saw at ADA? Is the thought that that still waits until we get to G6 and you eliminate some of the noise factors with acetaminophen and some other medicines? Or is there any possibility you think you could get that with G5?

好的。當我們思考以 CGM 取代指尖採血的目標時，這個思路是基於你們在 ADA 上展示的那些數據嗎？你們的想法是否仍是要等到 G6，並消除對乙醯胺酚（acetaminophen）以及其他一些藥物造成的雜訊因素？還是你們認為用 G5 也有可能達成？

Mike, that is a good question. We've discussed this with the agency. With a 9% MARDR, accuracy is there. And the consistency of the performance of Gen 4 is there with this new algorithm.

Mike，這是個好問題。我們已經和主管機關討論過。以 9% 的 MARDR 來看，準確度是到位的。而且透過這個新演算法，第 4 代的表現一致性也到位。

We're going to start putting together new information and risk mitigation factors and all of the things that the FDA would want to see this. And we'll see what we can learn and do with the Gen 4 system and then apply it to Gen 5 because it, theoretically, would be the same algorithm and the same sensor.

我們會開始整理新的資訊、風險緩解因子，以及 FDA 希望看到的所有內容。然後看看我們能從第 4 代系統學到什麼、能做到什麼，再把它套用到第 5 代，因為理論上會是相同的演算法與相同的感測器。

So we're going to proceed with that with our current system and label it accordingly with respect to acetaminophen. If the Agency comes back and says something different, that's fine. But we're going to figure out this path now. We're not going to wait.

所以我們會用目前的系統推進這件事，並就乙醯胺酚的部分做相應標示（label）。如果主管機關回覆說需要不同作法，也沒問題。但我們現在就要把這條路走出來，我們不會等。

All right. I'll let some others jump in. Great quarter.

好，我讓其他人接著問。這一季表現很棒。

Thank you.

謝謝。

William Plovanic, Canaccord Adams.

William Plovanic，Canaccord Adams。

A couple of questions. First of all, what exactly are the features and benefits you plan on having included in G5? Because it's pretty fluid; so I'm just curious, where do we stand now?

我有幾個問題。首先，你們計畫在 G5 中納入的功能與效益到底是什麼？因為看起來變動性很大；所以我想了解一下，目前進展到哪裡了？

Specifically, Gen 5 from a sensor perspective, will be a Gen 4 PLATINUM sensor built on the same manufacturing line with the same membranes. We won't change the core manufacturing processes.

具體來說，從感測器角度，第 5 代會是第 4 代 PLATINUM 感測器，使用同一條製造產線、同樣的膜材。我們不會改變核心製造流程。

With respect to the user interface, that will be a mobile app, launched initially on an iPhone platform. And it will be a different interface than what we have today. We've done a lot of human factors work and patient work to make sure that is a good interface and will go through and add benefit to our patients.

在使用者介面方面，會是一個行動 App，初期會先在 iPhone 平台推出。介面會不同於我們目前的版本。我們做了大量的人因工程與病患研究，以確保這是個好的介面，並能為病患帶來效益。

With respect to the algorithm, that's going to depend, as Terry talked about, uncertainty due to the timing of the G4 AP algorithm. Do we include that in Gen 5; do we do it earlier; do we wait and do it after? We're working through some of those issues now, and we haven't made a decision.

在演算法方面，正如 Terry 提到的，會取決於 G4 AP 演算法時程所帶來的不確定性。我們要不要把它納入第 5 代；要不要更早做；或是等之後再做？我們正在釐清其中一些議題，目前尚未做出決定。

But the key factor on Gen 5 is the transmitter has a Bluetooth chip in it. It will talk directly to a cell phone and another device. So you can have two devices that receive a signal from that transmitter. And we will offer the patients a receiver that receives a Bluetooth signal as well, so they have a backup in case their phone battery goes dead. So that's how we're positioning the basic feature set of Gen 5, and then we'll go from there.

但第 5 代的關鍵因素是：發射器內建藍牙晶片。它可以直接與手機以及另一個裝置通訊。因此你可以有兩個裝置同時接收該發射器的訊號。我們也會提供病患一個同樣接收藍牙訊號的接收器，作為備援，以防手機電池沒電。這就是我們對第 5 代基本功能組合的定位，之後再往下延伸。

So the factory calibration or the replacement claim or insulin dosing claim, you don't know if that'll be part of it or not yet?

所以工廠校準（factory calibration）、免指尖採血（replacement claim）或胰島素劑量給藥（insulin dosing claim）的主張，你們還不確定是否會納入其中？

We don't know. And, Bill, those things are independent from each other. We're going to pursue the dosing claim based on the accuracy of the sensor, actually as it sits in the current Gen4 platform. Then, in fact, if we can get that claim, we would apply it to the Gen 5 system because, again, it's the same sensor and the same algorithm that we're using now.

我們還不確定。而且 Bill，這些事情彼此是獨立的。我們會基於感測器的準確度來推進給藥主張，實際上是以目前第 4 代平台的狀態來推進。然後，如果我們能取得該主張，我們會把它套用到第 5 代系統，因為同樣地，使用的是相同的感測器與相同的演算法。

So we're kind of looking at that as an independent feature. And we'll move it into the product feature set as quickly as we can. We're not going to hold up Gen 5 waiting for that. We'd love to include it if we could. And we're actively engaged, as I said earlier, in dialog with the Agency on how to get there.

所以我們把它視為一個獨立功能，並會盡快把它納入產品功能組合。我們不會為了等它而延後第 5 代。如果能納入我們當然很希望。而且如我先前所說，我們正積極與主管機關對話，討論如何達成。

And then factory calibration?

那工廠校準呢？

That won't happen with Gen 4. We'll start reducing calibrations with Gen 6.

第 4 代不會做到。我們會從第 6 代開始降低校準次數。

Okay. Perfect. This is pretty fluid on the generation, what the features and benefits. That's helpful.

好的。完美。這些世代的功能與效益確實變動很大。這樣的說明很有幫助。

To switch over to the peds, the insurance coverage today. If you think of the policies that are out there, what does insurance coverage look like for peds? I remember, initially, it was 25 and older in terms of the payors. How does it look today?

切換到兒科（peds）部分，談談目前的保險給付。如果看現在市面上的保單，兒科的保險給付狀況如何？我記得一開始在付款方（payors）那邊是以 25 歲以上為主。現在看起來如何？

Even though, as you mentioned, the coverage decision was 25 and older. But we never had any pushback from the payers regarding pediatric. Even though their policy said X, in reality, they were reimbursing for it. It's been no big change from the standpoint of the reimbursement landscape once we got the pediatric indication.

如你提到的，雖然給付決策是 25 歲以上，但我們從未在兒科方面遭遇付款方的反對。即使他們的政策寫的是 X，實際上他們仍然有在給付。自從我們取得兒科適應症後，從給付環境的角度來看，並沒有什麼重大改變。

So it's all preapprovals, right? You have to go through a preapproval process?

所以都是事前核准（preapprovals），對吧？你必須走事前核准流程？

It is a mix of prior authorization in some cases or just on recommendation, depending upon the policy. Recommendation by the physician that the patient is failing to achieve adequate glycemic control, as measured by a physician, not necessarily by some numeric number.

