UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): November 12, 2019

 

SENSEONICS HOLDINGS, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware

 

001-37717

 

47-1210911

(State or Other
Jurisdiction of Incorporation)

 

(Commission File Number)

 

(IRS Employer
Identification No.)

 

20451 Seneca Meadows Parkway
Germantown, MD  20876-7005

(Address of Principal Executive Office) (Zip Code)

 

Registrant’s telephone number, including area code:  (301) 515-7260

 

Not Applicable

Former name or former address, if changed since last report

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

 

o                 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o                 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o                 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o                 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock

 

SENS

 

NYSE American

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x

 

 

 

 

Item 2.02.                                        Results of Operations and Financial Condition.

 

On November 12, 2019, Senseonics Holdings, Inc. (the “Company”) issued a press release announcing its financial results for the three and nine months ended September 30, 2019, as well as information regarding a conference call to discuss these financial results and the Company’s recent corporate highlights and outlook. This press release has been furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by this reference.

 

The information in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section. The information contained herein and in the accompanying exhibit is not incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

 

Item 5.02.                                        Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

(b) Departure of Jon Isaacson as Chief Financial Officer

 

On November 12, 2019, Jon Isaacson and the Company agreed that his service as the Company’s Chief Financial Officer would terminate, effective as of November 15, 2019, and that Mr. Isaacson would remain employed in an advisory capacity to support a transition of responsibilities through December 31, 2019 (the “transition period”). Mr. Isaacson’s separation was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

 

In connection with Mr. Isaacson’s departure, on November 12, 2019, the Company and Mr. Isaacson entered into a Severance Agreement and Release (the “Severance Agreement”). The Severance Agreement provides that Mr. Isaacson will continue to receive his current base salary through the transition period and, following the transition period, will be eligible to receive severance payments equal to continued payment of his base salary for six months, employee benefit coverage through June 30, 2020, and a payment of $100,000 representing approximately half of Mr. Isaacson’s target bonus in 2019. The Severance Agreement contains a release and certain restrictive covenants that are binding upon Mr. Isaacson.

 

The foregoing description of the Severance Agreement is not complete and is qualified in its entirety by reference to the Severance Agreement, which will be filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ending December 31, 2019.

 

(c) Appointment of Nick Tressler as Chief Financial Officer

 

On November 12, 2019, the Company’s board of directors appointed Nick Tressler as the Company’s Chief Financial Officer, effective as of November 15, 2019 (the “Effective Date”). Mr. Tressler will begin service as the Company’s principal financial officer and principal accounting officer as of the Effective Date.

 

Nick Tressler, age 46, has served as the Company’s Senior Director, Financial Planning and Analysis since March 2019.  Prior to joining the Company, Mr. Tressler served as a strategic and financial consultant for several biopharmaceutical companies from April 2018 to March 2019.  Prior to that, Mr. Tressler was the Vice President, Financial Planning and Analysis at Sucampo Pharmaceuticals, Inc., a public global biopharmaceutical company, from May 2016 to April 2018.  Prior to Sucampo, Mr. Tressler was a Site Controller at AstraZeneca PLC, a public global biopharmaceutical company, from 2013 to May 2016.  Mr. Tressler holds a M.B.A. from The Johns Hopkins University Carey Business School and a B.S. from the University of Maryland College Park Robert H. Smith School of Business.

 

2

 

There are no arrangements or understandings between Mr. Tressler and any other person pursuant to which he was selected as an officer of the Company, and there is no family relationship between Mr. Tressler and any of the Company’s directors or other executive officers.

 

Employment Agreement with Mr. Tressler

 

In connection with his appointment as Chief Financial Officer, on November 12, 2019, Mr. Tressler and the Company entered into an amended and restated employment agreement (the “employment agreement”), effective on the Effective Date.

