10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2024

Commission File Number 001-42491

BETA BIONICS, INC.

(Exact name of Registrant as specified in its charter)

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (949) 427-7785

Securities registered pursuant to Section 12(b) of the Act:

Title of each class TradingSymbol(s) Name of each exchange on which registered

Common Stock, $0.0001 par value per share BBNX Nasdaq Global Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes☐No ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes☐No☒

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☐No☒

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes☒No☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐

Non-accelerated filer ☒ Smaller reporting company ☒

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the Registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the Registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐No☒

The Registrant was not a public company as of the last business day of its most recently completed second fiscal quarter and therefore cannot calculate the aggregate market value of its voting and non-voting common equity held by non-affiliates as of such date. The Registrant’s Common Stock began trading on the Nasdaq Global Market on January 30, 2025.

The number of shares of the Registrant’s Common Stock outstanding as of March 1, 2025 was 43,348,840.

Table of Contents

Page

PART I 5

Item 1. Business 5

Item 1A. Risk Factors 71

Item 1B. Unresolved Staff Comments 135

Item 1C. Cybersecurity 135

Item 2. Properties 136

Item 3. Legal Proceedings 136

Item 4. Mine Safety Disclosures 137

Item 6. [Reserved] 139

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 166

Item 8. Financial Statements and Supplementary Data 166

Item 9A. Controls and Procedures 166

Item 9B. Other Information 166

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 166

Item 10. Directors, Executive Officers and Corporate Governance 167

Item 11. Executive Compensation 174

Item 14. Principal Accounting Fees and Services 198

Item 15. Exhibits, Financial Statement Schedules 199

Signatures

Special Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K (Annual Report) contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Annual Report, including statements regarding our future results of operations, financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would,” or the negative of these words or other similar terms or expressions.

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, factors and assumptions described under Part I. Item 1A. “Risk Factors” and elsewhere in this Annual Report, regarding, among other things:

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our expected future growth;

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the size and growth potential of the markets for our products, and our ability to serve those markets;

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our ability to accurately forecast demand for our products;

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the rate and degree of market acceptance of our products;

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the expected future growth of our sales and marketing organization;

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our ability to implement our multi-channel coverage and reimbursement strategy;

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the performance of, and our reliance on, third parties in connection with the commercialization of our products, including single source suppliers;

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our ability to accurately forecast and manufacture appropriate quantities of our products to meet commercial demand;

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regulatory developments in the United States;

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our ability to maintain regulatory approval for our products or obtain regulatory approval for new products in the United States;

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our research and development for existing products and any future products;

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the development, regulatory approval and commercialization of competing products;

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our ability to retain and hire senior management and key personnel;

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our expectations regarding the period during which we qualify as an emerging growth company under the JOBS Act;

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our expectations regarding the impact of geopolitical and macroeconomic factors;

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our financial performance and capital requirements;

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our expectations regarding our ability to obtain and maintain intellectual property protection for our products, as well as our ability to operate our business without infringing the intellectual property rights of others;

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our expected use of our existing cash, cash equivalents and short-term investments, including expected use of net proceeds from our initial public offering and other financing transactions; and

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other risks and uncertainties, including those described under Part I. Item 1A. “Risk Factors” in this Annual Report.

These risks are not exhaustive. Other sections of this Annual Report may include additional factors that could harm our business and financial performance. We operate in a very competitive and rapidly changing environment where new risk factors may emerge from time to time, and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in, or implied by, any forward-looking statements.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Annual Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. These forward-looking statements speak only as of the date of this Annual Report. We undertake no obligation to update any forward-looking statements made in this Annual Report to reflect events or circumstances after the date of this Annual Report or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments. We intend the forward-looking statements contained in this Annual Report to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Annual Report. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

You should read this Annual Report and the documents that we reference in this Annual Report and have filed as exhibits with the understanding that our actual future results, levels of activity, performance and achievements may be different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

Summary of Risks Related to Our Business

Our business is subject to a number of risks of which you should be aware before making a decision to invest in our common stock. These risks are more fully described in Part I. Item 1A. “Risk Factors” in this Annual Report, including the following:

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We have a limited commercial history and limited experience marketing and selling our products. We only recently launched our commercial product, which may make it difficult to evaluate the prospects for our future viability and predict our future performance.

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Our quarterly and annual financial condition, operating results and cash flows may fluctuate in the future, which could cause the market price of our stock to decline substantially.

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We currently rely on sales of our iLet and related single-use products to generate all of our revenue, and any factors that negatively impact sales of these products may adversely affect our business, financial condition and operating results.

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Although we consummated our initial public offering and the concurrent private placement, we may need to raise additional funds in the future, and these funds may not be available on acceptable terms, if at all.

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The failure of our iLet and related products to achieve and maintain market acceptance could result in us achieving sales below our expectations, which would cause our business, financial condition and operating results to be materially and adversely affected.

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We face competition from numerous competitors, most of whom have far greater resources than we have, which may make it more difficult for us to achieve significant market penetration and which may allow them to develop additional products for the treatment of diabetes that compete with our iLet.

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We currently have a limited marketing and sales organization and have limited experience as a commercial-stage company marketing devices. If we are unable to successfully expand our marketing and sales capabilities or enter into additional agreements with third parties to market and sell devices, we may not be able to generate product revenue, and our business may be adversely affected.

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Our future success depends on our ability to retain our key personnel and to attract, retain and motivate qualified personnel.

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We are highly dependent on the success of our iLet for the treatment of T1D, which is cleared by the FDA for commercial sale in the United States for the treatment of T1D, and we do not have any other commercial products. If we are unable to obtain and maintain regulatory clearance or approval for planned modifications to the iLet or for new indications, or for any future development-stage products, or if we are unsuccessful in our efforts to continue to commercialize our cleared version of the iLet, our business will be materially harmed.

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We are subject to a post-market surveillance order issued by the FDA for our iLet. If the FDA determines that our iLet does not perform as anticipated, or if the FDA identifies new concerns related to the safety and effectiveness of the device, we may need to make changes to or recall or withdraw the iLet from the field, which could harm our business.

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The regulatory authorization process of the FDA, or any comparable foreign regulatory authorities, is lengthy, time-consuming and inherently unpredictable. Even if we complete the necessary

clinical trials, we cannot predict when, or if, we will obtain marketing authorization or clearance for any of our product candidates. Modifications to our currently commercialized version of the iLet may require new marketing authorizations or clearance.

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Use of our commercial or development-stage products may cause adverse events or undesirable side effects or present other safety concerns which may cause us to suspend or discontinue clinical trials, delay or prevent marketing authorization, limit the commercial profile of labeling for any product that has received marketing authorization, or result in significant negative consequences following marketing authorization.

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We are developing our iLet in combination with other therapies and devices, which requires additional development time and exposes us to additional risks.

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We are substantially dependent on various third parties for the development and potential commercialization of our iLet and product candidates. Certain of our current and future collaborators may control aspects of our clinical trials, which could result in delays or other obstacles in the development of the investigational devices or other development-stage candidates, such as glucagon, we develop. If our collaborations are terminated or are not successful, our ability to successfully develop and commercialize our iLet and product candidates may be adversely affected.

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We have limited experience manufacturing our products and, if we are unable to manufacture our products in high-quality commercial quantities successfully and consistently to meet demand, our growth will be limited.

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We obtain some of the components and subassemblies included in our iLet from single source suppliers, and the partial or complete loss of one or more of these suppliers could cause significant production delays, an inability to meet customer demand and a substantial loss in revenue.

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Our iLet is complex in design and may contain defects that are not detected until use, which could increase our costs, including warranty costs, and reduce our revenue. If our iLet does not perform as expected or the reliability of the technology on which our products is based is questioned, our operating results, reputation and business will suffer.

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We rely and will continue to rely on third parties to conduct clinical trials of our iLet, which means we do not have full control over the conduct of such trials.

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Our iLet is currently cleared only for the treatment of T1D in adults and children six years of age and older. If our iLet is authorized for marketing or cleared in a bihormonal configuration for the treatment of T1D or for any other indications, such marketing authorization or clearance will be limited by the FDA to the specific indication for which granted. We are prohibited from marketing the iLet for other indications, such as T2D.

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If we are unable to obtain or protect intellectual property rights related to the iLet, we may not be able to compete effectively in our market.

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If we fail to comply with our obligations in our current and future intellectual property licenses with third parties, we could lose rights, which may be important to our business.

PART I

Item 1. Business.

Overview

We are a commercial-stage medical device company engaged in the design, development, and commercialization of innovative solutions to improve the health and quality of life of insulin-requiring people with diabetes (PWD) by utilizing advanced adaptive closed-loop algorithms to simplify and improve the treatment of their disease.

Diabetes is a serious, chronic, and often lifelong condition with no known cure that is characterized by extended periods of elevated levels of glucose in the bloodstream (hyperglycemia), resulting from the body’s inability to either produce or effectively utilize the hormone insulin. To treat their diabetes, PWD must undergo a rigorous regimen of daily insulin substitution, as elevated levels of glucose in the blood over time can lead to serious and often life-threatening cardiovascular, metabolic and nervous system complications. Despite decades of innovation that have advanced the quality of care available, a significant unmet need remains as the vast majority of PWD still cannot manage their diabetes effectively.

Our product, the iLet Bionic Pancreas (iLet), was cleared by the U.S. Food and Drug Administration (FDA) for the treatment of T1D in adults and children six years of age and older in May 2023. The iLet autonomously determines and delivers every insulin dose without requiring a user to count carbohydrate intake, which we believe can make effective glycemic control easier to achieve. This unique ability of the iLet to determine 100% of all insulin dosing represents a new category in automated insulin delivery that is separate and apart from hybrid closed-loop devices, which only partially automate insulin delivery, making it more far-reaching than any other current technology on the market. Since we began commercializing the iLet, our installed base has grown nearly 5x, from 2,304 iLets as of December 31, 2023 to 15,298 iLets as of December 31, 2024.

