Conference Transcript - TNDM 2026-06-08

Operator

Next presentation, very pleased to welcome John Sheridan, President and CEO of Tandem, and Lee Vossler, Executive Vice President and CFO. Very timely to have you here coming off ADA. So I thought that maybe that would be a good place to start, just to talk us through kind of your reflections on the conference, key themes both from kind of a market perspective, what you heard kind of walking the exhibit floor and talking to customers, and what you thought the big takeaways for Tandem were.

John Sheridan, CEO

Yeah, it was a great conference for us. We had, you guys probably know, we received CE mark for our pregnancy indication just a few days before the conference started, and we had a symposium on Saturday morning into which we actually went through and presented the data to a pretty large group of doctors, and that went over very well. Pregnancy is a really important indication for us. People who are pregnant that have type 1 is not necessarily a large audience, but when you consider it, it's people who are considering pregnancy. So it's really anybody who has, you know, who's in childbearing years, they're really the market for this because you want to be on the product before you get pregnant, and you can use the exact same product during pregnancy. So important population. I thought the data was excellent, really well received. So that was a big part of the day or the weekend. And the other thing that we did is we actually had an innovation suite set aside. And in that suite, we basically took 20 doctors at a time and let them get up close and personal with Tandemobis' tubeless system, which I thought went over incredibly well. In fact, David was in an afternoon session of that with a number of sell-side investors. He did pretty much the exact same thing. And I will say, when we actually just put it on and showed people how easy it was to do that, there were absolutely gasps in the audience, which I was pretty surprised to see that. That was a total awesome response. Similar behavior from the physicians. I think a lot of excitement about it. And the thing that's really important about the tubeless version of MOBI is that, you know, the basis of competition four or five years ago was primarily therapeutic outcomes. And with Control IQ, I think we dominated the market at that point in time and did quite well. I think over time that's changed, though. Now it's not only therapeutic outcomes. It's also form factor and market access. And so over the last year or so, we've been working on all of those elements. We're really now in the execution phase of the pharmacy transition. We're making good progress. I'm sure we'll talk about that in a few minutes. And then we're also just about ready to commercialize our tubeless version of Mobi. So with that, you know, we have addressed the elements of that competitive situation that we didn't have. We now have pharmacy, we have form factor, and we have the best algorithm. And I think as a result of that, we expect to see, you know, double-digit growth. We expect to see significant growth in MDI starts, and we expect to see competitive conversions go up as well. So we're very excited about that, and like I said, it went over very well. We had a number of papers or posters that were presented on just the ease of use of using the economic and I think the experiential benefits of using Control IQ over large populations, pediatric populations, so things like that, that went very well. But I would say for us it was a great show, and it just confirmed the strategy that we're working on.

Operator

So maybe just one kind of market-related question. It feels like it's hard to talk about diabetes or ADA without sort of facing the GLP-1 question. I mean, if you think about the past three ADAs, it's certainly, I think, been an evolution of the conversation of GLP-1 versus diabetes technology, whether that's pumps or CGM to kind of question marks to the GLP-1s. With some of these technologies to augment it, like you kind of walked away from ADA feeling, where are we with kind of the GLP-1 discussion?

John Sheridan, CEO

You know, I think we've kind of, like, gotten past that early last year. And I will say two or three years ago, certainly a great deal of anxiety about the impact that that may have on people with type 2. Maybe it's going to slow the progression of type 2 and reduce or limit the growth in the insulin-intensive type 2 area. What we've done is we've done several clinical studies. And in those studies, we've had a significant portion of the group. In fact, our pivotal study was roughly 300 people, and half of the control group had used GLP-1s for at least three months before the study started. These are modern GLP-1s. They had to remain on the GLP-1s throughout the study. And when you look at the A1Cs of that group, before the study started, they had very high A1Cs. So they may have been losing weight, but their diabetes was in very poor control. So like high single digits, low teens, you know, it was problematic. And when they went on to control IQ, we saw a substantial reduction in A1C. And I think the conclusion from that study, as well as several others before that, is that it's a complementary situation where you need both. You need both of them, really, I think, to manage the weight and diabetes control. And I think that's pretty much, I mean, I think our competitors have been saying the exact same thing. It's a complementary situation, and I think now it's been confirmed in multiple clinical studies. So I think it's no longer the risk that people have perceived it was, like I said, two years ago.

