德康醫療 (DXCM) 2019 Q1 法說會逐字稿

Welcome to the DexCom First Quarter 2019 Earnings Release Conference Call. My name is Adrian, and I'll be your operator for today's call. (Operator Instructions) Please note, the conference is being recorded.

歡迎參加 DexCom 2019 年第一季財報發布電話會議。我是 Adrian，將擔任今天電話會議的接線員。(接線員指示) 請注意，本次會議將被錄音。

I'll now turn the call over to Matt Dolan. Matt Dolan, you may begin.

我現在把電話交給 Matt Dolan。Matt Dolan，您可以開始了。

Thank you, operator, and welcome to DexCom's First Quarter 2019 Earnings Call. Our agenda begins with Kevin Sayer, DexCom's Chairman, President and CEO, who will provide a summary of the quarter; followed by a financial review and outlook from Quentin Blackford, our Executive Vice President and CFO; and then a strategic update from Steve Pacelli, our Executive Vice President of Strategy and Corporate Development.

謝謝您，接線員，並歡迎各位參加 DexCom 2019 年第一季財報電話會議。我們的議程首先由 DexCom 董事長、總裁兼執行長 Kevin Sayer 開場，提供本季摘要；接著由我們的執行副總裁兼財務長 Quentin Blackford 進行財務回顧與展望；然後由我們的策略與企業發展執行副總裁 Steve Pacelli 提供策略更新。

Following our prepared remarks, we will open up the call for your questions. (Operator Instructions) Please note that there are also slides available related to our first quarter performance on the DexCom Investor Relations website on the Events & Presentations page.

在我們的事先準備發言之後，我們將開放電話供各位提問。(接線員指示) 請注意，在 DexCom 投資人關係網站的「活動與簡報」頁面上，也提供與我們第一季表現相關的投影片。

With that, let's review our Safe Harbor. Some of the statements that we will make in today's call may constitute forward-looking statements. These statements reflect management's intentions, beliefs and expectations about future events, strategies, competition, products, operating plans and performance. All forward-looking statements included in this presentation are made as of the date hereof based on information currently available to DexCom and are subject to various risks and uncertainties, and actual results could differ materially from those anticipated in the forward-looking statements. The factors that could cause actual results to differ materially from those expressed or implied by any of these forward-looking statements are detailed in DexCom's Annual Report on Form 10-K, quarterly reports on Form 10-Q and other filings with the Securities and Exchange Commission. Except as required by law, we assume no obligation to update any such forward-looking statements after the date of this presentation or to conform these forward-looking statements to actual results.

接下來，讓我們回顧我們的安全港聲明。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、策略、競爭、產品、營運計畫與績效的意圖、信念與預期。本簡報中所包含的所有前瞻性陳述，均於本簡報日期作出，係基於 DexCom 目前可得資訊，並受各種風險與不確定性影響，實際結果可能與前瞻性陳述中所預期者有重大差異。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有重大差異的因素，已詳載於 DexCom 的 Form 10-K 年度報告、Form 10-Q 季度報告及其他向美國證券交易委員會提交的文件中。除法律要求外，我們不承擔在本簡報日期後更新任何此等前瞻性陳述，或使其與實際結果一致的義務。

Additionally, during the call, we will discuss certain financial measures that have not been prepared in accordance with GAAP with respect to our non-GAAP and cash-based results. Unless otherwise noted, all references to financial metrics are presented on a non-GAAP basis. 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. Please refer to the tables in our earnings release in the Investor Relations portion of our website for a reconciliation of these measures to the most directly comparable GAAP financial measure.

此外，在本次電話會議中，我們將就非 GAAP 與以現金為基礎的結果，討論若干未依 GAAP 編製的財務衡量指標。除非另有說明，所有對財務指標的提及均以非 GAAP 基礎呈現。此額外資訊的呈現不應被孤立看待，亦不應視為可替代依 GAAP 編製之結果，或優於依 GAAP 編製之結果。請參閱我們網站投資人關係專區之財報新聞稿中的表格，以取得這些衡量指標與最直接可比較之 GAAP 財務衡量指標的調節表。

Now I will turn the call over to Kevin.

現在我把電話交給 Kevin。

Thank you, Matt, and thank you, everyone, for joining us.

謝謝你，Matt，也謝謝各位的參與。

We are off to a great start in 2019 with much of the momentum that we experienced in 2018 continuing into our first quarter. First quarter revenues grew to $280 million, a 52% increase over the first quarter of 2018. Once again, this strong performance was broad-based, as increased volumes in both our U.S. and OUS businesses drove results above our expectations, even as we absorbed the pricing headwinds that we have anticipated.

2019 年我們有個非常好的開局，2018 年所累積的動能在第一季持續延續。第一季營收成長至 2.80 億美元，較 2018 年第一季增加 52%。再次地，這項強勁表現是全面性的；即使我們承受了先前預期的價格壓力，美國與美國以外（OUS）業務的出貨量增加仍推動結果超出我們的預期。

We have spent years developing our innovative technology and demonstrating real-world clinical outcomes. And as awareness builds, demand for DexCom CGM is very strong among both new and existing patients. We remain confident that the company is well positioned to drive towards our long-term targets. Particularly, as we expand the rollout of G6 and improve access to CGM. With this growing demand in mind, we are on track to meet our goal of doubling our G6 capacity by the end of 2019.

我們多年來投入開發創新技術，並證明其在真實世界中的臨床成效。隨著市場認知提升，新舊病患對 DexCom CGM 的需求都非常強勁。我們仍然有信心，公司已具備良好定位，可推進我們的長期目標。尤其是在我們擴大 G6 的推廣並改善 CGM 可近性之際。考量到這股成長中的需求，我們正按計畫在 2019 年底前達成將 G6 產能倍增的目標。

From a cost perspective, we are demonstrating good expense control with revenue growth outpacing the increase in operating expense growth by more than 2x. We continue to believe that patient outcomes demonstrate the true value of a CGM. In the first quarter, we showed real-world data that demonstrates the effectiveness of our Urgent Low Soon alert in the G6, which provides an actionable warning in advance of a dangerous hypoglycemic low. Not only have we seen a further decrease in hypoglycemia among G6 users with this feature, but this has been achieved regardless of a user's frequency of screen views. We also show the correlation between users of DexCom SHARE and Follow apps and better timing range for children and adolescents with diabetes. Once again highlighting the importance of this feature to our user base.

從成本角度來看，我們展現了良好的費用控管，營收成長速度超過營運費用增幅的 2 倍以上。我們持續相信，病患的治療結果展現了 CGM 的真正價值。在第一季，我們展示了真實世界數據，證明 G6 的「緊急低血糖即將發生」警示（Urgent Low Soon alert）的有效性，該功能可在危險的低血糖發生前提供可採取行動的預警。我們不僅看到 G6 使用者的低血糖情況進一步下降，而且無論使用者查看螢幕的頻率如何，都能達成此效果。我們也展示了 DexCom SHARE 與 Follow 應用程式使用者與糖尿病兒童及青少年更佳的目標範圍時間（time in range）之間的關聯。再次凸顯此功能對我們使用者族群的重要性。

It is outcomes such as these that have contributed to DexCom's great reputation among clinicians and allow us to capitalize on the increasing global awareness around CGM technology. The kind of demand we are experiencing can also bring certain challenges. This is especially the case in the first quarter of every year as we must reconfirm benefits and document clinical necessity for each patient. The process can be burdensome at times with our teams going back-and-forth with clinicians and payers on the patient's behalf.

正是這類成果，促成 DexCom 在臨床醫師間的良好聲譽，並使我們能把握全球對 CGM 技術日益提升的認知。我們所經歷的這種需求也可能帶來某些挑戰。這在每年第一季尤其明顯，因為我們必須為每位病患重新確認給付資格並記錄臨床必要性。此流程有時相當繁瑣，我們的團隊需代表病患在臨床醫師與付款方之間反覆溝通。

To our customers, we understand the fundamental importance of DexCom CGM in your life and are working around the clock to make sure that you are cared for. We saw improvement in our ability to meet demand and serve our customers as the quarter progressed and believe that the initiatives that we introduced to expand our customer's volume per structure are progressing well, with several areas showing meaningful productivity improvements. Considering the significant level of demand for DexCom CGM and the strength of our first quarter, we are very pleased to be able to increase our revenue outlook for 2019.

對我們的客戶而言，我們理解 DexCom CGM 在您生活中的根本重要性，並全天候努力確保您獲得妥善照護。隨著季度推進，我們在滿足需求與服務客戶方面的能力有所改善；我們也相信，為擴大每位客戶可服務量之架構所推出的各項措施進展良好，其中數個領域展現了顯著的生產力提升。考量 DexCom CGM 的顯著需求水準以及我們第一季的強勁表現，我們非常高興能夠上調 2019 年的營收展望。

I will now turn the call over to Quentin who will provide detail on this outlook as well as a review of our financials.

我現在把電話交給 Quentin，他將就此展望提供細節，並回顧我們的財務表現。

Thank you, Kevin. As a reminder, unless otherwise noted, the financial metrics that I discuss today will be presented on a non-GAAP basis. Reconciliations to GAAP can be found in today's earnings release as well as on our IR website.

謝謝你，Kevin。提醒各位，除非另有說明，我今天討論的財務指標將以非 GAAP 基礎呈現。與 GAAP 的調節可在今天的財報新聞稿以及我們的投資人關係（IR）網站上找到。

Today, we reported worldwide revenue of $280.5 million for the first quarter of 2019 compared to $184.4 million for the same quarter in 2018, representing growth of 52% on a reported basis and 53% on a constant currency basis or $96 million of absolute dollar growth.

今天我們公布 2019 年第一季全球營收為 2.805 億美元，較 2018 年同季的 1.844 億美元成長，按報告基礎成長 52%，按固定匯率基礎成長 53%，亦即絕對金額增加 9,600 萬美元。

Clearly, the growing awareness for CGM has continued into the New Year. Geographically, U.S. and international revenues both demonstrated strong growth of 45% and 79%, respectively, over the first quarter of 2018. International revenues grew 86%, excluding the impact of currency, at least 25% of total company revenues in the first quarter, representing a high-water mark for the business and tracking towards the long-term expectations that we highlighted at our Investor Day late last year.

顯然，市場對 CGM 的認知提升在新的一年仍持續。就地區而言，美國與國際營收相較 2018 年第一季分別強勁成長 45% 與 79%。若排除匯率影響，國際營收成長 86%；第一季國際營收至少占公司總營收的 25%，創下業務新高，並朝向我們在去年年底投資人日所強調的長期預期邁進。

We have seen continued success in shifting to the pharmacy channel consistent with our expectations at the start of the year, and we will continue to prioritize this initiative as we seek to drive improved access to DexCom CGM. Our first quarter gross profit was $168.8 million or 60.2% of sales. The sequential decline from the fourth quarter of 2018 was consistent with what we have seen in prior years.

我們持續成功地依照年初的預期轉向藥局通路，並將在推動改善 DexCom CGM 可近性之際，持續優先推動此項倡議。我們第一季毛利為 1.688 億美元，約占銷售額的 60.2%。相較於 2018 年第四季的連續性下滑，與我們過去幾年所見的情況一致。

Relative to the first quarter of 2018, gross margin was negatively impacted by incremental investments to scale infrastructure as we drive significant capacity expansion in 2019 and the continued shift in our mix towards the U.S. pharmacy and International business. As demand continues to exceed expectations, we're accelerating investments to increase capacity, which is putting some additional pressure on gross margins. We now expect gross margins for the year of 64% to 65% as we speed up our capacity ramp to meet the growing demand.

