Good afternoon, and welcome to the Beta Bionics Third Quarter 2025 Earnings Conference Call. As a reminder, today's conference is being recorded. I would now like to hand the conference over to Blake Beber, Head of Investor Relations. Please go ahead.

Good afternoon, and thank you for tuning in to Beta Bionics Third Quarter 2025 Earnings Call. Joining me for today's call are Chief Executive Officer, Sean Saint; and Chief Financial Officer, Stephen Feider. Both the replay of this call and the press release discussing our third quarter 2025 results will be available on the Investor Relations section of our website. The replay will be available for approximately 1 year following the conclusion of this call. Information recorded on this call speaks only as of today, October 28, 2025. Therefore, if you are listening to any replay, any time-sensitive information may no longer be accurate. Also on our website is our supplemental third quarter 2025 earnings presentation and updated corporate presentation. We encourage you to refer to those documents for a summary of key metrics and business updates. Before we begin, we would like to remind you that today's discussion will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect management's expectations about future events, our product pipeline, development timelines, financial performance and operating plans. Please refer to the cautionary statements in the press release we issued earlier today as well as our SEC filings, including our Form 10-Q filed today for a detailed explanation of the inherent limitations of such forward-looking statements. These documents contain and identify important factors that may cause actual results to differ materially from current expectations expressed or implied by our forward-looking statements. Please note that the forward-looking statements made during this call speak only as of today's date, and we undertake no obligation to update them to reflect subsequent events or circumstances, except to the extent required by law. Today's discussion will also include references to non-GAAP financial measures with respect to our performance, namely adjusted EBITDA. Non-GAAP financial measures are provided to give our investors information that we believe is indicative of our core operating performance and reflects our ongoing business operations. We believe these non-GAAP financial measures facilitate better comparisons of operating results across reporting periods. Any non-GAAP information presented should not be considered as a substitution independently or superior to results prepared in accordance with GAAP. Please refer to our earnings press release and supplemental earnings presentation on the Investor Relations section of our website for a reconciliation of non-GAAP measures to their most directly comparable GAAP financial measure. With that, I'd now like to turn the call over to Sean.

Thanks, Blake. Good afternoon, everyone, and thank you for joining. We're proud to share with you all today the details of our strong performance in the third quarter as well as discuss our updated annual projections for the full year 2025. Starting with our performance in the third quarter, we continue to make key advances across our business, both commercially and in our innovation pipeline. Demand for the iLet, both in existing practices as well as new practices continues to exceed our expectations. And in the third quarter, we saw a record number of both new patient starts as well as the percentage of those new patient starts going through the pharmacy channel. The iLet automation and adaptation continue to set a new standard for our industry, simplifying and alleviating the burden of managing diabetes for our users, their caregivers and their health care providers. But we're not stopping there. And we're continuing to push the envelope on key innovations to our pipeline that I believe will enable Beta Bionics to disrupt ourselves in the future and deliver even more life-changing solutions to people with diabetes and the community that supports them. During today's call, I'll begin by covering our Q3 results, which exceeded our expectations across the board. Stephen will then discuss our Q3 performance and updated full year 2025 guidance in more detail. Lastly, I'll share some exciting updates across our innovation pipeline, including iLet and some new features we recently rolled out; Mint, which is our patch pump in development; and lastly, our bihormonal system in development. Let's begin with an overview of our Q3 2025 performance. I'm pleased to share that we delivered $27.3 million in net sales, which grew 63% year-over-year. Q3 revenue growth was predominantly driven by 5,334 new patient starts in the quarter, which grew 68% year-over-year as well as our growing installed base of users accessing their monthly supplies for iLet through the pharmacy channel. In Q3, a low 30s percentage of our new patient starts were reimbursed through the pharmacy channel, which is significantly higher than the high single-digit percentage we saw in Q3 of the prior year and increasing sequentially compared to the high 20s percentage we saw in Q2 of this year. As of the end of Q3, Beta Bionics has greater than 80% of insured lives in the U.S. covered under formulary agreements with pharmacy benefit managers, or PBMs, including all the major PBMs that operate in the U.S. However, patients covered under those formulary agreements do not yet benefit from the pharmacy channel until the health plans that partner with those PBMs adopt the iLet for reimbursement under their pharmacy benefit. Which is why the over 80% of covered lives under PBM agreements differs from the low 30s percent of our new patient starts that actually benefited from accessing iLet and its consumables through the pharmacy channel during the quarter. Driving adoption of the iLet as a pharmacy benefit at the health plan level remains a core focus of ours, and that is why we share the percentage of new patient starts going through the pharmacy as the right KPI to use to measure our progress in that channel, not just the PBM covered lives percentage, which does not account for pull-through at the health plan level. Shifting now to gross margin. Our gross margin in the quarter was 55.5%, up 212 basis points compared to 53.4% in Q3 of 2024 and up 167 basis points sequentially relative to 53.8% in Q2 of this year. Last quarter, we guided towards sequential gross margin expansion in Q3 of this year relative to the prior quarter, citing benefits of increased scale and manufacturing volume leverage, greater contribution of high-margin revenue from our growing pharmacy installed base and continued cost discipline. We delivered in all those areas in Q3 and expect that each of those factors will continue to provide a tailwind to gross margin in Q4, as Stephen will discuss in more detail shortly. Looking ahead, I'm confident in the direction this business is headed in. The iLet's highly differentiated, fully adaptive closed-loop algorithm is producing phenomenal real-world outcomes, and those outcomes are resonating with users, caregivers, providers and payers. We're expanding availability for the iLet in the pharmacy channel, enabling more people with diabetes to access insulin pump therapy with minimal to no upfront out-of-pocket costs. The 20 new territories we onboarded toward the end of Q1 of this year have hit the ground running, and they're validating our strategy to remain disciplined and highly selective in our sales force hiring as we look forward. With that, I'll hand the call over to Stephen to provide some additional color on our third quarter performance and full year 2025 guidance and later wrap up the call with some important updates on our pipeline. Stephen?