這是混合型態：有些情況需要事前授權（prior authorization），有些則只要依照建議即可，取決於保單。由醫師建議該病患未能達到足夠的血糖控制（glycemic control），這是由醫師衡量，不一定是用某個數字門檻來判定。

Okay. Great. The last question I have is that's a very impressive gross margin number. I think you're already addressing the levels you expected to hit and kind of max out at. What do you project that gross margins can go to off the current sensor now?

好的，很好。我最後一個問題是：這個毛利率數字非常亮眼。我想你們已經在說明你們預期能達到、以及大概會在什麼水準見頂。以目前這款感測器來看，你們預估毛利率還能提升到多少？

The biggest factor here is volumes, Bill. We know that we can apply more overhead the more sensors we manufacture. We can gain some efficiencies. We've always said 70% to 80% maximum with the current sensor. Probably a target more like 75% on the Gen 4 sensor would be where we would fall out, assuming pricing remains consistent in that $70 to $75 range.

這裡最大的因素是出貨量（volumes），Bill。我們知道感測器製造得越多，就能分攤更多製造費用（overhead），也能取得一些效率。我們一直說以目前的感測器來看，上限大約是 70% 到 80%。若假設定價仍維持在每個 70 到 75 美元的區間，對第 4 代感測器而言，較可能的目標大概會落在 75% 左右。

We're going to have to have some advances with respect to new manufacturing techniques and some of the hardware elements of the sensor, particularly the applicator, before we can drive them down even further. We're pretty close now. We can get more efficient with respect to returns and with respect to the electronics manufacturing.

在我們能把成本再進一步壓低之前，必須在新的製造技術以及感測器的一些硬體元件上有所進展，特別是施打器（applicator）。我們現在已經很接近了。我們還可以在退貨（returns）以及電子製造方面提升效率。

We have constant improvement initiatives on all these things that are ongoing currently. But as far as picking up 10% more margin points next year, that's probably not happening.

我們目前在所有這些項目上都有持續改善的計畫在進行中。但如果要在明年再多拿到 10 個百分點的毛利率提升，那大概不太可能。

You mentioned the applicator. Is that part of G5 or no?

你提到施打器。那是 G5 的一部分嗎？還是不是？

Not the first pass.

第一版不會。

Great. That's all I had. Thank you very much.

很好。我就這些。非常感謝。

Tom Gunderson, Piper Jaffray.

Tom Gunderson，Piper Jaffray。

Good afternoon. As you said, the numbers speak for themselves. So I'll just go on a couple of the topics that you brought up. One is CMS, Medicare patients, 500,000. They say it's not medically necessary. And everybody else in the world says that whether it is necessary or not, it is good for the patient and good for costs. I'm curious. And, yes, you can go through Congress. We know how effective that's been for others.

下午好。如你所說，數字本身已經說明一切。所以我就接著談幾個你提到的主題。其中一個是 CMS、Medicare 病患，50 萬人。他們說這在醫療上並非必要。而世界上其他人都說，不管是否「必要」，這對病患有益、也有助於成本。我很好奇。而且，是的，你們可以透過國會來處理。我們也知道對其他人而言那有多有效。

Terry, is this a person that can be swayed, is it a committee? It is a stiff arm that says -- No way under any circumstances? What do you think it would take to turn CMS around other than a change in the laws?

Terry，這是一個可以被說服的人嗎，還是一個委員會？它是一個強硬的手段，意思是——在任何情況下都不可能嗎？你認為除了修改法律之外，還需要什麼才能讓 CMS 改變方向？

I think the easiest way to achieve it is to get a claim of non-injunctive for our therapeutic dosing claim. I think that clears the decks, and that's the quickest way to change the -- and it is by committee, Tom, it's not by a single individual strong-arming the system.

我認為最容易達成的方法，是為我們的治療劑量（therapeutic dosing）主張取得一項「非禁制令」（non-injunctive）的主張。我認為那能清除障礙，而這也是最快改變——而且這是由委員會決定的，Tom，不是由某一個人以強勢手段操控整個體系。

From that standpoint, you've heard Kevin talk about the emphasis on getting to a claim. We've had these open, active discussions with the agency about how we achieve that. We have to identify risks and mitigation of those risks with Gen 4 for an adjunctive claim, but we're well on our way down that pathway.

從那個角度來看，你也聽到 Kevin 談到取得一項主張的重要性。我們一直與主管機關就如何達成這點進行公開且積極的討論。為了取得輔助性（adjunctive）主張，我們必須辨識 Gen 4 的風險以及這些風險的緩解措施，但我們在這條路徑上已經進展順利。

And although I think the legislative effort just bolsters some of the other things that we're doing and increases awareness, I still think that to change the policy decision, we will have to achieve that new claim.

而且，雖然我認為立法方面的努力只是強化我們正在做的其他事情並提高認知度，但我仍然認為，要改變這項政策決定，我們必須取得那個新的主張。

Got it. Thanks.

了解。謝謝。

On the New England Journal article and all the buzz that went around the Russell system, we've maybe gotten too immune to that over the years and hearing the data and seeing things come out. But now you get a major journal, you get a big media attention at ADA. It probably, I'm guessing, correct me if I'm wrong, didn't have an impact on Q2.

關於《新英格蘭醫學期刊》的文章，以及圍繞 Russell 系統的所有熱議，多年來我們可能對這些已經有點麻木了，聽到數據、看到結果出來。但現在你有一個頂尖期刊，又在 ADA 得到大量媒體關注。我猜——如果我說錯請糾正——它大概沒有對第二季（Q2）造成影響。

Do you feel like getting that kind of media attention and people saying, oh, yes, there is a CGM that works, gets you some of the uplift that you expect for the rest of the year?

你覺得獲得那種媒體關注、大家說「喔，對，確實有一個有效的 CGM」，是否會帶來你預期今年剩餘時間的某些拉抬？

No, I think it is still early. And the whole progress of artificial pancreas that certainly we are the choice of the overwhelming majority of artificial pancreas programs around the globe. But I would caution the audience that, for the most part, outside of the things that Medtronic diabetes is doing in AP, the rest of these are all investigator-initiated trials. So they're not really company-sponsored. They're individual companies participating but coordinated by academic centers.

不，我認為現在仍然太早。人工胰臟的整體進展方面，確實我們是全球絕大多數人工胰臟計畫的首選。但我會提醒各位，基本上，除了 Medtronic diabetes 在 AP（人工胰臟）方面所做的事情之外，其餘多數都是研究者主導（investigator-initiated）的試驗。所以它們並不是由公司贊助。個別公司會參與，但由學術中心統籌協調。

I think there's a lot of work that needs to be done. And if we just look at all of the different component parts, they all have to come together. And I think even FDA was at Keystone last month and got up and said, in their view, the artificial pancreas will be a combination of different component parts supplied by different companies coming together to create a unique product.

