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.
This content is powered by Benzinga APIs. For comprehensive financial data and transcripts, visit https://www.benzinga.com/apis/.
View the webcast at https://edge.media-server.com/mmc/p/23g86ces/
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 …
This post was originally published here