Thanks, Sean. Approximately 70% of our 5,334 new patient starts in Q3 came from people with diabetes that used multiple daily injections prior to starting the iLet, which is an important representation of how much the iLet is expanding the market for insulin pumps and addressing an unmet need. We believe the iLet is a game changer given its unique simplicity and ease of use, powered by the most advanced adaptive algorithm available. Given its simplicity, we're able to reach a broader group of patients and providers that were previously inaccessible to existing automated insulin delivery players, and we're seeing that in our results. Turning to gross margin. The improvements we saw in our Q3 gross margin relative to the prior year and the prior quarter are driven by 2 primary factors: number one, growth in the pharmacy installed base, which generates high-margin recurring revenue and where we continue to see strong patient retention; and number two, lower cost per unit from higher manufacturing volumes, driven by growth in patient demand. Shifting to operating expenses. Total operating expenses in the third quarter were $32.2 million, an increase of 62% compared to $19.9 million in the third quarter of 2024. The increase in sales and marketing expenses relative to the prior year is driven by expansion of our field sales team, which still stands at 63 sales territories exiting Q3. The increase in R&D expenses relative to the prior year is driven by the Mint and bihormonal programs. The increase in G&A expenses relative to the prior year is driven by new costs related to operating as a public company. Let's discuss cash. As of September 30, 2025, we have approximately $274 million in cash, cash equivalents and short- and long-term investments. We are sufficiently capitalized to fund all of our key initiatives and positioned to begin generating free cash flow well ahead of historical diabetes peers. Turning to our updated full year 2025 guidance. We are raising guidance across the board. We project total revenue for the full year of 2025 will be greater than $96.5 million, up from our prior guidance of $88 million to $93 million. This means we project sales of at least $28.5 million in Q4 2025. For the full year 2025, we now expect 27% to 29% of our new patient starts to be reimbursed through the pharmacy channel versus our prior guidance of 25% to 28%. This implies that we project our pharmacy mix as a percentage of new patient starts in Q4 to be similar to the mix we saw in Q3. I want to point out a couple of factors that could create variability to the upside or downside in our pharmacy mix of new patient starts in Q4. On one hand, we continue to drive more adoption of the iLet under the pharmacy benefit at the health plan level, which pushes pharmacy mix higher. On the other hand, new patient starts in the DME channel tend to be strong in Q4 because many people have hit their out-of-pocket maximum and can receive their pump and supplies at no cost until year-end. Taking those dynamics together, we expect Q4 pharmacy mix as a percentage of new patient starts to be similar to Q3 but recognize there is potential for that mix to trend higher or lower based on those dynamics. Moving on to gross margin. We are raising our outlook to 54% to 55% gross margin for the full year 2025 versus our prior guidance of 52% to 55%. This means we project Q4 gross margin to be in line with or improve slightly relative to Q3. We are increasing guidance at the low end and midpoint of the range for a couple of reasons. Number one, embedded in our revenue guidance raise and pharmacy mix guidance raise is a raise in our expectations for new patient starts, and that increased scale should generate a lower per unit cost through manufacturing volume leverage. And number two, we expect to benefit from our growing pharmacy installed base, where the large number of new pharmacy users year-to-date, combined with the strong retention of those users, produces high margin recurring revenue in Q4 and beyond. We continue to contemplate the impact of existing and potential tariffs in our full year gross margin guidance. We are aware of recent initiatives focused on reevaluating the application of tariffs in our industry and do not have a reason at this time to believe that duty-free exemptions from custom components of the iLet and its consumables are in any jeopardy. With that, I'll hand the call back to Sean to discuss updates on our innovation pipeline. Sean?