Operator

And I want to dive into your portfolio, but one more kind of broader question to ask, which is you talk about form factor meeting one of the kind of unmet needs for TANM in the marketplace. So when you go to an ADA, there's so many different presentations about time and range up from 66 to 67. Then you hear about form factor, and then you hear about close-up algorithm. There are a lot of features that can inform patient and physician decision-making around prescribing a technology. How do you think those kind of rank in terms of, or how do you think about the interplay between those different features, and are there different things that matter to different populations?

John Sheridan, CEO

Well, it's a very segmented market, and people have different opinions on how they want to wear, control, interact with the device. And so that being the case, we believe that you have to have choice in the market, and just having a single pump with a single sensor, it's just not going to work because, as I said, people really want to have differences and they want to have choice. So, you know, I think that, as I said, form factor is a significant issue these days, and I think the patient population, there's definitely a market for form factor, for a tubeless form factor out there. And I think physicians, you know, when they have a patient that comes in that's using pens and needles, and they ask for a patch device, if it has an AID system on it, which, of course, one of them does, they're going to put them on that product. I will say that one of the things that I continue to feel very good about is when you talk to the general physician community, they will tell you and tell us that we have the best algorithm on the market today. And so I think that, you know, so, again, we're going to eliminate that form factor advantage here in the not-too-distant future. And so in that case, it comes back to the algorithm. And I think our system has better control. There's immediate and sustained improvement in that control over time. So, again, I think that, you know, when you look at the tubed market today, the tube market is growing slowly. It's growing maybe mid-single digits. If you look at the tubeless market, it's growing in excess of 20%. And so we want to participate in that market and take advantage of that opportunity, which I think we're going to do in the second half of this year.

Operator

Have you filed Moby Tubeless?

John Sheridan, CEO

Well, you know the answer to this. And what we have said is that we will file in the second quarter. We're not going to tell people exactly when. I will stay absolutely confident that we will file in the second quarter. And I think we'll probably talk about it on the second quarter call.

Operator

Not going to get it out. Fair enough. Which is obviously a huge part of not just 2026, but sort of your commercial strategy going forward. I thought, Lee, on Saturday you provided some very helpful perspective on just the mechanics and flow to the pharmacy. Maybe you're just going to update us on where we are and maybe just sort of reiterate some of those comments you made.

