Beta Bionics (NASDAQ:BBNX) reported first-quarter financial results on Tuesday. The transcript from the company's first-quarter earnings call has been provided below.
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Summary
Beta Bionics reported Q1 2026 net sales of $27.6 million, a 57% year-over-year increase, driven by new patient starts and a growing installed base accessing the pharmacy channel.
The company's gross margin improved to 59.5%, attributed to the efficiency of the pharmacy business model and lower manufacturing costs.
Full-year 2026 revenue guidance was raised to $131-$136 million, with expectations of 37-39% new patient starts reimbursed through the pharmacy channel.
Operating expenses increased by 47% year-over-year to $40.7 million, driven by sales force expansion and R&D investment in the Mint and Bihormonal programs.
Beta Bionics is addressing an FDA warning letter with corrective actions and continues to advance its Mint Patch Pump and bihormonal system development, aiming for a full commercial launch of Mint by 2027.
Full Transcript
OPERATOR
Good afternoon and welcome to the Beta Bionics first quarter 2026 earnings conference call. At this time, all participants are on the listen-only mode. After the speakers' presentations, there will be a question and answer session and instructions will follow at that time. As a reminder, please be advised that today's conference is being recorded. I would now like to hand the conference over to Blake Bieber, Head of Investor Relations. You may begin, sir.
Blake Bieber (Head of Investor Relations)
Good afternoon and thank you for tuning in to Beta Bionics first quarter 2026 earnings call. Joining me on today's call are Chief Executive Officer Sean Saint and Chief Financial Officer Steven Fidder. Both the replay of this call and the press release discussing our first quarter 2026 results will be available on the Investor Relations section of our website. Information recorded on this call speaks only as of today, April 21, 2026. Therefore, if you are listening to the replay, any time sensitive information may no longer be accurate. Also on our website is our supplemental first quarter 2026 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 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. With that, I'd now like to turn the call over to Sean.
Sean Saint
Thanks Blake. Good afternoon everyone and thank you for joining. We're pleased to share with you all today our financial results for the first quarter as well as positive updates to our full year guidance for 2026. In Q1, the company continued to progress rapidly across our key initiatives both commercially in terms of driving adoption of the islet and expanding pharmacy channel access and developmentally in terms of advancing our Mint Patch Pump program and our bihormonal program. Our teams continue to execute relentlessly to deliver life changing solutions to the diabetes community today and over the long term. Diving into a brief overview of our Q1 performance, we delivered $27.6 million in net sales, which grew 57% year over year. Q1 revenue growth was driven predominantly by growth in new patient starts as well as our growing installed base of users who continued to access their monthly supplies for the islet through the pharmacy channel and who we continue to retain at a high level. The percentage of new patient starts that were reimbursed through the pharmacy channel grew to a high 30% compared to a low 30% in Q4 and a low 20% in Q1 2025. Our gross margin was 59.5%, expanding over 860 basis points year over year. Stephen will discuss our gross margin dynamics shortly in more detail, but I wanted to highlight this exceptional performance as evidence that the pharmacy business model is working, as is our ability to drive leverage and manufacturing costs as we scale. I'm proud of these results and eager to build on them as we progress throughout the year. With that, I'll hand the call over to Steven to provide some additional color on our first quarter performance and our full year 2026 guidance.
Steven Fidder (Chief Financial Officer)
Stephen thanks Sean. Our Q1 performance exceeded our expectations across the board. Revenue performance was mainly driven by new patient starts and the recurring revenue generated from our growing pharmacy installed base. Q1 revenue saw modest contribution from pharmacy and DME stocking, but the stocking benefit in Q1 declined relative to Q4 in both channels. I'd now like to highlight some of our Q1 commercial metrics. New patient starts declined more than 10% but less than 20% compared to Q4 2025 consistent with our expectations. Given typical seasonal Demand patterns from Q4 to Q1, a high 30s percentage of our new patient starts in Q1 accessed islet through the pharmacy channel. The increase compared to the prior quarter exceeded our expectations. It is important to note that most pharmacy plan changes occur at the beginning and midpoint of the calendar year. Thus we do not expect an uptick from Q1 to Q2. Our pharmacy strategy continues to deliver strong financial results for the business driven by the advantaged recurring revenue model, low out of pocket costs for patients, a streamlined process for healthcare providers, and our ability to retain patients utilizing the product. Lastly, we continue to expand the insulin pump market as approximately 70% of our new patient starts came from people with diabetes using multiple daily injections prior to starting the islet. Moving on to gross margin, Q1 gross margin was 59.5% representing an increase of 52 basis points relative to the prior quarter and an increase of 864 basis points relative to the prior year the primary driver here is our pharmacy installed base which generates high margin recurring revenue and where we continue to see strong user retention. Previously, I've shared a simple way to think about how the pharmacy channel impacts our overall gross margin. The framework I introduced was that when our pharmacy installed base in a given quarter exceeds three times the the number of new patient starts through pharmacy in that same quarter, the pharmacy channel generates higher gross margin than the DME channel and becomes accretive to our overall gross margin. We crossed that threshold in Q1 and we expect further gross margin expansion as our pharmacy installed base continues to grow. The other key driver of strong margin performance this quarter was lower cost of materials for the islet relative to the prior quarter and year. We also benefited from a couple of one time gross margin tailwinds in the quarter, including higher than planned islet production and modest contribution from pharmacy islet revenue. While we don't expect those one time tailwinds to repeat, I expect our core gross margin to remain a key area of strength going forward and an important driver of our ability to generate free cash flow at an earlier stage as compared to our diabetes peers. Total operating expenses in the first quarter were $40.7 million, an increase of 47% compared to $27.6 million in the first quarter of 2025. The increase in sales and marketing expenses relative to the prior year was driven by expansion of our field sales team, which we made excellent