Thanks, Stephen. As I've stated before, our goal with our pipeline programs is to disrupt the industry and disrupt ourselves. Let's start with an update on Mint, our patch pump in development. We've spoken at length in the past about the key advantages of Mint's 2-piece design architecture, where we believe we've chosen a design that creates an advantaged user experience relative to other patch pumps currently on the market and in development. Our design choices spanning from a patch change experience that doesn't require phone interaction to eliminating the need for recharging and to enabling firmware over-the-air updates are all in service of user experience. Add those advantages to our industry-leading algorithm, which has been shown to produce excellent clinical outcomes independent of user engagement, and we believe that Mint will be a true game changer when it commercializes. In Q3, we continued to execute according to plan on our Mint timelines and remain highly confident in our ability to gain 510(k) clearance for the product as well as manufactured at scale. Our goal remains to commercialize Mint with an unconstrained commercial launch by the end of 2027, meaning we expect to be able to fully support demand for the product by that time. Shifting to our bihormonal pump program. In September, we completed our pharmacokinetic, pharmacodynamic or PK/PD bridging trial for our glucagon asset. Full results from that trial are in line with our expectations, and we believe such results are supportive of the continued development of our glucagon asset for use in our bihormonal system and development. In Q4 of this year, we expect to initiate a feasibility trial of our biohormonal system to test it in humans for the first time with our glucagon asset before progressing the asset to any larger scale studies. As a reminder, the PK/PD study was the first-in-human trial for our glucagon asset, but the biohormonal system also includes our bihormonal pump and algorithm for insulin and glucagon dosing, and we're yet to test that system using our glucagon asset in humans such that we believe the best strategy is to run at least one biohormonal system feasibility trial before progressing to pivotal trials. There is no change to our expectations that we'll conduct concurrent pivotal trials to fulfill the requirements for a 505(b)(2) NDA with a chronic drug indication for glucagon and the ACE and IAGC 510(k)s for the pump and algorithm, respectively. We continue to be extremely excited by the biohormonal system's ability to transform clinical outcomes for people with diabetes, but more importantly, the ability to transform the way people experience their diabetes and shift their mindset from diabetes being a disease that they manage to simply a disease that they have. To highlight another recent win in our pipeline, on September 29, we received a special 510(k) clearance for certain feature updates for the iLet. These updates focused on improving the usability of the pump. We introduced an improved workflow for the cartridge change process to make it more seamless for the user and eliminated redundant low glucose alerts to ensure our users are focusing on the alerts that matter most, while reducing alert fatigue. These updates are illustrative of both the intent we have in listening to feedback from our users as well as the speed with which we operate in an effort to ensure our users' needs are consistently met every day. There's one more update that I'd like to discuss on the regulatory front. In late June, the FDA issued a Form 483 following an inspection. The Form 483 is primarily related to our customer complaint handling system and our criteria for reporting complaints to the FDA, which are ultimately reflected in the FDA's Manufacturer and User Facility Device Experience database, also known as the MAUDE database. The result of the FDA's inspection is not unusual in our industry as numerous precedents the agency has set for our peers at similar stages would suggest. We believe that in those instances, Beta Bionics and our peers likely develop similar definitions for what constitutes a reportable complaint prior to the FDA's feedback. And each company has successfully taken the steps required to align reporting with the FDA standards. We are no different, and our remediation efforts to the Form 483 are straightforward and well underway. Regarding the change to the criteria for reporting complaints to the FDA, we revised our definition of what complaints are reportable to better align with the broader industry standards. Our revised standard operating procedure for reportable complaints took effect in late July, which resulted in a notable increase in reportable complaints in August and September. To cite some examples of how our definition of reportable complaints has changed, prior to the 483, we were not reporting complaints such as the device screen cracking or a hypo or hypoglycemic event that did not require medical intervention. We now report these types of complaints to the FDA given they could result in an adverse event if ignored. I want to make something abundantly clear. While the number of complaints we have reported to the FDA increased, most notably in August and September after the new system went live, this is not the result of a change to the underlying complaint or adverse event rate relative to our installed base. In terms of what to expect going forward, since we received the Form 483 in June, we've submitted monthly progress reports to the agency. We're confident that our new complaint handling system and reporting system meets or exceeds the expectations laid out by the agency in their Form 43 observations. As part of this process, we will be applying the new reporting criteria to all historical complaints we have received since the iLet launched. That remedial filing process started very recently. As such, we expect to see the number of MAUDE entries relative to our installed base increase considerably from October to November and remain elevated until we have completed the remediation process as both current and historical complaints will layer on top of each other. We expect to complete the remediation process by the end of Q2 2026, at which time the number of MAUDE entries relative to our installed base will fall as historical reports are no longer being submitted. Shifting to the topic of type 2 diabetes. In Q3, we continued to see some health care providers prescribe iLet to their type 2 diabetes patients off label. We estimate that over 25% of our new patient starts in Q3 were from type 2, which is consistent with the prior quarter. While we're not committing to a specific timeline, we remain eager to pursue the type 2 diabetes label to the FDA. To conclude the prepared remarks portion of today's call, I want to highlight the key points that we hope you take away from our discussion. Number one, iLet's differentiation is resonating wider and deeper in the market. Number two, our commercial strategy is working, and we're continuing to execute relentlessly toward the goal of making iLet the new standard of care. Lastly, we're aiming to build the most innovative pipeline in the industry with the goal of disrupting the industry and ourselves, and we continue to make progress on each key pipeline initiative every day. This is a business that we believe is set up for sustainable success over the near, medium and long term, and we're excited to continue sharing updates with you all as we continue to execute. With that, thank you all for tuning in, and we'll now open the call for Q&A.

