Afternoon, everybody. Mike Pollard, Medical Device Analyst at Wolfe Research, towards the end of day two of the Wolfe Healthcare Conference. This session, pleased to be joined by Beta Bionics. We have CFO Stephen Feider in the audience, Head of Investor Relations Blake Beber. Stephen, Blake, thanks for being here. Pleasure to be here. Thanks, Mike. Look forward to the discussion. So far, so good in the public markets for Beta Bionics. You're growing starts and revenue at accelerating rates, playing the game of beats and raises well. Few nits to pick. I think as you reflect on the plan that you laid out this year initially for yourself, what's driven the positive surprises on the execution front? Good question. I'm not in the least bit surprised that we're having commercial success. We knew that the design of the product, the algorithm, its core differentiation was better and different. The traction that we're seeing, the productivity we're seeing from our field sales force, not surprising at all. There are a few things that are going very well that I'll just highlight, one of which that I think has been exceeding my expectations, and I'll start there, and that's pharmacy reimbursement. As you guys, the audience probably knows, when we get the pump reimbursed in the pharmacy, we negate the upfront payment or we negate the upfront revenue that we otherwise would have recognized in the DME channel. We generate roughly $450 a month of recurring revenue. What it ends up doing for Beta Bionics in the medium and long term is it's more accretive financially for us. A huge advantage for us as a company, and it's just part of the reason why it was a big initiative. The reason that it actually, what it actually also does is it generates more new patient starts on the product than we otherwise would have gotten. The reason for that is that it's easier, dramatically easier for the doctor to prescribe the product, eliminates a lot of the paperwork. If you just write a pharmacy prescription versus a DME statement of medical necessity and the entire documentation process. For the patient, the out-of-pocket to start on the product is dramatically lower than in DME. Just reiterating what I said, the pharmacy reimbursement and that percentage that we're seeing of all of our new patients on the product that are getting reimbursed through that channel, that's exceeded my expectations, and that's led to more new patient starts than we otherwise would have had. That's one. We don't have a pharmacy or we don't have a type two indication on the product. I'm in no way selling the product for type 2. Again, it's not indicated for that. We would need to get the clearance. We did see a reasonably high percent. We have been seeing a reasonably high percentage of our new patient starts that are type 2. I think a part of that is driven by one of our competitors who's made a big investment in that area. Even though, again, we're not selling the product there, the fact that we've seen such an uplift in insulin pump adoption in the type 2 market, Beta Bionics has benefited from that. Good review. Before we dig into some of the weeds, just as you reflect on 2025, biggest challenge that was unexpected? It's just competitive. Now, are we winning and am I surprised we're winning? No, I'll just reiterate. The patch pump company that we compete with is a very tough competitor. A tubeless pump fully reimbursed in the pharmacy channel is certainly tough competition. Each one of these companies is fighting tooth and nail for the next new patient. I believe our pump is very well positioned to win, but it's a highly competitive environment. That's, I think, on balance, the biggest challenge. That's a good segue. Let's talk about why iLet can win. You just highlighted pharmacy. Let's stay on physician and patient and outcomes focus first, and then we can weave in economics. As I've tried to learn your story, I think ease of use resonates most. I think it's easier for patients to start and maintain. It's easier for doctors to maintain, limited requirements to tinker with settings. Now, one of the bigger picture nits is, hey, the algorithm can get you really good control, but not maybe as tight as you could with some of the higher touch products. As I continue to cover medtech and for those in the audience, no, I just had a moment in cardiology, like data matters, but to a point, at which point I think ease of use experience wins and differentiates. That to me is kind of like my story around iLet. It's easier, it gets you good control, it maybe doesn't get you the very best tippy top control, but that's the trade-off that a bunch of stakeholders are willing to make for that improvement and ease of use. I just spoke a lot there, trying to repackage that, which I'm trying to figure out about your story. What do you think of what I just said? Yeah, well said. I'll gently disagree that iLet’s clinical outcomes, you alluded to this briefly there. iLet’s clinical outcomes are as good or better than any other system on the market. We've proven that with the various illustrations that we've now published, showing what kind of starting A1Cs people have when they come to our product, and then what kind of