相較於 2018 年第一季，毛利率受到負面影響，主因為我們在 2019 年推動大幅產能擴張之際，為擴大基礎設施規模所做的新增投資，以及我們的產品組合持續轉向美國藥局通路與國際業務。由於需求持續超出預期，我們正加速投資以提升產能，這也對毛利率帶來一些額外壓力。我們目前預期全年毛利率為 64% 至 65%，因我們加快產能爬坡以滿足不斷成長的需求。

We remain confident in our ability to bring cost out of the system as the year progresses and over the long term, beginning with the introduction of our new G6 transmitter and continued to implementation of automation into the manufacturing process, which will allow us to exit the year with gross margins approaching 70%.

我們仍對隨著年度推進以及長期而言能夠降低系統成本充滿信心；這將從推出全新的 G6 發射器開始，並持續在製造流程中導入自動化，使我們在年底時的毛利率可望接近 70%。

These improvements provide us with the strategic flexibility to be proactive with payers and to navigate future uncertainties in the pricing environment as we continue to push for greater access to CGM. Operating expenses were $176.4 million for the first quarter 2019 compared to $147.6 million in the same period last year. This reflects an increase of 20% year-over-year and compares favorably to our 52% revenue growth in the quarter, resulting in significant operating expense leverage from the prior year.

這些改善為我們提供策略上的彈性，使我們能更主動與支付方合作，並在持續推動 CGM 更廣泛可近性的同時，因應未來定價環境的不確定性。2019 年第一季營業費用為 1.764 億美元，去年同期為 1.476 億美元。這反映年增 20%，且相較於本季 52% 的營收成長更為有利，因而相較去年帶來顯著的營業費用槓桿效益。

Operating loss was $7.6 million in the first quarter of 2019 compared to $28.7 million in the same quarter of 2018. Our improved operational discipline resulted in a 1,290 basis point improvement in operating margins from the prior year. Adjusted EBITDA was $26.1 million or 9.3% of revenue for the first quarter compared to $4.5 million or 2.4% of revenue for the first quarter of 2018.

2019 年第一季營業損失為 760 萬美元，2018 年同季為 2,870 萬美元。我們改善的營運紀律使營業利益率較去年提升 1,290 個基點。第一季調整後 EBITDA 為 2,610 萬美元，約占營收的 9.3%；相較之下，2018 年第一季為 450 萬美元，約占營收的 2.4%。

As we said throughout 2018, we believe that there is an opportunity to drive significant operating leverage toward our long-term targets and both of our first quarter adjusted EBITDA and operating margin reflect great progress towards these goals. However, we are not pursuing this leverage at the expense of the growth in our business. We remain confident in the opportunity that lies ahead, not only for our core business, but also the application of CGM technology to new markets.

正如我們在 2018 年反覆提到的，我們相信有機會朝長期目標推動顯著的營運槓桿，而我們第一季的調整後 EBITDA 與營業利益率皆反映出朝這些目標邁進的重大進展。然而，我們不會以犧牲業務成長為代價來追求這些槓桿效益。我們仍對未來的機會充滿信心，不僅是核心業務，也包括將 CGM 技術應用於新市場。

We will continue to invest in these initiatives, our R&D pipeline and other strategic opportunities in order to maximize DexCom's long-term potential. Our net loss was $4.6 million or $0.05 per share and our balance sheet remains strong having ended the quarter with approximately $1.4 billion in cash and equivalents and no borrowing against our $200 million revolving line of credit. As mentioned, we continue to prioritize investment into our capacity expansion initiatives and automation of manufacturing, which led to $39 million of CapEx in the first quarter.

我們將持續投資於這些倡議、我們的研發管線以及其他策略性機會，以最大化 DexCom 的長期潛力。我們的淨損為 460 萬美元（每股 0.05 美元），資產負債表仍然強健；本季末約有 14 億美元的現金及約當現金，且未動用 2 億美元的循環信用額度借款。如前所述，我們持續優先投資於產能擴張計畫與製造自動化，因此第一季資本支出（CapEx）為 3,900 萬美元。

Looking at the remainder of the year, given the strength of our first quarter performance and the growing demand that we are seeing for DexCom real-time CGM, we are increasing our full year revenue expectations by $75 million, and now anticipate total revenue of approximately $1.25 billion to $1.3 billion for the year, reflecting reported growth of 21% to 26%.

展望今年剩餘期間，鑑於第一季表現強勁以及我們所見 DexCom 即時 CGM 需求持續成長，我們將全年營收預期上調 7,500 萬美元，並預估全年總營收約為 12.5 億至 13 億美元，反映報告口徑成長 21% 至 26%。

As I mentioned previously, we anticipate full year gross margins to approximate 64% to 65% for 2019, showing meaningful improvement in the back half of the year as we look to exit the year approaching 70%. We now expect operating margins of approximately 6% and remain comfortable with our original target of adjusted EBITDA margins of approximately 18%.

如我先前提到的，我們預期 2019 年全年毛利率約為 64% 至 65%，並預期在下半年出現顯著改善，目標在年底時接近 70%。我們目前預期營業利益率約為 6%，並仍對原先設定的調整後 EBITDA 利益率約 18% 的目標感到有把握。

Our restructuring efforts associated with setting up operations in the Philippines are progressing well with nearly 200 employees now on the ground in Manila. We have been extremely pleased with early indications demonstrating significant efficiency and scaling benefits. We now expect the restructuring-related costs to come in at approximately $15 million to $20 million, with the majority in the first half and now slightly below our original estimates.

我們與在菲律賓設立營運據點相關的重整工作進展順利，目前在馬尼拉已有近 200 名員工到位。我們對早期跡象所展現的顯著效率與規模化效益感到非常滿意。我們目前預期重整相關成本約為 1,500 萬至 2,000 萬美元，其中大部分將發生在上半年，且目前略低於我們原先的估計。

With that, I will now turn the call over to Steve for a strategic update.

接下來，我將把電話會議交給 Steve，請他提供策略更新。

Thank you, Quentin. As our first quarter performance indicates, global awareness and demand for real-time CGM continues to increase dramatically, not only in the U.S., but also in international markets like Germany, the U.K. and Australia. In February, DexCom stood front and center at the annual Advanced Technologies & Treatments for Diabetes or ATTD conference, with DexCom product utilized in numerous clinical studies and presentations from key leaders in the diabetes community. As anyone in attendance can attest, there is genuine excitement toward our efforts around Decision Support, app enhancement and of course, the G6 platform. The global rollout of G6 remains a key strategic objective in 2019.

謝謝你，Quentin。如我們第一季表現所示，全球對即時 CGM 的認知與需求持續大幅提升，不僅在美國，也包括德國、英國與澳洲等國際市場。2 月，DexCom 在年度「糖尿病先進技術與治療」（Advanced Technologies & Treatments for Diabetes，ATTD）大會上成為焦點，DexCom 產品被用於多項臨床研究，並由糖尿病領域的關鍵領袖進行多場發表。任何與會者都能證明，市場對我們在決策支援、App 強化，當然還有 G6 平台方面的努力抱持著真切的期待。G6 的全球推廣仍是 2019 年的關鍵策略目標。

As Kevin noted, we are doubling G6 capacity by the end of 2019. Given the level of performance and ease-of-use that the G6 system brings, we expect G6 to continue to function as a platform product for DexCom for many years to come, even in certain markets beyond the launch of our next-gen G7 product. Yet as we push the rollout and production of G6, our teams are also making significant progress towards finalizing G7, and we remain on track for a late 2020 or early 2021 initial launch.

如 Kevin 所提到的，我們將在 2019 年底前把 G6 產能加倍。鑑於 G6 系統所帶來的效能與易用性，我們預期 G6 將在未來多年持續作為 DexCom 的平台型產品，即使在某些市場於我們下一代 G7 產品上市之後亦然。然而，在我們推動 G6 的推廣與量產之際，我們的團隊也在完成 G7 定案方面取得重大進展，我們仍按計畫於 2020 年底或 2021 年初進行初始上市。

As a reminder, G7 will be an entirely new sensor platform for DexCom. One that meets the iCGM standards and further extends our leadership with a significantly reduced form factor and extended wear in a fully disposable one-piece wearable. Strong, therapeutic, cost-saving outcomes utilizing CGM continue to present themselves across the health care landscape. For several quarters, we have discussed CGM usage in non-intensive type 2 diabetes, prediabetes, gestational diabetes, broad potential deployment in the hospital and application in overall wellness.

提醒一下，G7 將是 DexCom 全新的感測器平台。它將符合 iCGM 標準，並透過大幅縮小外形尺寸與延長配戴時間，在完全一次性的一體式穿戴裝置中進一步鞏固我們的領導地位。在整體醫療照護領域，使用 CGM 所帶來的強勁治療效果與節省成本的成果仍持續浮現。過去數個季度，我們已討論 CGM 在非密集治療的第二型糖尿病、糖尿病前期、妊娠糖尿病、在醫院的廣泛部署潛力，以及在整體健康（wellness）上的應用。

While it is now time for an increased focus in investment in these areas, particularly since we know that these opportunities will require completely different business models and distribution channels, in order to lead this effort, I'm pleased to announce that we have pointed Matt Dolan as General Manager of New Markets. As many of you are already aware through his involvement with our Investor Relations and Corporate Development Efforts, Matt is a great leader and we are confident that he and his dedicated team are the right people to guide these key growth initiatives for DexCom.

雖然現在是時候加大對這些領域的投資，特別是因為我們知道這些機會將需要完全不同的商業模式與分銷通路；為了領導這項工作，我很高興宣布我們已任命 Matt Dolan 擔任新市場總經理。如各位多半已透過他參與我們的投資人關係與企業發展工作而了解，Matt 是一位出色的領導者；我們相信他與其專責團隊是引領 DexCom 這些關鍵成長倡議的最佳人選。

Turning back to our core business. We have proven ourselves to be early advocates of the principle of interoperability and patient choice, having established partnerships with multiple insulin delivery players, and we will continue to leverage the iCGM designation. We are seeing significant progress from these collaborations and look forward to the launch of a few of these connected products over the next 12 months. We are especially thrilled for our patients as these innovative products stand ready to minimize the burden of diabetes management. And we are proud that DexCom stands at the center of this progress.

回到我們的核心業務。我們已證明自己是互通性與病患選擇原則的早期倡議者，並已與多家胰島素輸注相關業者建立合作夥伴關係；我們也將持續運用 iCGM 的指定資格。我們在這些合作中看到顯著進展，並期待在未來 12 個月內推出其中幾項互聯產品。我們特別為病患感到振奮，因為這些創新產品已準備好減輕糖尿病管理的負擔。我們也以 DexCom 站在這項進展的核心而自豪。

With that, I will pass it back to Kevin.

那麼，我把話交回給 Kevin。

Thanks, Steve. This is obviously an exciting time to work at DexCom. Not only are we working hard to bring our technology to the increasing number of people with diabetes who see the benefit of real-time CGM, but we are very actively exploring possible applications of our sensor technology to additional populations. My personal expectations for our New Markets group are very high. We need to gather as much clinical and cost-based evidence as possible with our G6 platform so that we are truly prepared to attack these markets in a big way with G7. In the meantime, we are capitalizing on the continued momentum in our core business, leading to a significant increase in our annual revenue guidance.

謝謝你，Steve。顯然，現在是在 DexCom 工作令人振奮的時刻。我們不僅努力將我們的技術帶給越來越多看見即時 CGM 益處的糖尿病患者，同時也非常積極地探索將我們的感測器技術應用於其他族群的可能性。我對我們新市場團隊的個人期望非常高。我們需要用 G6 平台蒐集盡可能多的臨床與成本面證據，讓我們能真正做好準備，未來以 G7 大舉進攻這些市場。與此同時，我們正把握核心業務持續的動能，帶動我們的年度營收指引大幅上調。

With this success, we have put everybody on the DexCom team to roll out in the first quarter, from the commercial team, to manufacturing, to customer support, to R&D and beyond. We know you have worked incredibly hard, and we thank you.

在這項成功之下，我們讓 DexCom 團隊的每個人都投入第一季的推進工作，從商務團隊、製造、客戶支援、研發到其他各部門。我們知道你們付出了極大的努力，並在此向你們致謝。

In summary, we are pleased with DexCom's performance to start the year and believe that we are well positioned for another great year of revenue growth, technology advancement and increasing profitability.