我認為還有很多工作要做。如果我們看所有不同的組成部分，它們都必須整合在一起。我想 FDA 上個月也在 Keystone 會議上發言表示，依他們的看法，人工胰臟將會是由不同公司提供的不同組件組合而成，最終共同形成一個獨特的產品。

There are challenges. And if we just look at the insulin, everybody pretty much agrees that the insulin isn't fast enough; it's not predictable enough. You've got a glucagon; if you're using a bihormonal system, there's never been a stabilized glucagon. So all the work that has to go into that to get a new drug essentially through the FDA. I just think there's a lot of work to be done.

挑戰很多。如果只看胰島素，幾乎大家都同意胰島素不夠快、可預測性也不夠。再看升糖素（glucagon）；如果使用雙荷爾蒙系統（bihormonal system），目前從未有穩定化的升糖素。因此，為了讓一個新藥本質上通過 FDA，還需要投入大量工作。我只是覺得還有很多工作要完成。

We get the goodwill associated with being the premiere product in that space. But when the rubber meets the road, it's the performance of the G4 PLATINUM and the confidence that patients get out of using it and the trust. That's really what is driving our Q2 numbers and hopefully for the rest of the year as well.

我們確實因為在那個領域是領先產品而獲得好感。但真正落到實處時，推動我們第二季（Q2）數字的，是 G4 PLATINUM 的表現、病患使用後獲得的信心與信任；也希望這同樣能推動今年剩餘時間的表現。

Got it. Last question, a quick one. You and Kevin have taught us the seasonality between Q4 and Q1 and the things that go into that. It's hard to see seasonality when you grow 64%. It covers a lot. Do you think there's any seasonality, positive or negative, in summertime?

了解。最後一個問題，簡短的。你和 Kevin 一直教我們 Q4 和 Q1 之間的季節性，以及其中的因素。當你成長 64% 時，很難看出季節性，因為成長掩蓋了很多。你覺得夏季有任何正面或負面的季節性嗎？

We've got July under our belt. And I would only say, we've got to get August and September. I think summer ends the 21st of September or something like that. So I'm not going to comment on the seasonality of this summer. There are so many things and factors that are going on that it's hard to be predictive. I will predict that seasonality, that Q1 is going to be different than Q4, Q1 2015.

我們已經走過 7 月了。我只能說，還得看 8 月和 9 月。我想夏天大概是 9 月 21 日左右結束之類的。所以我不會評論今年夏天的季節性。有太多事情和因素同時發生，很難做出預測。我會預測的是季節性：Q1 會不同於 Q4，也就是 2015 年的 Q1。

But remember that as installed base grows and the number of sensors, the impact on seasonality is because patients do need sensors in the first quarter. It lessens as the influence of disposables becomes much more prevalent than our durables. So stay tuned.

但請記得，隨著裝機基礎（installed base）成長以及感測器數量增加，季節性的影響在於病患在第一季確實需要感測器。當耗材（disposables）的影響變得比我們的耐用品（durables）更為主導時，季節性就會減弱。所以敬請期待。

My other comment before I go off, is pharmacy benefit also has a mitigating factor because for those patients that do have pharmacy benefit coverage, first-year seasonality is immaterial.

我在結束前的另一點補充是：藥局給付（pharmacy benefit）也有緩和因素，因為對於那些有藥局給付保障的病患而言，第一年的季節性影響並不顯著。

Can you quantify that?

你能量化一下嗎？

International business is completely immune to seasonality.

國際業務完全不受季節性影響。

You quantified international at 13%. Can you quantify pharmacy benefit?

你把國際業務量化為 13%。你能量化藥局給付嗎？

I'll look at Kevin because he's the numbers person.

我看一下 Kevin，因為他是負責數字的人。

We're kind of holding back on that, Tom. We'll probably give an upgrade on that at the first of the year, but we are moving rapidly. And so a good number of patients are getting processed that way, and contracts are falling into line the way we want them to.

我們目前有點保留這個數字，Tom。我們可能會在明年年初提供更新，但我們推進得很快。因此，有相當多的病患正透過那種方式完成處理，而合約也正按照我們希望的方式逐步到位。

Got it. Thank you.

了解。謝謝你。

Raj Denhoy, Jefferies.

Raj Denhoy，Jefferies。

Hello, good afternoon.

你好，下午好。

I wonder if I could just ask a little bit about the mobile platform. You've now signed up Insulet to put data on that as well. Maybe you could just describe a little bit about, one, where you are in that. I guess the Share system is supposed to be feeding into that or will soon for the current generation. The Gen 5 will feed into it off a cell phone.

我想請教一下行動平台（mobile platform）的部分。你們現在也已經與 Insulet 簽約，讓他們的資料也能放到那個平台上。也許你可以稍微描述一下：第一，你們目前進展到哪裡。我想 Share 系統應該會把資料導入那個平台，或很快就會，針對現有世代。Gen 5 則會透過手機把資料導入。

Is that the path we should think about that? And as you start other systems to this as well, is there a revenue component that goes along with this also? Maybe just some broad thoughts would be helpful on how we should frame that.

這是我們應該用來理解的路徑嗎？另外，當你把其他系統也納入其中時，這裡是否也會有相應的營收組成？如果能提供一些宏觀想法，幫助我們如何框架理解，會很有幫助。

Raj, this is Steve.

Raj，我是 Steve。

You've articulated it the right way. Share will be the first entree into the mobile platform; not truly a mobile product in the sense that the Share cradle is plugged into the wall. It's essentially a docking station for the G4 PLATINUM receiver. We look at Gen 5, although much of the back end infrastructure for Gen 5 is the same as we built for Share. Gen 5 is truly the first mobile product where the patient will interact with their CGM data directly on the smartphone.

你表述得很正確。Share 會是進入行動平台的第一步；但嚴格來說它不算真正的行動產品，因為 Share 底座（cradle）是插在牆上供電的。它本質上是 G4 PLATINUM 接收器的擴充底座。我們看 Gen 5，雖然 Gen 5 的後端基礎架構有很大一部分與我們為 Share 建置的是相同的。Gen 5 才是真正的第一個行動產品，病患將直接在智慧型手機上與他們的 CGM 資料互動。

With respect to Insulet, you should assume that the Insulet, the mobile app that we developed on behalf of Insulet, will be an iteration of the base Gen 5 app. So we'll file and release a Gen 5 system. And we will follow with probably a PMA supplement to our Gen 5 app that will incorporate their insulin onboard data. The extension of the deal that was announced yesterday is really, again, all about flexibility and convenience for the patient. So that the deal yesterday was really just to extend where Insulet would be incorporating their insulin onboard data and their insulin data into our mobile app.

至於 Insulet，你可以假設：我們代表 Insulet 開發的行動 App，會是基於 Gen 5 基礎 App 的一個迭代版本。因此我們會先申報並推出 Gen 5 系統。接著我們可能會以 PMA 補充（PMA supplement）的方式，針對我們的 Gen 5 App 納入他們的「體內胰島素」（insulin onboard）資料。昨天宣布的交易延伸，基本上同樣是為了病患的彈性與便利性。所以昨天的交易，主要就是延伸到 Insulet 會把他們的體內胰島素資料與胰島素資料整合進我們的行動 App。

The deal that we announced yesterday is kind of the reverse of that, where they'll be able to develop some software that they'll develop and incorporate into their handhelds that will enable the patient to have CGM access on their PDM. Remember something that Kevin said earlier in the call. The architecture of Gen 5 is such that it can pair to two devices at the same time.