There are two principal types of diabetes within the overall population:

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Type 1 diabetes (T1D): an autoimmune disorder that often develops during childhood or adolescence, but can occur at any age, arising from a person’s immune system attacking and destroying the insulin-producing beta cells in the pancreas leading to elevated blood-glucose (BG) levels. According to the Centers for Disease Control and Prevention (CDC), there are currently approximately 1.8 million people with T1D in the United States, all of whom require daily insulin replacement to manage their disease.

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Type 2 diabetes (T2D): a metabolic disorder that typically develops in adulthood, whereby the body becomes resistant to insulin, and, consequently, increased insulin production or replacement is needed to regulate BG levels. As T2D progresses, the body’s beta cells cannot maintain the increased insulin levels needed to regulate BG. There are currently approximately 36 million people with T2D in the United States according to the CDC, of whom an estimated 1.8 million require daily intensive insulin therapy, based on public and industry data.

The dynamic evolution of care in the field of diabetes over the past several decades has been characterized by continuous cycles of innovation that have produced several generations of increasingly sophisticated and complex devices to help maintain BG levels within the normal range or achieve goal, as established by the American Diabetes Association (ADA). The capabilities of devices range from offering convenience features to allowing transformative improvements in efficacy. We believe that, while these new technologies have managed to remove or reduce some “twentieth-century burdens” of disease management (e.g., logbooks, fingerstick measurements, not knowing BG levels for large stretches of the day and night), they have also added new, “twenty-first-century burdens” (e.g., bombardment with overwhelming amounts of data, constant alerts and alarms, and 24/7 information overload). The psychological, emotional and cognitive burden imposed by the continuous need for user engagement to manage the disease is substantial, unsustainable by most and unachievable by many. We believe that the iLet marks a significant breakthrough in the achievement of our ultimate goal, as it has been shown to enable clinically relevant improvements in glycemic control across broad populations of PWD, while dramatically reducing necessary user engagement.

Our initial commercialization efforts for the iLet are in T1D in the United States. Currently, only about 20% of adults, and an even smaller percentage of children, with T1D meet or exceed the ADA goal for therapy for hemoglobin A1C (HbA1c), a measure of average BG levels over an extended period of time, which is 7.0% or lower. Therefore, the remaining 80% are at elevated risk of developing an array of life-threatening cardiovascular, metabolic, and nervous system complications that arise as a result of chronic exposure to hyperglycemia. We believe that one of the principal causes of these suboptimal outcomes is the complexity of user experience of most currently available insulin pumps and partially automated insulin delivery (AID) systems, also known as hybrid closed-loop systems, which has kept the majority of PWD from adopting them despite the improved disease management these systems can offer. These systems require PWD to set and periodically adjust several insulin pump parameters, to quantify daily carbohydrate intake, and to frequently calculate proper doses of insulin for their pump to deliver. This complexity and the constant engagement required to achieve the full therapeutic benefits that these systems can offer limit the adoption of these systems to a subset of PWD and to subspecialty healthcare providers (HCPs). We believe that approximately one-third of people with T1D in the United States utilize insulin pumps or hybrid closed-loop systems to receive their daily insulin, while the majority receive their daily insulin via the self-administration of multiple daily injections (MDI) via a pen or syringe, a less complex, but often less effective, technique that has been shown to be associated with higher HbA1c levels.This is based on our internal estimates factoring epidemiologic data from government and leading industry organizations such as the CDC (to establish the overall size of the T1D population) and industry sales data from public filings and disclosures made by the leading device manufacturers (Medtronic plc (Medtronic), Tandem Diabetes Care, Inc. (Tandem) and Insulet Corporation (Insulet), who collectively hold approximately 96% market share) and aggregated by third-party data service providers (to provide independent estimates of both overall device penetration of various diabetes populations). Despite many advances in pump therapy over the past several decades, pump penetration in people with T1D in the United States has remained stable for years.

Figure 1.~80% of Type 1 PWD in the United States Are Not at ADA Goal for HbA1c

The iLet was specifically designed to provide improvements in glycemic control relative to insulin pumps hybrid closed-loop systems, and MDI therapy without the complexity and management burden of current insulin pumps and hybrid closed-loop systems. It is enabled by adaptive closed-loop algorithms that continuously learn each person’s unique and ever-changing insulin requirements and then autonomously delivers the correct insulin doses every five minutes throughout the day and night. Only the user’s body weight is required for initialization, unlike insulin pumps and hybrid closed-loop systems, which require a complex host of parameters to configure. The adaptive closed-loop algorithms are designed to remove the need to manually adjust insulin pump therapy settings and variables required by conventional pump therapy and hybrid closed-loop systems, which both require the user to determine the size and timing of both meal and correction insulin doses and to adjust basal insulin dosing. Therefore, we believe the adaptive closed-loop algorithms can make the iLet easier to initiate and use on a daily basis than other available AID systems. The iLet autonomously determines all insulin doses. We believe this convenient product feature, coupled with improved glycemic control, will appeal to broad segments of PWD who are seeking a simpler path to improved disease management.

Figure 2. The iLet Bionic Pancreas

The iLet is the culmination of over 20 years of significant, industry-leading research and product development, as shown below. The iLet’s differentiated algorithms were first developed in 2002. To date, the iLet and its predecessor bionic pancreas devices have been evaluated in 21 pre-pivotal clinical trials and one pivotal trial. In total, over 800 individuals participated across all 22 trials.

Figure 3. Select Historical Achievements

The safety, effectiveness, and simplicity of the iLet were evaluated in the investigator-initiated iLet Bionic Pancreas Pivotal Trial (BPPT) of 440 people assessing the efficacy and safety of the iLet in people with T1D between the ages of six and 83 with starting HbA1c levels between 5.3% and 14.9%, which we believe is the largest and most diverse population ever studied in a pivotal clinical trial of an AID system. Participants

were randomized to either iLet therapy or standard of care (SC), which was defined as their own insulin delivery modality plus a DexCom G6 continuous glucose monitor (CGM) if they were not already using a DexCom G6 CGM as part of their own diabetes management regimen. As a group, the participants who randomized to iLet therapy experienced an average reduction in HbA1c of 0.6%, from a baseline of 7.9% to 7.3% over 13 weeks, while participants who randomized to standard of care saw no change from a baseline of 7.7%. We believe the results of this trial validate the iLet’s core value proposition of marrying effective glycemic control with the simplicity of use that is brought about by adaptive closed-loop algorithm insulin dose determination and delivery. The trial met its primary endpoint, finding that participants using the iLet demonstrated statistically significant and clinically relevant (as defined by a decrease in HbA1c of at least 0.5%) improvements in glycemic control versus the standard of care, both across the overall trial population and among important subgroups: adults only, children only, those with starting HbA1c levels greater than 7.0%, those on MDI, and those on insulin pump therapy without automation. For more information regarding the BPPT, please see subsection titled “—The iLet Bionic Pancreas Pivotal Trial testing the iLet in adults and children with T1D” below.

In addition, the improved glycemic control seen in the results of the BPPT has been supported by additional, “real-world” iLet data. Of the 5,190 iLet users who uploaded CGM readings to the Beta Bionics cloud over the first year after our commercial launch (May 19, 2023 to May 18, 2024), 3,675 of them had at least three-weeks’ worth of iLet data (which affords at least one week of algorithm learning followed by two weeks to provide a reliable estimate of CGM outcomes). Of those 3,675 iLet users, 3,300 also had a pre-iLet baseline HbA1c value available. Data from these 3,300 users showed an overall improvement, from an average baseline HbA1c (as provided to us by the medical providers in the statements of medical necessity) of 8.5% to an average glucose management indicator (GMI)—a population-based estimate of HbA1c based on mean CGM glucose that is widely accepted as an indicator in the diabetes industry (and further explained below)—on the iLet of 7.3%. This demonstrated an improvement in HbA1c that was larger than that observed in the BPPT and is clinically meaningful (as defined by a decrease in HbA1c of at least 0.5%) in this patient population, which was much larger and had worse glucose control at baseline than those who participated in the BPPT. GMI is frequently used as a substitute for HbA1c in remote monitoring (iCGM) settings (which is what iLet users upload to the Beta Bionics cloud) given that HbA1c is typically measured in a laboratory setting.

The GMI and HbA1c are directly comparable measures of BG levels. The GMI was specifically designed by leaders in the field to be a CGM-derived measure of average BG levels that could be compared to the HbA1c, which requires a blood test. A means to enable this translatability has become increasingly necessary given the recent rise in CGM utilization as the principal means of measuring BG levels. The HbA1c correlates with a person’s average historical BG level over a period of several months, whereas the GMI is derived from a mathematical formula that converts a person’s average CGM value over at least two weeks into the HbA1c that would be expected based on that average. The HbA1c for any particular individual may be impacted by exogenous factors unrelated to the average BG, such as individual variability in both the red-blood-cell lifespan and/or the glycosylation propensity of the hemoglobin molecule within red blood cells. The GMI, on the other hand, may be impacted by how consistently a person uses the CGM. In practice, therefore, the correlation between the GMI and HbA1c values can differ from person to person, but the values are typically well-correlated in population studies as these inter-subject variations tend to cancel each other out in large populations. To maximize the commercial value of the iLet opportunity, we have assembled a team across our organization with broad experience in the successful commercialization of innovative technologies in the field of diabetes disease management. Our initial commercialization efforts have been focused on identifying the people with T1D most likely to adopt the iLet across multiple demographics, including age, level of glycemic control, current therapy, and HCP to create a multi-factor target-customer profile. Understanding how these factors interrelate with the decision to either adopt an AID system for the first time or to switch from an existing insulin pump or AID system will be key to identifying the people most likely to switch from their current therapy to the iLet and assisting with their transition. We have also partnered with DexCom, Inc. (DexCom) and Abbott Diabetes Care Inc. (Abbott)—global leaders in popular and easy to use CGM technology—to integrate the iLet with the DexCom G6 and G7 iCGMs and with Abbott’s FreeStyle Libre 3 Plus CGM sensor. An iCGM is a wearable device that works by inserting a small sensor under the skin into fatty tissue and tracks blood sugar levels in real time. The sensor measures glucose levels in the interstitial fluid and sends the information to a receiver, smartphone or insulin pump. The user can view their glucose levels, trends, and to what degree their

levels are rising or falling. The iCGM is a crucial component of AID systems, and by partnering with these global leading iCGM platforms, we believe we leverage all of the benefits that these iCGMs offer in an elegant solution for PWD. Use of the iLet requires the independent purchase of a compatible third-party iCGM to provide realtime data to the iLet user.