總結來說，我們對 DexCom 年初至今的表現感到滿意，並相信我們已做好充分準備，在今年再創營收成長、技術進步與獲利能力提升的佳績。

I would now like to open the call up for Q&A. Matt?

接下來我想開放電話會議進入問答。Matt？

Thank you, Kevin. (Operator Instructions) Operator?

謝謝你，Kevin。(接線員指示) 接線員？

(Operator Instructions) Our first question comes from Jayson Bedford from Raymond James.

(接線員指示) 我們的第一個問題來自 Raymond James 的 Jayson Bedford。

I'll ask my question and related follow-up upfront here. First, Quentin, just implied in the initial guidance was about $100 million in assumed pricing headwinds due to the mix in the pharmacy, international, et cetera. Is that what's still baked into the new guidance? And then second, in terms of the move to the pharmacy I realize the inherent benefits for existing users migrating to what should be a lower-cost setting. But receiver growth continues to be quite strong. So my question is, do you think the move to the pharmacy has stimulated incremental growth in new patient adds? And any color that you could provide around the pharmacy dynamic in the quarter would be great.

我先把我的問題以及相關追問一次提出。第一，Quentin，最初的指引中隱含約 1 億美元的定價逆風假設，原因包括藥局通路、國際市場等組合因素。這個假設仍然包含在新的指引裡嗎？第二，關於轉向藥局通路，我理解既有用戶轉移到理應成本更低的場景所帶來的內在好處。但接收器（receiver）成長仍然相當強勁。所以我的問題是，你認為轉向藥局通路是否刺激了新增病患的增量成長？另外，如果你能就本季藥局通路的動態提供一些說明，將非常有幫助。

Sure. So yes, Jason, to your point, the $100 million that we talked about on the initial call for the year setting the original expectations, that's still consistent with how we think about it over the course of the year. So no change there. Obviously, we've got a concerted effort in place to move to the pharmacy channel, and that's playing out about just like we anticipated that it would. Your point on new patient growth, I am certain that the pharmacy channel makes access more easy and more convenient for folks. I'm certain that's a part of the driver. And when you look at the overall growth in the company, there is no question that the primary driver of our growth is new patient volume. So I am sure it's connected.

當然。所以是的，Jason，正如你所說，我們在年初那通電話中談到、用來設定原始預期的那 1 億美元，仍與我們對全年走勢的看法一致。所以這部分沒有變化。顯然，我們已採取一致且有計畫的行動推進轉向藥局通路，而進展大致如同我們原先預期。至於你提到的新病患成長，我確信藥局通路讓民眾取得產品更容易、更便利。我確信這是驅動因素之一。而當你看公司整體成長時，毫無疑問，我們成長的主要驅動力是新病患量。所以我確定兩者是有關聯的。

And our next question comes from Travis Steed from Bank of America.

下一個問題來自美國銀行（Bank of America）的 Travis Steed。

Just looking at your Q1 revenue, it seems typical seasonality, so that's 20% Q1 for the full year. Just trying to think about -- that suggested $100 million more than you're guiding to for 2019. So is that just the typical conservatism that you have? Or is there anything else we should consider as we model out 2019?

看你們第一季營收，似乎符合典型的季節性，也就是第一季約占全年 20%。我在思考——這樣推算出來會比你們對 2019 年的指引高出約 1 億美元。所以這只是你們一貫較保守的作風嗎？或者在我們建模 2019 年時，還有其他需要納入考量的因素？

I think the right way to think about it, and I know we talked about 20% back on the last call. I think a few things came through in the quarter. We talked about the strength in the fourth quarter being really driven by new patient additions that came in late in the quarter. Now if you recall, at that point in time, we had shared that we expected those folks may be back with their next reorder really early in the second quarter. We saw a lot of that end up coming through in the month of March was a bit ahead of our expectation, a great signal and great outcome. But at the end of the day, that was a bit of the upside surprise. I think the other thing to keep in mind just around seasonality is that, as we continue to move more into the pharmacy channel, and as we continue to see the OUS business become a bigger part of the overall business, and as that Medicare continues to grow faster than the commercial business, all of those have very different seasonal patterns to them, generally, which might have more revenue early in the year. So we're just trying to be thoughtful around all of those different dynamics in the business, as we set expectations for the full year. Surely not trying to signal anything. We know what your math would indicate that you laid out, but we're just being mindful of some of the shifts in the mix of the business.

我認為正確的理解方式是——我知道我們在上一通電話中談到 20%。我想本季有幾件事浮現出來。我們提到第四季的強勁表現主要是由於該季末新增病患的加入所帶動。如果你還記得，當時我們也分享過，我們預期這些用戶可能會在第二季初就回來進行下一次補貨。我們看到其中相當一部分在 3 月就發生了，時間比我們預期更早，這是很好的訊號與成果。但歸根結底，那是部分超出預期的正向驚喜。另外，關於季節性還有一點要記住：隨著我們持續更深入轉向藥局通路、海外（OUS）業務在整體業務中的占比提高，以及 Medicare 的成長速度持續快於商業保險業務，這些項目一般而言各自都有非常不同的季節性型態，通常會使年初的營收較高。因此，在設定全年預期時，我們只是希望對業務中這些不同動態保持審慎。當然不是想傳達任何其他訊號。我們知道你所提出的數學推算會指向什麼，但我們只是留意業務組合變化所帶來的一些轉移。

All right. No, that's helpful. And then I want to make sure I heard you correctly. You're exiting the year with 70% roughly gross margins? Just kind of give us a little bit more info on how you're going to get there. And is that sustainable into next year? And also does it give you a little bit more flexibility on pricing, if needed?

了解。不，這很有幫助。另外我想確認我是否聽對了。你們在年底時的毛利率大約會到 70%？能否再多提供一些資訊，說明你們要如何達到這個水準？而且這在明年是否可持續？另外，如果有需要，這是否也讓你們在定價上更有彈性？

Yes. So I think this is -- the 70% ability to get into that number by the end of the year is in line with the plans that we've always had around our gross margins progression into the future. You go back to our Investor Day and we laid out the path that arguably could take us up north of 70%, and then you have the headwinds that continue to play in with the revenue per patient, mix challenges that we envision as we continue to move into the pharmacy or OUS becomes more significant. So there's nothing out of the ordinary here. It's right in line with what we've planned to be able to do.

是的。所以我認為——到年底能達到 70% 的能力，符合我們一直以來對未來毛利率提升路徑的規劃。回到我們的投資人日，我們曾勾勒出一條路徑，理論上可把毛利率推升到 70% 以上；同時也有逆風持續存在，例如每位病患營收（revenue per patient）與組合挑戰——我們預期在持續轉向藥局通路或海外（OUS）占比提高時會出現。所以這裡沒有任何不尋常之處。這完全符合我們原先的規劃。

The big enabler for us, and we've talked about this lower cost design transmitter for some time now, you're going to see that start to play through in the fourth quarter. So the teams have done an incredible job of designing cost out of the system. We'll start to produce that in the back half of the year. You'll actually see it start to get produced in the third quarter. That will get hung up in inventory a bit. We'll start to sell through it in the fourth quarter, and the benefit will start to play through.

對我們而言最大的推動因素——而且我們談這個較低成本設計的發射器已經有一段時間了——你會看到它在第四季開始反映出來。所以團隊在把系統成本設計下來方面做得非常出色。我們會在下半年開始生產。實際上你會在第三季看到開始投產。它會先在庫存中累積一段時間。我們會在第四季開始銷售消化，而效益也會開始逐步顯現。

So it's in line with the plans that we've had. I think in terms of next year, I would just tell you, let's stick in the mid-60s at this point in time. I think it absolutely gives us the flexibility to continue to navigate the pricing environment and do what we need to do to ultimately generate the most significant growth for the company. But it's these kind of things that give us the strategic opportunities to be flexible on how we think about positioning ourselves.

所以這與我們既有的計畫一致。我想就明年而言，我現在只能告訴你，我們先維持在 60% 中段這個水準。我認為這絕對能讓我們保有彈性，持續因應定價環境並做我們需要做的事，最終為公司帶來最顯著的成長。但正是這類事情，讓我們在思考如何定位自己時，擁有可彈性運用的策略機會。

And our next question comes from Robbie Marcus with JPMorgan.

下一個問題來自摩根大通（JPMorgan）的 Robbie Marcus。

Congrats on the great quarter. I want to address the question that's been impacting the stock and clearly, top of mind for investors lately, and that's the potential impending approval of your competitor's Libre 2.0 (sic) [Libre 2] product. And there's a lot of questions out there about, what does it look like? Does it get iCGM? And how those alerts and alarms will compare as a product versus G6 today and eventually G7? So I'd love to get your thoughts here. And any clarity or insight you can give us would be much appreciated?

恭喜本季表現亮眼。我想談一個一直影響股價、而且顯然也是投資人近期最關心的問題，也就是你們競爭對手 Libre 2.0（原文如此）[Libre 2] 產品可能即將獲准。外界有很多疑問，例如它看起來會是什麼樣子？它會取得 iCGM 嗎？以及它的警示與警報功能，作為產品，與目前的 G6 以及未來的 G7 相比會如何？所以我很希望聽聽你們的看法。你們能提供的任何釐清或洞見，我們都將非常感激。

Robbie, this is Kevin, I'll take that one. Thanks. Let's go back a bit, it was about a year ago at this time that we talked about the iCGM standards for the first time. And we remain very bullish on the fact that the FDA did give us guidance and standards by which we can develop products in the future that will be safe and in the best interest of our patient. And we stand by that. We've wanted standards and guidance for years so we know what the bar is to shoot at, and we actively look at that. We never assumed when we started this process that we would be the only iCGM company in the world, that eventually others would up their game to get that approval. And in the event that Abbott does get approval on the iCGM standards, that's -- they've obviously provided enough clinical evidence to do so with the FDA.

Robbie，我是 Kevin，我來回答這題。謝謝。我們先回顧一下，大約一年前的這個時候，我們第一次談到 iCGM 標準。我們仍然非常看好 FDA 確實提供了指引與標準，讓我們未來能依此開發對病患安全、且符合病患最佳利益的產品。我們也堅持這一點。我們多年來一直希望有標準與指引，這樣我們才知道要達到的門檻在哪裡，我們也一直積極關注。我們在啟動這個流程時，從未假設我們會是全球唯一的 iCGM 公司；最終其他人也會提升水準以取得該項核准。如果 Abbott 最終在 iCGM 標準下獲得核准，那顯然代表他們已向 FDA 提供了足夠的臨床證據。

If you look back at the history of our company, and we were reminiscing about this today as we were preparing for the call, ever since I've been here, we've always had a competitive offering from another company in the field that claim to be as good as a DexCom. But you'll notice, the claims of those companies have always been, we're as good as a DexCom. Never as good as somebody else. We're as good as a DexCom. Real life use in field has proven over and over again that our technology leads the way. And that our actual real-world clinical performance, on-body and on-patients, has always been the best and has always survived and given us the position to do that. We're very confident that our product will remain top-of-the-line and will do -- and will be extremely well received.