我們昨天宣布的交易某種程度上是反向的：他們將能開發一些軟體並整合到他們的手持裝置中，讓病患能在他們的 PDM 上存取 CGM。請記得 Kevin 先前在電話會議中提到的一點：Gen 5 的架構可以同時與兩個裝置配對。

So a patient using Insulet system, once all of these software developments are completed, a patient would be able to pair with their Insulet handheld and be paired with their smartphone at the same time. I guess the key distinction would be, on our smartphone app, the patient out of the gate will not be able to control insulin delivery from their smartphone. Whereas the software being developed by Insulet would be a fully-contained medical device system. So the patient would be able to interact with their OmniPod, as well as their CGM data in one location.

因此，使用 Insulet 系統的病患，一旦這些軟體開發都完成後，就能同時與 Insulet 的手持裝置配對，也能同時與自己的智慧型手機配對。我想關鍵差異在於：在我們的智慧型手機 App 上，病患一開始將無法透過智慧型手機控制胰島素輸注。相對地，由 Insulet 開發的軟體將是一個完整封閉的醫療器材系統。因此病患可以在同一個地方同時操作他們的 OmniPod，以及查看他們的 CGM 資料。

Okay. That's helpful.

好的。這很有幫助。

But this idea of also the cloud-based system, where you're going to be collecting data that can be used remotely, if somebody wants to monitor a child, for instance. Is it contemplated that Insulet or other partners will be adding data to that type of system as well? Or is it really just this local arrangement as you've kind of described it?

但另外還有雲端系統這個概念，也就是你們會收集可供遠端使用的資料，例如有人想要監測一個孩子。是否有考慮讓 Insulet 或其他合作夥伴也把資料加入那種系統？還是說其實就只是你剛才描述的這種本地端安排？

I would call that to be determined. The key factor there is that you need to have network connectivity. So I'm not sure -- it would be a good question for you to ask the Insulet folks tomorrow during their call.

我會說這還有待決定。關鍵因素在於你需要有網路連線。所以我不確定——這會是個很好的問題，你可以在明天他們的電話會議上問 Insulet 的人。

I'm not sure if their next gen handheld if they're intending to have cellular connectivity. The key to the remote monitoring is being able to have a network-connected device and be able to have basically real-time data transmitted from the handheld device.

我不確定他們下一代手持裝置是否打算具備行動網路連線。遠端監測的關鍵在於要有一個可連網的裝置，並且能夠讓資料基本上以即時方式從手持裝置傳輸出去。

So certainly that is a DexCom goal; and then we'll certainly be going down that path with Gen 5. I'm not sure that any of these other partners -- when you talk about cloud-based data sharing or this open architecture strategy that we've adopted, you need to make sure you're clear between what is real-time data versus what is retrospective data capable of review and doing analytics and things by a physician or even by the patient retrospectively.

所以這當然是 DexCom 的目標；而我們也一定會在 Gen 5 走這條路。我不確定其他合作夥伴——當你談到雲端資料分享或我們採用的開放式架構策略時，你必須清楚區分即時資料與回溯性資料；後者是醫師甚至病患事後可用來檢視、做分析等用途的資料。

We're not opening up our architecture, other than potentially to a couple of the pump companies at this point, to any real-time transmission. The FDA has been pretty clear that if it's real-time data being used or capable of use for therapeutic purposes, they've been very clear with us that will absolutely be a Class 3 regulated medical device. So for example, when we talk about -- we mentioned in our prepared remarks an integration with Tidepool, which is an organization, a non-profit, looking to develop some analytical tools and aggregate data from a multitude of devices.

我們目前不會開放我們的架構（除了可能對少數幾家幫浦公司）來做任何即時傳輸。FDA 已經很明確表示，如果是即時資料被用於或可用於治療目的，他們非常清楚地告訴我們，那絕對會被歸類為 Class 3 受管制醫療器材。舉例來說，當我們談到——我們在事先準備的發言中提到與 Tidepool 的整合；Tidepool 是一個非營利組織，致力於開發一些分析工具，並彙整來自多種裝置的資料。

The data that Tidepool would be updating and integrating into their software platform would not be real-time data. This is going to be retrospective data that the patient or the clinician would be able to use after the fact to potentially use to adjust treatment, adjust insulin, adjust diet, exercise, things like that. But it would not be the same as what patients will be using our real-time data app on the phone. Or for Insulet, for example, having access to CGM data with real-time alerts, et cetera.

Tidepool 會更新並整合到其軟體平台的資料不會是即時資料。這將是回溯性資料，病患或臨床醫師可在事後使用，可能用來調整治療、調整胰島素、調整飲食、運動等。但這不會等同於病患在手機上使用我們的即時資料 App。或例如 Insulet 取得 CGM 資料並有即時警示等等。

You have to make sure you draw that distinction between the types of data sharing that we're going to be doing going forward.

你必須確保你把我們未來要做的資料分享類型之間的差異劃分清楚。

No, understood. One last question on this topic. In terms of is there a business model around it, in the sense that other than obviously driving better adoption and sensor utilization. Is there another revenue stream that you contemplate from the data component of this?

了解。關於這個主題最後一個問題。就商業模式而言，除了顯然能推動更好的採用率與感測器使用量之外，你們是否也考慮從資料這個部分取得另一條營收來源？

If I had to guess right now, I would say probably not. But it is something that we're certainly still exploring. Certainly, I don't think doctors are going to pay for it; and I certainly don't think patients are going to pay for it. To the extent, down the road, we're able to show financial benefit and improved outcomes, potentially payers might be willing to pay for something this, on a monthly basis or something.

如果我現在要猜，我會說大概不會。但這確實是我們仍在探索的事情。我當然不認為醫師會為此付費；我也不認為病患會為此付費。若未來我們能證明有財務效益並改善結果，或許保險支付方可能願意按月之類的方式為此付費。

But I would tell you, from our perspective, I don't think we're counting on it. It is more important to drive utilization, particularly in the pediatric market. If parents have real-time access, all-the-time access to their child's data, I think that's a pretty powerful tool that will help ensure consistent utilization of and drive sensor sales. So I don't think we're looking to monetize it at this point, but we'll explore it as we move down the path.

但我會告訴你，從我們的角度來看，我不認為我們把它當作主要依靠。更重要的是推動使用量，特別是在兒科市場。如果父母能即時、隨時取得孩子的資料，我認為那是非常有力的工具，有助於確保持續使用並帶動感測器銷售。所以目前我們不打算把它變現，但會在推進的過程中持續探索。

That's very helpful, thank you.

這非常有幫助，謝謝。

Danielle Antalffy, Leerink Partners.

Danielle Antalffy，Leerink Partners。

Thanks so much.

非常感謝。

Good afternoon. Congrats on a great quarter.

下午好。恭喜你們交出很棒的一季。

I was wondering if you could give a little bit more color on pediatrics, 25% to 35% of new patient adds this quarter. Is that mix the mix we should think about going forward? Do you think it should be higher than that?