Leigh Vosseller, CFO

Sure, absolutely. So for us, pharmacy this year is a race and restart. We talked a lot last year about launching into the pharmacy channel where we started with just the MobiPump and supplies, and we went in with a business model that looks very similar to what it looks like in the DME space. And so this year when we started the year, we decided that the best approach for us to maximize the pharmacy opportunity is to launch with the pay-as-you-go model. And so what that meant was when we came into the beginning of the year, we really had to restart. While we had contracts last year with formulary coverage, we had to go back and renegotiate every single one of them for the new pricing structure. So the first quarter for us was really about building up the opportunity, so getting that formulary coverage to get us started. And it was also about the operations. And so it was implementing the system that we needed to launch pharmacy at scale with a model of this sort. And so we did a really good job, I would say, outperformed our own expectations in terms of market access. We had a goal this year of getting to 40% to 50% formulary coverage, and as we exited the first quarter, we were already at 40%. And that's really important, too, because we were able to do that off-cycle from the normal formulary. So when we talk to payers and PBMs today, they're already thinking about 2027, and we brought them back to this year, and we were able to make this change at a pretty rapid pace. And we're not done. I would say there's still a great chance we'll be at 50% by end of the year. We have a number of things in the works we're still looking at. And MobiTubeless, with approval, will give us another chance to talk to people this year that can also help with growing that formulary coverage. So then when you turn to the operations side of things, it's not as easy as just turning on a switch. you have access. There's work you have to do. And it's not insurmountable, but maybe underappreciated operationally, how this changed everyone's step in the process. And so it changes how we engage with the patient. When we talk to them now, we have to talk about two different benefits and help them understand the value of each and which one might work best for them. It changes how the physician writes their prescriptions to us. And so there is a way they can do it in DME, which was a little bit more flexible with a lot of engagement with us. In pharmacy, it's a little bit more rigid, if you will, and so very structured in the type of information they have to share. So it may result in some back and forth with the physicians as they're getting used to the new way to prescribe. It changes how we engage with our distributors. It's the same distributors that we use for DME. They also have a pharmacy capability, but how we operate within our own system and how we hand over referrals to them to process all changed. And so that's what we were working on in the first quarter, and we were fortunate to have everything in place to kick off a launch in March. And so we started with only the month of March. We started with just less than 5% of our shipments going through pharmacy for that free Pago pump and then less than 5% of our customers ordering through pharmacy in our install base. So that number of customers was relatively the same in Q4 and Q1 because we were focused on the operations piece, but we weren't really trying to drive that throughput. And that's what the coming months and quarters are about. It's about continuing to iterate on our learnings from the process and to drive more volume. And so you can expect to see month over month, quarter over quarter, an increase in the throughput, and so for us to achieve the goals that we laid out at the beginning of the year.

Operator

And maybe just on the script writing, one thing that I didn't appreciate was, so if I'm a tandem user and I come up for renewal and I'm ordering supplies, if I'm already ordering through DME, I would call it order supplies. You would check my benefits. If I can order to the pharmacy, you go contact my physician to rewrite the SRIP. And is that a digital engagement, or how seamless is that engagement on the SRIP amendment?

Leigh Vosseller, CFO

So I would say when the engine's running smoothly, it's going to be pretty seamless. But today, it does require another prescription from the physician. And this is at a point when they don't normally have to write a prescription. And so that's where there's just this new interaction that physicians aren't necessarily prepared for. They're used to focusing on the pumps and the therapy, getting patients going. Once they've gotten them on the supplies, it's not something they have to ordinarily reconsider. And so we're reaching out and asking them to engage in the process. And so it creates a little bit of extra work for everybody in the whole channel or the whole work stream. And so that's why it's not necessarily something that you can just flip on overnight. But, again, not insurmountable by any means, just behavior change that we have to manage through.

John Sheridan, CEO

We do have examples, though, of patients who express interest in a pump and they don't interact with Tandem at all. They get the prescription, it goes through this channel, and they get their pump in a couple of days. And that's kind of the model we are working to get to. Not there yet, but we definitely know it. We've proven it now many, many times. And there's learning curve issues we're dealing with on a general basis, which I think are all tractable. And I think when you look at the market, people have been there, and they've done that, and they're in the channel. We expect to be there just as successfully as they have been.

Operator

I think we always get a lot of questions on price in the pharmacy. I think when you introduced the $350 number, you were very clear about the reason why the $350 number was what you represented in guidance, but was not necessarily your go-to-market pricing strategy. Can you just sort of clarify how you're thinking about pricing and what you're seeing so far as you worked with the transition?

Leigh Vosseller, CFO

Yes. So as we thought about, we had to look at the array of contracts that we find with different rebate percentages across them. And then we also had to anticipate what we think might be required from a copay assistance perspective. And so you have to think about from the co-pay assistance, we're not just competing with others and what their out-of-pocket is. It's actually competing with our own DME channel. So what we want to make sure is that for the patient, it's the lowest out-of-pocket if they were to shift into the pharmacy channel. And without any history to show evidence of how these might even out over time in a sustainable trend, we gave a modeling assumption. It's not meant to be the price point. It's not our goal pricing. it was just to say, while we're getting started, as we're learning, this is a good baseline to think about what the average monthly rate would be for supplies in our business. And as we continue to gather more information, and again, we're still actually measuring our time in pharmacy in really weeks, barely months at this point. So as we move through this year, we'll continue to inform you more regularly at what that might look like and how to think about the future. It's really just about us, as we're taking these initial steps, making sure that we have everyone grounded

Operator

appropriately. Very helpful. And then as we think about just the evolution, I think there are kind of two pieces too, right? There's the new patients going through the pharmacy, but then there's also the existing installed base converting that. I think you said existing installed base potentially to be 80% converted within three, by the end of year three. Is that right or wrong?