Our first question comes from Mike Kratky with Leerink Partners.

The fact that you're creeping up on $100 million in revenue for the year and at a much higher rate of pharmacy mix than we've been expecting is super impressive. So, congrats on the ongoing execution. Just to that point, can you share some additional color on what's driving that momentum you're seeing? What factors really seem to be contributing to that demand? And can you talk about the cadence of new starts throughout the third quarter, specifically that's shaping your assumptions on the fourth quarter?

Thank you, Mike, for that. In terms of what is driving the quarter, I believe it is largely consistent with the factors that have contributed to our success so far. We consider the iLet as a new category of device, and it requires a shift in thinking. This launch is not just another insulin pump but a different approach that takes time to gain acceptance. We expect to see increased adoption as people become more familiar with it over time, and we’ve noticed that trend continuing. However, I don't think there was any specific initiative in Q3 that notably influenced the quarter. Stephen, could you elaborate on this further?

Yes. Cadence in demand, I'll just address that briefly. It was generally consistent across the entire quarter. So, nothing really to read into in terms of timing of demand and where it was relative to the upcoming quarter.

Understood. And maybe just one quick follow-up. In terms of things that are out of your control, how does the government shutdown impact your assumptions on the timing for the Mint launch, if at all?

I would say it doesn't currently have an impact on our expectations for timing. We reiterated those earlier in the call. Yes, I'll leave it at that.

Our next question comes from David Roman with Goldman Sachs.

Maybe I'll just start with a further question on kind of what you're seeing in the underlying market dynamics. You talked about the 70% of patients coming from MDI converts. Can you maybe give us a flavor on the remaining 30% of the patients, whether that's coming from conversions of patients who are coming up for renewal. It looks to be a big bolus of renewal patients coming to market. Is that conversions from different pump therapy? Maybe just help us understand the balance of the growth drivers there and how you see that unfolding through the rest of '25 and into '26.

Yes, thanks, David. This is Stephen here. Regarding the remaining 30% from competitive pump systems, it's approximately evenly split among our three main competitors. Looking ahead, our demand has consistently been divided with 70% from injections and 30% from competitive pumps over the last four to eight quarters. We do not foresee any changes in this trend. The market for insulin pumps, for both type 1 and type 2 diabetes, is still significantly underrepresented. I want to emphasize those percentages. Therefore, there remains a substantial opportunity for a company like ours with a new and differentiated system, and I expect that most of our demand will continue to come from MDI.

That's very helpful. I appreciate you reiterating the timelines for the Mint full commercialization by the end of 2027. Could you remind us of the different steps that need to occur before that? For instance, have you completed human factor testing? Also, what updates will you be able to provide us along the way?

Yes. I don't think we're going to provide any additional information on where we are at the moment. I mean, we would reiterate that generically, the 3 main steps that we need to look for here are 510(k) clearance followed by manufacturing readiness followed by launch. We've talked about those in the past. But I don't want to get into the details of exactly where our internal program is, less people read more or less into them than they deserve. So, for the moment, we'll reiterate our timelines, and we reserve the right, of course, at all times to update you as we know more.