我想請你們再多談一點兒科的情況，本季新增病患中有 25% 到 35% 來自兒科。這個占比是我們未來應該預期的組合嗎？你們覺得應該比這更高嗎？

And then a follow-up on utilization, sensor utilization amongst peds. Is it dramatically different than with adults?

另外追問使用量，兒科族群的感測器使用量是否與成人有顯著差異？

The launch is so early, I don't have a good indicator for pediatric utilization. And we haven't run those numbers. Gut-feel, based on the kids we've seen, I think utilization's very high as we're around them.

產品才剛推出不久，我沒有一個好的指標來判斷兒科的使用量。我們也還沒跑那些數字。直覺上，根據我們看到的孩子，我覺得在我們接觸到的情況下使用量非常高。

With respect to 25% to 30% of our new patients, that's where this quarter came out. We've often said that we'd like to see our total revenue base get up to 30% of our revenues derived from the pediatric market. And as Terry said in his remarks, we're up to 16%.

至於新增病患中 25% 到 30% 的占比，這就是本季的結果。我們過去常說，希望我們的總營收基礎中，有 30% 的營收來自兒科市場。而如 Terry 在他的發言中所說，我們目前已達到 16%。

So this is a good starting point. It's certainly better than we did in Q1, and we'll just keep going from there.

所以這是個不錯的起點。肯定比我們在第一季做得更好，我們會從這裡繼續往前推進。

Okay. Great. As far as number of endocrinologists that you're speaking to, have you started touching on the pediatric-only endocrinologists? I think there are 800 to 1,000 that you've talked about in the past. Where are you in penetrating those physicians? That's it for me. Thanks so much.

好的。很棒。就你們接觸的內分泌科醫師數量而言，你們是否已開始接觸只看兒科的內分泌科醫師？我記得你們過去提過大約有 800 到 1,000 位。你們在滲透這些醫師方面進展到哪裡？我就這些。非常感謝。

We're early in the process. And what we've learned is, with some of the physicians, we definitely had a running start. And with some of the others, we've got huge educational efforts. That's why Terry and I both characterize this as a very big opportunity.

我們還在早期階段。我們學到的是，對某些醫師而言，我們確實有先發優勢；但對另外一些醫師，我們需要投入大量的教育工作。這也是為什麼 Terry 和我都把這形容為一個非常大的機會。

There's a lot of education we've got to do. But ultimately, what we end up with is a lot of very happy customers. So we're focusing pretty heavily on that. Our team is out in the field, and they're doing a great job.

我們還有很多教育要做。但最終我們得到的是許多非常滿意的客戶。所以我們正相當專注在這件事上。我們的團隊在第一線，他們做得非常好。

Great. It sounds like still a lot of runway there. That's great. Thanks so much.

很好。聽起來那裡仍有很長的成長跑道。很棒。非常感謝。

Jan Wald, Benchmark.

Jan Wald，Benchmark。

This is Erica in for Jan. I just have a couple question since it's been such a thorough Q&A session so far.

我是 Erica，代替 Jan。我只有幾個問題，因為到目前為止問答已經非常完整了。

As far as Medicare, is that something where you'd mostly be looking for a therapeutic indication to drive it or possibly doing a study to look at the benefits and what cost benefit you'll have from the reduced adverse events or reduced problems with poor insulin control?

關於 Medicare，你們主要是希望透過治療性適應症來推動，還是可能會做一項研究來看其效益，以及因不良事件減少或胰島素控制不佳問題減少所帶來的成本效益？

No, it's clearly therapeutic benefit that you would no longer have to rely solely on finger sticks in order to adjust your insulin dose.

不，這很明確是治療效益，也就是你不再需要完全依賴指尖採血來調整胰島素劑量。

With respect to doing a large based clinical trial, I don't think it is necessary at this point. Obviously, it's a patient population that is substantial. A lot of the clinical work that has gone on in the past has been inclusive of age-appropriate patients. But none of them have been standalone enough to generate an independent analysis of that segment.

至於做一個大型臨床試驗，我認為目前沒有必要。當然，這是一個相當可觀的病患族群。過去進行的許多臨床工作都包含了適齡病患，但沒有任何一項是足夠獨立到可以對該族群做出單獨分析。

But as I think we go along, once we have that adjunctive claim, then the need to do additional clinical work in a specific age population group is not requirable.

但我想隨著我們往前走，一旦我們拿到那個輔助（adjunctive）主張，那麼在特定年齡族群再做額外臨床工作的需求就不是必須的。

Okay. That sounds fantastic and definitely should help you keep your costs down, which leads into second question.

好的。聽起來很棒，而且確實應該能幫你們把成本壓低，這也帶到第二個問題。

We were going to ask about when we could look for you to really start driving this through. But this quarter showed that you're showing some great leverage. Is that something that we can start holding you accountable for?

我們原本想問你們何時會真正開始推動這件事。但本季顯示你們展現了很好的槓桿效益。這是否是我們可以開始要求你們對此負責的事情？

That's a good question and I'll answer that. Certainly, we strive to achieve leverage here. There's no question.

這是個好問題，我來回答。當然，我們努力在這裡達成槓桿效益。毫無疑問。

But we also take opportunities to spend on a discretionary basis as we see growth coming. We have a study that we're starting later this year that will have several hundred patients to whereby we're going to really evaluate the efficacy of CGM with respect to lowering A1Cs; with respect to healthcare costs. It's going to be a several-million-dollar effort for us, something we would have never considered a couple of years ago.

但我們也會在看到成長來臨時，把握機會以裁量方式增加支出。我們今年稍晚會啟動一項研究，將納入數百名病患，用以真正評估 CGM 在降低 A1C 方面的效益；以及在醫療照護成本方面的影響。對我們而言，這會是一項數百萬美元規模的投入，是幾年前我們根本不會考慮的事情。

We also take opportunities -- and we've taken opportunities in R&D and in our clinical trial group over the first six months as we've seen growth -- to spend a little more money to do some things. We've accelerated our spending on the Gen 6 sensor a bit because our results in our early feasibility studies have been so promising. We've accelerated some spending on miniaturizing electronics as well. Because the more we travel, the more we hear -- Make this thing simple and easy for us to use. And small is a big piece of that equation.

我們也會把握機會——而且在看到成長的前六個月裡，我們已在研發與臨床試驗團隊方面把握機會——多花一些錢來做一些事情。我們稍微加速了對 Gen 6 感測器的支出，因為我們在早期可行性研究中的結果非常有前景。我們也加速了電子元件微型化方面的一些支出。因為我們走訪越多，就越常聽到——請把這個東西做得簡單、容易使用。而「小型化」是那個方程式中很重要的一部分。

Yes, we're trying to obtain leverage. But, no, we don't go to bed worrying about that as much as we go to bed worrying about winning the race of getting the best technology to market as fast as we can. That's how we balance it.

是的，我們正在嘗試取得槓桿。但不，我們上床睡覺時，擔心的不是這件事；我們更擔心的是在把最好的技術以最快速度推向市場的競賽中勝出。我們就是這樣取得平衡的。

Okay. Thank you very much. That's it from us.