如果你回顧我們公司的歷史——我們今天在準備這通電話時也在回想——自從我在這裡以來，我們在這個領域一直都有其他公司提出具競爭力的產品，並聲稱它們跟 DexCom 一樣好。但你會注意到，那些公司的說法一直都是：我們跟 DexCom 一樣好。從來不是跟其他人一樣好。而是跟 DexCom 一樣好。實際的真實世界使用情況一再證明，我們的技術領先。而且我們在真實世界的臨床表現——在身體佩戴、在病患身上——一直都是最好的，也一直經得起考驗，讓我們得以維持這樣的地位。我們非常有信心，我們的產品仍會是頂尖水準，並且會——也會獲得非常好的市場反應。

We have not seen a lot of Libre 2 in Europe where it's been launched, so we don't have a lot of answers. And we're not going to speak to the characteristics of their product. We know a lot about ours. We have enhancements coming for G6 over the course of the year that will make it an even better product offering and over time as we offer Decision Support and other things for our patients. We intend to have the best experience that a patient could possibly have with G6. When we move to G7 and its size advantage, the body wearable, the one-piece component where we don't have to put a transmitter in the system anymore. The lightweight nature of it. And many of you know, I wear the G7 quite a bit now as I've always been a sensor snob, it is a patient experience, it's a bigger leap than from G5 to G6 has been in our previous history. So we know that product will be wildly competitive and have all the features and benefits of the current G6 system and more. So we -- our pipeline is fabulous. It's a great market opportunity and there's room for a number of participants and a number of products, not just one.

我們在 Libre 2 已經上市的歐洲並沒有看到太多，因此我們沒有太多答案。我們也不會評論他們產品的特性。我們很清楚我們自己的產品。在今年接下來的時間裡，我們會對 G6 進行一些強化，讓它成為更好的產品方案；並且隨著我們為病患提供決策支援（Decision Support）及其他功能，會持續提升。我們希望讓病患在使用 G6 時，能獲得可能最好的體驗。當我們轉向 G7，憑藉其尺寸優勢、可穿戴於身體、以及一體式元件——我們不再需要在系統中另外放入發射器（transmitter）。它也更輕巧。你們很多人都知道，我現在常常佩戴 G7；我一向是個對感測器很挑剔的人，而這個病患體驗的提升幅度，比我們過去從 G5 到 G6 的躍進還要更大。所以我們知道那個產品會非常具有競爭力，並具備現行 G6 系統的所有功能與效益，甚至更多。所以我們——我們的產品管線非常出色。這是一個很棒的市場機會，也有空間容納多家參與者與多種產品，而不只是單一產品。

That's really clear. I appreciate the thoughts, Kevin. And then just a follow-up. Maybe not too far off of this, but can you give us some flavor of what your discussions with payers are like. Are the payers focused on cost avoidance of diabetes, adverse events and improving patient outcomes? Or are they just simply focused on moving reimbursement to the lowest-cost dominator? I appreciate it.

這點非常清楚。Kevin，謝謝你的看法。接著我再追問一題。也許與此不會差太遠，但你能否分享一下你們與保險支付方（payers）的討論大概是什麼樣子？支付方是著重於避免糖尿病相關成本、降低不良事件並改善病患結果嗎？還是他們只是單純把重點放在把給付移到最低成本的主導者？謝謝。

It depends on the meeting and it depends on the payer. We have been very successful in our payer discussions over the past several months and have had wins on numerous payer discussions. For example, Cigna just gave us pharmacy coverage and pharmacy benefit. We do not issue press releases every time we have a win because that's our job, that's normal course of business for us. But we have great coverage there and some local payers and pharmacy coverage.

這取決於會議，也取決於支付方。過去幾個月我們在與支付方的討論上非常成功，並在多個支付方洽談中取得勝利。例如，Cigna 剛剛給了我們藥局通路給付與藥品福利（pharmacy benefit）。我們不會每次拿下一個成果就發新聞稿，因為那是我們的工作，對我們而言是正常的日常營運。但我們在那裡以及一些地方性支付方與藥局給付方面，都有很好的覆蓋。

We do spend a lot of time discussing outcomes and educating payers. And I think over time, as we get more data and as we can build a better case, we can get those type of contracts in place. I would put the onus for that back on us rather than on the payers. We just need better measurables and better data. It's taken us years to develop that clinical evidence. The DIaMonD study that we talked about for the first time a couple of years ago was really our first endeavor to do that. And now with all this data coming to our servers, to our mobile platforms, we believe we'll be able to make some very strong real-world evidence just from our patients as we look at time and range statistics, and compliance with the system and how well they do on hypo avoidance. I gave an example in my prepared remarks of the predictive alert that we have in the G6 system and how we're seeing a significant reduction in hypoglycemia because of that alert. That type of evidence is something we really haven't presented in the past, and we will do that going forward now that we have so much data from the mobile systems. We're very comfortable playing in that realm because we know the outcomes that our device provides to patients are outstanding.

我們確實花了很多時間討論治療結果並教育支付方。我認為隨著時間推進，當我們取得更多數據、並能建立更有力的論證時，我們就能把那類合約建立起來。我會把這方面的責任更多放回到我們自己身上，而不是支付方。我們只是需要更好的可衡量指標與更好的數據。我們花了好幾年才建立起那些臨床證據。我們幾年前第一次提到的 DIaMonD 研究，確實是我們在這方面的首次嘗試。而現在，隨著所有這些數據進到我們的伺服器、進到我們的行動平台，我們相信，當我們觀察時間範圍（time in range）統計、系統使用依從性（compliance），以及他們在避免低血糖（hypo avoidance）方面的表現時，我們將能僅從病患端就建立非常強而有力的真實世界證據。我在事先準備的發言中舉了一個例子，談到我們在 G6 系統中的預測性警示（predictive alert），以及我們如何因為這個警示而看到低血糖顯著下降。這類證據是我們過去其實沒有呈現過的，而未來在我們從行動系統取得如此大量數據之後，我們會持續呈現。我們非常有信心在這個領域發揮，因為我們知道我們的裝置為病患帶來的結果非常出色。

And our next question comes from Danielle Antalffy from Leerink.

我們的下一個問題來自 Leerink 的 Danielle Antalffy。

Congrats on a really good quarter. Just a question, and this is sort of following up on the question around the impact of a competitor potentially getting iCGM. But just curious if you can give any color directionally or what have you on the percent of your installed base domestically today and/or new patient adds that are MDI versus pumpers? I think historically you've said, the majority of the patients coming on to the DexCom are MDI and not actually pumpers. Anything you can say to that?

恭喜你們交出非常亮眼的一季。我有個問題，算是延續先前關於競爭對手可能取得 iCGM 對你們影響的提問。想請教你們能否就方向性提供一些資訊：目前你們在美國的既有裝機基礎（installed base）以及／或新增病患中，MDI 相較於使用胰島素幫浦（pumpers）的占比大概如何？我記得你們過去曾提到，加入 DexCom 的病患多數是 MDI，而不是幫浦使用者。對此你們有什麼可以補充的嗎？

The majority of our new adds now are MDI patients, Danielle, by a reasonable margin. As we're getting a much larger patient base, we're going over into those who are not on the pump systems for more of the new adds. But I anticipate, as our partners get new systems out, that we will see significant growth in that segment as well as these systems do more than just deliver insulin but actually have algorithms that can improve outcomes. Right now our new patient adds are primarily MDI patients. That's most of them.

Danielle，目前我們新增的病患多數是 MDI 病患，而且差距相當明顯。隨著我們的病患基礎變得更大，新增病患更多來自未使用幫浦系統的人群。不過我預期，隨著合作夥伴推出新系統，我們在那個區隔也會看到顯著成長，因為這些系統不只是輸送胰島素，還會有能改善結果的演算法。目前我們新增病患主要是 MDI 病患。大多數都是。

Got it. Okay. That's helpful. And then just a question on the G7, and I want to make sure I'm understanding correctly how pricing is going to change with G7. I know you guys haven't sort of outlined your go-to-market strategy per se, but I think you've said in the past that at some point, you're expecting to be at -- well, tell me if this is correct. Are you expecting to eventually be pricing at parity with the competition as we look down -- further down the line to G7 and beyond? Or do you think that even with G7, you'll still be pricing at a premium?

了解。好的。這很有幫助。接著想問 G7，我想確認我是否正確理解 G7 的定價將如何改變。我知道你們尚未具體說明 go-to-market 策略，但我想你們過去曾說過，某個時間點你們預期會——請告訴我這樣理解是否正確。展望更長期到 G7 及之後，你們是否預期最終會把定價拉到與競品同等（parity）？還是你們認為即便到了 G7，你們仍會維持溢價（premium）定價？

I'm not going to outline all the specific details regarding that. But here is our strategy and here's how we look at that. We look at the annual revenue per patient per year and what is the appropriate amount to charge a patient. For example, as we've gone from G7 to G6, that's how we look at that product offering as annual revenue per year rather than pricing on the individual components.

我不會把所有相關的具體細節都攤開來講。但這是我們的策略，也是我們看待這件事的方式。我們會看每位病患每年的年度營收（annual revenue per patient per year），以及向病患收取多少才是合適的金額。例如，當我們從 G7 走到 G6 時，我們就是用「每年年度營收」的角度來看這個產品組合，而不是針對單一零組件逐項定價。

With respect to how we price G7, there's a lot of variables involved here. If we have Decision Support tools that lead to better outcomes, does that justify a premium, does it not? I think we'll have to see it over time. What's most important for the investment community to know is from a cost basis, we have a lot of flexibility with G7. We designed that product for manufacturing. We designed that to be a lower cost product offering than we have today, particularly with the extended wear. We're prepared for what the market will do, but we will study this at great length and have a very detailed go-to-market strategy before we go, but I can't commit to anything specifically now. We're very optimistic about all the directions we can go.

至於 G7 要如何定價，牽涉到很多變數。如果我們有決策支援（Decision Support）工具能帶來更好的結果，這是否足以支撐溢價、或不需要溢價？我想這需要隨時間觀察。投資社群最需要知道的是，從成本基礎來看，G7 讓我們有很大的彈性。我們在設計這個產品時就以製造為導向。我們把它設計成相較於目前產品更低成本的產品方案，尤其是在延長配戴（extended wear）方面。我們已為市場可能的走向做好準備，但我們會深入研究，並在正式推進前制定非常細緻的 go-to-market 策略；不過我現在無法對任何具體事項做出承諾。我們對所有可能的方向都非常樂觀。

And our next question comes from JP McKim from Piper Jaffray.

我們的下一個問題來自 Piper Jaffray 的 JP McKim。

I wanted to ask, one, just, Kevin, you made a comment that you -- that I think you're wearing a G7 now. So it feels a little more real me. And so I don't know, maybe initial thoughts on it, and then, will we see a trial start for G7 this year? Or is that still something that will happen in 2020?

我想問兩點。第一，Kevin，你提到你——我想你現在戴的是 G7。所以對我來說感覺更真實了一些。想請你分享一下初步感受；另外，今年我們會看到 G7 的試驗（trial）啟動嗎？還是這仍會是在 2020 年才會發生的事？

Look, we run trials with G7 all the time. But they're small trials that we're gathering data to learn and fine-tune the features of the system. With respect to the experience, the regulatory people are probably going to kill me if the legal guy doesn't first, but it really is spectacular. The wearable is pretty much nonexistent on your body. As I look at projects we've started and innovation that we've attempted during my term at this company, this is the biggest leap we've ever taken. And it's a huge leap. And kudos to all the people involved in it because if I were to design what I'd hope CGM would have been when I started in this business, 25 years ago this week, I would have designed this. And so we're finally here.

你看，我們一直都有在用 G7 進行試驗。但那些是小型試驗，我們在蒐集資料以學習並微調系統的功能。至於使用體驗，若法務人員沒先把我「處理掉」，法規同仁大概也會把我「處理掉」，但它真的非常出色。穿戴在身上幾乎沒有存在感。回顧我在這家公司任期內啟動的專案與嘗試的創新，這是我們做過最大的躍進。而且是巨大的躍進。要向所有參與的人致敬，因為如果要我設計一個我在 25 年前、也就是我這週剛好踏入這個產業時所希望的 CGM 形態，我會設計成這樣。所以我們終於走到這一步了。

That's really helpful. And then maybe just on -- if I could ask one on just the non-intensive programs. There are several trials that we should see some data at ADA around. I mean either Matt or Kevin, like how do you -- how do you define success in those trials? Is it -- are payers really keen on recent amount of medications or are they'd sort of give the time, the range of the metrics? Or -- I guess, how do you -- how should we look at those trials as successful?