 

Pursuant to the terms of his employment agreement, Mr. Tressler is entitled to an annual base salary of $340,000 and is eligible to receive an annual performance bonus of up to 40% of his annual base salary based upon the Company’s board of directors’ assessment of Mr. Tressler’s performance and the Company’s attainment of targeted goals as set by the board of directors in their sole discretion. In accordance with the employment agreement, Mr. Tressler will also be awarded an option to purchase 300,000 shares of common stock on the Effective Date with an exercise price equal to the closing price per share of the Company’s common stock on the Effective Date. 25% of the shares subject to the option vest on November 15, 2020 (the first anniversary of the Effective Date) and the remaining shares vest in 36 equal monthly installments thereafter, subject to Mr. Tressler’s continuous service through each applicable vesting date. If Mr. Tressler’s employment is terminated by us for reasons other than for cause or if he resigns for good reason (each as defined in his employment agreement), he would be entitled to receive severance payments equal to continued payment of his base salary for one year, a prorated portion of his target bonus for the year in which his service is terminated, employee benefit coverage for up to one year, and reimbursement of expenses owed to him through the date of his termination, subject to his execution of a release and the satisfaction of other specified conditions. If Mr. Tressler’s employment is terminated by us other than for cause or if he resigns for good reason, within one year after a change in control (as defined in his employment agreement), he would be entitled to the benefits described above, and 100% of his then unvested equity awards would become fully vested. Mr. Tressler has also entered into a ideas, inventions, competition and confidentiality agreement with the Company.

 

The foregoing description of Mr. Tressler’s employment agreement is not complete and is qualified in its entirety by reference to the Agreement, which will be filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ending December 31, 2019.

 

(d) Appointment of Francine Kaufman to Board of Directors

 

On November 11, 2019, the Company’s board of directors appointed Francine Kaufman to serve as a director of the Company. Dr. Kaufman will serve as a Class I director whose term will expire at the 2020 annual meeting of stockholders.

 

There is no arrangement or understanding between Dr. Kaufman and any other person pursuant to which she was selected as a director of the Company, and there is no family relationship between Dr. Kaufman and any of the Company’s other directors or executive officers. The Company is not aware of any transaction involving Dr. Kaufman requiring disclosure under Item 404(a) of Regulation S-K. Additional information about Dr. Kaufman is set forth below:

 

Francine Kaufman, age 68, has served as the Company’s Chief Medical Officer since March 2019. Prior to joining the Company, Dr. Kaufman served as Chief Medical Officer and Vice President of Global Clinical, Regulatory and Medical Affairs at Medtronic Diabetes from 2009 to January 2019. Prior to that, she served as Director of the Comprehensive Childhood Diabetes Center, and head of the Center for Endocrinology, Diabetes and Metabolism at Children’s Hospital Los Angeles from 1991 to 2009. Dr. Kaufman is also a Distinguished Professor Emerita of Pediatrics and Communications at the Keck School of Medicine and the Annenberg School of Communications of the University of Southern California. She was formerly the president of the American Diabetes Association in 2003 and chair of the National Diabetes Education Program from 2008 to 2009. Dr. Kaufman was also elected to the National Academy of Medicine in 2005. She was also

 

3

 

an advisor to the Governor on the California Initiative on Health, Fitness and Obesity in 2007. Dr. Kaufman received her B.A. from Northwestern University and her M.D. from Chicago Medical School.

 

Item 9.01.                                        Financial Statements and Exhibits.

 

(d)                                 Exhibits.

 

Exhibit

 

 

Number

 

Description

 

 

 

99.1

 

Press Release of Senseonics Holdings, Inc. dated November 12, 2019

 

4

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: November 12, 2019

SENSEONICS HOLDINGS, INC.

 

 

 

 

By:

/s/ Jon Isaacson

 

Name:

Jon Isaacson

 

Title:

Chief Financial Officer

 

5

Exhibit 99.1

 

 

SENSEONICS HOLDINGS, INC. REPORTS THIRD QUARTER 2019 FINANCIAL RESULTS

 

GERMANTOWN, MD, November 12, 2019 —Senseonics Holdings, Inc. (NYSE American: SENS), a medical technology company focused on the development and commercialization of the first and only long-term, implantable continuous glucose monitoring (CGM) system for people with diabetes, today reported financial results for the quarter ended September 30, 2019.