Our next question comes from Matt O'Brien with Piper Sandler.

Can you hear me okay? I've had some technical issues.

Loud and clear. You got it, Matt?

All right. Great. I appreciate the questions. Maybe just starting with those 20 new territories that you added in Q1. Maybe if you can just tease out the impact that those 20 territories are having here in Q3 because you don't typically see such a meaningful step-up here in the third quarter versus Q4 based on seasonality. So just maybe talk about how those reps are ramping and then kind of what's left for that group and that cohort as we think about maybe the next 18 months?

The new territories that we added at the beginning of the year are definitely maturing and becoming more productive, and overall, the sales force is also improving. If you look at the growth in new patient starts from Q2 to Q3, we experienced an 8% increase. This growth is largely due to the 20 new territories we added, but the iLet product is still relatively new in nearly every territory across the country. As a result, we are seeing an increase in both new store sales and same-store sales nationwide.

Okay. I wanted to ask more about Mint and the 483 issue, as it's new information. Can you explain the seriousness of the 483 and your remediation efforts? It seems like you're already on track. Please frame the 483 in terms of its seriousness and your ability to respond quickly.

Yes. Great question, Matt. I mean, it's tough to put a qualifier on something like that. I mean, obviously, the FDA issues Form 483 when they find something to be important. But I think with the Form 483 as long as you're aggressive with dealing with the problem and you don't have a big problem, and we've certainly been that. We're very far along in our remediation efforts. New systems are fully in place at this time. And what we're seeing now, as we stated on the prepared remarks, is just the implementation of those systems and sort of remediating past complaints. But the new systems are in place at this time. And no, we don't foresee any ongoing challenges at all. Stephen, do you got anything to add to that?

Sure. I think the interpretation of the rules regarding reportable and nonreportable complaints allows for a lot of flexibility. Before the FDA observation, we had a confident interpretation of the rules that we stood by. However, the FDA disagreed with our interpretation during their observation, which is acceptable. They requested that we adjust our approach to align with their new definition, and we complied. To us, this is not a major issue as long as we follow through on our commitments. We wanted to bring this up to ensure transparency, as there may be some misinformation about the recent increase in reportable complaints in the MAUDE database. We don’t see this as a problem, and it's typical for us to address concerns directly. That is why we mentioned it today.

Our next question comes from Travis Steed with Bank of America Securities.

This is Stephanie Piazzola on for Travis. Congrats on a good quarter. Maybe just wanted to follow-up again on the increased complaints being reported. Maybe you can just elaborate more on the real-world performance and feedback and retention that you're seeing despite some of the complaints received. And if you could clarify, it sounds like you've made good progress on the remediation already, but some things will continue through Q2 of next year, if I heard that right. So maybe you can just clarify what's going to be outstanding through then.

Yes, first of all, I wouldn't read too much into the term complaint in this instance. The insulin pump industry experiences a significant number of complaints across all companies, which can be surprising. This is primarily due to a broad definition where any issue a customer reports about the product is considered a complaint, which is acceptable under the established guidelines. However, I want to make it clear that I don't believe there are any significant issues with our product. I wouldn't put too much emphasis on it. Regarding the second part of your question, I believe it has been addressed, but I seem to have overlooked the latter part of your inquiry.

It was just that you mentioned you made good progress on the remediation efforts that continue through next year. So...

Yes, I can provide more details on that. Essentially, we have been reviewing all the calls we've received over time. Each call requires us to determine if it should be classified as a reportable complaint to the agency. Currently, we are going back through all those calls and identifying the ones that now meet the new criteria for reportable events, even if they didn’t qualify before. Does that clarify things?

Yes. Got it.

And we'll be done with that process by Q2 of next year.

Okay. Understood.

Again, the systems are now in place. Everything is working as it should at this point. We just have to go back and do all that catch-up work. That's all.

Okay. Got it. And then you talked about some of the positive growth drivers that you have this year and are going to continue into Q4. Maybe just thinking a little bit ahead to next year, how we can think about some of those continuing and then any headwinds that we should keep in mind for next year as well?

I'll start with that one, and then Stephen can add anything he may want to. The primary growth driver that I mentioned is the increasing understanding of what iLet is. When you examine the adoption data from health care providers, it often takes several years. We anticipate this positive momentum will persist as more individuals grasp the benefits of iLet and as we create more real-world evidence demonstrating its effectiveness in practical settings. Additionally, another positive factor is pharmacy adoption, which enhances the ease of integrating iLet and prescribing it. We believe that the expansion in pharmacy adoption will continue into next year as well.

And this year, thank you for the compliment, Stephanie, on the results. We're definitely happy with them.