progress on in Q1 towards our previously stated goal of expanding by at least 20 sales territories in 2026. Newly onboarded territories generally take at least a quarter of to begin contributing meaningfully to sales, so we're excited for those additions to take shape throughout the year. On R and D expenses, the increase relative to the prior year is driven by the Mint and Bihormonal projects. The increase in G and A expenses relative to the prior year is driven by continued efforts to scale the company in support of commercial growth and pipeline initiatives. As of March 31, 2026, we we have approximately $240 million in cash, cash equivalents and short and long term investments. We believe we are sufficiently capitalized to fund all of our key initiatives and remain well positioned to generate free cash flow well ahead of historical diabetes peers. We feel that all of the key indicators that we monitor suggest we are building a sustainably successful and profitable business, including strong product market fit, solid sales force productivity, growing pharmacy traction, healthy gross margins and continued operational discipline. I'd now like to discuss our Revised full year 2026 guidance which we're raising across the board, we now project total revenue for the year to be 131 to $136 million, up from our prior guidance of 130 to $135 million. On pharmacy mix, we now expect 37 to 39% of our new patient starts to be reimbursed through the pharmacy channel versus our prior guidance of 36 to 38%. Our increased revenue and pharmacy mix guidance reflects our higher expectations for new patient starts driven by strong Q1 performance and the success we've had in onboarding new sales territories where we're on track toward our goal of adding at least 20 territories in 2026. On gross margin, we are raising our outlook to 57.5 to 59.5% for the full year versus our prior guidance of 55.5 to 57.5%. Our gross margin outlook reflects the strong performance in Q1 normalized for one time tailwinds and our expectation of continued contribution from our pharmacy installed base along with increasing leverage from manufacturing scale over over the course of the year. To briefly comment on operating expenses, we expect year over year growth to accelerate for the remainder of the year compared to Q1 driven by continued expansion of the sales force, increased investment in brand and direct to consumer marketing, and spending related to Mint and our bihormonal programs. With that, I'll hand the call back over to Sean.
Sean Saint
Thanks Steven. To wrap up the call, I'll briefly touch on our remediation efforts regarding the FDA warning letter we received in late January and then highlight the progress we're making in our innovation pipeline. Regarding the warning letter, the Company is continuing to take this matter very seriously. Our teams and leadership are conducting thorough systemic reviews of our quality management system and instituting corrective actions that we believe address the agency's observations. The Company is responding quickly to the Agency's concerns and we've been providing periodic updates to the FDA regarding changes to our processes and documentation that we believe address many of the FDA's concerns. As stated in the warning letter. One example of our progress thus far is our efforts to remediate old complaints under our new complaint handling system and definitions for reportable complaints. We recently completed that work well ahead of schedule, which we believe is a good representation of our organization's commitment to resolving the warning letter in an effective and timely manner. We still have work to do in other areas to fully address the agency's concerns and we look forward to continuing to work together with the FDA to resolve this. Now for the pipeline, let's Start with a quick update on Mint, our patch pump and development in Q1 we continued to advance Mint toward our goal of an unconstrained commercial launch by the end of 2027. We remain confident in our ability to gain FDA clearance for Mint, manufacture the product at scale and ultimately realize the opportunity to make Mint the market leading product in automated insulin delivery that we believe it has the potential potential to be for our bihormonal system development. In Q1 we initiated a Phase 2 a feasibility trial to stress test and iterate the system. Our phase 2A trials have helped us to identify further areas for system optimization and preparation for the more advanced stages of development inclusive of a phase 2B feasibility trial and phase 3 pivotal trials. I'm excited by our continued progress with the bihormonal system as it represents what we believe has the potential to be a transformative innovation for people with diabetes. Our industry talks a lot about moving towards fully closed loop algorithms which the industry generally defines as algorithms that don't require any engagement from the user. Another topic that's always top of mind for the industry is health outcomes. The ADA's Glycemic Goals for most non pregnant adults with diabetes is less than 7% A1C and greater than 70% time and range which the vast majority of people with diabetes aren't achieving today. When we look at the body of evidence of insulin only fully closed loop algorithms, we believe that they will not enable the majority of people with diabetes to achieve the ADA's glycemic goals, but bihormonal may be different. We believe that the existing body of evidence of bihormonal fully closed loop algorithms shows the potential for the majority of people with diabetes to achieve the ADA's glycemic goals. That is such a big reason why bihormonal has game changing potential for the industry at large and why our commitment to the program has never been stronger. At the end of Q1 we also launched a key new feature called Bionic Insights within our healthcare provider portal. This is a one of its kind intelligent data analytics and reporting feature within the industry. Bionic Insights surfaces clinically relevant indicators, user activities and system events and packages them into actionable insights that that help healthcare providers make more informed and personalized treatment recommendations for their patients. Early feedback on the feature has been overwhelmingly positive and we're extremely excited by its potential to further improve experiences and outcomes with Islet. Lastly on our innovation pipeline I want to cover type 2 diabetes. In Q1 we continued to see some healthcare providers prescribe Islet to their type 2 patients off label. We estimate that 25 to 30% of our new patient starts in Q1 for from type 2. While we're not committing to a specific timeline, we remain eager to pursue the type 2 diabetes indication through the FDA. I want to leave you all with one key message from today's call. We are building a business that we believe is uniquely positioned to succeed over the short, medium and long term. Fueled by our exceptional commercial product, pharmacy channel strategy, operational efficiency, and what we believe to be the most innovative pipeline in the diabetes industry. We're excited and motivated to deliver. Thank you all for joining today's Call. We'll now open up the call for Q and A.