 

Recent Highlights & Accomplishments:

 

·                  Total net revenue of $4.3 million

 

·                  OUS net revenue of $3.8 million

 

·                  U.S. net revenue of $0.5 million after accounting for gross to net reductions, primarily related to the EversenseÒ Bridge Program

 

·                  U.S. gross revenue was $2.1 million.  Reconciliations of net revenue and net U.S. revenue to gross revenue and U.S. gross revenue, respectively, have been provided in the tables following the financial statements in this press release.  An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures”

 

·                 Received a finalized national payment rate for the EversenseÒ CGM System for Medicare beneficiaries through the Part B benefit from the Centers for Medicare and Medicaid Services, expanding coverage of Eversense to Medicare beneficiaries with type 1 or type 2 diabetes on insulin

 

·                 Reached over 150 million covered lives through additional positive coverage decisions from Humana, Health Care Service Corporation and other health insurance providers

 

·                 Completed enrollment in the PROMISE 180-day sensor clinical study

 

·                 Real-world Eversense performance, longitudinal efficacy and multi-year safety data was published in three peer reviewed articles in Diabetes Technology and Therapeutics demonstrating compelling and sustained time in range of 62-64% with wear time in the mid-80s percentage, all with a favorable safety profile

 

·                  Implemented a restructuring to reduce expenses, strengthen the productivity of our commercial efforts, and extend our ability to build the business and grow revenue

 

“In the third quarter, we experienced growth in our covered lives, prescriber base and installed patient base,” said Tim Goodnow, PhD, President and Chief Executive Officer of Senseonics. “We will continue to focus on creating more access to our technology and addressing barriers through innovative initiatives to add to our patient and inserter base.  We have now structured our workforce to focus on these commercial priorities and manage expenses to extend our cash runway. We are confident that our efforts to remove barriers to access combined with recent positive coverage decisions such as those from Humana, HCSC and Medicare will help accelerate market adoption in 2020 and in the future.”

 

Third Quarter 2019 Results:

 

In the third quarter of 2019, total revenue, net was $4.3 million, which includes U.S. net revenue of $0.5 million after accounting for gross to net reductions, primarily related to the Eversense Bridge Program and OUS net revenue of $3.8 million, compared to total revenue, net of $5.2 million for the third quarter of 2018.  Gross revenue for the third quarter of 2019 was $5.9 million, including U.S. gross revenue of $2.1 million.

 

 

Third quarter 2019 gross profit decreased by $0.8 million year-over-year, to ($3.3) million. The decrease in gross profit was primarily due to lower revenue, net in our OUS region compared to the same period in the prior year.

 

Third quarter 2019 sales and marketing expenses increased by $3.7 million year-over-year, to $11.6 million. The increase was due primarily to the build out of the salesforce and commercialization efforts in the U.S.

 

Third quarter 2019 research and development expenses increased by $3.7 million year-over-year, to $11.1 million. The increase in research and development expenses was primarily driven by expenses associated with the 180-day PROMISE clinical study.

 

Third quarter 2019 general and administrative expenses increased by $0.3 million year-over-year, to $5.4 million.

 

Net loss was $19.5 million, or $0.10 per share, in the third quarter of 2019, compared to $31.9 million, or $0.18 per share, in the third quarter of 2018.

 

As of September 30, 2019, cash and cash equivalents were $130.6 million and outstanding indebtedness was $143.6 million. Over $100 million in gross proceeds were raised through a combination of borrowings under a term loan agreement and the issuance of convertible debt and equity in July 2019.

 

2019 Financial Outlook

 

Net revenue for full year 2019 (after accounting for the gross to net reductions primarily related to the Eversense Bridge Program) is now expected to be in the range of $20 to $22 million. This compares to the previous guidance of $25 to $30 million. Gross revenue is expected to be in the range of $25 to $27 million for full year 2019.   A reconciliation of net revenue to gross revenue on a forward-looking basis is presented below under the heading “Reconciliation of Forecasted Revenue, Net to Forecasted Gross Revenue.”

 

Conference Call and Webcast Information

 

Company management will host a conference call at 4:30 pm (Eastern Time) today, November 12, 2019, to discuss these financial results and recent business developments. This conference call can be accessed live by telephone or through Senseonics’ website.