Yes.

The uptake that we've seen in pharmacy this particular year, meaning now in the low 30s percentage of our new patient starts, it's way exceeded even our internal expectations. And what it's really doing for next year's financials that's great is that we're retaining those patients at a very, very high level. And because of that, it's high-margin recurring revenue now that we have in this pharmacy installed base, which is the design of the whole program, and that's the intention of the whole program to move to a subscription-like revenue stream. And you're going to see that in our financials, and you've already been seeing that in even like the gross margin profile that we now, again, have this high-margin revenue that we've generated from our growing pharmacy installed base.

Our next question comes from Michael Polark with Wolfe Research.

First topic for me was the 510(k) clearances you mentioned, a different cartridge change process and elimination of redundant low glucose alerts. I guess I'd just be curious the cartridge change process, what improved? How was it before? How is it now? And what kind of was the root cause, if you will, of too many low glucose alerts. Is that a software fix or another change?

Yes. Regarding the cartridge change process, there are minor improvements in the user experience, including different screens and similar details. While these changes may not be significant, we believe they are impactful. However, I want to highlight the low glucose alerts. With an insulin pump system, you receive various alerts for low glucose levels, including urgent low, low, and very low. These alerts can accumulate, requiring you to dismiss each one individually, or you can focus on the most critical alert. It doesn’t make sense to clear multiple alerts that all indicate the same issue, which is frustrating. Does that make sense?

Yes, understood. The other one is just maybe kind of a look into '26 as well, a reminder on what's a good way to think about sales force expansion as you roll into next year? Any soft circle for number of territories that you would hope to add?

Yes, of course. Good question, Mike. Yes, of course, we have our internal expectation of how many new sales territories we're going to expand and win next year, but I'm not going to talk about a forecast for 2026 that gives any indication as to what our revenue is going to look like. So unfortunately, I'm not going to share that number.

Our next question comes from Frank Takkinen with Lake Street Capital Markets.

On a really, really solid quarter. Just a curiosity question versus my model, and I could be unique in how I modeled it this quarter, but it feels like the bigger portion of outperformance, you outperformed on both my DME and PBM expectations. A bigger portion for me was related to DME. Was this just a modeling discrepancy on my side? Or was DME maybe a little bit stronger than you anticipated? Any specifics on maybe where the pumps are placed, which geographies you maybe didn't have health plans set up or anything to kind of call out that maybe drove that DME being a little stronger than my expectations?

Yes, good question, Frank. The strong performance in DME was mainly due to new patient starts surpassing expectations, along with some positive stocking dynamics in Q3 compared to Q2. This resulted in an increase in DME revenue for Q3. Additionally, although you didn't mention it, there was a negative impact on pharmacy supply kit revenue due to unfavorable stocking dynamics in Q3 versus Q2. Specifically for DME, customers ended Q3 with more inventory than they had in Q2, leading to a favorable stocking dynamic.

Got it. Okay. That's helpful. And then maybe on the bihormonal timeline? I know you guys are talking about the feasibility study, but how should we maybe think about when you guys might formalize a cleaner timeline kind of similar to how you've talked about patch end of 2027. Will you do that with the bihormonal pump in the near future? How should we think about that?

We understand your interest in a timeline for the bihormonal product. While we have internal expectations, we're unable to share specifics at this moment. The complexity of aligning both CDRH and Cedar on the requirements for a pivotal clinical trial contributes to this uncertainty, along with our transition into a drug company. It would be premature to provide a timeline now because things may evolve as we gain insights and align with the agency. Rest assured, we are focused on bringing the product to market as quickly as possible. We will inform you about the timelines once we are in a better position to do so. Meanwhile, we are making progress, including completing the PK/PD studies and preparing to implement the new feasibility trial, which we are excited about.

Our next question comes from Jeff Johnson with Baird.

So Sean, regarding the bihormonal question, even if you can't provide a timeline, could you remind us that we are familiar with 510(k) pathways in the diabetes space? We know about the typical 6-month review processes and that these usually involve 13- to 26-week trials. Once you start a pivotal trial, how long would it run for a bihormonal approach on a per patient basis? I realize it takes time to enroll the first and last patients, but I’m more interested in how long the study would last for each patient. Also, how should we think about the review timeline once you have the data and submit it to the agencies? How long could the review process take?

Yes. Great question, Jeff. The ICH guidelines require that for a chronic drug indication, we need a year's worth of data on an individual patient. So, in response to your point about enrollment and other factors, the trial will run for at least a year involving multiple patients. We also need to consider the timelines for enrollment, the review of that data, early interactions with the agency, and then the actual NDA submission, which I believe will take about a year.