Leigh Vosseller, CFO

How should we think about those two moving pieces? Sure. So actually the other way around. So this year, we expect for pumps going out the door that about 20% will go out in the pharmacy model, so for free, basically. Starting low, as I mentioned, first quarter, less than 5%, so obviously you have to exit above 20% to average that for the year. In two to three years, 80% of pumps could be going through that channel. And then in the meantime, what we'll be doing is building up the install base who's ordering in pharmacy through the Pagel model as they get a pump, but also converting customers over time. So as patients come up for renewal, we'll check their benefits, as we said earlier, and we'll encourage them to shift over to the pharmacy channel. So the key metric we'll really be looking for for the future is not the individual parts and pieces, but just pharmacy sales as a percent of U.S. sales. This year, we expected to average 15%. In two to three years, we expect to be around 70%. And because of the pricing power there, that does not mean 70% of customers have to be ordering through pharmacies, much less than that. and that gives us the opportunity to continue to drive that install base over the next couple of years as we build up formulary access.

Operator

Maybe we could turn back to kind of just the pharmacy business and the interplay with actual performance of the pump franchise. It's a little bit hard to necessarily get a great view of market share because each of you provide different KPIs and metrics with pump shifts or new patient starts. So we're getting a lot of different data points from you and your competitors, but what do you think is happening in terms of underlying market share for Tandem, both in terms of new patient starts and also the renewal population?

John Sheridan, CEO

I think that the fact that now one of our competitors is now public and we can actually see the data, it'll be a lot clearer, because that's something we haven't been able to see. We haven't had to estimate that over the last couple of years. I would say that we've had the first quarter data, and I think there was some concern that the market's slowing down based on the first quarter. And I would say it's just not enough data to make that assertion. If you look at 2025, I think all of the pump companies did quite well. There was growth. I think we saw the penetration rate increase. And if anything, when you look at 2026, there's more technology coming to market that's going to reduce the burden. It's going to make it easier to use. It's going to enhance the performance. And I think those are the factors that drive growth as well as, I think, reducing out-of-pocket. So all of these things are happening in 2026. I think I anticipate that we'll continue to see growth in 26 and beyond. And I think that, you know, there's seasonality that's impacting the first quarter. We saw seasonality in line with the way we normally see it. There was no surprises for us. I do think that there's some macro factors that could be impacting the performance in that quarter. Certainly people are concerned about the cost of gas and inflation. I think they're being more cautious when it comes to spending. But that's why, you know, moving into the pharmacy channel right now is so important because we can't significantly reduce their out-of-pocket and really offset that concern.

Operator

And as you kind of take a look back at the past couple years, do you think have you gained share, lost share, held share in each of those categories, those new patient starts or renewals?

John Sheridan, CEO

I think our renewals have done quite well. I mean, we continue to see a greater percentage of people renewing in time, and now it's over 70%. And, you know, it's, you know, one of the things I'm very proud of is when you look back at the most competitive period, you know, when one of our competitors came to market with a patch, you would think at that point we would have lost people. In fact, if anything, we saw people renew faster and more people renewed. So, you know, I think once you become a member of the Tandem family, you stay with it. And that's because we do things like we give away technology for free if you're in warranty. And we also provide excellent service. So I think on renewals, you know, we did see a continued performance. I think on new starts, you know, certainly we did see a reduction in MDI during that period. But I think over the last couple of quarters, we're starting to see improvement. I mean, we're still losing share, but we're losing less share. And as we move into the second quarter of the year, we expect to see growth there again. And then on competitive conversions, I think that most of the competitive conversions we've had over time have come from Medtronic, but Medtronic is now doing a much better job of retaining their competitive conversions. So on the new start side, you know, we've lost some, but we expect with the things that we're doing now, our strategy is intended to get back to the point where we see double-digit growth. We see growth in new starts, and that's primarily where we want to see it.