這真的很有幫助。接著如果可以，我想問一個關於非密集型（non-intensive）方案的問題。有幾個試驗我們應該會在 ADA 看到一些數據。我是想問 Matt 或 Kevin，你們如何定義那些試驗的成功？是付款方（payers）真的很在意近期用藥金額，還是他們會更看重時間、區間等指標？或者換句話說，我們應該如何看待那些試驗算是成功？

Yes. I would say, you have to take the individual markets and kind of look market-by-market. So certainly, in the non-insulin-using, non-intensive type 2 market, reduction of drug cost is paramount, right? In the hospital, things like length of stay -- reduce nursing time is important but reducing length of stay, getting people out of the ICU down to a step-down ward, into the general ward and out of the hospital. And actually, as important these days, prevention of hypoglycemia in a hospital setting is becoming increasingly important, it's on CMS's radar as a key metric for hospitals. So reduction of hypoglycemia is going to be important going forward in that market. Gestational diabetes, we're still early in exploring opportunities there. I'd love to tell you that at some point, the CGM session will actually replace the oral glucose tolerance test. That's going to take some time and effort and some clinical trial work on our part. So there's no kind of one size fits all in the new markets' development opportunities, but Matt has developed and will continue to develop a pretty robust team to tackle all these markets. And clearly, over the next several years, 3- to 5-year time horizon, those markets becoming increasingly important for us.

是的。我會說，你必須把各個市場拆開來看，逐一以市場為單位評估。因此在不使用胰島素、非密集型的第二型糖尿病市場，降低藥物成本是最關鍵的，對吧？在醫院端，像是住院天數（length of stay）——減少護理時間也很重要，但更重要的是縮短住院天數，讓病人從加護病房（ICU）轉到下轉病房（step-down ward）、一般病房，並出院。而且在當今同樣重要的是，在醫院情境中預防低血糖正變得愈來愈重要，這也是 CMS 關注的醫院關鍵指標之一。因此在該市場中，降低低血糖發生率未來會很重要。妊娠糖尿病方面，我們仍在早期探索機會。我很希望未來某個時間點，CGM 的監測期（session）能真正取代口服葡萄糖耐受試驗（oral glucose tolerance test）。但這需要一些時間與努力，也需要我們進行一些臨床試驗工作。所以在新市場的開發機會上，沒有一種「一體適用」（one size fits all）的標準；但 Matt 已建立並將持續建立一支相當強健的團隊來攻克這些市場。而且很明顯，在接下來幾年、以 3 到 5 年的時間範圍來看，這些市場對我們會變得愈來愈重要。

And our next question comes from David Lewis, Morgan Stanley.

我們的下一個問題來自 Morgan Stanley 的 David Lewis。

Just 2 from me. Quentin, just want to come back to the gross margins. I appreciate your commentary about the 70% for the back half of the year and mid-60s next year. But if I take the LRP, which obviously as you're aware with 65% in 2023. Scaling and innovation, about 700 basis points of that. So it actually feels like both of those factors are playing a pretty powerful role on the back half of '19. So is it safe to assume the 65% 2023 number, given you're seeing earlier scaling and innovation is a -- is now a conservative number and we should think about that number being kind of materially higher?

我這邊有兩個問題。Quentin，我想回到毛利率（gross margins）。我理解你提到今年下半年 70%，以及明年中段 60%（mid-60s）的看法。但如果我看 LRP（長期計畫），很顯然你也知道 2023 年是 65%。其中規模化（scaling）與創新（innovation）大約貢獻 700 個基點。所以感覺這兩個因素在 2019 年下半年其實已經發揮相當強的作用。那麼是否可以合理假設：既然你們更早看到規模化與創新的效益，2023 年 65% 這個數字其實是——現在看來偏保守，我們應該把那個數字視為可能實質上更高？

Yes. I don't want to get out to 5 years out from now and talk about whether it's conservative or aggressive. I think what we tried to lay out for you is that we have very clear lines of sight to some very specific improvement efforts that will drive the gross margin higher over time. What becomes a bit more of a variable that we're prepared to be able to address is the revenue per patient headwind. And as the mix shifts between different channels, we're going to have more than enough leverage flowing through the COGS profile of our business to be able to address that very aggressively and still produce a very attractive gross margin profile. So we're happy with where things are at. The lower-cost transmitter coming in the back half of this year has always been something that we planned for and knew that we'd see a nice benefit from. To Kevin's point earlier, you're going to see an incremental benefit coming from G7 as well as that's been designed to be even more cost-effective. So there's a lot of nice levers in front of us that give us the opportunity to combat some of the headwinds that might be out there.

是的。我不想把時間拉到從現在起 5 年後，再來討論那是保守還是積極。我認為我們試圖向各位說明的是：我們對一些非常具體的改善措施有非常清晰的可視性，這些措施將在時間推移下推動毛利率提高。而我們已準備好能夠應對、且變數稍大一些的部分，是每位病患收入的逆風。隨著不同通路之間的組合發生變化，我們在業務的銷貨成本（COGS）結構上將有綽綽有餘的槓桿可以傳導，得以非常積極地應對，同時仍能產出非常具吸引力的毛利率結構。所以我們對目前的狀況感到滿意。今年下半年推出的低成本發射器一直都是我們規劃之中、也知道會帶來不錯效益的項目。如 Kevin 先前所說，你也會看到來自 G7 的額外效益，因為它的設計更具成本效益。因此我們面前有許多很好的槓桿工具，讓我們有機會對抗可能存在的一些逆風。

Okay. And just a quick follow-up on just the pharmacy benefit, the peridynamics, can you just update us, Steve, maybe on where you are into the pharmacy benefit coverage. I think it was 50% last quarter. And more specifically, a lot has been made, sort of, inter-quarter about first provider or primary provider relationships. Can you just sort of talk about whether preferential provider or formerly relationships are having any impacts on U.S. demand? And sort of how you see the future of preferred provider relationships in the channel, so the who you are in mix and we would say I'm preferred provider?

好的。另外就藥局給付（pharmacy benefit）再追問一下，關於這些動態（peridynamics），Steve，你能否更新一下目前藥局給付覆蓋的進展？我記得上季是 50%。更具體地說，跨季度之間大家談了很多所謂第一供應商或主要供應商關係。你能否談談，優先供應商或既有關係是否對美國需求造成任何影響？以及你如何看待通路中優先供應商關係的未來，也就是在組合中你是誰、以及我們會說「我是優先供應商」？

I'll answer the second part of that question first, which the answer is no. I mean we've seen some isolated instances of companies trying to negotiate for preferred status, but that's certainly not something we're seeing as a trend as we move to the pharmacy benefit. As for commercial lives under coverage, we're certainly north of 50%. We haven't given a more granular number than that, and we're still not processing -- in terms of our commercial business, we're not processing close to 50% through the pharmacy channel at this point. We're working hard to move more and more patients into that channel. So when we say we have north of 50% of the commercial lives covered, we're certainly still not processing 50%.

我先回答問題的第二部分，答案是否定的。我的意思是，我們確實看到一些零星案例，有公司試圖談判以取得優先地位，但在我們轉向藥局給付的過程中，這絕對不是我們看到的趨勢。至於納入覆蓋的商業保險人數（commercial lives），我們肯定已超過 50%。我們沒有提供比這更細的數字；而且就我們的商業業務而言，目前透過藥局通路處理的比例也遠不到 50%。我們正努力把越來越多病患導入該通路。因此當我們說商業保險人數覆蓋已超過 50% 時，我們確實仍未達到 50% 的處理量。

And our next question comes from Joanne Wuensch from BMO Capital Markets.

下一個問題來自 BMO Capital Markets 的 Joanne Wuensch。

Very nice quarter. Two questions really. At the ADA meeting in June, can you give us a feel for what we should be looking for there?

這一季表現非常好。我有兩個問題。在 6 月的 ADA 會議上，你們能否讓我們了解一下我們應該關注哪些重點？

Yes. Steve, why don't you take that one?

可以。Steve，你來回答這題好嗎？

Yes. I mean I would say the most exciting data set, if you will, that we hope to see at ADA will be really a combined data set together with Tandem, where we should get a, at least, a first peak if not a full-blown view of the iDCL data. So that's -- again, that's Tandem's X2 pump with the DexCom G6 and the DexCom/type 0 algorithm running a hybrid close loop systems. So that's probably the highlight for us and for Tandem collectively at ADA. There will be a number of additional kind of poster and some podium presentations, but from a data perspective that's really what we're looking forward to.

好的。我想最令人興奮的資料集（如果你要這麼說）是我們希望在 ADA 看到與 Tandem 合併呈現的資料集，我們應該至少能先一窺、甚至看到更完整的 iDCL 資料。也就是——再次說明——Tandem 的 X2 幫浦搭配 DexCom G6，以及 DexCom/type 0 演算法所運行的混合式閉環系統。所以這大概是我們以及 Tandem 在 ADA 的共同亮點。另外還會有一些海報與口頭報告，但就數據面而言，這才是我們最期待的。

Yes. I'd just add. The other thing, Joanne, that we're going to continue to see is anybody who stands up to speak starts talking about CGM. Every outcome, every trial, everything going on, CGM is clearly becoming the standard of evaluation -- of evaluating diabetes care across the board. And I believe that trend is going to continue at ADA, and you will see CGM pretty much interwoven everywhere with everything that's done.

是的。我再補充一下。Joanne，另一件我們會持續看到的事情是：任何站上台發言的人都會開始談 CGM。每一個結果、每一項試驗、所有正在進行的事情，CGM 顯然正成為評估——用來評估糖尿病照護的——全面性標準。我相信這個趨勢會在 ADA 持續下去，你會看到 CGM 幾乎與所有進行的事情交織在一起。

That's helpful. And then my second question has to do with the OUS market. Growth was strong there again this quarter, and I'm just trying to get an idea of sustainability and into what other regions you might be looking to venture into?

這很有幫助。第二個問題與美國以外（OUS）市場有關。本季那邊的成長再次很強勁，我想了解其可持續性，以及你們可能還會考慮進入哪些其他地區？

You were talking about the OUS market?

你是在談 OUS 市場嗎？

internationally, yes?

是的，國際市場？

Yes.

是的。

Clearly, the growth was strong there, and I think, you look at overall adoption of CGM in that overall marketplace is probably still sub-10% in terms of the long range opportunities. And so there's a huge amount of runway that continues to exist in front of us. And our core markets continue to drive the primary growth for us today. Germany was another standout performer in the quarter leading the way for us. But there is significant other new markets that are coming online. We just saw significant growth coming out of the Nordic markets, for example. We saw incremental reimbursement approved in Australia that allowed significant amount of contribution over the course of later part of this year and into next year. And then you get into some of the Asian markets, where we haven't started to see the contribution yet, but expect nice tailwinds coming out of Japan and Korea, for example.

很明顯，那邊的成長很強勁；而且我認為，從長期機會來看，整體市場對 CGM 的採用率可能仍低於 10%。因此我們前方仍有非常長的跑道。而我們的核心市場目前仍是推動主要成長的動力來源。德國在本季也是另一個突出的表現者，為我們領先帶動。但也有許多其他新市場正在啟動。例如，我們剛看到北歐市場出現顯著成長。我們也看到澳洲核准了額外的給付，讓今年下半年到明年能帶來相當程度的貢獻。接著是一些亞洲市場，我們尚未開始看到貢獻，但例如日本與韓國，我們預期會帶來不錯的順風。

So there are several new market opportunities, or even markets that we're in today, that it is growing at incredible rates, in paces of growth and a relatively untapped market opportunity. So I think there's several channels for overall growth in that international business that -- to get it to the point where in our long-range plans, we talked about it being closer to 30%, 35% of the overall business, which means it's going to be growing faster than the U.S. business. I think there's a lot of channels that will continue to make that available to us.