Jeff wanted to add that once the pivotal studies are complete, it can take the FDA up to a year to evaluate the data and respond to the submission, just to put a final bow on your question.

One year on that, too, yes. Okay. That helps. And not a pharma guy, so never as strong there. But also then, Stephen, maybe can you just maybe quantify for us the stocking headwind in pharmacy and the stocking tailwind in DME at all and how much of that was on supply side? Just as we look at the supply revenue this quarter on a per patient basis in the pharmacy channel, it came down about 10%, 12% or so sequentially, and we keep trying to wrestle with how much of that is attrition versus stocking dynamics and all that. So, just maybe help us quantify, especially in the pharmacy channel, maybe what that stocking headwind was in the quarter?

Yes, I have two parts to my answer. First, I won't specify the exact dollar amount of the stocking impact between DME and pharmacy, but they essentially offset each other nearly dollar for dollar this quarter. This means there's a net neutral stocking impact, with a favorable outcome in DME and an unfavorable one in pharmacy. Regarding your question about attrition and retention, while I won't disclose our retention or attrition rates, I acknowledge that we receive consistent inquiries about this. The reason for this is clear: other companies in the industry also do not share such rates. I want to highlight a specific metric that could help clarify any concerns you may have. Focus on the number of pharmacy supply kits per patient per quarter. To calculate this, take the pharmacy supply revenue for the quarter, divide it by the price of each pharmacy supply kit (approximately $450), and then divide that by your estimate of the pharmacy installed base. If you apply this metric to this quarter and recent quarters, you'll find that it is well over 3, regardless of the attrition or retention assumptions you adopt in your model, even if you set the attrition rate very low. This indicates that since a patient typically uses only one pharmacy supply kit per month, equating to three per quarter, having a figure above 3 suggests that there is no retention or attrition issue affecting the business. I hope this information is useful, but again, I won't go into specifics on attrition and retention numbers for reasons we've previously discussed.

Yes. No, that math is helpful. That's exactly how we run it in our model. I guess it's just we're trying to understand the 40% decline we've seen in per patient per pharmacy over the last 2.5 quarters.

I think it’s important to note that there will be significant variations in that metric from quarter to quarter. This quarter you observed a decline, but there have also been increases in the same metric when looking at trends over time. This highlights the fluctuations in pharmacy stocking, which significantly affects our quarterly revenue. The main reason for such variability is the dramatic shift in our pharmacy demand. We’ve moved from guidance in the low teens or low double-digit percentages to now being in the low 30s. As a result, pharmacy customers are unsure how much to order to meet the demand, contributing to the large fluctuations you are seeing.

Our next question comes from Richard Newitter with Truist Securities.

Congratulations on the quarter. Regarding the pharmacy channel and the current percentage, you are clearly surpassing expectations, including our model and the consensus. It seems like you are on track to achieve a percentage in the low 30s as you exit. Could you clarify where this percentage could reasonably go? What is the threshold we should consider before you potentially move to a commercial model with a patch? Is it possible for this to reach 50% by the end of 2026? What are the boundaries we should take into account as we refine our models, given that you are clearly exceeding our previous projections?

Yes. I appreciate the question. Frankly, the frustrating answer for us and you is that we don't know. We're doing something nobody has ever done before, and that's push a durable pump through the pharmacy channel. To your point, we've exceeded our own expectations on what we can do there. We hope that those exceedances continue and that we can get even farther than even we think we can. But it's very hard for us to make a prediction on that, and I don't think we're frankly in any better position to do it than anybody else. We're just forced with going out and actually doing the work. So, I'm sorry, we can't make that prediction. But what I will tell you is that we'll try and make that number as high as we absolutely can.

Okay. Fair enough. Regarding the type 2 indication, Sean, you've previously mentioned that it's not preventing you from increasing that percentage. It was a bit flat this quarter. I'm curious about anything you might be observing. There are several competitors with an official indication and data available. You indicated that you're not ready to detail the strategy and timing for securing an indication. However, could you share your thoughts on that and what options you are considering?

Yes. First, I wouldn't consider it flat. The percentage remained the same, and our base of new patient starts has grown. I don't believe it's advantageous for Beta Bionics to significantly increase that percentage, whether it's around 30% or roughly 25%. We need to focus on increasing our total new patient starts, and as you mentioned, we're not actively selling it right now. It is what it is in terms of percentages, and that's acceptable. There are other factors that influence our decision to invest and the timing of that decision, which I can't discuss at this moment due to connections with our internal product pipeline. However, I would say we are performing as well as anyone in that channel, despite not having an official indication. I'll leave it at that.