OPERATOR
Thank you, ladies and gentlemen. As a reminder to ask a question, please press star one one on your telephone, then wait for your name to be announced. To withdraw your question, please press start 11 again. Please stand by while we compile the Q and A roster. Our first question comes from the line of of Mike Kratke with Lee Rink Partners. Your line is open.
Mike Kratke (Equity Analyst)
Hi, everyone. Thanks for taking my questions and congrats on the strong quarter, I guess, To start, it was really encouraging to see the high 30s percent of new starts through the pharmacy channel, but your updated guidance of 37 to 39% seems to suggest it could hang out there over the next few quarters. So is there any fundamental reason driving that assumption or, Or anything you're seeing from a competitive standpoint that may be tempering expectations there?
Sean Saint
Hey, Mike, appreciate the question, and happy belated birthday, by the way. Forgot that I missed that. So, nothing notable about the calendar year other than the biggest step ups in pharmacy coverage happen at the start of the year and at the middle of the year. So January and July and the other thing that's important to note about pharmacy reimbursement is that while we feel like the business is highly predictable in areas like revenue, this particular area isn't perfectly predictable. It's business-to-business sales, long sales cycle. And so our guidance acknowledges both of those factoids that I just shared there. In terms of competitive pressure that we're feeling as it relates to the pharmacy channel, none at all. That's dampening guidance in any way?
Mike Kratke (Equity Analyst)
Actually. If anything, the move from our competitors, our tubed insulin pump competitors, to the pharmacy channel makes payers and PBMs more inclined to want to move insulin pumps, or tubed insulin pumps in particular, to a pharmacy reimbursement. So we actually don't see that move that we're seeing from our competitors to be bad at all. Awesome. Very much appreciate that. And maybe just separately, in terms of the ongoing salesforce expansion, any additional color you can provide in terms of what inning we're in there or how far along you are there? Yeah, I don't want to speak specifically to the number. As you can imagine, based on the prepared remarks, we are not in the ninth inning,, meaning there's more expansion to happen. But most of the expansion of the field sales force will happen in the first half of the year. So a lot of it happened in the first quarter and then you'll see some in the second quarter as well and that'll round out most of what we expect to expand by. we expect to expand by. Awesome. Thanks again, Steven.
OPERATOR
Of course, Our next question comes from the line of the line of David Roman with Goldman Sachs. Your line is open.
David Roman (Equity Analyst)
Thank you and appreciate your taking the question here.
Sean Saint
Maybe I'll just start with the ADA guideline changes that I think went into effect in December regarding aid therapy. And could you give us some perspective on what you're observing in the field as it relates to prescribing patterns? I know you talked about in your prepared remarks beta contributing to expanded expansion of the overall pump market. But help us understand a little bit more what you're seeing Both on the type 1 and type 2 side from an underlying demand perspective. Yeah, David, this is Sean, good question. I don't think that the ADA guideline changes, while helpful, are really impacting prescribing patterns on a daily basis. You know, things like that take time to filter out. I don't think we've ever seen, the industry just react to a shift. And I think also the guideline evolutions were relatively subtle. Beyond that, I'm really not sure what I can add in terms of evolutions, I mean, I think the last quarter has been relatively stable in terms of prescribing patterns, narrative, et cetera. I just don't have any data at the moment.
David Roman (Equity Analyst)
Okay, maybe just to clarify there, we obviously continue to get a ton of questions around GLP-1s, especially given the oral dynamic. So maybe just any perspective there. And then just for my follow up here, you talked, Steven, I think, about accelerating OPEX growth through the year. How are you thinking about just overall investment in cost to serve here? Because as we look across the space, you have one of your competitors very aggressively going down the Direct-to-Consumer path.