因此有好幾個新市場機會，或甚至是我們今天已在其中的市場，都正以驚人的速度成長，且市場機會相對仍未被充分開發。所以我認為，國際業務的整體成長有多個通路——使其達到我們在長期規劃中所談到、接近整體業務 30% 到 35% 的水準；這也意味著它的成長速度將快於美國業務。我認為有很多通路會持續讓我們具備達成這點的條件。

And our next question comes from Margaret Kaczor from William Blair.

下一個問題來自 William Blair 的 Margaret Kaczor。

So first one from me is more a bigger picture prospective because we've now seen several quarters of strong patients growth. So what I'm curious about is whether you guys are seeing a change in prescription patterns in the market? Whether it's endos or patients, and irrespective more of pharmacy or G6, but is CGM really becoming widely expected and a go-to from those type 1 patients?

我第一個問題比較偏宏觀，因為我們已經看到連續好幾季病患數強勁成長。所以我好奇的是，你們是否看到市場上的處方模式正在改變？不論是內分泌科醫師或病患端，也不特別區分是藥局通路或 G6，但 CGM 是否真的正在成為第一型糖尿病患者普遍期待、且會優先採用的選項？

Margaret, this is Kevin. I believe it's becoming much more widely accepted and prescription patterns are rising across the board. That -- it's just becoming the tool of the manager insulin delivery. And it's not -- while it is becoming a tool and more accepted, penetration rates are still not at the point where we need to step back and worry. In the type 1 market, we think the penetration rates in the U.S. are still in the 30% range across the board. And type 2 intensive insulin using is still not that big a number either. So over time, there's plenty of market runway here to continue to go on the international front. Penetration rates in the intensive population are close to being at that high. But we think it is much more accepted than it was before. And we think G6 has had a very positive impact for us in these new markets because it's much easier to use. There's no calibration feature, the easier insertion, the direct-to-phone connectivity. All the things we've built into G6 were designed to drive this market and we're seeing the benefits of that as we go forward.

Margaret，我是 Kevin。我認為這正變得更廣泛地被接受，而且整體處方模式都在上升。也就是說——它正逐漸成為管理胰島素輸送的工具。而且它並非——雖然正成為一項工具、也更被接受，但滲透率仍未到我們需要退一步擔心的程度。在第一型糖尿病市場，我們認為美國的滲透率整體仍在 30% 左右。而第二型糖尿病的密集胰島素使用者規模也還沒有那麼大。因此隨著時間推進，國際市場方面仍有很長的成長跑道可以持續拓展。在密集治療族群中的滲透率接近達到那麼高的水準。但我們認為它比以前更被接受得多。我們也認為 G6 在這些新市場對我們帶來非常正面的影響，因為它更容易使用。沒有校準功能、更容易插入、可直接連接手機。我們在 G6 中打造的所有功能都是為了推動這個市場，而我們也在持續前進的過程中看到其效益。

And so just to follow up on that. It seems like you guys have got nice improvements. So the endos saw selecting patients that they think that will see the most benefits from that. And what else maybe do you need, I know you mentioned new connected product launches this year. I don't know if those are digital software or hardware?

那我再追問一下。看起來你們確實有不錯的改善。所以內分泌科醫師會挑選他們認為能從中獲益最大的病患。那另外你們還需要什麼嗎？我知道你提到今年會推出新的連網產品。我不確定那些是數位軟體還是硬體？

It's interesting. I just spent some time with several of the folks from the field. And I would tell you, a lot of this varies territory to territory. It varies practice to practice still. There is not a standard guideline where all the doctors are identifying different patients and having different criteria. I would say like anything, that it's changing rapidly. When I first went out on the field, when I started here, the only patient recommended for CGM was a pumper. I would ask doctors, who do you put on CGM? They'd say somebody with a pump is where we start. That certainly is not the case anymore. And so it varies across the board, but it is much more prevalent than it used to be. There's still plenty of room.

這很有意思。我剛花了一些時間和幾位前線同仁交流。我會告訴你，很多情況會因地區而異。也仍會因診所/醫療機構而異。目前並沒有一套標準指引讓所有醫師都用一致的方式辨識不同病患、採用不同標準。我會說，跟很多事情一樣，這正在快速改變。我剛開始到前線、也就是我剛來這裡時，唯一被建議使用 CGM 的病患是使用胰島素幫浦的人。我會問醫師：你們讓哪些人用 CGM？他們會說：我們從使用幫浦的人開始。現在當然已經不是這樣了。所以各方面仍有差異，但它比以前普遍得多。仍然有很大的成長空間。

And our next question comes from Jeff Johnson from Baird.

下一個問題來自 Baird 的 Jeff Johnson。

Kevin, I want to go back and ask you a question on the MDI versus pump mix that was talked about earlier. Especially within the MDI category, are you seeing any change in that patient base? Are you winning any competitive converts there? Or are those all native first-time users of CGM that you're winning on that MDI side?

Kevin，我想回到先前談到的 MDI 與幫浦的組合占比，問你一個問題。特別是在 MDI 類別中，你們是否看到那個病患基礎有任何變化？你們是否在那裡贏得一些從競品轉換過來的使用者？還是說在 MDI 端你們贏得的都是首次使用 CGM 的原生新用戶？

I don't have a good piece of data here.

我這裡沒有很好的數據。

Yes, I would say -- I would say, anecdotally, just honestly coming out of our national sales meeting and talking to our field force, who really they're on the front line, that you hear anecdotal stories that yes, people would try Libre and then if they are content with an on-body experience, with a sensor experience that they do migrate to a DexCom, but we don't have any real metrics to kind of give you as to what sort of conversion rate we have on Abbott to DexCom. With respect to Medtronic, they've launched a standalone system, but we -- honestly, we just don't do that system out in the marketplace at all.

是的，我會說——我會說，就軼事經驗而言，坦白講，剛從我們的全國銷售會議出來、並與我們的前線團隊交流後，他們確實在第一線，你會聽到一些軼事：是的，有些人會先試用 Libre，然後如果他們對貼身佩戴、感測器的使用體驗感到滿意，他們確實會轉移到 DexCom；但我們沒有任何真正的量化指標可以提供，來說明從 Abbott 轉到 DexCom 的轉換率大概是多少。至於 Medtronic，他們推出了獨立系統，但我們——老實說，我們在市場上根本沒有遇到那個系統。

Yes. Fair enough. And then on Medicare, I just -- we didn't get much color on that this quarter. Any update there on stick rates, on demand trends, things like that. I know G6 is pushed till later this year in that channel. Has that been impacting near-term demand? Just any updates would be helpful?

是的。可以理解。另外關於 Medicare，我只是——這一季我們沒有得到太多相關資訊。那邊有沒有關於黏著率（stick rates）、需求趨勢之類的更新？我知道在那個通路 G6 會延後到今年稍晚才推。這是否影響了短期需求？任何更新都會很有幫助。

Yes. No change in trends there, Jeff. I would say our stick rates remain very, very high. I mean we're incredibly encouraged by what we're seeing there. And the new patient funnel continues to be very full. So pushing the G6 launch out into later in the year has not impacted any trends that we've seen in that Medicare business right now.

是的。Jeff，那邊的趨勢沒有變化。我會說我們的黏著率仍然非常、非常高。我們對目前看到的情況感到非常振奮。而新病患的導入漏斗仍然非常充足。因此把 G6 的上市延後到今年稍晚，並沒有影響我們目前在 Medicare 業務中看到的任何趨勢。

And our next question comes from Doug Schenkel from Cowen.

下一個問題來自 Cowen 的 Doug Schenkel。

This is Ryan on for Doug. And first off, Matt, congrats on the new role. You referenced G6 enhancements coming this year earlier in the call and talked about new algorithms on the last quarterly call. Can you provide any more details, should we expect the new algorithm to noticeably improve the performance metrics of G6 during 2019? And then should we expect extended wear for G6 during 2019?

我是 Ryan，代 Doug 提問。首先，Matt，恭喜你擔任新職務。你在稍早的電話會議中提到今年會有 G6 的強化功能，並在上一季電話會議談到新的演算法。你能否提供更多細節？我們是否應預期新的演算法在 2019 年會明顯改善 G6 的效能指標？另外，我們是否應預期 2019 年 G6 會延長配戴時間？

You know what, let us -- we're going to keep that close to the vest and not lay out the -- the road map. In the U.S., I can tell you in 2019, we don't expect extended wear for the G6 in 2019. The decisions that we are making around things that would require extensive trials of that nature are very interesting. Do we commit those resources to G6? Or do we commit those resources to accelerating G7? And in many cases, we're choosing the G7 acceleration over that. But there are new features coming out in the fall on G6, and we'll kind of wait a while before we lay what all those are out to everybody.

你知道的，這部分——我們會先保留，不會把——路線圖攤開來講。在美國，我可以告訴你，2019 年我們不預期 G6 會在 2019 年延長配戴時間。我們正在做的決策，涉及那些需要進行此類大型試驗的事項，確實很有意思。我們要把資源投入在 G6 嗎？還是把資源投入在加速 G7？而在很多情況下，我們選擇加速 G7 而不是那樣做。不過，G6 在秋季會推出一些新功能，我們會再等一段時間，之後再向大家說明具體有哪些。

And your next question comes from Chris Pasquale from Guggenheim.

下一個問題來自 Guggenheim 的 Chris Pasquale。

I just want to follow up on the comment about the gross margin, Quentin, and why we shouldn't assume that 70% is a good number going forward? I'm assuming some of that has to do with the continuation of the pharmacy dynamic next year. But just kind of flush out how much you have to sort of swim upstream to maintain margins in the mid-60s? And what you're thinking about over the next, call it, 18 months?

我想追問一下你對毛利率的評論，Quentin，以及為什麼我們不應該假設未來 70% 是一個合理的數字？我猜其中一部分與明年藥局通路動態的延續有關。但能否更具體說明一下：為了把毛利率維持在 60% 中段，你們需要在多大程度上「逆水行舟」？以及你們對未來大約 18 個月的看法？

Yes. Without getting into specifics around 2020, maybe I'll just point you to one of the dynamics that we feel in the business right now, which is somewhat considerable to what we saw last year as well. For the full year, when we set margin expectations, we talked about there being roughly a 200 basis point headwind relative to the revenue per patient impact of moving into some of these other channels, both pharmacy and OUS.

是的。在不談 2020 年具體細節的前提下，我或許只指出我們目前在業務中感受到的一個動態；這個動態相當程度上也類似於我們去年看到的情況。就全年而言，當我們設定毛利率預期時，我們談到相較於每位病患收入（revenue per patient）因轉向某些其他通路（包括藥局通路與 OUS）所帶來的影響，大約會有 200 個基點的逆風。

I think based upon what we know at that point in time, that's probably the right way to continue to think about that headwind as we roll into next year. Clearly, we'll refine that as we learn more as we exit the year. But they start to push up into the 70s with the lower-priced transmitter. It clearly gives us opportunities to be more thoughtful around pricing strategies into the future. So that's why I come back into the mid-60s for the time being. But in terms of the pressure we're feeling from mixed channel, a couple of hundred basis points right now is what we're seeing. So you can model from there where you want. But I still think the mid-60s is right way to think about it over the long term.

我認為，根據我們在當時所掌握的資訊，隨著我們進入明年，這大概仍是持續看待該項逆風的正確方式。很明顯地，隨著我們在年底前獲得更多資訊，我們會再加以精煉。但隨著較低價位的發射器推出，他們的毛利率開始往70%區間推升。這顯然讓我們在未來的定價策略上，有更多機會更審慎地思考。所以這也是為什麼我目前仍回到以60%中段作為基準。但就我們目前因通路組合（mixed channel）所感受到的壓力而言，我們看到的是大約幾百個基點的影響。所以你可以從那裡開始建模，依你想要的方式推估。但我仍然認為，從長期來看，以60%中段來思考是正確的。

That's helpful. And then on the new markets, I'm assuming it's going to be a little while before we see some real data in some of these new indications. But at this point, is there a lead candidate that you guys think is most promising or that you think you want to go after first?