 

Live Teleconference Information:

Live Webcast Information:
Visit http://www.senseonics.com and select the “Investor Relations” section

Dial in number: 800-309-1256

Entry Number: 532764

International dial in: 786-789-4796

 

A replay of the call can be accessed on Senseonics’ website http://www.senseonics.com under “Investor Relations.”

 

About Senseonics

 

Senseonics Holdings, Inc. is a medical technology company focused on the design, development and

 

 

commercialization of transformational glucose monitoring products designed to help people with diabetes confidently live their lives with ease. Senseonics’ CGM systems, Eversense® and Eversense® XL, include a small sensor inserted completely under the skin that communicates with a smart transmitter worn over the sensor. The glucose data are automatically sent every 5 minutes to a mobile app on the user’s smartphone.

 

Non-GAAP Financial Measures

 

In accordance with U.S. GAAP, Senseonics reports revenue in its financial statements on a net basis, which takes into account gross to net reductions resulting from discount programs, such as the Eversense Bridge Program. To supplement its condensed consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP and present total revenue, net, Senseonics is also providing investors with gross revenue and U.S. gross revenue.  These measures do not reflect the gross to net reductions from these discount programs and, accordingly, may be considered to be non-GAAP financial measures. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and Senseonics’ non-GAAP measures may be different from non-GAAP measures used by other companies.

 

Senseonics uses these non-GAAP financial measures for financial and operational decision-making. Senseonics’ management believes that these non-GAAP financial measures provide meaningful supplemental information regarding Senseonics’ performance and provide better transparency on the impact of reimbursement and the Eversense Bridge Program. Senseonics believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing Senseonics’ performance and when planning, forecasting, and analyzing future periods. For more information on these non-GAAP financial measures, please see the reconciliation of these non-GAAP financial measures to their nearest comparable GAAP measures at the end of this press release.

 

Forward Looking Statements

 

Any statements in this press release about future expectations, plans and prospects for Senseonics, including statements about Senseonics’ revenue trajectory, reducing the dependence on the Eversense Bridge Program, Senseonics’ growth, Senseonics’ projected net revenue and gross revenue for full year 2019, the ongoing commercialization of Eversense and the potential life-enhancing benefits Eversense offers people with diabetes, the effect of efforts to increase market adoption, the impact of coverage decisions, and other statements containing the words “believe,” “expect,” “intend,” “may,” “projects,” “will,” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: uncertainties in the development and regulatory approval processes, uncertainties inherent in the commercial launch and commercial expansion of the product, and such other factors as are set forth in the risk factors detailed in Senseonics’ Annual Report on Form 10-K for the year ended December 31, 2018, Senseonics’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, and Senseonics’ other filings with the SEC under the heading “Risk Factors.” In addition, the forward-looking statements included in this press release represent Senseonics’ views as of the date hereof. Senseonics anticipates that subsequent events and developments will cause Senseonics’ views to change. However, while Senseonics may elect to update these forward-looking statements at some point in the future, Senseonics specifically disclaims any obligation to do so except as required by law. These forward-

 

 

looking statements should not be relied upon as representing Senseonics’ views as of any date subsequent to the date hereof.

 

Investor Contact

Lynn Lewis or Philip Taylor

Investor Relations

415-937-5406

Investors@senseonics.com

 

 

Senseonics Holdings, Inc.

 

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

 

 

 

September 30, 

 

December 31, 

 

 

 

2019

 

2018

 

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

130,580

 

$

136,793

 

Accounts receivable

 

2,800

 

830

 

Accounts receivable - related parties

 

3,468

 

6,267

 

Inventory, net

 

19,862

 

10,231

 

Prepaid expenses and other current assets

 

4,862

 

3,985

 

Total current assets

 

161,572

 

158,106

 

 

 

 

 

 

 

Deposits and other assets

 

3,108

 

117

 

Property and equipment, net

 

2,366

 

1,750

 

Total assets

 

$

167,046

 

$

159,973

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

3,253

 

$

4,407

 

Accrued expenses and other current liabilities

 

18,705

 

13,851

 

Deferred revenue

 

—

 

628

 

Term Loans, current portion

 

—

 

10,000

 

Total current liabilities

 

21,958

 

28,886

 

 

 

 

 

 

 

Term Loans, net of discount and current portion

 