Sean Saint
You have a lot of people out there hiring reps, but it looks like generally speaking, revenue expectations are pretty similar for most of the players here. So are you just seeing a higher customer acquisition cost as the market becomes more competitive and how you're thinking about just that operating expenses versus growth trade off. Well, let me take the first part of that, the GLP one based question and I'll just say that, look, I think in many ways this is sort of an asked and answered point on GLP-1s. I think they're a phenomenal class of drugs. I think they are helping a ton of people. I think when you talk about certainly type 1 and also insulin dependent, type 2 intensive, insulin managed, type 2 specifically, not really a huge impact there. Obviously oral medications I think are a continued evolution of that drug class. It's a great, you know, great evolution for those. But when you consider that we were going from a once a week injectable to an oral, probably not the thing that kicks it over into a class of drug that people taking four injections per day or wearing a pump are utilizing, that's not the reason it wasn't helping them is my point. I don't think oral is going to be the change there. But again, another evolution of that drug class that's helpful for them. I'm going to let Steven take the second half of that investment question.
Steven Fidder (Chief Financial Officer)
Yeah, sure. So first thing David I'm going to comment on is with regards to our sales and marketing growth for the rest of the year and what we're expecting in opex. So as I just alluded to in Mike's question, you'll see our sales and marketing spend grow here into the second quarter because of expansions of our field sales team. And that's why you saw the uptick in sales and marketing in Q1 26 relative to Q4 25. So that's what we're anticipating. And this also embeds some investment that we're making in direct to consumer advertising. Not at the same level as some of our competitors, but we are making notable investments there in terms of the customer acquisition cost. I think that's a really good point. And I think when you look at our profit and loss, for example, our sales and Marketing costs in Q1 26 are 75% of our revenue. That's not an efficient business at scale, of course. And so our sales and marketing costs, our customer acquisition cost needs to go down. And it will. And the ways that it'll go down primarily are building an install base, in particular in pharmacy where we generate a high gross margin recurring revenue from selling supplies in the pharmacy. And then the second one is that we are readying this business in terms of the brand recognition and building a Customer first or customer forward brand in anticipation of the mint product. And yeah, for those two reasons I'm comfortable that we are building a profitable business in the medium long term that will just start generating free cash way earlier than what we've seen in diabetes. Sorry, I got a little feedback there earlier than any diabetes peers. But I acknowledge that the customer acquisition costs today for a business like us, acknowledging we're getting most of our new or a lot of our new patients from Pharmacy Channel and we're building a brand that it doesn't look like a perfectly economical sales and marketing model at this exact moment.
David Roman (Equity Analyst)
Understood. Well, just not yet, but I appreciate all the perspective.
OPERATOR
Our next question comes from the line of Frank Takonen with Lake Street Capital Markets. Your line is open.
Frank Takonen (Equity Analyst)
Thank you for taking the question. Wanted to start with one on gross margin. Obviously a really strong performance in Q1. Was hoping maybe you can help quantify some of the benefits you called out related to the higher Islet production and anything else that you mentioned on what may have contributed to Q1 and then extrapolating that out to so it feels like gross margin is trending kind of towards the higher end of the guided range today. Is there something in there kind of tempering that expectation?
Steven Fidder (Chief Financial Officer)
Hey Frank, appreciate the question. So with gross margin. Yes there were as I mentioned on the prepared remarks, there were one time tailwinds that we had in Q1 that brought the gross margin up from what it's current run rate is. I don't want to quantify specifically what that impact was, but it was relatively small but notable. So that's that is the first point. And then the second thing you asked about is kind of relative to our guidance, doesn't your Q1 actual performance look these are my words, not yours, but you're kind of alluding to like doesn't this look like sort of conservative based on what the Q1 performance is? And I would say maybe. But I just want to acknowledge two key points. Number one is just reiterating that Q1 did have some one time favorability in it. And then the second point is that cost of sales generally has sometimes discrete and semi-unpredictable one time charges that can happen unfavorably in any given quarter and in short run periods makes gross margin semi difficult to predict. And so acknowledging that similar to how we had a favorability of a one time charge in Q1, I'm not at all forecasting any future result of that nature for us. But I am saying that our guidance embeds the openness to that. But I think, look, gross margin is a very high point for our business. There is massive room for upside in gross margin in the long term for the company. And I hope what you're seeing in just the results even this quarter is that we're demonstrating cost favorability in our ability to manufacture costs more and more efficiently quarter over quarter. And then the pharmacy business model is absolutely working. I even alluded to today that the pharmacy business unit or the pharmacy revenue model has a higher gross margin as of this quarter than even the DME revenue model. And this is in its early state, so more upside to common gross margin in the long term. But there's sort of your answer to on why guidance is set the way it is. Got it.
Frank Takonen (Equity Analyst)
Very helpful. And then maybe just for my second one related to cash burn, any seasonal considerations we should think about with the cash burn from Q1, Q2, Q3 and Q4 just a little higher cash burn in Q1 and just kind of trying to understand how we should model the burn profile throughout the end of the year.