While the iLet can be prescribed by any HCP (PCP or subspecialists), we are promoting sales of the iLet through an internal sales organization, where our initial direct sales efforts are focused on people with T1D who are treated within high-volume endocrinology practices in the United States. Over time, we plan to expand into the more diffuse population of people with T1D who are treated by primary care physicians (PCP). Although we continue to analyze the timing related to this expansion, we do not currently have a specific timeline. These PCP treat an estimated 50% of the T1D population in the United States but do so among a much more diversified patient base than the endocrinologists. We believe that the iLet’s core value proposition of marrying effective glycemic control with the simplicity of use that is brought about by adaptive closed-loop algorithm insulin dose determination may resonate particularly well among PCP who do not have the subspecialty-level of expertise, the resources, or the clinical bandwidth that is needed to initiate insulin-pump or hybrid closed-loop therapy or for the continual demand (such as adjustments at quarterly visits) those systems place on clinical practices in follow-on care.

We are also optimizing our direct sales efforts by growing, in parallel, a community support team, a recent strategic marketing initiative and a targeted campaign we call the “Bionic Universe,” which is built around a community of the iLet users, caregivers, and key opinion leaders (KOLs) who share their stories to inspire others. The Bionic Universe aims to create a people-focused community dedicated to making diabetes management easier for everyone. This community is designed to facilitate the sharing of experiences and to help members learn more about the iLet. We employ both direct media and social media communication strategies to build the Bionic Universe and leverage feedback from this community to continuously improve both current and future device generations.

We are pursuing a multi-channel durable medical equipment (DME) and pharmacy benefit plans (PBP) coverage and reimbursement strategy to maximize access to the iLet within the T1D population, provide flexibility for PWD in choosing their device, provide PWD with advantageous coverage and reimbursement terms and provide us with potential access to higher revenue streams. We are working with payors to expand the reach of coverage and reimbursement under both DME and PBP channels. We believe that utilizing a strategy between DME and PBP will make the iLet more accessible to PWD and the HCPs who recommend and initiate the device. We believe the PBP channel, in particular, reduces the administrative burden associated with DME reimbursement, minimizes the initial economic burden to PWD with little to no upfront cost, ensures faster and easier access for PWD to purchase the device, and, over time, is economically favorable to us.

In order to maintain our competitive position in the marketplace, we intend to continue investing in our research and development activities to expand the potential therapeutic applications of the iLet based on our scalable technology platform. We are currently developing the following products:

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Patch Pump. We are in the early stages of developing an insulin pump that is designed to adhere directly to the skin and administer insulin without the need for tubing, commonly known in the diabetes industry as a “patch pump.” Our patch pump features a two-component design: a durable component that contains the electronics and motor, and a disposable component that includes the insulin reservoir, adhesive, an insertion device, and a cannula. This design is intended to enable efficient manufacturing and provide a convenient pump-change experience. Our patch pump is intended to unlock a new pool of PWD who are looking to receive the many benefits of the iLet, but prefer the patch pump form factor.

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Bihormonal iLet. We are also in the early stages of developing a first-of-its-kind bihormonal configuration of the iLet, which combines automated delivery of insulin and glucagon, the BG-raising hormone that protects against low blood sugar (hypoglycemia), with adaptive closed-loop algorithms where all doses of both hormones are autonomously determined. Hypoglycemia, which can develop while a person is either awake or asleep, can lead to a range of acute medical

complications, including tissue and organ damage, seizures, and coma; it can also be fatal. For people with T1D, the person’s immune system attacks and destroys the alpha cells in the pancreas that secrete glucagon. Consequently, people with T1D have a dual-hormone insufficiency, not just an insulin insufficiency. There are currently no commercially available devices capable of delivering both insulin and glucagon. We believe the ability to both proactively and reactively provide automated microdose administration of glucagon represents a large commercial opportunity and the next new paradigm in diabetes disease management—from automated insulin delivery to automated glycemic control. To advance this opportunity, we have entered into a collaboration and license agreement with Xeris Pharmaceuticals, Inc. (Xeris), whereby we have an exclusive license to commercialize a pump-compatible Xeris glucagon formulation.

In the future, we intend to pursue expanded use of the iLet to treat people with insulin-dependent T2D, as we believe the size and composition of this population make it a compelling opportunity. We believe our planned expansion for the iLet’s use in T2D will require an additional 510(k) clearance. We expect that we will need to conduct studies to determine the iLet’s applicability for T2D in order to obtain the additional 510(k) clearance. Although we continue to analyze the timing related to this expansion, we do not currently have a specific timeline. While there are certain differences in how T2D is treated relative to T1D, these differences primarily relate to the amount and rate of insulin delivered. Approximately 1.8 million PWD have T2D and require intensive insulin therapy, but fewer than 10% of this population has adopted pump technology to date. This is based on our internal estimates factoring epidemiologic data from government and leading industry organizations such as the CDC, as well as industry sales data from public filings and disclosures made by the leading device manufacturers (Medtronic, Tandem and Insulet) and aggregated by third-party data service providers. If the iLet is cleared for use in T2D, we believe that these individuals, who span socioeconomic and educational levels, and their HCPs, 90% of whom are PCP, may find the iLet’s combination of simplicity and efficacy particularly appealing.

We believe our financial and operating results and clinical and real-world data to date validate our opportunity, strategy, and execution. In the six full quarters since launching the iLet in May 2023, our quarterly revenue has grown over 6x—from $3.1 million for the quarter ended September 30, 2023 to $20.4 million for the quarter ended December 31, 2024—while our operating expenses have grown only 2x during the same time period—from $10.0 million to $24.7 million, respectively. Approximately 69% of the iLet’s adoption through December 31, 2024 came from PWD who were previously utilizing MDI, while the remainder came from PWD utilizing insulin pumps or hybrid closed-loop systems. We believe this split, which approximates the current share of the T1D population for each modality, demonstrates that the iLet’s value proposition is resonating across broad segments of the population of PWD and their HCPs.

Our revenue for the year ended December 31, 2024 was $65.1 million, more than 5x that of our annual revenue of $12.0 million for the year ended December 31, 2023. Our net losses were $54.8 million for the year ended December 31, 2024 and $44.1 million for the year ended December 31, 2023.

Our Strengths

We believe the success and continued growth of our company will be driven by the following strengths:

Highly Differentiated Technology Powered by Algorithmically Autonomous Insulin Dosing

Our novel iLet was developed to revolutionize the management of diabetes by offering meaningful clinical, ease-of-use, and quality of life improvements over the current standard of care. The iLet is the first FDA-cleared insulin delivery device that autonomously determines every insulin dose. Our system offers a significantly improved user experience by administering insulin without the need to count carbohydrate intake. The iLet was designed to maximize PWD’s preference by integrating with leading CGM systems and allowing the use of either pre-filled or manually filled insulin cartridges. The iLet also represents a significant reduction in the setup and follow-on care burden currently borne by PWD and their caregivers. The initial setup of our device is designed to increase PWD and HCP accessibility by only requiring the input of the user’s body

weight, after which the iLet uses sophisticated proprietary algorithms to automate all insulin dosing. We believe that the combined innovative features of the iLet represent a meaningful breakthrough among other insulin delivery therapies to treat PWD, and may lead to improved disease management, quality of life, and penetration of the large and growing population of PWD.

Robust Compendium of Clinical and Real-World Data

Through our clinical trials, the BPPT and our analysis of post-approval data, we have developed a significant body of clinical data from more than 3,000 patients, which we believe supports the safety, effectiveness, and simplicity of the iLet. Our BPPT of 440 volunteers with T1D between the ages of six and 83 years old with starting HbA1c levels between 5.3% and 14.9% represents what we believe is the largest and most diverse population ever studied in a pivotal trial of any AID device. The trial met its primary endpoint, finding a statistically significant and clinically meaningful (as defined by the FDA as a decrease of at least 0.5%) improvement in HbA1c levels in participants randomized to use the iLet versus standard-of-care therapy across the overall trial population and among five clinically important subgroups: adults, children, those with starting HbA1c levels greater than 7.0%, those on MDI, and those on insulin pump therapy without automation. The results of this trial suggest that improved glycemic control can be achieved across delivery modalities without the burdens of frequent user engagement, and we believe these results validate the iLet’s core value proposition.

In addition, the improved glycemic control seen in the results of the BPPT has been supported by additional, “real-world” data generated from the CGM readings of 3,675 iLet users over the first year after our commercial launch (May 19, 2023 to May 18, 2024). For more information regarding the BPPT, please see subsection titled “—The iLet Bionic Pancreas Pivotal Trial testing the iLet in adults and children with T1D” below.