好的。非常感謝。以上就是我們的提問。

Mimi Pham, ABR Health Company.

Mimi Pham，ABR Health Company。

For the Vibe, I know J&J is controlling that launch schedule and strategy. But can you comment on if there are any constraints on your end from J&J launching post-approval within days, weeks?

關於 Vibe，我知道 J&J 在掌控上市時程與策略。但你能否評論一下，J&J 在核准後於數天、數週內上市，從你們這邊是否有任何限制？

Mimi, I can't comment specifically. But what I can tell you is I've been very impressed with their efforts in the pre-commercialization stage, which is what I would describe us right now. I think if they get a timely approval -- and I don't want to quantify timely, within the next month or two, probably -- I think they will make a concerted effort to try to launch the product this year. There are no constraints. We're ready to go.

Mimi，我無法具體評論。但我可以告訴你的是，我對他們在商業化前期（我會形容我們目前正處於這個階段）的努力印象非常深刻。我認為如果他們能及時獲得核准——我不想量化「及時」，大概在接下來一兩個月內吧——我認為他們會全力以赴，嘗試在今年推出產品。沒有任何限制。我們已經準備就緒。

Okay, great. In terms of the international strength, was that from more favorable international coverage in any region? Or is that just due to stronger uptick of the Vibe or J&J increasing their marketing efforts international with Vibe?

好的，很棒。就國際市場的強勁表現而言，那是因為某些地區的國際給付/保險覆蓋較有利嗎？還是只是因為 Vibe 的成長更強，或 J&J 在國際上對 Vibe 加大了行銷力道？

J&J has done very well with Vibe, but it's not just Vibe. We are growing in several of our countries. We have some core countries: Germany, the Netherlands, we've done very well in Canada with our launch this year. We do very well in Italy, and Sweden is a huge market for us. And the physicians there in Sweden have figured out some ways to get some very good reimbursement.

J&J 在 Vibe 上做得非常好，但不只是 Vibe。我們在多個國家都在成長。我們有一些核心國家：德國、荷蘭；我們今年在加拿大的上市表現也非常好。我們在義大利表現也很好，而瑞典對我們來說是個非常大的市場。那裡的醫師在瑞典也找到了取得非常好的報銷/給付的一些方法。

Those countries are all growing very rapidly. Vibe is included in that mix. But our distributors are doing very well by us also. So it's both.

這些國家都在非常快速地成長。Vibe 也包含在其中。但我們的經銷商也為我們做得非常好。所以兩者都有。

In terms of the initial interest in the G4 PLATINUM professional version, is it coming from mainly your existing customers? Or is this attracting any new endos to CGM?

就 G4 PLATINUM 專業版的初期興趣而言，主要是來自你們既有客戶嗎？還是也吸引了新的內分泌科醫師開始使用 CGM？

It's both. Obviously, the goal here is to replace the SEVEN PLUS professional with G4. But I think additionally, since it is real-time, there is a common theme amongst endocrinologists that even on a diagnostic tool, having the patient be able to visualize the information is important as part of the whole training process. Whether or not the patient ultimately migrates to their own personal use, which is one of the draws of having this.

兩者都有。顯然，這裡的目標是用 G4 取代 SEVEN PLUS 專業版。但我也認為，因為它是即時的，內分泌科醫師之間有個共同的主題：即使是診斷工具，讓病人能夠把資訊視覺化，作為整體訓練流程的一部分也很重要。不論病人最終是否會轉為自己個人使用——這也是擁有它的一個吸引力。

But also the lessons that they can learn just in the week that they're on it versus a blinded unit, I think is driving many of the physicians to replace their former system that was a blinded system with one that is unblinded.

此外，我認為病人在配戴一週期間能學到的內容，相較於盲測裝置要多得多，這也促使許多醫師把原本的盲測系統，換成非盲測的系統。

Got it. Thank you so much.

了解。非常感謝。

Jayson Bedford, Raymond James.

Jayson Bedford，Raymond James。

Hello, this is Mike Rich calling in for Jason. Thanks for taking the questions.

你好，我是 Mike Rich，代替 Jason 來電。謝謝你們回答問題。

Circling back to the pharmacy benefit strategy, what accelerates that conversion? Is there anything specific that you need to provide some of the large PBMs before them coming on board, or is it just timing?

回到藥局給付策略，什麼因素會加速那個轉換？在大型 PBM 加入之前，你們是否需要提供任何特定內容，還是只是時間問題？

As a follow-up to that, you mentioned ASPs were modestly up this quarter. Longer term, as you shift to the pharmacy channel, does that pressure ASPs; or can you withstand that?

追問一下，你提到本季 ASP 小幅上升。長期來看，當你們轉向藥局通路時，是否會對 ASP 造成壓力；還是你們能承受？

As we said earlier, our target ASPs on sensors are $70 to $75 per sensor. And as we model these out for the various payers and the PBMs, the wholesalers, this entire distribution channel, that's where we're focusing to realize our net ASP, at least within that range. So we're assuming pricing can remain the same.

如同我們先前所說，我們對感測器的目標 ASP 是每顆 70 到 75 美元。當我們針對各類付款方、PBM、批發商以及整個配銷通路進行建模時，我們聚焦在實現我們的淨 ASP，至少落在那個區間內。因此我們假設價格可以維持不變。

With respect to driving that, it's a function of a number of things, getting PBMs signed up. We'd already announced our Express Scripts arrangement. Our Caremark arrangement is known as well. On top of that, we look at individual payers who can then flip the switch and go over to the benefit administered by those groups.

至於如何推動，取決於多項因素，包括讓 PBM 簽約。我們已經宣布與 Express Scripts 的合作安排；與 Caremark 的安排也眾所周知。在此之上，我們也看個別付款方，他們之後可以「切換開關」，轉到由那些團體管理的給付。

There are also several other payers who administer their own mail order pharmacies, who we've been in negotiations with. And combine that with even the pharmacies, the retail channel in general, what this represents for us is a sales and distribution opportunity that's not at all like what we've ever done before.

另外也有幾個付款方是自行管理其郵購藥局，我們一直在與他們談判。再加上藥局端、整體零售通路，對我們而言，這代表一個前所未有的銷售與配銷機會。

So there's a learning curve here for us, and we're learning as we go. But we've had some pretty good success. Like we said last call, I'll iterate again, any patient that comes in here, we ping -- we call it ping -- we ping their pharmacy benefit first. If we can get them product through their pharmacy at a lower co-pay, we run with it. And we've had some pretty good success with that program.

所以我們在這裡有學習曲線，也是在做中學。但我們已經取得相當不錯的成果。就像我們上次電話會議說的，我再重申一次：任何病人進來，我們會先去查——我們稱之為 ping（查詢）——先查他的藥局給付。如果我們能透過藥局以較低的自付額讓他拿到產品，我們就會採用這個方式。而這個計畫我們做得相當成功。

I'd only say on the pricing, what we really look at is the reduction in transactional costs. On both sides of the equation, the pharmacy side, they're doing less paperwork; and as a result of that, they have less embedded costs. The same is true for us. If we can run it through a pharmacy, we don't have all of the paperwork accumulation and submission and the costs associated with that.