results it's getting for patients regardless of what their blood glucose control was before they came to the iLet. I could share more on that, but we're confident that the iLet is as good or better clinically than any other system. I think a unique challenge that we have with our clinical outcomes or with the product's differentiation and the ease of use is that, and we market this, we train to this, so it's our problem that we live with and that we've addressed, is that when patients are living with the iLet and doctors are managing the iLet, there is nothing for them to do. Meaning if they have a period of sustained hyperglycemia that maybe doesn't make sense to them, or they have a hypoglycemic event, which can happen for countless reasons, including you eat and then you go for a walk. In any other pump system that's on the market, all the other traditional pumps, the user can blame the product, or sorry, they can blame themselves for why that occurred. They can make a tweak to maybe the behavior with which they, their behavior or a task that they're performing on that system. In the case of the iLet, it's perceived as the iLet’s fault. The reality is there's nothing, insulin sensitivity changes all the time based on various behaviors that people take on in their day-to-day. Avoiding hypo with only insulin is impossible. We have to communicate to the user, to the doctor, that they are seeing a dramatic reduction in the amount of hypers and hypos that they're experiencing relative to standard of care, relative to their prior therapy, and that that's just a part of their experience of living on the product. The ease of use has made their clinical outcomes dramatically better. It has made their lifestyle dramatically better. It's these isolated instances that people have where they may blame the system. That's our job to educate them that they need to be blood glucose aware. Ease of use is absolutely a winning argument. You're going to find, I think, all these companies, as they've already kind of stated, that automated delivery, learning-based algorithms, that is the future. We just decided to build a product for the future that we knew was coming, and we're going to stay ahead. You'll see that be the winning argument. I liked your other point. Moving on maybe to the other point, Mike. What's interesting about clinical outcomes is that, yes, they do matter. Absolutely. In order to win the attention of an HCP, in order to win the attention of many patients that are on a competitive pump system, you absolutely have to have a compelling clinical case. However, you aren't going to find very many people living with type 1 that are cruising around talking about 0.5 reduction in their A1C. Clinical outcomes, I totally agree with you, matter to an extent, but they are not the way that the world thinks about, like the people, the users of these products think about managing their diabetes. What they think about is how it fits into their life, how it makes their life better. That oftentimes doesn't just mean clinical outcome. Helpful. How about on the physician side? What's the profile of the best iLet prescribers today? What commonalities have you been able to identify? Geography, size, incumbent mix, scope or narrowness of practice? Because when you map the next physician targets to go in, I imagine you have some things that look more attractive to you than others. What does that look like to this point? Start with a little bit of a cliché answer. I think the perfect profile is someone, an altruistic doctor who wants their patients to get better, combined with a doctor who is interested and open to the idea of making their job easier. Embedded in that last statement is the real, what I believe is the real demographic that makes an iLet prescriber particularly successful, are the types that we target. It's the folks that are open to a new way of thinking about insulin pumping. If you've built your healthcare provider practice at a diabetes clinic around how well you manage the setup and adjustments of pump settings every quarter, and you have a team of certified diabetes educators that are very good at that particular process, and they've made careers out of doing that, that actually is a pretty tough habit to break, especially if they like doing that and if they see that as a prideful element of their job. Now, eventually, as you guys know, like any innovation, it takes a first mover and people do end up converting when there's a better and a bit different solution over time. The right type of provider demographic is someone who's open-minded to the idea of automation. That actually can run the gamut. That can be large centers or large systems. That can be standalone practices. That can even be primary care standalone practices that have a high predominance of type 1 or type 2 in their practice. It is really more the personality and where they fall on the sort of the innovator's dilemma curve of early adopter. That generally is who we're having the most success with. Interesting. Let's say you approach one of those accounts with differentiated setup and staff to support it. You make your pitch and it does not resonate. What is the follow-up there? All right. If