Tandem Diabetes Care (TNDM) Oppenheimer 36th Annual Healthcare MedTech & Services Conference summary

Pharmacy channel transition and financial impact

• Pharmacy channel contributed to record gross margins, reaching 58% in Q4, with expectations to exit the year at 60% and achieve 65% earlier than planned due to increased pharmacy sales.

• By 2026, pharmacy sales are projected to be 15% of total sales, with only 10% of customers using the channel, and expected to reach 70% of sales in 2–3 years, driving further margin expansion.

• The shift to pharmacy is expected to accelerate both gross margin and volume growth, as it addresses affordability barriers and expands access for patients.

• The pay-as-you-go model and co-pay assistance reduce upfront costs, increasing pump adoption and retention, especially among those previously deterred by high DME costs.

• International expansion and direct business outside the US are also expected to contribute to gross margin improvements.

Product portfolio and market segmentation

• The market remains segmented between tubed and tubeless pumps, with strong demand for both; a tubeless product is planned for launch this year.

• Mobi will launch first as a tubeless device, followed by Sigi as a next-generation, smaller, differentiated product, leveraging learnings from Mobi's market experience.

• Maintaining a diverse portfolio is key, with ongoing improvements and both tubed and tubeless options to meet varied patient preferences.

• Competitive advantage is expected from a fully closed loop algorithm and extended wear features, especially in the tubeless segment.

Pricing, contracts, and reimbursement

• Net pricing for the pay-as-you-go model is modeled at $350/month, with actual net pricing to be refined as more data on contract mix and rebates is gathered.

• Pricing differentiation may emerge as clinical data and algorithm advancements provide opportunities for higher reimbursement.

• Currently, tube vs. tubeless does not impact pricing or contracts; focus remains on product features and formulary access.

• Contracts with major PBMs provide access to 80% of covered lives, with about a third on formulary under the pay-as-you-go model.