Operator

And retention should be a big opportunity, if you go back and trace your trajectory to when, in 2019, 20, 21, 22, you had a period of really strong outside performance. And all of those patients, and some of them have already passed the renewal, but some of them are still on the forward in the renewal pool. So it seemed like that, and converting them to pharmacy is a big opportunity.

John Sheridan, CEO

I think that we're going to certainly try to convert people who are, just as they come up to purchase supplies to pharmacy. But once a person is renewing and they see the opportunity to renew for zero out-of-pocket, that $1,000 during DME has been a real, you know, I've taken that away. I think if anything we'll see the renewal.

Operator

Out-of-pocket costs rank in terms of either barriers to renewal or barriers to pump adoption in general.

John Sheridan, CEO

I'd say, I mean, I can't tell you where it is, and I'd say it's a significant concern. Yeah, and I think that people are always thinking about it. That's why I think that's why we have seasonality, because they wait until the fourth quarter when their deductible has been met. And that's why we see the lion's share of purchases in the back half of the year.

Operator

And how are you going to handle the Mobi to tubeless handoff? And are you going to see any period of time where patients who, if someone gets Mobi today, but you get approval for tubeless in two weeks, you're going to let them swap it out? How are you thinking about it?

John Sheridan, CEO

Well, Mobi to tubeless, it's the exact same pump that's on the market today. So there's a significant number of people out there that have Mobi today. And what they do today is they buy a cartridge that works with a tube, and then we have the infusion set. And so that's the cartridge and the infusion set are the supplies people purchase today. With Mobi tubeless, we have a different cartridge, and we have an infusion plate. And the infusion plate has adhesive on one side, and it has an inserter on the top. And so you would put the adhesive on your body, you would insert the cannula, and then you take the cartridge that is the tubeless cartridge, put it on the same Mobi pump, and you slip it in to the plate. And that's how it works. So, you know, it's really about providing new supplies to an existing Mobi user or it's about having somebody purchase a new Mobi with the tubeless supplies. So, you know, so we expect a significant portion of people in the marketplace will be interested in trying out the tubeless option. And I would imagine that some people would want to have both tubed and tubeless, and they can't because that's the way this thing works. So there's really nothing on the market that's going to give people, you know, the opportunity to try. When it comes to wearability, there's nothing like it on the market today. And I think that the other benefit of it is that infusion plate, it's the infusion plate that uses the SteadySet technology, so it's an extended wear infusion plate. so it will last for seven days which reduces the amount of time you have to insert a cannula it doubles that amount of time and what you do simply is you just take the pump off you change the cartridge when you run out of insulin in your cartridge and you fill it back up and then you put it back on and so that's one of the great things about the product is you can just take it off when you want to you can charge it, you can do all sorts of things but again it's a great variety of options when it comes to

Operator

use the wearability. And is there any, I don't know, best to ask this question, besides any of these product transitions, there's some sort of weirdness in the gross margin. Is you ramp a product? Are you selling more pieces? Are any of that investors need to just be aware of from a mechanic standpoint when you launch tubeless Mobi? You're right. We typically do

Leigh Vosseller, CFO

see some level of headwind when we launch a new product until we get to a level of volume and scale to leverage all the benefits on fixed overhead. We had something similar with Mobi, but what you may remember is we didn't go backwards. It really just, I guess, kept us about even as we got through the early parts of the launch. And so I would say MobiTube was a similar expectation. It might initially have a little bit of a buffer on being able to increase gross margin, but it shouldn't necessarily drive it backwards.

John Sheridan, CEO

Very helpful. And we saw an awesome year. Our first quarter was awesome when it came to gross margin, and we also saw a positive EBITDA, which is the first time we've seen that in quite a while.