Our next question comes from Jon Block with Stifel.

Anything to call out regarding just the competitive landscape? There's really been a good amount of focus there with the new entrant, but your competitive wins as a percent of adds actually ticked up a bit Q-over-Q and obviously had a huge growth rate if we look at it year-over-year. So just any color you can provide there with the landscape may be changing or maybe not?

Jeff, yes, I appreciate the question. Short answer is no. It is a highly competitive industry. It's competitive not only just for recruiting the right type of sales reps, but every account has a lot of different sales reps that are trying to sell and get the attention of the HCP at that given account. But we're confident in what we have. We have a highly differentiated product, the easiest system on the market, we believe, to use for doctors, for patients, a compelling solution with the pharmacy reimbursement. And so, I don't see the market or the competitive landscape as meaningfully different than it was semi recently, and we feel confident.

Okay. Stephen….

Sorry, that was Jon, my bad.

All good. All good. Stephen, maybe I'll stick with you. I'm struggling with the guidance from gross margins in a good way. And I know you gave some reasons that you sort of said, hey, it implies flattish to slightly up GMs Q-over-Q for 4Q. But your pharmacy mix is largely consistent with the assumption is with 3Q. And we've seen a lot of scale, right, throughout 2025 when you just look at your sequential gross margin improvement despite pharmacy ramping as an overall percentage. So, can you just tell me why like that improving scale dynamic wouldn't resonate as much if you would in 4Q '25? Or is this maybe just leaving a little bit of wiggle room considering you really don't know the percentage DME versus pharmacy because of the deductible metric you brought up earlier?

On the high end of the range, the gross margin guidance for Q4 aligns with the expected revenue increase for that quarter. The growth in scale and its impact on gross margin is consistent with the revenue rise from the previous quarter. However, at the low end of the range, it might seem surprising that we're guiding lower. This is mainly due to unpredictability in the pharmacy reimbursement channel. There is a possibility that in Q4, we may exceed our expectations in pharmacy, which could lead to new patient starts and create a short-term challenge for revenue and gross margin. Additionally, with cost of sales, we prefer to set expectations where we have a high level of confidence. There can sometimes be unexpected factors that lead to one-time charges. While I’m not indicating that I foresee any of these in Q4, it’s a possibility. Therefore, we prefer to be cautious with significant increases in gross margin guidance.

Our next question comes from Jeffrey Cohen with Ladenburg Thalmann & Company.

Congrats on a strong quarter. Just one for us. If you could maybe talk about your special 510(k). Was this software only and was uploaded to all the units out there? And does that help or would that help in Mint development? Or are some of those updates being embedded into Mint now?

Yes, it's a software upgrade. All our users can download and use it, and we always encourage them to access the latest version. Some aspects of the upgrades are related to Mint, while others, like how we handle alarms and alerts, will definitely be seen in Mint. However, the cartridge change process doesn't relate to Mint at all. So it's a mix. At Beta Bionics, we prioritize user innovation and experience, and we'll incorporate any relevant user experience improvements into Mint.

Our next question comes from David Roman with Goldman Sachs.

I appreciate your taking the follow-up. And I hate to focus on the 483, but the MAUDE dynamic has become such a distraction for investors intra-quarter. And as we think about the kind of remediation process here, that does have the potential just to create some noise for people out there counting up MAUDE reports, which is sort of like a meaningless metric, but it does get a lot of attention. So, can you maybe just help us frame like how we should think about those reports when we see them, how to interpret the remediation filings? And just maybe help us kind of calm the obsession with counting MAUDE entries.

Great question. From our perspective, this is something that every company in the diabetes space has experienced at some point. As Stephen mentioned, the guidelines for what constitutes a complaint or report are quite vague, and we all have had to align our understanding with the agency's. For anyone looking to dive deeper, I encourage you to check the MAUDE database. That’s the purpose of it. You can review what has been submitted, both in our case and in the cases of other companies. You can analyze the rates, and we have been fairly transparent about our installed base, among other things, allowing you to make comparisons. We believe we compare favorably. However, it’s difficult to say how to think beyond that. We don’t perceive an underlying issue in our data. The 483 report itself was not related to the actual complaints received or their quantity; it was strictly about how the reports were defined as complaints, and that’s it. I hope that clarifies things.

I'm showing no further questions at this time. I'd like to turn the call back over to Sean for any closing remarks.

All right. Thanks, everyone. As usual, we enjoyed discussing a strong quarter with you today. We appreciate your work to understand our business. And I guess we look forward to seeing you all next quarter. Thank you.

Yes. Thanks, everyone.

Thank you for your participation. You may now disconnect. Good day.