Steven Fidder (Chief Financial Officer)
Yeah. I think cash burn for us is going to sort of approximate adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
Frank Takonen (Equity Analyst)
for the rest of the year. The reason Q1 cash burn exceeded, we burned about $25 million in Q1. That was higher than what our adjusted EBITDA was of around 17 million. And the reason for that is we paid transparently. We paid cash bonuses in Q1. So there was a big change in our crude expenses. And then the second thing is there was some working capital differences between Q4 quarter end and Q1 quarter end, notably inventory, accounts receivable and accounts payable. So those totaled about $4 million of impact. And that'll kind of get you to where, you know, closer bridging the gap between that 25 million of burn and the adjusted. the adjusted EBITDA number. Got it. Very helpful. Thanks for taking the questions.
OPERATOR
Our next question comes from the line
John Block (Equity Analyst)
of John Block with Stifel. Your line is open. Great. Thanks guys. Good afternoon. Maybe I'll go with a couple modeling questions, but the first one, Stephen, I think the street was about 44 or 45% in 2026 sales in first half. You know, prior to tonight's print, it sort of landed around 31 million for Q1 26. And just curious is that you mentioned this year would be more front end weighted relative to 2025 for a handful of reasons. But when we look at that one H weighting or maybe even more specifically the $31 million for 2Q is that the right cadence to think about for the model or anything else to call out as we think about the balance of the year on the top line.
Steven Fidder (Chief Financial Officer)
Yeah, I'll reiterate the guidance that I gave on the last call that you just alluded to, John, which is that the first half of 2026 will have more revenue in terms of waiting for the calendar year period than what we saw the first half of 2025. Than what we saw in the first half of 2025. I'm sorry, I'm not going to specifically comment on the number you shared in terms of Q2 guidance. That's not a number we don't want to give quarterly revenue guidance. But based on what I just told you, I think you can kind of get a really good sense as to what that number is or at least a tight range for it. So I'll leave it there.
John Block (Equity Analyst)
Yep, fair enough. So maybe I'll take a different shot on gold, but go to gross margin going into this year. I think what you alluded to was gross margin would increase sequentially throughout 2026. And obviously there was material upside to 1Q26.
Steven Fidder (Chief Financial Officer)
Right. Sort of like a good problem to have. You don't want to quantify the one timers, but just help us out when we think about gross margin going forward. Now that you're already at the upper band of revised guidance for gm, what are the call it the upside or downside for GMs or cogs from here as we think about the next handful of quarters. Yeah. So again, I'm not quantifying. Well, I appreciate the question and I'm not quantifying the extent of the one timer that we saw or the one timers that we saw in Q1 to give you the run rate Q1 gross margin. But relative to the run rate Q1 gross margin, we are still expecting an
John Block (Equity Analyst)
uptick quarter over quarter in gross margin. So there was nothing, I guess also notable about Q1. And we're not calling down gross margin or a different slope for the rest of the year, in terms of the outlook. It's just that Q1 had a big number for reasons that I've now explained. Okay, sorry, if I can just clarify there. So we're still we're up sequentially off the normalized 1Q26GM number. You're not going to quantify it, but logically it's got to be about a 200bp tailwind. If you're up sequentially and still get to the range. The revised range. Yeah. Without commenting on specifically the 200bp tailwind. Bingo. Fair enough. I'll take the rest offline. Thanks, guys. All right.
OPERATOR
Our next question comes from the line of Richard Neuwieder with Truist Securities. Your line is open.
Felipe
Hi, it's Felipe on for Rich. Just to follow up on the pharmacy channel, I think, you know, you had mentioned that more competitors trying to enter with durable pumps into the channel is potentially going to accelerate the shift over. So I'm just wondering if you could dig into that and maybe give any context on conversations that you've been having with your PBM partners and then just one follow up. Thank you.
Sean Saint
Yeah, Felipe, it's Sean, really beyond just saying that the more companies that are accessing this channel, the more normal it becomes. The less one off these conversations are, the more of us that have success through this channel, the more future people accessing will also have that success. And that success brings more success with all other payers. And the more payers that start to pay, the more that the ones who choose not to become outliers. So I think this is definitely a snowball rolling down a hill. And multiple payers accessing this channel are a positive for all of us. We're more than happy to see that. And I think it ultimately makes our entire industry quite a bit more healthy, frankly. We're happy to have started that snowball rolling in the durable pump space.
Felipe
And then if you could just remind us why you expect economics in the channel to hold over the long term. There are a lot of misconceptions around multiple players in the channel and potential trends downward in economics. Just any clarity around that would be helpful. Thank you.