這很有幫助。接著關於新市場，我的假設是，在這些新的適應症上，我們可能還要一段時間才會看到一些實質數據。但就目前而言，你們是否認為有一個最有前景、或是你們想優先切入的領先候選方向？

I would say, we're -- look, we're already commercial to some extent in the non-intensive type 2. I mean we've characterized some of the work we're doing, particularly with UnitedHealthcare as pilot studies, but we're talking about multiple thousands of patients. So there are large pilot studies. With respect to the work being done by United, Onduo, et cetera, you're not going to see any data. In fact, they hold some of the findings and the learnings there to be highly proprietary, so they're not going to share that with anybody. To the extent we run a more formalized clinical protocol for a hospital indication or a gestational indication or something like that, that data may become available. But right now, I don't think we have any plans to -- really, to tip our hat to our potential competitors in those markets as well.

我會說，我們——你看，我們在非密集型的第二型糖尿病（non-intensive type 2）領域，某種程度上已經在商業化了。我的意思是，我們把正在做的一些工作，特別是與UnitedHealthcare合作的部分，描述為試點研究（pilot studies），但我們談的是數千名病患。所以那是大型的試點研究。至於United、Onduo等正在進行的工作，你不會看到任何數據。事實上，他們認為其中一些發現與學習成果具有高度專有性，因此不會與任何人分享。如果我們針對醫院適應症、妊娠適應症或類似方向，執行更正式的臨床方案，那些數據可能會變得可取得。但就目前而言，我不認為我們有任何計畫——坦白說——去向那些市場中的潛在競爭對手透露我們的意圖。

And our next question comes from Raj Denhoy from Jefferies.

下一個問題來自Jefferies的Raj Denhoy。

Just really wanted to ask about the leverage, the middle of the income statement you guys are talking about. And I appreciate the comments on the increase to the folks in the Philippines now. So a couple of questions there. One is, if you think about the environment getting potentially more competitive. One of the concerns is that, customer service for you guys has always been such a really strong suit and as you move that now offshore and how you maintain that? And so I'm curious if you have any kind of really data or anything you can offer in terms of how that transition is going.

我主要想問的是你們談到的槓桿，也就是損益表中段的部分。我也很感謝你們提到目前在菲律賓的人員增加。所以這裡有幾個問題。第一個是，如果你們考量到競爭環境可能變得更激烈。其中一個疑慮是，你們的客戶服務一直是非常強的優勢，而當你們把這部分移到海外之後，要如何維持？所以我想了解，你們是否有任何數據或資訊可以分享，說明這個轉移進展得如何？

Yes. Raj, we've been incredibly impressed by the team that's being built over there. And we pay very close attention to, not only quantitative assessment and performance metrics, but also qualitative. And so we try to take the opportunity with every single patient as they work with our folks over there to get feedback from them on how the calls went and what we can do better. And I can tell you out of the gate, our qualitative scores are higher than what we've seen in our domestic teams. So we're seeing great results and something that we're paying very close attention to.

是的。Raj，我們對那邊正在建立的團隊感到非常驚艷。我們非常密切地關注，不僅是量化評估與績效指標，也包括質化面向。因此，每一位病患與我們那邊的同仁互動時，我們都盡量把握機會向病患蒐集回饋，了解通話進行得如何，以及我們可以如何做得更好。我可以告訴你，一開始我們的質化評分就高於我們在國內團隊所看到的水準。所以我們看到很好的成果，而這也是我們非常密切在追蹤的。

From an efficiency perspective, we've been beyond, to be quite honest, what we anticipated we might be able to recognize in the early stages there. You look at some of the work coming out of our customer advocacy or complaints area, our tech support and other back-office functions, and the efficiencies are significant that lead us to believe that it's going to make it much easier to scale, much more quickly and clearly, more effectively. So we couldn't be more encouraged by what we're seeing out of that effort there. I believe that over time, that becomes a real strategic asset to this company and allows us to be more aggressive in how we think about other strategic opportunities in markets we might want to pursue. Or how we just compete in the local markets that we're in already. So very encouraged by what we're seeing there.

從效率的角度來看，坦白說，我們的表現甚至超出我們原先預期在早期階段可能達成的水準。你看看我們在客戶倡議或申訴處理、技術支援以及其他後勤功能所產出的工作，效率提升非常顯著，讓我們相信這將使擴張更容易、速度更快，而且顯然更有效率。所以我們對這項努力所呈現的成果再鼓舞不過了。我相信隨著時間推進，這會成為公司真正的策略資產，並讓我們在思考其他可能要追求的市場策略機會時更具進取性。或者讓我們在既有的在地市場競爭上更有力。因此，我們對目前看到的狀況非常鼓舞。

And your next question comes from Ravi Misra from Berenberg Capital.

下一個問題來自Berenberg Capital的Ravi Misra。

So my first one is again on gross margins. Just hoping, Quentin, maybe you could give us a little bridge between the first quarter and fourth quarter ramp? And then on the first quarter, what are the headwinds that showed up in that margin that are going to fall away, maybe break it down versus year-over-year versus mix-shift or underutilized overhead?

我的第一個問題同樣是關於毛利率。Quentin，希望你能幫我們稍微搭一座橋，說明第一季到第四季的爬升路徑？另外就第一季而言，毛利率中出現的逆風有哪些會消退？能否拆解一下，例如相較去年同期、通路/產品組合轉移（mix-shift）或產能未充分利用導致的固定成本分攤等？

Ravi, when you're talking fourth quarter, you're talking about from Q1 this year to Q4 of '19?

Ravi，你說的第四季，是指從今年Q1到2019年的Q4嗎？

Right. Yes, exactly.

對。是的，沒錯。

Sure. So I think -- let me just talk year-over-year real fast, Q1-to-Q1 around some of the headwinds that we had. There was about 200 basis points of impact related to the continued shift towards pharmacy, and the OUS business being a bigger part of the overall contribution. And then there's about 200 basis points associated with really our focus on doubling capacity. And we talked about the fact that with the demand being beyond what we had anticipated, we're accelerating some of that spend. So we pulled some of that forward. Not all of that is capitalizable or inventoriable, and so it's run through the P&L a bit earlier than what we had anticipating. So I think you'll see Q1 will be that low-water mark. I think you'll start to see it improve a bit in Q2 and see some real improvement in Q3 and onto Q4. And really what drives that, in Q3, you're going to start to get just the benefit of levering the fixed overhead that we put in place right now to design the automated manufacturing capabilities. In Q4, while you're getting some of the benefit of that leverage or the fixed overhead, you're really going to start to get the play-through of the benefit on the low-cost transmitter. So hopefully that gives you a bit of a bridge over the course of the year in terms of what the contributing factors are. But I think for us, we can see a clear line of sight of getting close to that 70% range as we exit the year.

好的。所以我想——我先很快談一下年對年，Q1對Q1的一些逆風。大約有200個基點的影響，與持續往藥局通路（pharmacy）轉移，以及海外（OUS）業務在整體貢獻中占比提高有關。另外大約有200個基點，則與我們專注於將產能加倍有關。我們也談到，由於需求超出我們原先預期，我們正在加速部分支出。因此我們把其中一些支出提前了。並非所有這些都能資本化或計入存貨，因此比我們原先預期更早地反映在損益表（P&L）中。所以我認為Q1會是低點。我認為你會看到Q2開始略有改善，Q3會有更明顯的改善，並延續到Q4。真正的驅動因素是，在Q3你會開始受益於我們目前為設計自動化製造能力而建置的固定製造費用（fixed overhead）所帶來的槓桿效益。到了Q4，在你仍持續享有固定成本槓桿效益的同時，你也會真正開始看到低成本發射器（low-cost transmitter）帶來的效益傳導。希望這能讓你對全年各項貢獻因素有一個大致的銜接與理解。但我認為，對我們而言，我們很清楚地看得到在年底前接近70%區間的路徑。

Great. I can add some follow-ups offline. And then my second question is, just around type 2 usage and kind of some of the commentary you had around moving patients from the ward -- from ward to ward, just curious, what's the take on the proposed rule changes around new technology add-on payments? I mean do you see a space for your CGM products to fit into that designation? And what could that mean from a reimbursement or payment perspective?

很好。我之後可以在線下再補充一些追問。我的第二個問題是，關於第二型糖尿病的使用情況，以及你們提到把病患從病房——從一個病房移到另一個病房的那段評論，我想請教對於新技術加成給付（new technology add-on payments）的擬議規則變更，你們怎麼看？我的意思是，你們是否認為你們的CGM產品有空間符合那項認定？而從給付或支付的角度來看，這可能意味著什麼？

Yes. Absolutely, and particularly in the hospital setting, as I mentioned, CMS has a renewed focus and has identified hypoglycemia in the inpatient setting as a huge problem. And so you're not going to detect hypoglycemia with finger sticks, even if you're taking a couple of finger sticks an hour, right? So I think that the CGM plays perfectly into that environment. And we've long known that recurring hyperglycemia in the hospital as a problem leads to reduced healing times. We can get CGM put on this -- the idea would be to get CGM put on these patients potentially pre-op, get them into the hospital with the sensor already on, get their blood sugar under control before a procedure and get them in and out of the hospital as quickly as possible. So yes, we think there's great application here. We think also the disposable nature of G7 is the perfect product opportunity there.

是的。完全同意，尤其是在醫院場域，如我先前提到的，CMS 重新聚焦，並已將住院病患的低血糖視為一個非常嚴重的問題。因此你不可能只靠指尖採血來偵測低血糖，即使你每小時做幾次指尖採血也一樣，對吧？所以我認為 CGM 非常適合這樣的環境。而且我們早就知道，醫院裡反覆的高血糖問題會導致傷口癒合時間延長。我們可以讓這些病患使用 CGM——構想是可能在術前就替病患裝上 CGM，讓他們進院時感測器就已經戴著，在手術前把血糖控制好，並讓他們能盡快進出醫院。所以是的，我們認為這裡有很大的應用空間。我們也認為 G7 的一次性（拋棄式）特性在那裡是非常理想的產品機會。

And our next question is from Matt Taylor from UBS.

下一個問題來自 UBS 的 Matt Taylor。

So I wanted to ask, Quentin, a question, see if you could give us a little bit more detail on what changes here sequentially in terms of some of the assumptions that are embedded in the revenue guidance for the year? You did address a little bit of this in the earlier question about the pricing headwinds, but can you just give us a sense for what has changed? And if you could provide broad strokes on the different components, that would be helpful?

我想問你一個問題，Quentin，看看你是否能更詳細說明一下：就今年的營收指引而言，這裡在序列上（逐季）有哪些假設發生了變化？你先前在談到定價逆風的問題時有稍微提到一些，但你能否讓我們了解一下到底改變了什麼？如果你能用較概括的方式拆解不同組成部分，會很有幫助。

Yes. I think -- it's really quite simple. To be honest with you, it's not a lot of different moving pieces. It comes down to new patient volume more than anything else. I think the demand that we continue to see in the business coming off at Q4 and the strong Q1 continues to increase our confidence in the adoption of the technology in the marketplace, and so it's really new patient volumes that are driving the incremental growth. I think that you'll see a lot of that come through on the commercial business through the pharmacy channel. From our experience, we believe that's where the majority ends up showing up, and then the international business is a bit strong as well. So those 2 channels are the primary drivers. And at the end of the day, it's all new patient volumes that are driving it. The pricing assumption, I talked about earlier, no change in terms of the $100 million headwind.