Significant New Product Pipeline

We have invested heavily in our research and development activities to expand the potential therapeutic applications of the iLet based on our scalable technology platform. Our proprietary algorithms have been developed and refined based on over a decade of clinical trials and real-world experience. We believe the continued advancement of our algorithms will be fundamental in improving health outcomes and quality of life for PWD. We are currently in the early stages of developing a smaller, semi-disposable patch pump that is intended to unlock a new pool of PWD who are looking to receive the many benefits of the iLet, but prefer the patch pump form factor. We are also in the early stages of advancing the development of our first-in-kind bihormonal iLet, which is designed to automatically deliver both insulin and glucagon. We believe the ability to both proactively and reactively automate glucagon administration would simultaneously improve HbA1c and reduce hypoglycemia.

Extensive Intellectual Property Portfolio

Our technology is supported by an extensive intellectual property portfolio which includes patents, know-how and trade secrets. As of December 31, 2024, we own or have rights in 61 issued U.S. patents, 21 pending U.S. nonprovisional patent applications, 6 pending U.S. provisional patent applications, 101 issued foreign patents (including 9 issued European patents and their national validations), and 43 pending foreign patent applications, certain of which relate to various current or prospective aspects of the iLet, and related prospective bihormonal and adjunct products and methods. This includes exclusive, worldwide sublicensable licenses from the Trustees of Boston University (BU) to a portfolio of U.S. and international patents directed at the algorithms and other components of the iLet and an exclusive collaboration and license agreement with Xeris to commercialize a pump-compatible glucagon formulation.

Highly Efficient Business Model

Our goal is to continue to drive fiscally responsible revenue growth through enhanced patient access and vertically-integrated manufacturing. We are pursuing a multi-channel DME and PBP coverage and reimbursement strategy to maximize access to the iLet within the T1D population, provide flexibility for PWD in choosing their device, provide PWD with advantageous coverage and reimbursement terms and provide us with potential access to higher revenue streams. We are working with payors to expand the reach of coverage and reimbursement under both DME and PBP channels. As an alternative to DME, the PBP channel provides a lower upfront cost to PWD and potentially greater economic value to us over the life of the iLet. We believe utilizing this strategy optimizes medical and economic outcomes for key stakeholders and may result in enhanced user adoption. In addition, we have designed the various hardware, software, and electronics platforms of the iLet to maximize scalability, reliability, serviceability, and manufacturability from initial development, including multi-sourcing components to support production efficiencies. As a result, our gross margin was 55% for the year ended December 31, 2024.

Experienced Management Team

Our senior management team has extensive experience, including lived experience, in the diabetes and medical technology industry. Specifically, our team has extensive operating experience in commercialization, product development, clinical research, regulatory approval, and reimbursement of innovative medical technology products at well-regarded companies such as Medtronic, Tandem and Companion Medical, Inc. in insulin pump therapy, and DexCom in CGM. Since our founding, we have been supported by a seasoned board of directors with extensive industry and public company experience.

Our Strategy

Our mission is to grow our business by successfully commercializing our innovative solutions for safe, simple, and effective autonomous glycemic control and to reach as many people living with insulin-requiring diabetes as we can. Our goal is to establish the iLet as the standard of care for insulin delivery. The key elements of our growth strategy are as follows:

Continue our commercialization efforts by utilizing our sales force to educate PWD and HCPs on the compelling potential benefits of the iLet and to drive awareness

To fully realize the commercial opportunity presented by the iLet, we have developed an integrated commercial strategy to drive adoption across the T1D population and establish and maintain customer loyalty through customer service and educational programs. While the iLet can be prescribed by any HCP (PCP or subspecialists), we are promoting sales of the iLet through an internal sales organization, where the initial direct sales efforts are focused on people with T1D who are treated within high-volume endocrinology practices in the United States. Over time, we plan to expand into the more diffuse population of people with T1D who are treated by PCP. Although we continue to analyze the timing related to this expansion, we do not currently have a specific timeline. We believe that the iLet’s core value proposition of marrying effective glycemic control with the simplicity of use that is brought about by adaptive closed-loop algorithm insulin dose determination may resonate particularly well among PCP who we believe service an estimated 50% of the T1D population in the United States but who do not possess the subspecialty-level of expertise, the resources, or the clinical bandwidth that is needed for insulin-pump or hybrid closed-loop therapy or for the continual demand (such as adjustments at quarterly visits) those systems place on clinical practices in follow-on care.

Build our commercial and customer support infrastructure to maximize access to the iLet and maximize customer retention

We have an integrated customer-support strategy designed to efficiently fulfill orders, educate both new users and their caregivers during device initialization and follow-on care, and respond promptly to inquiries throughout the life of the product. Our commercialization efforts are supplemented with strategic marketing

initiatives and a targeted campaign we call the “Bionic Universe,” which is built around a community of the iLet users, caregivers, and KOLs who share their stories to inspire others. The Bionic Universe aims to create a people-focused community dedicated to making diabetes management easier for everyone. This community is designed to facilitate the sharing of experiences and to help members learn more about the iLet. We utilize both direct media and social media communications strategies to build the Bionic Universe. We leverage feedback from this community to continuously upgrade both current and future device generations.

Leverage our in-house manufacturing capabilities to optimize production efficiency and maintain quality

We manufacture the iLet and the ready-to-fill insulin cartridges at our facilities located in Irvine, California. By assembling and testing the iLet in-house, we believe that we can maintain better quality control and compliance with our own internal specifications and with applicable regulatory standards. We expect that our 50,000 square foot facility in southern California, which commenced operations in 2020, will have sufficient production capacity to support our anticipated clinical and commercial demand for the foreseeable future.

Obtain third-party coverage and reimbursement from payors under both DME and PBP channels

We are pursuing a multi-channel DME and PBP coverage and reimbursement strategy to maximize access to the iLet within the T1D population, provide flexibility for PWD in choosing their device, provide PWD with advantageous coverage and reimbursement terms and provide us with potential access to higher revenue streams. We are working with payors to expand the reach of coverage and reimbursement under both the DME and PBP channels. We believe that utilizing this strategy between DME and PBP will make the iLet more accessible to PWD and the HCPs who prescribe the device. The PBP channel reduces the administrative burden associated with DME reimbursement, minimizes the initial economic burden with little to no upfront cost, ensures faster and easier access for PWD to purchase the device, and, over time, is economically favorable to us.

Increase our addressable market by developing a patch pump and bihormonal iLet, as well as seeking expansion into the treatment of T2D

We are leveraging our algorithms to develop two additional products in our pipeline: the patch pump and the bihormonal iLet. The patch pump is an insulin pump that is designed to adhere directly to the skin and administer insulin without the need for tubing. Our patch pump features a two-component design: a durable component that contains the electronics and motor, and a disposable component that includes the insulin reservoir, adhesive, an insertion device, and a cannula. This design is intended to enable efficient manufacturing and provide a convenient pump-change experience. The bihormonal iLet is being designed and configured to administer both insulin and glucagon—the hormone responsible for raising BG levels—in a fully closed-loop system in which all doses of both hormones would be determined and delivered autonomously. We believe this bihormonal capability would offer a meaningful additional benefit to PWD as it would allow the proactive raising of glycemic levels as needed to reduce the risk of hypoglycemia.

In addition, we intend to pursue expanded use of the iLet to treat people with insulin-dependent T2D, as we believe the size and composition of this population make it a compelling opportunity. We believe our planned expansion for the iLet’s use in T2D will require an additional 510(k) clearance. We expect that we will need to conduct studies to determine the iLet’s applicability for T2D and in order to obtain the additional 510(k) clearance. Although we continue to analyze the timing related to this expansion, we do not currently have a specific timeline. While there are certain differences in how T2D is treated relative to T1D, these differences primarily relate to the amount of insulin delivered. Approximately 1.8 million PWD have T2D and require intensive insulin therapy, but fewer than 10% of this population has adopted pump technology to date. This is based on our internal estimates factoring epidemiologic data from government and leading industry organizations such as the CDC, as well as industry sales data from public filings and disclosures made by the leading device manufacturers (Medtronic, Tandem and Insulet, who collectively hold approximately 96% market share) and aggregated by third-party data service providers. We designed the iLet to serve both the T1D

and T2D populations, and we believe that the T2D total addressable market for insulin pumps in the United States is estimated to be approximately $6 billion.

Diabetes Overview

Insulin-deficient diabetes can lead to chronic, life-threatening diseases for which there are no known cures. Over its typically multi-decade course, diabetes can lead to many serious and often life-threatening complications, including cardiovascular disease, kidney disease, stroke, blindness, neuropathy and cognitive impairment.

Diabetes is a complex, multisystemic disease characterized by sustained and prolonged elevated BG levels, or hyperglycemia, that results from the body’s inability to either produce the hormone insulin, which is responsible for the proper metabolization of glucose, or properly utilize it. In the absence of insulin, ketones rise in the blood, which becomes acidotic. Insulin insufficiency leads to catabolism (in which the body begins to waste fat and muscle), which in the extreme, leads to diabetic ketoacidosis (DKA), and, ultimately, death. PWD also face the daily risk of low blood sugar, or hypoglycemia, which has multiple causes, including receiving excess exogenous insulin in the course of disease management. Hypoglycemia, which can strike without warning, starves the brain of needed glucose and can result in cognitive impairment, loss of consciousness, seizures, and death.

As diabetes has no known cure, its treatment paradigm entails an arduous daily regimen of disease management and insulin substitution whereby PWD must maintain constant vigilance regarding both their BG levels and the amount of insulin they receive. The long disease course, daily management requirements, and potentially catastrophic consequences of mismanagement each represent a significant burden to PWD, their caregivers, and society at large. Despite decades of innovation that have advanced the quality of care available, the vast majority of PWD cannot currently manage their diabetes effectively. The ramifications of this suboptimal treatment are substantial. Based on data from long-term population studies, including an analysis of epidemiological data from the Scottish Care Information–Diabetes Collaboration (SCI-DC) public database published in the Journal of the American Medical Association (JAMA), diabetes is estimated to shorten overall life expectancy by 7-10 years on average. According to the ADA, PWD are estimated to spend 2.5 times more on healthcare than people without it throughout their lifetime. In addition to the clinical burden of diabetes, the financial burden is substantial with an estimated annual cost to the U.S. healthcare system of over $400 billion according to the ADA.