Sean Saint
Yeah, that's a good question. The primary reason for the moment is that insulin pumps are non-commoditized markets. And when you look at the pharmacy channel, there are plenty of examples of commoditized markets getting into a race to the bottom because you're in a situation where a particular payer really only needs to offer one of those products because they're easily switchable. And in fact, you'll see situations where scripts can be changed between different products without the approval of the healthcare provider. That is not the case in insulin pumps. When you write a script for an eyelet, the payer, well, whoever must deliver an eyelet specifically and you need to get a new script for something else. It is the definition of a non-commoditized market. So there really limits the ability to create downward price pressure in a situation, in a market like we have today because of the nature of automated Insulin delivery and the unique algorithms that we're all providing, that really is not going to change anytime soon given the clinical trials, etc, etc that are required to go into these pumps. And as of today anyway, we are still looking at a very differentiated market and of course we think islet being one of the more differentiated products out there. Does that help?
Felipe
Super helpful. Thanks for taking the questions.
Sean Saint
You got it.
OPERATOR
Our next question comes from the line of Jeff Johnson with Baird. Your line is open.
Jeff Johnson (Equity Analyst)
Thanks guys. Can you hear me okay? Sorry, I'm in the back of the car. Hopefully not too much noise here.
Sean Saint
We got you, Jeff. You sound all right.
Jeff Johnson (Equity Analyst)
Yeah, good, thanks. So, Sean, just maybe staying on that pharmacy point, you know, I think any updated thoughts you have on rebates maybe and how you're thinking about rebate dollars, you might provide the channel here over the, you know, next few years, handful of years anyway. And you know, how do you balance kind of staying at Tier 3 in some of your contracts and buying down the co pay versus maybe trying to move up to a tier 2 but having to chase an added rebate dollars as you compete against maybe one of your biggest or one of your bigger peers in the pharmacy channel there. So just rebates versus buying down CO pays and that just what's your outlook there over the next few years?
Sean Saint
Yeah, great question, Jeff. And you're absolutely right. That is very much building on Felipe's question. I would start with. When you just look at the non commoditization of the market, limiting the ability generally of payers to create the downward price pressure, we see a lot of durability of pricing here for the foreseeable future. So that's one aspect of your question. But the second, frankly, is very different. And that's the tier two versus Tier three argument or argument. So let me just be clear that. tier 2 versus tier 3 has, has two fundamental differences and really only the two. They are the rebate required to obtain tier 2 versus tier 3 and the copay that the user is asked to pay when their particular product is covered at either tier 2 or tier 3. So most companies, beta bionics certainly included, we have copay assistance programs which are transparent to the user which ensure that we control that copay at a particular level. Currently I believe we're at $25 or less per month. What that means though is that it's a math problem for us. We just balance the rebate required to move between tiers with the reduction in copay that we would get when we do it. And out of that it's a very simple math problem to tell us whether or not a tier 2 or a tier 3 positioning would be more advantage for Beta Bionics. We will always pick that, keeping in mind that our patients will always pay the $25 copay or less that we control. So it's really a win win for us and our users.
Jeff Johnson (Equity Analyst)
Fair enough. Appreciate the thought.
Sean Saint
Thanks, Jeff.
OPERATOR
Thank you. Please stand by for our next question. Our next question comes from the line of Matthew o' Brien with Piper Sandler. Your line is open.
Matthew o' Brien
Oh, afternoon. Thanks for taking the questions.
Sean Saint
The first one's a little convoluted, so forgive me, but I don't have perfect information here. But as I look at the model, it looks like the type 2 growth that we saw in Q1 was meaningfully higher than on the type 1 side. And so I'm just wondering, is the math there about right? Type 2 is really kind of carrying you right now as far as overall patient growth on a year over year basis. Are you still growing type 1 somewhere in the double digit range? And then are you exposed in the intermediate term by not having a type 2 indication, just given how well you're doing there? And then I do have a follow up. All right, yeah. So is type 2 growth driving the growth for the business? Look, type 2 has been. I have to be a little careful here because of course we don't have the indication. So you're going to always hear Sean and I, when we're talking about Type two, a little hesitant to say too much. But yes, the fact that 25 to 30% of our new users are coming to us with type 2 diabetes, that is a large part of our growth. But is our type 1 growth shrinking or is a type 1 market or the applicability for our product in type 1 shrinking? No, it is not. So the math will show that, yes, type two is a growth contributor for us and it's a larger growth contributor than what Type one in this particular quarter was. But it's not because the market for our product in type 1 is dwindling or anything of that nature. We're as confident as we've ever been. Are we exposed by not having a type 2 indication? I do think healthcare providers will prescribe what they want. That said, the fact that we cannot promote our product for type 2 and we do not, and of course legally we cannot, that does hinder our growth. Yes, it's an indication that we desire that we'll ultimately need in order to win at the level that we desire to in the medium and long term. But the fact that the product is prescribed the way that it has been in type two is really just a product of doctors being educated about what insulin pumps are out there. But if we had the ability to market ourselves for that particular area, absolutely, It would help us.