they're just totally non-receptive to the iLet whatsoever, we'll continue to reiterate how it's doing in similar practices with data. It's a data, it's a nerd-level sale with these providers. It's not like a slick talking, look at this new whiz-bang technology. They want to actually see how it's doing with a practice that maybe appears similar to theirs. Let's just say, it's data-driven. Let's just say then we actually win the argument and they're willing to try it. They try it on a certain subset of their patients, maybe people that have an A1C of 8.5-9 who are on CGMs, just hypothetically. It's so that we're, and so they give us the chance. Now our job, and this is what we're very good at and we have state-of-the-art systems in place to do, is we have ways for us to capture all that data real-time and keep it at top of mind for the doctor, not just top of mind, but available for the doctor to see how all their patients are doing on the product, illustrating not only what their outcome is, but also what their starting point was. We do that by, they can access that information in their healthcare provider portal, but also the sales rep will come back and present that data in an easy-to-understand format. That becomes the offensive tool for us to get adoption in their whole practice. Honestly, that's the playbook. Good. Let's shift gears, a few numbers. I'll fish. We'll see what hits the line or not. I'm the numbers guy. I'm not a good fisherman. Okay. We attempt to frame U.S. starts. All of us try to do that. Medtronic's kind of a black box. When I look at Pod and Tandem and Beta in 2025, make some estimates about what happens in the fourth quarter. I'm going to have you give or take 15% of the MDI starts in 2025. What I want to ask is what do you see for share of wallet for accounts that have been open? This is their second full year and they opened last year. That 15% is reflective of the accounts, the prescribers you've opened and you're still investing in Salesforce and coverage. You don't have all the accounts open is the punchline. What I'm driving to is 15%. Do you like the number? Do you dislike the number measured the way I described? If you like the number, in the accounts you have open, where is share of wallet? I think you're a little high. I like 11% of all new patient starts in the U.S. I think that's roughly what we're winning. Here's those MDI specifically, but I think that would also track to around 11%. Our Salesforce is somewhere between half to a third of the size of competitors. So we're targeting, so said another way, we're targeting half to a third of all endocrinologists or all potential prescribers in the US. And so the adjusted size of our, the adjusted market share that we're winning of new patient starts, you can double or triple somewhere in that range. Understood. That's helpful. Are there any accounts where you think you have half of the wallet? Definitely. Okay. Let's then, because you're going to add heads next year. I think I've asked this question every time we've had a chance to catch up. 63 territories this year, last data point I have, that's up 20 year- on- year. Remind us, what's the long-term target? What's the base case business vision here? How many territories? I think it's 100, 120, but opportunity for you to set the record straight there. At what pattern? Is it, again, 20 a year or is this going so well that 2026 would be a maybe bigger year for that reason? I believe the right number of territories in the U.S. is around 120, maybe a little north of that. Reserving the right to change my mind on this. There may be new efficient ways to sell that come about before we get there. I do not want to comment on the cadence for how long it's going to take us to get there. In particular, I will not comment on how many we're going to add next year, even though I know that number, because it's just sort of an implied number in the guidance. We'll communicate guidance at the end of the Q4 and its call. Yep. Understood. How about, it is a competitive market? You called out competitive conversion. It starts from competitor conversions, also ticked higher, has ticked higher throughout the year. I think the question I want to ask here is, you said it's split in thirds across the three major competitors. I would say a little surprised to hear that as it relates to the patch competitor. What do you hear from patients? Most common one, two, or three reasons why they moved from patch to your currently durable pump product? At ADA this year, we released some data that showed what the starting A1C was of patients that came to the iLet that were from a competitive pump. The starting point for that number was 8.1. We were bringing patients to, I think it was 7.3, 7.3 or yeah, around 7.3, 7.2 maybe even. I could be a little right. It is between 7.4 and 7.2. The point is, we were showing a dramatic improvement. That is a very dramatic improvement. They were on a competitive pump before. What's notable about that is that the patch pump competitor you just mentioned has a higher starting point than the average. The reason that people switch to the iLet that are on the patch pump, from what we've seen, is they're not really meant for