Operator

And maybe that's a good segue to talk a little bit about the P&L implications of the pharmacy transition because there's a lot to it. There's the pricing piece and the revenue, but it's a very different profile P&L for a set sold to the pharmacy if you think about the fully loaded P&L versus what is sold through DME. I would think that the incremental SG&A and R&D allocated to that or needed to support that is almost nothing. So maybe just talk us through kind of the broader P&L implications as we think through the pharmacy transition.

Leigh Vosseller, CFO

Yes, it is a very different infrastructure. So for the DME business today, because of all the labor that goes into getting someone prescribed in on the technology, we have hundreds of people in the organization, customer service folks that are supporting doctors and patients through that journey. And so for this year in particular, we're still supporting primarily a DME base, at least right now. And we've built the infrastructure to support pharmacy, which is more technology-based. And so there will be some incremental variable costs, but it will be nothing like the D&E space. And so we'll be able to grow and scale pharmacy with little incremental costs. And as we transition more and more out of D&E, we'll start to get leverage on that side as well. And so this year, you can think about it in SG&A, those costs are almost more doubling up to some extent. And the next couple of years, you'll start to see more leverage in SG&A.

Operator

And as you generate some of that incremental profitability, where are you thinking about putting it from an investment standpoint? I appreciate that there's a degree of profitability you want to achieve, but that will create a lot of room to redeploy resources. And what's on your mind for where you think that might go?

John Sheridan, CEO

I think we have opportunities to continue to invest in the commercial team. I think that advertising, marketing dollars are something that we don't have of the benefits some of our competitors have when it comes to the ability to do that. And certainly I think we'd like to, and I think we would use that, you know, just to make an increase of awareness in the market. And then certainly on technology. I mean, we, you know, we're always looking for additional technology for the company. And while there's no silver bullets out there that are really opportunities for us right now, you know, over time that may change. And I think having additional cash on hand to enable us to take advantage of that is something we're certainly considering.

Operator

Maybe it's a good opportunity just on the commercial side to touch on two things. One is that international doesn't get a lot of airtime, but it is a nice growth driver for you, and you're also going through a transition, OUS, from distributor to direct. Maybe you'd touch on the OUS commercial dynamics, and also maybe talk about chief commercial officer transitioning. Sometimes when those things happen, people want to read into it. It is an indicator of something from an underlying business basis. It didn't sound that way from your comments over the weekend, but maybe you could just address both.

John Sheridan, CEO

Well, so first of all, over the last year, we've definitely invested in sales and commercial. Specifically, last year we added to the sales organization. We've been working on improving the systems that they use to manage how they interact with physicians, to prioritize, keep track of the interactions that they've got, and just make them more efficient in the field. And, you know, so I think that these productivity improvements are in the process of being implemented right now. They're significant. And, again, it really automates a great deal of the stuff that they used to do in paper. And by doing that, I think we expect to see benefits from that. And then the other investment was really in going direct OUS. And so in 2025, we really spent the entire year developing the systems necessary to run a business direct. And so, I mean, we were depending entirely on distributors, you know, at the end of 24, and we had to put in the infrastructure, you know, to basically order, you know, to basically supply chain, you know, to manage customer service. All of that stuff has been done, so it was a pretty heavy lift in 25. In 26, we've gone direct in three countries. In the first quarter, we went direct in Switzerland, Austria, and the U.K. We have another country we're planning to go direct in at the end of this year. And then we have several more that we plan to go direct in in 2027. So, I mean, the process is in place. We've got almost like a cookie cutter that we can use to go from country to country. We've expanded the sales organization in the countries that we are direct in. We're planning on doing that right now with the sales organization that is in the back half of this year. And, you know, so I think from an operational point of view, the team has done an excellent job. I think having our own sales team, having our own operations in the OUS countries, there's two benefits. One is you have closer relationships with the HCPs. You can help them understand the technology better. You can interact with patients more than we have in the past. And then we have a great deal of technology that we've developed that's now available in the U.S. With our own team in-country, we can do a more effective job of getting the technology into the OUS markets faster. And we think that's very important. And when you think of the OUS markets, it's twice the diabetes, type 1 diabetes community is twice the size or more than twice the size as it is in the U.S., and it's much less penetrated. And so I think there's huge opportunity there. So we definitely want to continue to invest, bring technology, grow our own capabilities, and have many go direct. And so we'll probably exist in a hybrid format for quite a while. And I think we're looking to take advantage of the big opportunities first.