According to the CDC, in 2021 there were an estimated 29.7 million people in the United States who had been diagnosed with diabetes, representing approximately 9% of the overall U.S. population. The two most prevalent subtypes of diabetes are referred to as type 1 and type 2 diabetes.

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Type 1 diabetes is an autoimmune disorder that usually develops during childhood or adolescence, but can occur at any age, and arises from the inability of the body to produce insulin due to the destruction of insulin-producing beta cells in the pancreas. People with T1D are also deficient in the hormone glucagon, which serves as the body’s natural protection for low blood sugar, or hypoglycemia. In the United States, it is estimated that 1.8 million people have T1D and rely on intensive insulin therapy, based on public and industry data.

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Type 2 diabetes is a metabolic disorder that typically develops in adulthood as the body becomes resistant to insulin and, consequently, more insulin is needed to manage BG levels. As a result, the pancreas needs to produce more insulin than it normally would, which results in excess stress on beta cells. As the disease progresses, the beta cells cannot produce sufficient insulin for the increased needs. In many cases, daily insulin replacement becomes required despite the availability of other classes of medications. About 1.8 million or about 5% of the overall T2D population require intensive insulin therapy, based on public and industry data.

Our focus has been on the T1D population, but over time, we may expand our focus to include people with T2D who require intensive insulin therapy. In the coming decades, the total prevalence of PWD in the

United States is expected to continue to increase meaningfully. The number of people with T1D is expected to grow approximately in line with the expected overall U.S. population growth rate of about 2% per year, while those with T2D are currently expected to grow at a significantly faster rate due to the growth in risk factors for developing T2D, such as obesity.

The Current T1D Disease Management Paradigm

According to the ADA, the central objectives for disease management in the treatment of T1D are sustaining HbA1c levels at or below 7.0% over time while maintaining daily BG levels between 70 and 180 mg/dL, near the range experienced by healthy individuals, for 17 or more hours per day. Those accomplishing these goals have been shown to significantly reduce their risk of developing the long-term complications of diabetes. These guidelines were established based on the results of the landmark Diabetes Control and Complications Trial (DCCT). These results demonstrated that failure to maintain BG near an acceptable range had long-term negative health consequences for PWD, exacerbating the complications of the disorder. The achievement of glycemic goals, however, is a daunting task due to the lifelong, daily requirements and the complex and dynamic nature of the factors that drive BG levels. Currently, only about 20% of adults in the United States with T1D meet these established therapy goals for HbA1c. We believe that one of the principal reasons for these suboptimal outcomes is that, despite decades of innovation and clinical data demonstrating their superiority to alternatives, insulin pumps have only been adopted by approximately one-third of people with T1D (based on our internal estimates and publicly available industry data, including sales data publicly disclosed by the leading device manufacturers). We believe that one reason for this relatively low adoption rate is the demands placed on users to perform the complex tabulations and calculations required for even the most advanced pumps (other than the iLet) to function optimally.

Current Treatment Strategies

The current day-to-day strategy for T1D disease management is a two-step process comprised of monitoring one’s BG level and administering appropriate amounts of insulin, both to satisfy baseline needs and to adjust as glycemic levels change throughout the day, primarily due to food intake and physical activity. PWD have multiple options available to perform both the monitoring and administration functions, ranging from a fully manual process to nearly complete automation. The primary means of performing each function are as follows:

Monitoring

Glucose Meters and Test Strips

First introduced in the 1970s, this technique requires a PWD to take a blood sample, typically from their finger, several times a day to measure BG directly from the bloodstream. Monitoring BG in this fashion can be extremely accurate at the time of measurement but is limited in its overall utility by the large variations in BG that can occur between measurements. In order for this technique to be an effective diabetes management tool, measurements must be performed in regular intervals as often as several times a day and before or after various activities. It is estimated that 30% of people with T1D in the United States utilize glucose meters and test strips as their primary means of determining their BG level.

Continuous Glucose Monitor (CGM)

A CGM is a wearable device that provides regular estimates of BG based on levels present in the interstitial fluid, a thin layer of fluid that surrounds the cells of tissue below the skin. CGM devices enable the constant monitoring of BG levels via a catheter or sensor typically inserted subcutaneously in the back of the arm or abdomen. The sensor tracks changes in glucose levels throughout the day and night, as often as every five minutes, and provides glucose readings through wireless data transfer to a receiver. A CGM typically contains three components:

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a small electrode that is placed under the skin

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a transmitter that sends readings from the electrode to a receiver at regular intervals (every one to 15 minutes)

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a separate receiver that shows the glucose level on a display

Since receiving FDA approval in 2005, real-time CGMs have been adopted by an estimated 70% of people with T1D in the United States, with most of the adoption occurring since 2018, when the first CGM that no longer required calibration from blood samples received FDA approval.

Insulin Delivery

MDI

MDI insulin therapy is the most widely used method of insulin delivery as it requires minor training and has a lower relative cost to users. MDI consists of the delivery of insulin via several discrete subcutaneous injections, typically four or five, per day by either syringe or pen. This typically includes one injection of long-acting insulin per day and an injection of rapid- or short-acting insulin before each meal. The long-acting insulin (basal insulin) is designed to release slowly and evenly in the bloodstream for about 24 hours after it is injected and act as the background insulin would in a person without diabetes. The short-acting insulin (bolus insulin) is intended to act like the insulin released by the pancreatic beta cell around mealtimes in a person without diabetes. Since the inception of exogenous insulin therapy in 1922, MDI has been the standard of care for the majority of PWD. Currently, of the approximately 1.8 million people with T1D in the United States, we believe approximately two-thirds of the population utilize MDI, based on public and industry data. Although MDI requires minimal training, a great deal of sophistication and vigilance on the part of the user is required to achieve good results with this approach.

Insulin Pumps

Insulin pumps, first introduced in 1974, perform continuous subcutaneous insulin infusion and typically involve the use of a tethered programmable pump that administers insulin through an infusion set into a person’s body. Insulin pumps deliver continuous small doses of rapid-acting insulin to fulfill both basal (to reproduce long-acting insulin) and mealtime requirements, which more closely resembles the physiologic function of a healthy pancreas. Current-generation pumps offer a number of potential advantages relative to MDI, including the elimination of MDI, more precise insulin administration, greater glycemic control, and greater lifestyle flexibility. More recent innovations have enabled the direct integration of insulin pumps with data from a wearable CGM sensor to form hybrid closed-loop systems which incorporate algorithms that modulate pump settings to adjust the insulin delivery. Since the introduction of CGMs, based on public and industry data, we believe that approximately one-third of the overall population with T1D have adopted an insulin pump.

Limitations of Current Insulin Delivery Devices

Both MDI and insulin pumps exhibit limitations either in convenience, glycemic control, or both, and neither has eliminated the need for substantial user engagement to achieve adequate glycemic control. The primary limitations of each modality are as follows:

MDI

The primary drawback of MDI is its inherent imprecision, as it delivers insulin in large quantities at four to five discrete intervals throughout the day on average, and therefore does not mimic the natural insulin utilization patterns of a healthy metabolic system. Because dosages cannot be corrected, slowed, or withdrawn once given, this fundamental mismatch leads to wider variability in overall glycemic levels, inferior long-term outcomes for users, and a higher risk of dangerous hypoglycemic episodes. MDI also requires users to count the carbohydrates they consume, manually self-calculate the correct dosage and administer multiple dosages each day. This process can be complicated, burdensome, prone to error and incompatible with many lifestyles.

Insulin Pumps

Insulin pumps, when utilized optimally, represent a significant medical advance relative to MDI. To achieve this optimal functionality, however, the user of a currently available pump (other than the iLet) must make several manual adjustments throughout the day. Properly making these adjustments requires ongoing tabulation of food intake and calculation of the correct food-to-insulin ratios. All calculations and adjustments are based on a comprehensive understanding of absolute levels of glucose at a given time, whether levels are static or changing, and, if changing, how rapidly they are doing so. The proper operation of an insulin pump, therefore, requires extensive education and training for both users and caregivers. As such, the recognized clinical advantages provided by pumps have been insufficiently compelling to the majority of people with T1D to warrant adoption. The primary requirements for optimizing the effectiveness of current-generation pumps are:

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Initialization of and Ongoing Intervention for Insulin Dosing Regimen.All current technologies, except iLet, rely on a process of trial and error with physician intervention over many months to determine a user’s basal insulin rates, insulin correction factors, and carbohydrate-to-insulin ratios. This process requires the expertise of a clinician specially trained in the use of insulin pump therapy and vigilant participation by the user. Once calibrated to the individual, current pump technologies require iterative manipulation of user-specific variables that must be revisited several times a year by the HCP, which adds to the burden of diabetes management.

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Carbohydrate Counting.All current technologies, except iLet, require the user to quantitatively estimate the amount of carbohydrates they will be consuming (i.e., the number of grams of carbohydrate) and manually enter meal bolus dosing specifics to prevent BG from rising too high.

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Manual Calculation of Correction Dosages.All current solutions, except iLet, require the user to input the necessary treatment adjustment calculations to function optimally and deliver insulin to bring BG down.

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Manual Filling of Insulin Cartridges. None of the systems currently available on the market in the United States, except iLet, are compatible with prefilled insulin cartridges. Non-iLet users are required to handle an insulin vial and use a syringe with a needle to fill either a pump cartridge or reservoir.