that system and it's not giving them the outcome they want, which probably means they're not engaging with it. In order to get a good outcome on a competitive system, our belief is that you have to put in a substantial amount of work. That means you actually have to count carbohydrates, give yourself correction boluses. You actually have to be seeing an endocrinologist that you're willing to go back and see to adjust settings appropriately. If you're someone who's unwilling to do any of those things or unable to do any of those things, and you're on the competitive patch system, you're a good fit for us. Good answer. Good segue to the patch story for you. Series of questions here. Timing comment, let's just start there. Targeting, and I want to get the words right, targeting commercialization by the end of calendar year 2027. That's correct. Bingo. Okay. That means you have to be doing a lot of work in 2026, I would think, in 2027. And so just. Right now. Right now, just describe that project roadmap. Obviously, there is regulatory, there is manufacturing, there is payer contracting. Just describe those work streams, what you are working on today, what might be 2026, what is 2027. Because it is going to, this is another question, is this commercial launch a big bang, you are ready to go and compete at scale or it starts and then phases? I want to get a temperature check on how much you are doing today to set yourself up for that launch to be big from day one. I'm going to be super careful what I say here. I'll be loose with, I'll share a few details, but generally, I'm not going to answer a lot of what you just asked, the project roadmap for laying out for between how you get between here and 2027. The next time you're really going to hear us comment on an update on this is when we have the clearance. Okay. A couple notable things though. We are making the patches today. The manufacturing for these devices is in Irvine, where we make the iLet and all the consumables for the iLet, or the single-use products for the iLet. The ones that we're demoing when we're meeting with the investors throughout the day today, those are all being made in Irvine at a fully functioning manufacturing line. When you say patch, the durable, the whole thing, you're making the durable and the disposable component? Yes. Okay. Yes. The patch was, I remember the day, it was December of 2023, roughly. In my office, Mike, our Chief Technology Officer, and Sean, our CEO, both engineers, knew for sure, Mike had just started, he's a long-time friend and one of the most brilliant people I've ever met. They had known that we were going to need to make a patch for the longest time. They architected it. They came up with the design. Sean had been wearing patch pumps. Our CEO had been wearing patch pumps for his whole life. He knew the design decisions that had been made with the incumbent and how it could be dramatically simplified, which is what Sean's made a career out of, is an intolerance for slow and radically simplify things that have the opportunity to be simplified. They designed it. They sketched it out. I think Sean drew it up in a loose version of it in CAD. They hired a few friends and people that we knew, mechanical engineers that have been around the industry. The project started in earnest in December of 2023. Every single day since then, the progress of the product has taken place 60 ft from Sean's desk and he's in every single standup. That's how this stuff, so the point is we've already been investing in it considerably. The R&D OpEx line is filled with patch pump costs historically. It will continue to see more. That is the secret as to what this product, how this product goes fast, is you have a company that has the ability to move at that pace with that type of lead from the front energy that no decision is made, no decision is belabored. It's just relentless effort and focus on speed. The other bit I'll share is that I think for an unconstrained commercial launch, which is what I would characterize by the end of 2027 date as, is an unconstrained commercial launch. In order for that to be true, you need some level of reimbursement. I think maybe there's not a belief, I don't want to necessarily assume that investors are believing that, "Oh, okay, you get clearance, you launch it. Well, now you got to go get reimbursement in pharmacy." That's not true. The reality is that a big benefit that we as Beta Bionics have is that we pioneered pharmacy reimbursement, as I communicated earlier in our discussion, for durable insulin pumps. We already have PBM agreements in place. We already have underlying plan agreements in place, meaning we have relationships with all these decision makers as a fully functioning market access team. We already are talking about mint with these relationships. This is a concept that we're looking to gain reimbursement or coverage for at the time that we launch at some level. Now, will it be at the level of our patch pump competitor? No, it won't be, not even close. We are not expecting like, "Okay, now we're ready to sell it. All you got to do is pay cash. No reimbursement. We'll get to that later." Not at all. That is another maybe important