Operator

And maybe just cover the CCO.

John Sheridan, CEO

So, you know, we hired a CCO about Mark Navarro. He's a very good person, capable guy. We hired him about two and a half years ago. I would say his strength is, in particular, in strategic planning and decision-making. And so he really helped the team come up with the strategy that we're employing right now. I think if you look at what's happened over the last two and a half years, I think it's now moved from developing a strategy to execution. And I think that execution is something that was not necessarily a strength of his, and so we've just decided to move on. I think that if you look at a team he has right below, he's got a number of executives that are VPs or senior VPs that are all quite capable and doing an excellent job. And so, you know, there's definitely been some shuffling of the deck, but we do have executives that report to me that have experience in sales, market access, all of those areas. And so, you know, we've realigned the team, but we still have high confidence in executing, and there's a great deal of focus on executing. And we feel like doing it this way, we're going to continue on the plan. We'll probably do things faster than we were before. And we have a high degree of confidence in where we're going. I'll just say that in terms of bringing somebody else into the team at this point, we kind of want to wait until we get past this heavy execution phase because if we bring somebody in now, they're going to want to do things differently or change or they're going to question stuff. We don't want that distraction, honestly. And so let's get through this period of time, and maybe later in the year we'll start to look for a replacement.

Operator

And then the other area you talked about incremental investments is on technology. And it seems like just walking around ADA, the theme of the meeting seems to be very much automation, automation, automation. Maybe give us some perspective on your view on what fully closed loop means, what your fully closed algorithm, how should we be on that?

John Sheridan, CEO

Well, I'll say that everybody knows that we partnered with them back in the 2015 timeframe. We licensed Control IQ from a company called Type Zero, which was a spin-out from UVA, and we've now employed that and improved the technology. We continue to work with them, and one of the reasons that we went with Control IQ to begin with is that they had the most significant amount of clinical data on the algorithm, and it was excellent. And so today we find ourselves in a similar situation where they have an algorithm that's called AtaNet. It's been tested in feasibility studies quite a bit in the last year or two. And that's what we're working to implement right now, AIDANET. And so it works. It's basically a system that is, you know, you can set it and forget it. You can basically turn it on and not interact with the system at all, and it will control your blood sugar just as effectively as the system we have today does. However, if you feel like you want to interact with the system, it will allow you or the physician to go in and make changes to optimize the system. And I think that's a very important part because I know there are systems in the market that don't allow you to do that today. And I know physicians and patients find it very frustrating. So, you know, so that's something that we intend to initiate our pivotal study for here in the second half of this year. You know, I think that's going to be, you know, we're very excited about that. In addition to that, there's also optimization of the interface on the mobile app, which I think simplification is something that makes a great deal of sense to do in line with having the fully closed loop system on the market. And so that's certainly happening. and we have a very capable team of mobile developers that are working on that right now, and it's really exciting to see the work that's going on there. And then finally, if you look at the hardware, we have MobiTubles coming to market right now, but a couple of years ago we acquired CIGI. CIGI has a number of very interesting technologies that we're employing, and I think that the way to think of CIGI now is really not going to be a CIGI product. It's going to be the next generation Mobi, And I think we will bring that to market. And we think MobiTubeless, as it is today, will be very successful in the market for a few years. And so now we have time to go ahead and optimize the next generation Mobi, which will be smaller and it will employ a number of differentiating features in addition to this optimized mobile app that we think will really make it a killer product in the market.

Operator

Excellent. That's a great place to wrap up. And John and Lee, thank you for making the trip to Miami. We look forward to getting the next update in early August.

John Sheridan, CEO

Good to see you, David. Thank you very much.