Our Solution: The iLet Bionic Pancreas

We believe the iLet addresses the significant limitations of current insulin delivery and benefits a significant community of PWD living with T1D. FDA-cleared in May 2023, the iLet is the first adaptive closed-loop algorithm insulin dosing system that does not require T1D users to keep a daily tabulation of their carbohydrate intake or perform calculations to determine the correct dose of insulin to take. Its compact size and integration with the leading CGMs via Bluetooth make it well suited for those people living with T1D who prefer a discreet and convenient approach to personalized disease management with adaptive closed-loop algorithm insulin dosing and delivery. The iLet’s convenient form factor is augmented by a user interface that presents all relevant data in a familiar app-based format, allowing users to receive real-time updates on any adjustments the iLet is making. The iLet’s share/follow feature allows data to be shared in real time with a trusted “Bionic Circle” of friends and family members. This feature can be particularly helpful in the pediatric setting, where PWD and their parents are learning the nuances of T1D.

Figure 4. The Suite of Components of the iLet

As shown above, the iLet includes:

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A pumping platform, which consists of the pump itself and related single-use products, including cartridges for storing and delivering insulin, and infusion sets that connect the insulin pump to a user’s body. The pumping platform is designed to deliver analog insulin alone using either a prefilled cartridge or an empty cartridge that the user fills using an external insulin source of their choice. The iLet is not compatible with third-party infusion sets or insulin cartridges.

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A suite of adaptive control algorithms that autonomously analyze and administer the delivery of insulin doses based on CGM data.

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An intuitive touchscreen display that enables user interactions through a custom graphical user interface embracing smartphone simplicity.

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A wirelessly rechargeable battery, which must be recharged every 5-7 days, similar to the battery life of other competitive pump products, and wireless software update capabilities.

The iLet integrates with the user’s CGM device (either DexCom G6 or G7 or Abbott’s FreeStyle Libre 3 Plus), which measures the user’s glucose levels. The iLet’s suite of three adaptive algorithms then work together, using the user’s glucose levels from the CGM and the user’s qualitative meal announcements, to understand the user’s distinct patterns of food intake and insulin needs, allowing the iLet to make all insulin dosing decisions with minimal human intervention. The three algorithms described below, refined over more than a decade, are the key enabling innovation of the iLet.

Basal Algorithm

The proportional-derivative (PD) Basal Algorithm determines daily basal insulin requirements based on CGM data and autonomously adapts to the user’s changing insulin needs. The Basal Algorithm is initialized only with the user’s body weight. From this value, it then computes a nominal basal insulin infusion rate that is a fixed proportion of the body weight. The actual basal insulin dose that is to be infused at each five-minute interval — referred to as the instantaneous basal dose — is computed using a PD control strategy that utilizes the current and past CGM values and the value of the nominal basal infusion rate at that instant. Over time, the nominal basal infusion rate will adapt upward or downward over those parts of the day and night where the instantaneous basal rate runs higher or lower, respectively, than the current nominal basal infusion rate. This adaptation of the nominal basal infusion rate will lead to a variable nominal basal infusion rate throughout the day and night. The instantaneous basal doses will then be anchored around the current nominal basal infusion rate at every five-minute time step (288 segments each day) and not on the initial fixed nominal basal rate that was determined based only on the user’s body weight. This adaptive capability of our Basal Algorithm obviates the need for the user to ever have to set, or even know, their basal-rate profile.

Corrections Algorithm

Running in parallel with the Basal Algorithm, the model-predictive control (MPC) Corrections Algorithm uses CGM data to automatically modulate insulin delivery in addition to basal insulin delivery by either adding (to reduce risk of hyperglycemia) or reducing (to reduce the risk of hypoglycemia) dosage levels of insulin dynamically based on changing needs throughout the day. We incorporate insulin pharmacokinetics into the MPC formulation of the Corrections Algorithm by augmenting it with a mathematical formulation for estimating the current concentration of insulin in the blood and predicting future concentrations. Insulin pharmacokinetics is based on a two-compartment model of insulin absorption through the subcutaneous tissue and into blood. It assumes a bi-exponential time course of insulin absorption and clearance for each dose of insulin delivered every five minutes. The Corrections Algorithm uses the superposition of the time course of all past doses to determine the total amount of insulin pending in the subcutaneous tissue and blood as it makes its dose determination at each five-minute step. Our Corrections Algorithm, therefore, takes into consideration the slow absorption rate of insulin analogs and is designed to help prevent the iLet from delivering excess insulin which often occurs in MDI, insulin pump, or hybrid closed-loop systems due to user error. Furthermore, our Corrections Algorithm automatically adjusts its insulin dosing aggressiveness in real time to accommodate the different insulin needs between individuals and the variable needs within the same person throughout the day and over the course of weeks, months and years. Our adaptive Corrections Algorithm, therefore, obviates the need for the user to ever have to set, or even know, their insulin correction factor (also known as insulin sensitivity factor).

Meal Announcement Algorithm

The Meal Announcement Algorithm automatically adapts insulin doses at mealtime without requiring the user to determine the specific quantity of carbohydrates eaten. Instead, the user makes a simple declaration that an upcoming meal will be within historical norms, “the usual for me,” or “more” or “less” than usual. Our adaptive Meal Announcement Algorithm predicts the amount of insulin that is needed for the announced meal type and relative size based on the amount of insulin that was required in previously announced meals of that type and relative size. Any additional insulin needed is provided by the Corrections Algorithm based on CGM data and pending insulin previously dosed. If the user declares a meal as more than usual or less than usual at the time they announce the meal, the Meal Announcement Algorithm will then deliver a dose that is, respectively, 1.5 or 0.5 times the size of the dose that would be delivered for the “usual for me” meal announcement. If the meal has less than about a quarter of the amount of carbohydrates in a “usual for me”

meal, the user should not announce the meal but rather let the Corrections Algorithm automatically provide all of the insulin needed to treat that meal in real time. If the meal has more than about 1.5 times the amount of carbohydrates in a “usual for me” meal, the user should announce multiple meals for that meal (e.g. a “usual for me” meal announcement plus a “less” than usual meal announcement, or two “usual for me” meal announcements, etc.). As the user makes meal announcements, the Meal Announcement Algorithm continually adapts the size of the insulin doses it delivers for meal announcements based on data from the most recent past meal announcements. This adaptive nature of the Meal Announcement Algorithm obviates the need for the user to ever have to set, or even know, their carbohydrate-to-insulin ratios.

Other advantages of the iLet include pre-filled insulin cartridges, a simplified startup process and a mobile application, as described below.

Pre-filled Insulin Cartridge

Another significant advantage of the iLet is its utilization of prefilled faster insulin aspart (Fiasp) cartridges that allow users to quickly swap out expired cartridges with new ones without the multiple cumbersome steps required of users of the self-filling insulin reservoirs used by other pump systems. This eliminates the burden of requiring users to handle an insulin vial and use a syringe with a needle to fill a pump cartridge or reservoir. We believe prefilled cartridges present convenience advantages and lower training requirements as compared to self-filling reservoirs; they may also reduce user error because of the fewer steps involved. To provide flexibility, the iLet also provides users with the option to fill ready-to-fill cartridges with their choice of insulin aspart (Novolog) or insulin lispro (Humalog). Both are rapid-acting forms of insulin that begin working within 20 minutes of delivery. The iLet’s algorithms automatically adjust to the type of insulin being delivered without requiring any input by the user.

Figure 5. Comparison Between a Manual Fill Insulin Cartridge and Our Pre-Filled Insulin Cartridge

Simplified Startup Process

In contrast to existing technologies, the iLet features a simple user interface that only requires the input of a user’s body weight to initialize dosing. Should a user’s body weight increase or decrease by more than 15%, changing the device input can be done easily.

The iLet Mobile Application

The iLet mobile application’s features include:

•

an easy-to-use interface;

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easy-to-understand reports for the user and physician;

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firmware over-the-air upgrades;

•

compatibility with the iOS platform and the Android platform; and

•

automatic data uploads to the cloud.

The mobile application receives information from the iLet and displays that information discreetly to the user. This user-friendly, intuitive mobile application provides real-time glucose readings, trends, and graphs. It also allows for cloud-based storage.

The iLet’s share/follow feature allows data to be shared in real time with a trusted “Bionic Circle” of friends and family members. This feature can be particularly helpful in the pediatric setting, where PWD and their parents are learning the nuances of T1D.

Figure 6. The iLet Mobile Application’s Share/Follow Feature

The Commercial Opportunity for the iLet Bionic Pancreas to Address the Unmet Need

Despite the inherent benefits that pump technology provides, the management of insulin-dependent diabetes remains difficult. Smart pump technologies have had little success in alleviating the heavy burden on PWD as they still generally require perpetual monitoring and disciplined intervention. We believe this burden is responsible for limiting the number of users who have transitioned to pump use to roughly half the number of users that have adopted CGM. This remaining burden represents a significant unmet need that the iLet can

address. Therefore, we believe the availability of the iLet may substantially increase the number of PWD who would consider pump use. In fact, approximately 69% and 51% of the iLet’s adoption through December 31, 2024 and 2023, respectively, came from PWD who were previously utilizing MDI. We believe that the iLet represents one of the first significant advances in insulin delivery technology since the commercial availability of hybrid closed-loop systems in 2017 and offers users a substantially enhanced experience relative to all insulin delivery methods because it automates the determination of all insulin doses and provides the greatest flexibility in CGM and insulin choice. This allows the iLet to remove a substantial daily burden from users while offering improved glycemic control.