clarification. Other than that, I don't want to speak to anything, any other timelines. All fair. Patch would be pharmacy only or have you not? Patch will be pharmacy only. Yeah. So okay, no DME option. Right. Okay. Understood. That was great color about how that came to be. The decision that they made in that office 60 feet or that office once upon a time to be semi-durable, the number one reusable component and then the disposable component, the number one reason they made that choice in your view was ease of manufacturing or something else? The core design? Yes. No, actually ease of use was the entire reason for the design. For the patient. For the patient. Okay. I'll try to keep this brief. The ease of use of a two-part design, there's nothing about a two-part design that makes the user's process any more cumbersome than the current incumbent's product. It actually cuts out a few really important steps or it makes the product dramatically easier to use. There's just two notable ones I'll point out. One is there's no phone interaction. When you remove the disposable portion of the product, there's no batteries in it, so you don't need to recharge. Or sorry, when you remove the reusable portion of it, the durable, there's no batteries, no recharging. You set that aside and you fill up a disposable portion of insulin. You put the durable portion on the disposable and it repowers on the durable. Then you put it on your body. That's the extent of the steps for the change process. There's absolutely no phone interaction whatsoever. Whereas with the incumbent's product, there's a significant amount of phone interaction with unpairing and pairing a new device. That's one. Number two is, I don't want to shade the other product too much, but it is like a real challenge to have a firmware that lives on the pump that's disposable. Meaning if you launch a new CGM integration, if you have a new phone that gets released, which for example, the new iPhone, or you have a bug in your product, you have to change the next wave of patches that you make, fully disposable patches can contain the new firmware. The entire system of all the ones that are out there in the retail pharmacies, in the distribution centers, on people's shelves at home, all those are now on the old firmware and they can't be updated. It's a massive advantage to have firmware over-the-air upgrade, which is what having a two-part design allows you to do. You get the best in class, all the newest, latest, and greatest integrations, again, with say CGMs, with new hardware that you may need to pair with. That all happens just through an over-the-air automatic update. Big advantage. Very helpful. Last two minutes. Give you the floor. I thought the 483 mod update on the last was comprehensive, thorough. Thanks. Unconcerning after we digested all of the events there. Update us on remediation kind of and anything else you want to add here just to keep kind of concerns about this topic at a low level. I don't have much to add. I'm just going to reiterate things I said on the last earnings call. There's nothing new to add. The remediation is going great. It's not hard. Again, all that happened is that we had a difference in interpretation of what's considered a reportable complaint versus what's considered a non-reportable complaint. That's totally fine. FDA can make that call and they decided that they saw our interpretation differently or that they saw the interpretation of the rules differently. We take that seriously. We comply and the process is very straightforward. We send updates to the FDA every 45 days. No problem whatsoever. At some point, we'll stop sending updates because there's no more updates to send. Very straightforward. 483s are very, very common when you have an inspection. It's not like a label that you have to get removed. It's just an observation. The reason we felt like we chose to just talk about it on the earnings call was because there was a lot of noisiness out there about what's going on in the MAUDE database. For a group of people like investors that only have so much information to glean off of, I can understand why there's a reaction to that. We felt it would be best to just clear the air. Frankly, we were comfortable talking about it. There's not a question on that particular matter that I'm uncomfortable sharing. The catch-up reporting to mod, you highlighted expect catch-up, I think October, November, higher. By the end of this calendar year, you think you'll have done all that or what's upcoming? No, the remediation of approximately 34,000 cases that we have to go back and review, that will take us from November through June of 2026. Okay. You'll see us, the definition that we had of a reportable complaint changed in July. That made an uptick in the reportable complaints that you see in MAUDE. You're going to see even a more substantial uptick in the reportable complaints because there's a remediation effort between November and June. Then it'll be done. We'll get to the summer next year and you're caught up. Yeah. Okay. Yeah. Understood. Good. We're out of time, Stephen. Thank you for this call. Mike, good questions. Thanks everybody for listening. Thanks for being here.