在定價方面，我們真正看的其實是交易成本的降低。等式兩邊都一樣：藥局端文件作業更少，因此內含成本更低；我們也是如此。如果能透過藥局出貨，我們就不需要累積、提交大量文件，以及相關成本。

Every time we touch a piece of paper, it costs something as part of that. So this is a streamlined system. So from a COGS standpoint, in our operating margin on it, we can be a bit lenient in this in terms of negotiation because volume here will more than offset any price concessions that we might have to make in the end.

每碰一次紙本文件，都會產生成本。所以這是一個更精簡的系統。因此從 COGS 的角度、以及我們在其上的營業利潤率來看，我們在談判上可以稍微寬鬆一些，因為這裡的量將遠遠抵消我們最終可能必須做出的任何價格讓步。

Yes, got it. That's helpful.

是的，了解。這很有幫助。

The expanded agreement with Insulet was a pleasant surprise, especially considering the size of their pediatric user base. Do you have an idea what percent of your user base is currently using the OmniPod?

與 Insulet 擴大的協議是個令人驚喜的消息，尤其考量到他們兒科使用者基礎的規模。你們是否知道目前你們的使用者中，有多少百分比正在使用 OmniPod？

We have an idea, but we're not going to disclose it.

我們有概念，但我們不會揭露。

Okay. Fair enough.

好的。可以理解。

Lastly, Terry, you mentioned in your prepared remarks that sensor utilization has been stronger than ever. Did you see any changes in the quarter as it relates to utilization relative to the last 12 months? Generally, we're looking at, we estimate ten-day wear on average. Did that trend up, down, or is it just more patients ordering sensors?

最後，Terry，你在事先準備的談話中提到感測器使用量比以往任何時候都更強。就使用量而言，你們在本季相較於過去 12 個月有看到任何變化嗎？一般來說，我們估計平均配戴 10 天。那個趨勢是上升、下降，還是只是更多病人在訂購感測器？

Just more patients ordering sensors. We have not really seen a particular change in the days of utilization, as you said, in the last 12 months, per se.

只是更多病人在訂購感測器。就你所說的，在過去 12 個月裡，我們並沒有特別看到使用天數有什麼變化。

I do think that as you add more patients, maybe some of them, initially at least, will use the product according to labelled indication. And then as they get smarter or more experienced, they may try to push it to the days use that you've indicated. Obviously, we never recommend that. So we really don't monitor that other than what people say in the blogs.

我確實認為，當你加入更多病人時，也許其中一些人至少在一開始會依照標示適應症來使用產品。然後當他們變得更熟悉或更有經驗時，他們可能會嘗試把使用天數延長到你所提到的天數。顯然，我們從不建議那樣做。所以我們其實不會監測這件事，除了人們在部落格上怎麼說之外。

Okay. Great. Thank you.

好的。很棒。謝謝。

Thank you. Greg Chodaczek, Sterne Agee.

謝謝。Greg Chodaczek，Sterne Agee。

Just one quick one for you, Kevin. You said non-base stock-based comp was $13.2 million for Q2. You said it's going to be at least that per quarter for the next three quarters. Is that what you were saying?

Kevin，我這邊只有一個很快的問題。你說第二季非基礎的股票基礎薪酬是 1,320 萬美元。你說接下來三個季度每季至少都會是這個水準。你是這個意思嗎？

Through the end of Q1 of 2015, that's correct.

到 2015 年第一季末為止，是的，沒錯。

Okay. What percentage of users are type 2? Do you look at those?

好的。使用者中第二型糖尿病的比例是多少？你們有追蹤嗎？

No, I mean -- we really don't have a good number to give you there.

沒有，我是說——我們真的沒有一個可以提供給你的好數字。

Certainly less than 5%.

肯定少於 5%。

Yes. That's probably the easiest way to say it.

是的。這大概是最簡單的說法。

I'll try this one. What percentage of hardware was transmitters?

我再試一題。硬體中有多少百分比是發射器？

Nice try.

想得美。

Okay. Thank you.

好的。謝謝。

Tao Levy, Wedbush Securities.

Tao Levy，Wedbush Securities。

Following up on that last one, last quarter you talked about the transmitters and kind of seeing a bump up in that hardware. Was there anything special about that piece of business this quarter?

延續上一題，上季你們談到發射器，並提到那部分硬體似乎有一波成長。本季那塊業務有什麼特別之處嗎？

It remains very strong.

它仍然非常強勁。

Got you. Okay. And sales force adds, any changes there in the quarter? Are you still around 90?

了解。好的。那銷售團隊增員方面，本季有任何變化嗎？你們仍然大約在 90 人左右嗎？

We're still at the same place, And with respect to sales force adds, our typical process, as we get to the end of the third quarter and early into fourth quarter as we budget for next year, we start looking at doing the adds in Q4. And that would be our plan again this year, that we'll remain stable through this quarter.

我們仍然在同一個位置。至於銷售團隊增員，我們的典型流程是：當我們進入第三季末、第四季初並為明年編列預算時，我們就會開始評估在第四季進行增員。今年我們的計畫也一樣，也就是本季我們將維持穩定。

We're seeing our people really get up to speed now that we added late last year; and now they're firing on all cylinders, the new ones. So we'll wait until the end of Q3. And if we are looking at an expansion next year, we'll start the ball rolling in Q4 and have them all up to speed and hired by early Q1 of 2015.

我們看到去年年底新增的人員現在真的都已經上手了；新的同仁現在也都火力全開。所以我們會等到第三季末。如果我們打算明年擴張，我們會在第四季開始啟動，並在2015年第一季初之前把人都招募到位並讓他們完全上手。

Okay. Great. Lastly, on the Gen 5 and it being sort of designed for the mobile sort of environment, the regulatory process for the devices where a patient will be able to get the transmissions, so that the smartwatch or -- will that be regulated as a PMA-type product, or is it just -- or not?

好的。很好。最後，關於第5代（Gen 5）以及它算是為行動環境所設計，對於讓病患能夠接收傳輸資料的那些裝置，其監管流程是什麼？也就是智慧手錶或——它會被當作PMA類型的產品來監管嗎？還是只是——或不是？

Yes, what the FDA has said to us is that if, again, it's back to that real-time information versus retrospective information. To the extent that information is real-time coming from the transmitter, then it will absolutely be subject to our Class 3 PMA regulations. So what that means is our expectation, for example, for the Gen 5 system, is that the PMA system that the FDA will evaluate would be a dedicated receiver, a transmitter and the disposable sensors. And this time, it would also include a software application that would be included as part of the PMA.

是的，FDA對我們說的是：如果——同樣回到即時資訊與回溯性資訊的差別。只要資訊是由發射器傳來的即時資訊，那就絕對會受我們第3類PMA法規所規範。這代表我們的預期是，例如對於Gen 5系統，FDA將評估的PMA系統會包含一個專用接收器、發射器以及一次性（拋棄式）感測器。而這一次也會包含一個軟體應用程式，作為PMA的一部分。

So to the extent we could upload a PMA-approved software application on a phone or that same or similar PMA-approved software application on a Pebble watch, for example, we don't believe that the Pebble watch, just like a smartphone, would become part of the system, the regulated system. It's just the software application sitting on that device that would be part of the PMA. Does that make sense?