Figure 7. The Current Commercial Landscape for the iLet

We believe the commercial opportunity for the iLet in T1D is substantial. We estimate the T1D total addressable market for insulin pumps in the United States is approximately $6 billion, which is comprised of the approximately $2 billion total addressable market of existing pump users and the approximately $4 billion total addressable market of potential new pump adopters, as further described below. Total addressable market is the total overall revenue opportunity that we believe is available for insulin pumps if 100% market share is achieved, and it is not a representation that we will achieve such market share. The market share we achieve is subject to a number of assumptions, risks and uncertainties, including new pump adoption and conversion rates, which will fluctuate from time to time. For example, and as described below, since their introduction, CGMs have been adopted by an estimated 70% of people with T1D in the United States. For more information, please see the section under Part I. Item 1A. “Risk Factors—Risks Related to our Business, Strategy and Industry—The market opportunities for our iLet for the treatment of diabetes may be smaller than we anticipated, limiting our ability to successfully sell our current and future products.” In the coming decades, we believe this market will grow approximately in line with the expected overall population growth rate of about 2% per year. Our estimates of the T1D total addressable market for insulin pumps and related growth rate are based on independent industry publications and public industry data, as well as third-party forecasts derived from the same. There are two distinct subpopulations whose needs could be addressed by a product of the iLet’s profile:

Existing Pump Users: Approximately one-third of the total T1D population, $2 billion total addressable market

Based on publicly available industry data, including sales data publicly disclosed by the leading device manufacturers (Medtronic, Tandem and Insulet, who collectively hold approximately 96% market share), we estimate that the current dollar value of the insulin pump market for people with T1D in the United States is approximately $2 billion and that the percentage of people with T1D who utilize a pump is approximately one-third of the overall population.

Potential New Pump Adopters: Approximately two-thirds of the total T1D population, $4 billion total addressable market

We believe approximately two-thirds of people with T1D in the United States do not currently utilize a pump for insulin treatments and instead use MDI from either a syringe or an insulin pen, based on public and

industry data, including data publicly disclosed by the leading device manufacturers (Medtronic, Tandem and Insulet). PWD who use MDI encounter similar challenges as those who use hybrid closed-loop systems, including the need to count carbohydrates and calculate correction boluses. Furthermore, insulin pens lack the discretion and convenience of pumps. We believe this U.S. patient population would be valued at approximately $4 billion, assuming current users of MDI fully converted to pumps instead, and at current pump pricing levels.

Figure 8. A Comparison Between the iLet and MDI Therapy

In the past, people with T1D have shown willingness to quickly adopt new technologies when the value proposition was far superior to previously available options. Currently, our iLet is cleared only for the treatment of T1D in adults and children six years of age or older. We believe the iLet represents such a breakthrough, and its superiority could catalyze an adoption cycle similar to the one observed with CGMs in recent years. In that product space, the innovation of removing manual calibration materially accelerated adoption by improving both user experience and outcomes. Similar to insulin pumps, CGMs struggled for decades to gain a majority share. The first real-time CGM received FDA approval in 2005, but it was not until 2018, with the release of the DexCom G6, the first CGM that did not require fingerstick calibrations, that the CGM value proposition became compelling to a majority of people with T1D. Since then, CGMs have been adopted by an estimated 70% of people with T1D in the United States. We believe a similar potential exists for the iLet to dramatically expand the reach of insulin delivery technologies in the marketplace. Although DexCom is our partner, DexCom G6 is not our product, and we cannot provide any assurance that a similar potential for the iLet will be reached.

iLet Development History

The iLet is the culmination of over 20 years of research, including extensive pre-clinical and clinical trial work. To date, the iLet and its predecessor bionic pancreas devices have been evaluated in 21 pre-pivotal clinical trials and one 440-participant pivotal trial. In total, over 800 individuals participated across all 22 trials. Results from these trials have been published in over 15 peer-reviewed manuscripts. Collectively, these trials demonstrated both strong efficacy and safety data for the iLet and, over time, informed the refinement and development of the iLet’s algorithms. The pivotal trial results have been supported by our real-world data, which we have been gathering since first commercializing the iLet in May 2023. The iLet algorithms are the most thoroughly studied and tested of all dosing-decision technologies for AID systems. Efforts to emulate these algorithms would require years of clinical testing, iteration, and retesting, along with extensive regulatory review.

Pre-pivotal clinical trials testing the bionic pancreas algorithms and the iLet Bionic Pancreas System

The pre-pivotal clinical trials testing the bionic pancreas algorithms began in 2008 and continued through 2019, the year before the test-run period of the pivotal BPPT began in the fall of 2020. The 22 pre-pivotal trials were completed over this 12-year period. Twenty of these trials involved subcutaneous insulin infusion alone or subcutaneous insulin and glucagon infusion, and 16 of those 20 trials studied people with T1D. During the first four years (2008–2012), three of those 16 T1D trials were conducted in the inpatient setting at the

Translational and Clinical Research Centers (formerly the Mallinckrodt General Clinical Research Center) at the Massachusetts General Hospital (MGH), with the control algorithms running on a laptop computer. Eleven of the remaining 13 T1D trials were conducted between 2013 and 2019 in the outpatient setting in either a hotel, summer camp, or home-use environment. In seven of these 11 outpatient trials, the control algorithms ran on an iPhone that received real-time data from a CGM and delivered insulin and/or glucagon through one or two Tandem t:slim insulin pumps that were actuated via Bluetooth with doses commanded by the control algorithms running on the iPhone. In 2018 and 2019, the remaining four of the 11 outpatient trials were conducted with the iLet in adults and children with T1D.

An additional four pre-pivotal trials, which are not described in the table below, were conducted with the iPhone or iLet versions of the bionic pancreas in people with congenital hyperinsulinism, cystic fibrosis related diabetes, T2D, and people who had received bariatric surgery and were at risk of hypoglycemia. Also not described below are two of the T1D trials (one in the in-patient setting with the iPhone system and one in the home-use setting with the iLet) that were conducted with a previous bihormonal configuration of the bionic pancreas, using dasiglucagon (ZEGALOGUE). Descriptions of the remaining 13 T1D trials are included in the table below. In all of the more than 20 pre-pivotal trials that were conducted to test the algorithms over a 12-year period and in all of the other trials that are not included in Figure 9 below, there were no severe hypoglycemic events or DKA events associated with the bionic pancreas algorithms.

Figure 9. Summary of the iLet Bionic Pancreas Pre-Pivotal Clinical Trials in Adults and Children with T1D

Cohort Method Duration / Participant

Reference: El-Khatib et al. (2010) Science Translational Medicine, 2:27ra27

Cohort Method Duration / Participant

Reference: Russell et al. (2014) New England Journal of Medicine, 371:313-325

Cohort Method Duration / Participant

during the daytime) Pancreas (Gen 3 iLet) in the home-use setting

All of the clinical trials listed in Figure 9 were investigator initiated. The inpatient trials were all reviewed by the institutional review boards at both Boston University and MGH and were conducted under investigational device exemptions approved by the FDA. Funding for the inpatient trials came from the National Institutes of Health (NIH), the Helmsley Charitable Trust, and the Juvenile Diabetes Research Foundation (JDRF). The investigational devices were provided by Boston University.

The outpatient trials were all reviewed by the institutional review boards at either MGH or Stanford University, and were conducted under investigational device exemptions approved by the FDA. Funding for the outpatient trials came from the NIH and the Helmsley Charitable Trust. The investigational devices were provided by Boston University or Beta Bionics.

The iLet Bionic Pancreas Pivotal Trial (BPPT) testing the iLet in adults and children with T1D

Background

The BPPT was conducted in 2021 as a parallel-group Randomized Controlled Trial (RCT) to evaluate the efficacy and safety of the iLet in a cohort that was designed to approximate the demographics of the U.S. T1D population with respect to race and ethnicity, socioeconomics, baseline glycemic distribution, educational attainment, and annualized household income. Participants were not excluded for very high HbA1c, history of hypoglycemia unawareness, or recent episodes of severe hypoglycemia or DKA.

Unlike most other AID pivotal trials, the BPPT was an RCT, in which those who randomized to the control arm remained on their usual method of diabetes management, with the addition of CGM if they were not already using a CGM. Approximately one-third of the cohort used MDI at baseline, approximately one-third used a hybrid closed-loop system, and approximately one-third were on insulin pump therapy without automation. We believe the BPPT was the only AID pivotal trial that included AID systems as part of the comparator arm. The use of a control arm was critical in determining the level of improvement in glycemic control that was directly attributable to the iLet rather than other aspects of the clinical trial. In contrast, single arm safety trials, such as the pivotal trials of other AID systems, cannot isolate the effects of the system from other trial-related factors, such as more frequent HCP visits and insulin dosing parameter adjustments, that are common in clinical practice. The BPPT was also unique among AID pivotal trials in that users of any FDA-cleared AID device could enroll in the BPPT and still continue to use the AID if they were randomized to the

control arm. This aspect of the trial was designed to assess the potential for the iLet to impact glycemic control in the population of people with T1D at large, where other AID systems were already in use.

The BPPT was conducted at 16 centers in the United States, and it enrolled 440 adults and children (≥6 years old) with T1D. Prior to randomization, baseline CGM data and total daily insulin were collected with the DexCom G6 over a two-week evaluation period on each participant’s own therapy. Participants ≥18 years old (N=275) were randomly assigned in a 2:2:1 ratio to the iLet with insulin aspart or insulin lispro (Humalog, iLet-A/L group, N=107), the iLet with fast-acting insulin aspart (Fiasp, iLet-F group, N=114), or standard-of-care insulin delivery plus use of an unblinded DexCom G6 CGM (SC group, N=54). Participants 6-17 years old (N=165) were randomly assigned in a 2:1 ratio to the iLet with insulin aspart or insulin lispro (iLet-A/L group, N=112) or standard-of-care insulin delivery plus use of an unblinded DexCom G6 CGM (SC group, N=53).

We believe the BPPT cohort is the most diverse group that has participated in a pivotal trial for an AID system to date. The participating individuals self-identified as 74% White non-Hispanic, 10% Black non-Hispanic, 10% Hispanic or Latino, and 6% other or more than one race. At screening, 31% of participants used a hybrid closed-loop system, 4% used a system with predictive low glucose suspension, 31% used insulin pumps without automation, and 34% used MDI.