Matthew o' Brien
And apologies for that long question. And I think here comes another long one. But just the R and D spike that we saw in Q1 versus Q4. And I know there's some timing issues
Sean Saint
there, but is it fair to say I still think the bihormonal work is still kind of earlier stage versus Mint. Is it fair to say the big bump that we saw is much higher than what we were modeling was really related to Mint? And then do you. Are you sensing that your mint timing is. You don't have to give it to us, but just it's on track versus what you were expecting or maybe even potentially a little bit earlier than what you were expecting internally? Yeah, thanks for the question, Matt, it's Sean. Look, I'm not going to comment on the split between where we're spending our money between biohormonal and Mint. What I will say is that both products continue or both projects continue to and both will see upticks in spending over the next period of time. So I think at some level that was true on both. But I'm not going to quantify where the lion's share fell. And then in terms of mint, not really a lot I can share right now. I think the notable point that maybe I'll sort of reiterate is that we've been sharing the timeline. We've been sharing for quite a while and it hasn't slipped. And we've been continually reiterating it now for forever, I think. And I think that's what you want to see from us. Right? We're not moving it all around. We're just, you know, we want to be predictable and that's. That's what we've been. But with that being said, no really additional updates except reiterating our timeline. Unconstrained launch by the end of 27.
OPERATOR
Our next question comes from the line of Jeffrey Cohen with Ladenburg Thallman and company. Your line is open.
Jeffrey Cohen (Equity Analyst)
Hi, Blake and Sean. Good afternoon. So I guess firstly you did call out lower cost of materials in Q1 that was one time favorable. But anything related to deflation or scale as a function of that or too small to tell, can you say that the last part of your question related to inflation or scale. What did you say? So, Q1 cost of materials, was some of that deflationary in sense or was some of that scale related?
Sean Saint
As far as sheer scale, yeah. The primary driver of the lower cost per unit and the cost of materials is simply just volume. So CS scale, the more components we're able to or we're able to purchase, the larger scale, the lower cost per component.
Jeffrey Cohen (Equity Analyst)
Okay, got it. And then secondly, I want to follow up on the bihormonal. What might we see during 2026 as far as any data or publications related to the 2a or the 2b trials? Feasibility studies?
Sean Saint
Yeah, Jeff, that's a great question. You know, frankly, I don't think we really intend to publish a lot of this information. There's not really a benefit to us to do that. So, you know, what we will do is. I don't know about publishing, but as things complete, our cadence here has been to let you know that things are done. Not so much to tell you what's coming up. We'll continue to follow that path. 26 should bring some meaningful updates. But I'm not going to call it exactly what those are at this point. But I will reiterate now, we probably won't publish the results of these trials for various reasons. I just don't think there's a benefit. What I will say, and I alluded to this in our prepared remarks, is that in the past we really have published data on this. There's been quite a few studies published by Beta Bionics on our, our formative studies over the last 20 odd years on this product. And there's a lot there and there's some really, I think phenomenal results to be looked at. So that I think sets a line as to kind of where we'd like to see things sort of at a minimum. But they're, I don't say they're great outcomes from my perspective. So I would encourage you to go take a reread of some of the stuff we published in the teens. Got it. Thanks for taking the questions.
Jeffrey Cohen (Equity Analyst)
Yeah, you got it, Jeff.
OPERATOR
Our next question comes from the line
Matthew Blackman (Equity Analyst)
of Matthew Blackman with TD Coleman. Your line is open. All right, thank you guys. Can you hear me okay? Yeah, we got you, Matt. All right. Appreciate you taking my questions. Maybe. I'm sorry, I apologize. I've been jumping around calls, Stephen. I just want to get a feel for the new disclosure on new patient ads. I know we can pick whatever number we want, but Would you have us be sort of in that middle of that range? Is that a reasonable sort of launching point to model off of that, you know, greater than 10% but less than 20% Q over Q decline? Is being in the middle of that a fair, you know, point to sort of model that new patient number off of?
Steven Fidder (Chief Financial Officer)
Totally, totally appreciate why you want to know that. I. Unfortunately, what we've. What we've said in the prepared remarks is what we'd prefer to disclose in terms of the extent. So I'm sorry, Matt, but I won't go commenting further.
Matthew Blackman (Equity Analyst)
And then I just remind us again on the Salesforce expansion. I know we talked a little bit about it, but we know you're adding 20 territories, but just, you know, relative to the expansions you've done over the last several years, how similar or how different is this versus those expansions? Is this a lot of white space that you're filling in or are you now sort of splitting territories, going deeper into areas geographies so that you can really pound away at accounts? And if so, is the execution of the Salesforce expansion any different than what you've tackled successfully in prior years? And that's all I had. Thanks.
Sean Saint
Yeah. Matt, this is Sean. I'm not going to comment on size of the expansion, but, and this is probably an unsatisfying answer, but I'm going to say yes, of course it's both of those things. I would say technically, you know, white space would be an area that, you know, you kind of consider that you don't have a rep and we don't really have white space. There's a rep covering everywhere in the country. That being said, there are absolutely areas of the country that get essentially no rep visiting. You know, we never actually put a foot on the ground in that area. So we are putting reps in those spaces. So it's not technically white space, but for all intents and purposes it is. But then also they're replacing people at some stage, we're adding people in areas that were well covered. It's just all those things, we tend to take people that we tend to find good people and put them where we can. At some level. You're not just going to say, well, I'm going to take whoever's available and, you know, I don't know, pick a particular MSA and just find a person. We want to make sure that we get good people in every place. So that governs to some extent where and when we add.