因此，只要我們能在手機上下載一個已獲PMA核准的軟體應用程式，或例如在Pebble手錶上下載同一個或類似的已獲PMA核准的軟體應用程式，我們不認為Pebble手錶會像智慧型手機一樣成為系統、也就是受監管系統的一部分。成為PMA一部分的是放在該裝置上的軟體應用程式本身。這樣說有道理嗎？

Yes. But the goal would be -- in that smartwatch -- to be able to get the real-time data.

有。但目標會是——在那個智慧手錶上——能夠取得即時資料。

Certainly. We, again, back to our objective, which is maximum flexibility for the patient, we'd love to be able to put that application on a multitude of devices to let the patient choose where they want to see their CGM readings.

當然。我們再次回到我們的目標，也就是讓病患有最大的彈性；我們很希望能把那個應用程式放到多種裝置上，讓病患可以選擇他們想在哪裡看到他們的CGM讀值。

Perfect. Great, thanks.

完美。很好，謝謝。

(Operator Instructions)

（接線員指示）

Ben Andrew, William Blair.

Ben Andrew，William Blair。

Thank you.

謝謝。

Looking over the model, the guidance of $220 million to $235 million, to get to the low end, you'd have to do about $114 million of revenue. In the back half, you did $106 million. Our model, just cursory adjustments here, we've you growing at relatively modest rates sequentially, like 1% for the third quarter and then a more typical growth in the fourth. How conservative is that $220 million to $235 million range relative to some of the trends we've seen?

從模型來看，指引為2.20億到2.35億美元；要達到區間下緣，下半年你們大概要做出約1.14億美元的營收。去年下半年你們做了1.06億美元。我們的模型——這裡只是粗略調整——我們假設你們的季對季成長相對溫和，例如第三季約1%，然後第四季回到較典型的成長。相較於我們看到的一些趨勢，這個2.20億到2.35億美元的區間有多保守？

We've been waiting for this question all afternoon. I do have to tell you that, Ben. So thank you. As we put the guidance together, we typically do annual guidance. And we committed to 40% growth for the entire year, and $220 million represents a 40% growth number. $235 million is upwards closer to 50%.

我們整個下午都在等這個問題。我得跟你說，Ben。所以謝謝。當我們整理指引時，我們通常提供年度指引。我們承諾全年成長40%，而2.20億美元就代表40%的成長數字；2.35億美元則更接近50%的成長。

We have typically experienced a very slow sequential growth from Q2 to Q3. Last year, that was a bigger growth number. As we put this guidance together, we didn't anticipate the big change like we did last year.

我們通常在第二季到第三季之間的季對季成長會非常慢。去年那個成長幅度比較大。當我們制定這次指引時，我們並未預期會像去年那樣出現很大的變化。

The other thing to look at is there's this law of growing on a bigger base. Typically, our first-half and second-half split had been 45% first half; 55% second half. Last year, it was 40%/60%. So the second half was much, much bigger.

另外要看的還有一點：在更大的基期上成長的法則。一般而言，我們上半年與下半年的拆分通常是上半年45%、下半年55%。去年則是40%/60%，所以下半年大很多、很多。

As we looked at the numbers and looked at what we're doing, we moved our range up to there on just some broad-brush assumptions. We did not go back into every single kit we're going to sell new patients, upgrades, or all the other stuff. We looked at big-picture numbers and felt, as a low end, the 40% growth we'd committed to at the beginning of the year was a good low end. And we took it up to $235 million at the high end, and that's how we got there.

當我們看這些數字、看我們正在做的事情時，我們基於一些較粗略的假設把區間上調到這裡。我們沒有回頭逐一細算每一套我們要賣給新病患的套件、升級，或其他所有項目。我們看的是大方向的數字，並認為作為下緣，我們在年初承諾的40%成長是一個合理的下緣；上緣則拉到2.35億美元，這就是我們得出該區間的方式。

I will add, we will, similar to what we did last year, we're going to follow the same pattern we did last year. At the end of the third quarter, if we see something different, we'll give you an update on guidance and what we think we're going to do by the end of the year at the end of the next quarter.

我補充一下：我們會跟去年一樣，採取相同的節奏。在第三季末，如果我們看到有不同的情況，我們會在下一季末向各位更新指引，以及我們認為到年底會做到什麼程度。

Sure.

了解。

Kevin, just to push you a little bit, we're just rolling this through. We end up at the high end of the range, and we were before. But that suggests hardware revenue of about $67 million. We've got about $30 million of replacement hardware baked in. Don't even need to increase that, but probably could, which it does imply, even still, a relatively modest utilization rate compared to what you could see as peds ramp as a percent and patients are a little bit more compliant with label.

Kevin，我再稍微追問一下，我們只是把這些數字順著推算。我們最後落在區間上緣，而我們之前也是如此。但那暗示硬體營收大約是6,700萬美元。我們模型裡已經納入約3,000萬美元的替換硬體。甚至不需要提高那個數字，但可能也可以提高；即便如此，這仍意味著相對溫和的使用率，相較於你可能看到的情況——例如兒科（peds）占比提升，以及病患更遵循標示（label）而提高依從性。

I appreciate the conservatism, certainly, in terms of setting expectations. But in terms of what is maybe more likely than not coming through, it seems like even the $235 million is probably more like a middle of the range in terms of what's realistic for the year in our view.

我當然理解在設定市場預期方面的保守作法。但就更可能實際發生的情況來看，在我們的觀點裡，即使是2.35億美元，可能也更像是今年現實結果的區間中位數。

Okay. That's good.

好的。這很好。

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

謝謝。目前我們沒有其他問題。現在我想把電話交回給你，Terry。

Thank you.

謝謝。

There continues to be a growing adoption of CGM as a key tool to better manage a patient's diabetes. And DexCom enjoys the status of the most accurate and durable CGM ever commercially introduced. It is a testament to our technical staff of what they have accomplished and the fact that DexCom continues to raise the bar.

CGM作為更好管理病患糖尿病的關鍵工具，持續被越來越多地採用。而DexCom享有迄今商業化推出中最精準且最耐用的CGM之地位。這是對我們技術團隊所達成成果的肯定，也顯示DexCom持續提高標準。

As an example, just last week, Becton Dickinson announced it was shutting down its CGM program due to technical issues when moving into human feasibility testing. We have long stated that developing an accurate and reliable CGM is extremely challenging and very expensive. This is further proof of how difficult our work truly is and clearly supports our unique position in the diabetes industry. Thank you very much.

舉例來說，就在上週，Becton Dickinson宣布因在進入人體可行性測試時遭遇技術問題而關閉其CGM計畫。我們長期以來一直表示，開發精準且可靠的CGM極具挑戰且成本非常高。這進一步證明我們的工作確實非常困難，也清楚支持我們在糖尿病產業中的獨特地位。非常感謝。

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

謝謝各位女士、先生。今天的會議到此結束。感謝各位參與。您現在可以掛線。