是的。我想——其實很簡單。老實說，並沒有很多不同的變動因素。最主要就是新病患量（new patient volume）。我們在 Q4 之後持續看到的需求，以及強勁的 Q1 表現，讓我們對市場採用這項技術的信心進一步提升，因此推動額外成長的關鍵就是新病患量。我認為你會看到其中很大一部分會反映在商業端業務，透過藥局通路。依我們的經驗，我們相信大多數最終會在那裡呈現出來，而國際業務也相對強勁。所以這兩個通路是主要驅動因素。歸根結底，推動成長的就是新病患量。至於我先前提到的定價假設，沒有變化，仍然是 1 億美元的逆風。

Okay. And then maybe just a follow-up with the Head of New Markets here or just for the team, can you talk about which of the new markets you think is really going to be able to bear fruit for the company in the near term? Anything that you can share on the strategy there that's changed since -- you talked about some of the things at Investor Day?

了解。接著可能追問一下新市場負責人，或是請團隊談談：你們認為哪些新市場在短期內最有可能為公司帶來成果？在策略上有沒有什麼可以分享的變化——自從你們在投資人日談到一些事項之後？

This is Kevin. I'll take that. I'm not as concerned about bearing fruit on the revenue side, as I am building a long-term case. So our efforts this year go -- as we rolled this stuff out, as I said earlier in my prepared remarks, are to develop the outcomes, the cost base evidence that show these are markets where we're going to save patient's money and deliver better outcomes. So it will be largely developing that evidence in those business models, establishing the relationships we need to go distribute into these markets and taking some steps like that over 2019 and early 2020. And then when we roll out G7, we expect to roll that out to these other places as well.

我是 Kevin。我來回答。相較於短期在營收端「結果」如何，我更在意的是建立長期的論述與案例。因此我們今年的努力——隨著我們推動這些工作，如我先前在準備好的發言中提到——是要建立臨床結果與成本基礎的證據，證明這些市場能為病患省錢並帶來更好的結果。所以在 2019 年與 2020 年初，我們主要會在這些商業模式中建立上述證據、建立我們進入並在這些市場進行分銷所需的關係，並採取類似的步驟。接著當我們推出 G7 時，我們也預期會把它推廣到這些其他地區。

And that becomes more of a commercial thing right now. And again, I will echo something that Steve said earlier. We haven't just been sitting around on this and not working. We've had some of our best people working on these efforts for quite some time. Now what we've done is formalized the structure and said, you guys have a home, you have a group, you have some goals, go get this done. And we're going to start measuring that progress more, rather than just as projects. And that's what we're expecting in the near-term.

而目前這會更偏向商業化的事情。另外，我也想呼應 Steve 先前說的一點。我們並不是坐著不動、沒有在做事。我們已經讓一些最優秀的人才投入這些工作相當一段時間了。現在我們所做的是把組織架構正式化，並說：你們有歸屬、有團隊、有目標，去把它完成。我們也會開始更常衡量進度，而不是只把它當作專案來看。這就是我們短期內的期待。

And our next question comes from Steve Lichtman from Oppenheimer.

下一個問題來自 Oppenheimer 的 Steve Lichtman。

Kevin, on intensive type 2s, where do you think we're at penetration-wise today? And any updated color on your discussions with commercial payers and expanding access to those patients?

Kevin，針對需要密集治療的第二型糖尿病患者（intensive type 2s），你認為我們目前的滲透率大概到哪裡？另外，關於你們與商業保險支付方的討論，以及擴大這些患者可近性的進展，有沒有最新的補充說明？

We continue to pursue that with the payers and certainly, using the CMS ruling as a basis for that. It gives us a very good start. I don't think penetration is very deep there right now. I can give you a number, I think it's less than 10%, in general. However, a lot of those type 2 intensive patients are Medicare patients.

我們仍持續與支付方推進這件事，當然也會以 CMS 的裁定作為基礎。這讓我們有一個非常好的起點。我認為目前在那一塊的滲透率還不深。如果要給你一個數字，我想整體而言不到 10%。不過，許多需要密集治療的第二型患者是 Medicare 病患。

And as we launch -- as we look at launching G6 into Medicare later in the year, for example, we think we have an opportunity to grow that significantly, and that's a nice opportunity for us going forward in the future. I can tell you that the type 2 intensive patients on the system, Quentin referred to the stickiness of our Medicare patients. It's been extremely good so far. So they're getting very good outcomes, those who use it. So we're happy with it. It is a tremendous opportunity for us. And I -- we look forward to more coverage. It's a chore. Getting the insurance companies to pay more and spend more money is never simple.

而隨著我們——例如——在今年稍晚把 G6 推向 Medicare，我們認為有機會讓那一塊顯著成長，這對我們未來而言是個不錯的機會。我可以告訴你，系統上的第二型密集治療患者，Quentin 提到我們 Medicare 病患的黏著度（留存/持續使用）很高。到目前為止表現非常好。所以使用者的結果非常好。因此我們對此感到滿意。這對我們而言是非常巨大的機會。而且——我們期待有更多的給付涵蓋。這是一件苦差事。要讓保險公司多付錢、花更多錢從來都不容易。

Got it. And then, you also talked about the positive results you're seeing from the predictive hypo alerts. When do you think we could see data aggregated and published around the benefits there?

了解。另外，你也提到你們看到預測性低血糖警示帶來的正面結果。你認為我們何時能看到相關效益的彙整數據並發表？

I believe, Steve, that our predictive hypo alert paper was presented at ATTD. So that's already out, the G6 system, the patients that experience less hypoglycemia with the predictive alert.

Steve，我相信我們的預測性低血糖警示論文已在 ATTD 發表。所以那已經公開了；在 G6 系統中，使用預測性警示的患者經歷較少的低血糖。

And our next question comes from Suraj Kalia from Northland Securities.

下一個問題來自 Northland Securities 的 Suraj Kalia。

Congrats on a great quarter. So Quentin, a lot of my questions have been asked. Maybe I'll just kind of lump both my questions into one. And forgive me if you all have mentioned this on the call. What are the expectations for U.S. versus OUS contribution in FY '19? I'd love to get some perspective on how you'll see the margins for these 2 different buckets. I mean roughly speaking, the math tells me that roughly $400 million -- a little over $400 million would be OUS, the remaining would be U.S. Maybe you can kind of parse out for as what the -- how we should think about this? How the gross margins for the different buckets would be? And finally, this transmitter that is expected to bump up gross margins to 70% in Q4, what is the incremental gross margins contribution from this transmitter? I'd love to get some color, if possible?

恭喜你們有個很棒的季度。Quentin，我很多問題都已經被問過了。也許我就把兩個問題合併成一個。如果你們在電話會議中已經提過，也請見諒。對於 2019 財年，美國（U.S.）與美國以外（OUS）的貢獻預期是什麼？我也很想了解這兩個不同區塊的毛利率走勢會如何。大致上，我的計算顯示 OUS 約為 4 億美元——略高於 4 億美元——其餘則是美國。也許你可以幫我們拆解一下，我們應該如何看待這件事？不同區塊的毛利率應該怎麼看？最後，預期在 Q4 把毛利率推升到 70% 的那個發射器（transmitter），它對毛利率的增量貢獻是多少？如果可以的話，希望你能提供一些補充說明。

Sure. So in terms of U.S. versus OUS split, on the full year, our OUS business is expected to grow in the mid- to high-30s range, which -- the U.S. business is growing in the teens, the 20%-or-so. That's about what we've expected on the course of the full year. We haven't given specific gross margin data points on the U.S. or OUS business and we're not going to put that out there. And that shifts, honestly, quarter-to-quarter just based upon the mix of the revenue within say, OUS, where you've got a direct marketing, you've got a distributor business as well. So it just fluctuates based upon the mix. But we haven't put those data points out there, nor are we going to right now.

好的。就美國與美國以外（OUS）的拆分而言，以全年來看，我們的 OUS 業務預期將以約 30% 中段到高段的幅度成長；而美國業務則以十幾個百分點、約 20% 左右的速度成長。這大致符合我們對全年進程的預期。我們沒有提供美國或 OUS 業務的特定毛利率數據點，而且我們也不會對外公布。坦白說，這會隨季度而變動，主要取決於例如在 OUS 內部的營收組合：既有直銷，也有經銷商業務。因此會依組合而波動。但我們沒有對外提供那些數據點，目前也不會。

In terms of the incremental benefit associated with the transmitter, the G6 low-cost transmitter, without giving you the exact specific cost differential, we can tell you it's more than 50% cheaper than what the G6 existing transmitter is today. So in terms of orders of magnitude, I think that it's clearly a very significant benefit for us that drives the overall improvement in the gross margin in that fourth quarter time frame we've talked about.

就與發射器相關的增量效益而言，也就是 G6 低成本發射器，在不提供確切的具體成本差異數字的前提下，我們可以告訴你，它比目前既有的 G6 發射器便宜超過 50%。因此就量級來看，我認為這顯然對我們是非常顯著的效益，並推動我們先前談到的第四季期間整體毛利率改善。

And that concludes the question-and-answer session. I'll now turn the call back over to Kevin Sayer for final remarks.

問答環節到此結束。我現在把電話交回給 Kevin Sayer 作最後致詞。

Thank you very much, and thanks, everyone, for being on the call today. I actually wanted to stop the call at 52% growth and $95 million-plus in incremental revenue over Q1 of last year, but we decided we would keep going. Much of the discussion around this call and recent months has focused upon 2 things: The pricing environment and anticipated competitive offerings in the space. And I think too often we forgot one thing. This market opportunity is huge. It is extremely large, not only in the intensive insulin space, but ultimately, in the type 2 space and the other areas, so we're looking at all the way down to health and wellness.

非常感謝，也謝謝各位今天參與電話會議。其實我本來想在 52% 的成長、以及相較去年第一季增加超過 9,500 萬美元的增量營收時就結束這通電話，但我們決定繼續進行。這通電話以及近幾個月的許多討論，主要聚焦在兩件事：定價環境，以及該領域預期的競爭產品。而我認為我們太常忘了一件事。這個市場機會非常巨大。它極其龐大，不僅在密集胰島素治療領域，最終也涵蓋第二型糖尿病領域及其他領域，因此我們的視野一路延伸到健康與福祉。

We continue to see people now buying our system, getting a prescription because they want to manage their nutrition on the side and they're paying cash and using it, but seeing some very interesting things. We truly see today when CGM, in multiple configurations and forms, becomes a very useful tool across all of health care and truly the standard of care in the intensive management of diabetes.

我們持續看到現在有人購買我們的系統、取得處方，因為他們想在一旁管理自己的營養；他們自費購買並使用，同時也觀察到一些非常有意思的現象。我們確實看到，當今 CGM 以多種配置與形式，正成為橫跨整個醫療照護的非常有用工具，並且真正成為糖尿病密集管理的照護標準。

With respect to pricing, our channel and payer teams are doing very well at DexCom. I talked earlier about the recent win with Cigna. We are -- we're hitting on all cylinders here and that team has gone very well.

在定價方面，我們在 DexCom 的通路與支付方團隊表現非常出色。我先前提到近期與 Cigna 的勝利。我們——我們在這裡各方面都運轉順暢，而那個團隊的表現也非常好。

Given the size of the opportunity with respect to the competitive environment, I said earlier, we didn't expect to remain the sole voice of CGM forever. We always knew others would come. An increased awareness generated by all parties move patients to the technology that best meets their needs. And that technology remains DexCom. With G6, our planned enhancements coming later this year; our next-gen G7 offering, and the technologies that will be following that, we expect to be the leader in this industry, in this the space for a very long time.

鑑於在競爭環境方面的機會規模，我先前說過，我們不預期會永遠是 CGM 唯一的聲音。我們一直知道其他人會加入。由各方所帶來的更高市場認知，會促使病患採用最符合其需求的技術。而那項技術仍然是 DexCom。憑藉 G6、我們計畫在今年稍晚推出的強化功能；我們的下一代 G7 產品，以及後續將推出的技術，我們預期將在這個產業、在這個領域長期保持領導地位。

Thanks again everybody and have a great day.

再次感謝各位，祝大家有美好的一天。

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

謝謝各位女士先生。今天的電話會議到此結束。感謝各位參與，您現在可以掛線。