Matthew Blackman (Equity Analyst)
Appreciate it. Thank you so much.
OPERATOR
Thank You Our next question comes from the line of Travis Steed with Bank of America. Your line is open.
Grace
Hey, this is Grace on Travis. Thanks for taking the questions. I just wanted to start the first one maybe about the 2026 revenue guidance. I think it's implying about 33 million of year over year dollar growth. You did like 35 million in 2025. Just wondering if this is sort of a level of conservative in the guide or what sort of do you think takes it takes from the pipeline or other parts of the the business to accelerate revenue growth going forward on a dollar basis. Yeah, understood. Hey there. Hey, this is Stephen.
Steven Fidder (Chief Financial Officer)
Thanks for the question and for dialing in. Yes, your math is correct in terms of what the guidance kind of implies year over year growth wise the puts on what could go right for the business that would allow us to exceed the revenue guidance which we do set of course that you know we have confidence in. What we guide to is the islet builds confidence from the healthcare providers that are from endocrinologists around the country and the clinical results that we get from our product, they continue to resonate with healthcare providers. Patients have unique and great experiences on the device. Tell their health care providers, other healthcare providers about it or their healthcare provider about it and we start to build confidence and traction in same store sales. The other thing that's put on the business is the new store sales. So as Sean just alluded to, we added a lot of new sales territories already. We'll continue to add more of them in the second quarter. And most of the places where these new sales reps are going do not prescribe the ILIT today. And so turning on those particular healthcare providers by making them aware of the benefits of automation, the great clinical outcomes that we have from our product, if that exceeds our expectations, what's embedded in the guidance that would be another upside to the numbers that we've guided to.
Grace
Thank you. And then maybe just a follow up on any directional color that you can sort of help with on new patient starts relative maybe to 2025 or seasonally throughout the year of 2026 and maybe how that DTC advertising spend is going to help leverage the new patient starts in 2026. And thanks for taking the question.
Steven Fidder (Chief Financial Officer)
Of course the only we don't guide to new patient starts specifically, but the only point I'll kind of communicate to
OPERATOR
you all is just to reiterate that Q1 is the weakest quarter seasonally and we absolutely expect an uptick in new patient starts and then of course revenue to coincide in the second quarter. And other than that, I think I'll just kind of leave it to our full year guidance as it relates to revenue, which I think kind of embeds what our expectations are on new patient starts. But the Q1 to Q2 jump is the largest seasonal step change that we think happens in the calendar year. And you'll see that we believe in our results. Thank you. Please stand by for our next question. Our next question comes from the line
Ryan Schiller (Equity Analyst)
of Ryan Schiller with Wolf Research. Your line is open. Hi. Thank you for taking the questions. Just one for me on competition. There was a competitor who did a recent IPO and another competitor who launched a nationwide product launch. Have you seen any changes in the competitive environment and maybe where do you see the most opportunity today?
Sean Saint
Yeah, good question. You know, I mean, IPOs don't really have any bearing whatsoever on the actual, you know, market dynamics as far as we're concerned. So, yes, we're well aware of that, of course, but. But no impact from our perspective on the nationwide product launch of the other competitor? You know, look, sure, at some level you hear about it, there's definitely news out there. I would point out that that particular product is, while being a very good product, is quite similar to some of the other products on the market. And I do believe it's increasing competition with those other products quite a bit. Quite a bit different from what we offer. And you know, in general, you're the same person who's looking at a product like ours is not looking at that one. So I would say more muted impact to us. However, it's true that increased competition, always at the margin, is going to, you know, dilute everybody just a little bit. So I'd say that's unfortunate, but I wouldn't say that it impacts us all that much beyond that. And that project, of course, has been known and available at some level for a while. Nothing really that's changed the narrative out there. There hasn't been a big product launch, a meaningful product launch that we're aware of for quite a while. At this point, things are relatively stable. So for a company like Beta Bionics, our job is to continue to get the word out. We are offering a meaningfully differentiated product. That also means it's new, that also means it's different. It also means healthcare providers are not nearly as familiar with it as some of our competitors. So that's our job today. We've been doing it historically with a smaller sales force and frankly, we've been doing it in a I don't want to call it a niche exactly, but a smaller portion of the market, meaning the tube pump market. And with all that being said, I think we really, we like where we're at. We taking meaningful share of the new patient starts every quarter. Especially when considering our sales force. Especially when considering the smaller portion of the market that we play into, which is doing exactly what we need to do now. It's getting the information on our differentiated islet system with our new algorithm out there, getting the healthcare providers familiar and setting us up to then bring that more nationally with an added sales force and then ultimately to the entire market with our mint program. So I think we're doing the right things to set ourselves up for long term success here. But you know, those are long term statements and I suppose I started with. Yeah, no, no recent evolutions of the market that we're aware of. So thank you.
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