43,092

 

4,783

 

2023 Notes, net of discount

 

11,529

 

36,103

 

2025 Notes, net of discount

 

35,668

 

—

 

Derivative liabilities

 

26,988

 

17,091

 

Other liabilities

 

2,464

 

1,849

 

Total liabilities

 

141,699

 

88,712

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock, $0.001 par value per share; 450,000,000 shares authorized; 203,365,624 and 176,918,381 shares issued and outstanding as of September 30, 2019 and December 31, 2018

 

203

 

177

 

Additional paid-in capital

 

462,876

 

428,878

 

Accumulated deficit

 

(437,732

)

(357,794

)

Total stockholders’ equity

 

25,347

 

71,261

 

Total liabilities and stockholders’ equity

 

$

167,046

 

$

159,973

 

 

 

Senseonics Holdings, Inc.

 

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share data)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

 

2019

 

2018

 

2019

 

2018

 

Revenue, net

 

$

959

 

$

837

 

$

3,678

 

$

1,768

 

Revenue, net - related parties

 

3,360

 

4,321

 

8,671

 

9,960

 

Total revenue

 

4,319

 

5,158

 

12,349

 

11,728

 

Cost of sales

 

7,659

 

7,742

 

23,552

 

14,889

 

Gross profit

 

(3,340

)

(2,584

)

(11,203

)

(3,161

)

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

Sales and marketing expenses

 

11,560

 

7,851

 

38,573

 

17,469

 

Research and development expenses

 

11,076

 

7,402

 

28,688

 

23,805

 

General and administrative expenses

 

5,388

 

5,138

 

17,321

 

14,531

 

Operating loss

 

(31,364

)

(22,975

)

(95,785

)

(58,966

)

Other income (expense), net:

 

 

 

 

 

 

 

 

 

Interest income

 

519

 

820

 

1,556

 

1,245

 

Loss on extinguishment of debt

 

(398

)

—

 

(398

)

—

 

Interest expense

 

(3,460

)

(2,170

)

(7,459

)

(6,177

)

Debt issuance costs

 

(3,344

)

—

 

(3,344

)

—

 

Change in fair value of derivative liabilities

 

19,186

 

(7,513

)

26,147

 

(22,526

)

Other expense

 

(638

)

(43

)

(655

)

(226

)

Total other income (expense), net

 

11,865

 

(8,906

)

15,847

 

(27,684

)

 

 

 

 

 

 

 

 

 

 

Net loss

 

(19,499

)

(31,881

)

(79,938

)

(86,650

)

Total comprehensive loss

 

$

(19,499

)

$

(31,881

)

$

(79,938

)

$

(86,650

)

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per common share

 

$

(0.10

)

$

(0.18

)

$

(0.43

)

$

(0.57

)

Basic and diluted weighted-average shares outstanding

 

197,223,419

 

176,332,575

 

183,804,257

 

150,866,978

 

 

 

Senseonics Holdings, Inc.

 

Reconciliation of Total Revenue, Net to Gross Revenue

(in thousands)

 

 

 

For the Three Months Ended
September 30, 2019

 

For the Nine Months Ended 
September 30, 2019

 

Revenue, net

 

$

4,319

 

$

12,349

 

Gross to net reductions

 

1,604

 

3,178

 

Gross revenue

 

$

5,923

 

$

15,527

 

 

Senseonics Holdings, Inc.

 

Reconciliation of U.S. Revenue, Net to U.S. Gross Revenue

(in thousands)

 

 

 

For the Three Months Ended
September 30, 2019

 

For the Nine Months Ended
September 30, 2019

 

U.S. Revenue, net

 

$

527

 

$

2,441

 

Gross to net reductions

 

1,604

 

3,178

 

U.S. Gross revenue

 

$

2,131

 

$

5,619

 

 

 

Senseonics Holdings, Inc.

 

Reconciliation of Forecasted Revenue, Net to Forecasted Gross Revenue

(in millions)

 

 

 

Year Ending December 31, 2019

 

Revenue, net

 

$

20.0 – 22.0

 

Gross to net reductions

 

4.0 – 6.0

 

Gross revenue

 

$

25.0 – 27.0