The primary outcome of the BPPT was the glycated hemoglobin at 13 weeks. The key secondary outcome was the percentage of time that the CGM glucose level was less than 54 mg/dL, the threshold below which cognitive impairment can occur, especially if the exposure is prolonged. Another secondary outcome was the percentage of time that the individual spent in time in range (TIR), which is the amount of time a PWD spends in the target BG range (70–180 mg/dL), based on ADA guidelines. Additional outcomes included the percentage of time that the CGM glucose level was less than 70 mg/dL, the threshold for less concerning hypoglycemia, and percentage of time above 180 mg/dL and 250 mg/dL.

Statistical analyses were performed on an intention-to-treat basis. Continuous outcomes were compared between groups using linear mixed effects regression models and binary outcomes with logistic regression models, adjusting for the baseline value of the metric, age, and clinical center (random effect). Safety outcomes included the frequency of severe hypoglycemia, DKA, and other serious adverse events.

Results in the Primary Cohort

In the primary analysis (Figure 10) comparing the iLet using insulin aspart or lispro (iLet-A/L) with the SC in participants of all ages, the primary outcome, mean glycated hemoglobin at 13 weeks, decreased from 7.9% at baseline to 7.3% in the iLet group at week 13 and did not change (7.7% to 7.7%) in the SC group. The mean baseline adjusted group difference in glycated hemoglobin level at 13 weeks for iLet versus SC was –0.5 percentage points favoring the iLet, with a p-value of <0.001 (significance was defined as a p-value of <0.05). The baseline-adjusted difference in HbA1c between the iLet and standard of care were also least -0.5% favoring the iLet for important subgroups, including adults (-0.5%, P<0.001), children (-0.5%, P<0.001), those with starting HbA1c level >7% (-0.7%, P<0.001), and those using MDI at baseline (-0.8%, P<0.05), with all differences having p-values <0.001. In the key secondary analysis, the percentage of time the CGM level was <54 mg/dL was non-inferior in the iLet group compared with the SC group (P<0.001). The median values at baseline and over 13 weeks were 0.21% and 0.32% in the iLet group and 0.20% and 0.24% in the SC groups, respectively; the 13-week mean adjusted group difference was 0.00%, corresponding to zero minutes per day. Therefore, the iLet reduced the glycated hemoglobin level by 0.5% without increasing time <54 mg/dL at all.

The mean adjusted group difference for iLet versus SC in mean CGM level at 13 weeks was –16 mg/dL (P<0.001), consistent with the change in glycated hemoglobin. For percentage of TIR of 70-180 mg/dL, the difference was +11%, corresponding to 2.6 hours per day of increased TIR (P<0.001). The increase in TIR occurred, on average, within 48 hours of initiating the iLet using only the participants’ bodyweight. The percentage of time the CGM level was <70 mg/dL was not different between the groups (P=0.51).

Figure 10. Primary and Secondary Efficacy Outcomes in the Primary Analysis (All Ages, iLet-A/L vs. SC)

Baseline Follow-up(Over or at 13 Weeks) AdjustedDifferenceiLet minus

Primary Outcome

Key Secondary Outcome

Other Secondary Outcomes in Pre-specified Order

SD = Standard Deviation; IQR = Interquartile Range

A post-hoc analysis of participants of all ages in the iLet-A/L versus SC groups was performed to assess outcomes stratified by participant socioeconomic characteristics. The treatment effect of the iLet on glycated hemoglobin levels was similar by racial/ethnic group, educational attainment, and income category, and was nominally greater in racial/ethnic minorities and in those with lower educational attainment and income. The mean adjusted group difference was larger for participants using MDI (–0.8%) than for those who were using insulin pumps (–0.3%) or hybrid closed-loop AID systems (–0.3%) at enrollment. Of note, the treatment effect was statistically significant for iLet as compared to other AID systems. Higher baseline glycated hemoglobin levels were associated with larger mean adjusted group differences when using the iLet (e.g., –1.6% for >9% at baseline). For individuals with baseline HbA1c <7.0%, there was no statistically significant change in the HbA1c, indicating that the iLet was able to maintain the pre-trial level of glycemic control in these individuals despite the reduced setup and lower ongoing input requirements of the iLet.

Figure 11. Glycated Hemoglobin Levels, in the Primary Analysis (All Ages, iLet-A/L vs. SC), According to Subgroups at Baseline

Results in Secondary Cohorts

Secondary analyses were performed separately in adults and in children randomized to either iLet-A/L or SC. These results were consistent with those from the primary cohort analyses, which combined both age groups. The mean adjusted group difference in glycated hemoglobin level at 13 weeks for iLet versus SC was –0.5 percentage points (P<0.001) for both adults and for children. In the key secondary analysis, there was no significant difference in the percentage of time the CGM level was <54 mg/dL between the iLet group and the SC group in both adults and children. Over 13 weeks, the mean CGM glucose was reduced for iLet compared with SC by 16 mg/dL for adults and by 15 mg/dL for children (both P<0.001). The mean TIR 70-180 mg/dL was greater for iLet compared with SC by 11% (2.6 hours per day) for adults and by 10% (2.4 hours per day) for children (both P<0.001). In both cohorts, the increase in TIR occurred, on average, within 48 hours of initiating the iLet using only the participants’ bodyweight.

Secondary analyses were performed separately in adults randomized to the iLet with faster insulin aspart (Fiasp, iLet-F group). The mean adjusted group difference in glycated hemoglobin level at 13 weeks between the iLet-F and SC groups was –0.5 percentage points (P<0.001). There was no significant difference in the time <54 mg/dL or time <70 mg/dL over 13 weeks in the iLet-F group compared with the SC or the iLet-A/L groups. Mean CGM glucose was decreased by 18 mg/dL on average in the iLet-F group compared with the SC group (P<0.001). TIR was increased by 14% (3.4 hours per day) on average in the iLet-F group compared with the SC group (P<0.001). The only statistically significant difference between the outcomes between the iLet-F and iLet-A/L groups was a TIR that was greater by 29 minutes per day than in the iLet-A/L group (P=0.005). The increase in TIR occurred, on average, within 48 hours of initiating the iLet using only the participants’ bodyweight.

Figure 12. HbA1c, Time <54 mg/dL and Time in Range 70-180 mg/dL Change from Baseline

Glycated hemoglobin levels and time with glucose <54 mg/dL in the iLet groups for all participants (iLet-A/L, iLet-F, and SC) by age group at baseline. Baseline and 13-week values are connected by lines for the top and bottom 10% of values at either baseline or over 13 weeks.

Figure 12 shows the baseline and 13-week HbA1c and time <54 mg/dL values for all adults and all children in the BPPT. In addition to the reduction in mean HbA1c, the variability in the 13-week HbA1c was much smaller than the variability in the baseline HbA1c. Although there was no overall difference in the amount of time <54 mg/dL between the iLet groups and the SC groups in either adults or children, Figure 12 shows that individuals who had large amounts of time <54 mg/dL at baseline (e.g., >2% time <54 mg/dL) experienced reductions in hypoglycemia on the iLet.

Results of the patient-reported outcomes analysis on the BPPT revealed that in all age groups, the majority of participants would recommend using the iLet, including those with previous experience using AID. Similarly, all respondent groups (adults, teenagers, children, and caregivers) endorsed significantly greater benefits versus burdens, and most participants (74%-81%, depending on the group) reported strongly recommending the iLet. Adult participants reported statistically significant decreases in fear of hypoglycemia and in diabetes-specific emotional distress, as well as improvements in their perceived well-being. Children and teenagers also reported high acceptability and reduced burden, but less clear improvements in psychosocial outcomes, perhaps because they reported low levels of fear and distress and high levels of perceived well-being at baseline. Analysis of focus group material found that participants’ overall experience was positive, with decreased burden and improved freedom and flexibility.

Safety Results

In the primary analysis (adults and children randomized to either iLet-A/L or SC) a total of 244 adverse events were reported among 126 patients in the iLet-A/L group and 10 adverse events were reported in eight patients in the SC group. There were 214 episodes of hyperglycemia with or without ketosis reported in the iLet-A/L group, 160 of which were related to a trial device (which included both the iLet and the infusion set). Of the 160 events in the iLet-A/L group that were related to the trial device, 130 were adjudicated by the medical monitor as due to infusion set failure. It is common for infusion sets to be accidentally pulled out or for the cannula, the thin plastic tube that delivers the insulin under the skin, to pull out or become kinked and prevent insulin delivery. The other 30 device-related problems with insulin delivery included that the subject failed to connect the cartridge or tubing properly, failed to replace the insulin cartridge in a timely fashion or did not fill it completely and ran out of insulin or failed to recharge the battery and the iLet lost power, among other similar issues. Participants in the iLet-A/L group were required to notify trial staff in the event of hyperglycemia, whereas those in the SC group followed their usual practices and were instructed to contact their diabetes HCP in such events. Infusion set failures were the only reportable adverse events in the iLet-A/L group. These factors are thought to account for the difference in reported adverse events and hyperglycemia episodes between the two groups. Consistent with this, there were fewer episodes of prolonged hyperglycemia (defined as CGM glucose >300 mg/dL for at least 90 minutes during a 120-minute period) and less time >180 mg/dL and >250 mg/dL with the iLet than SC. There were no episodes of DKA in either group. In the secondary analysis comparing adults using the iLet with Fiasp against those using the iLet with aspart of lispro, two participants in the iLet-F group each experienced one DKA event, both confirmed to have been caused by an infusion set failures.

In the primary analysis (adults and children randomized to either iLet-A/L or SC), the incidence rates for severe hypoglycemia were 17.7 and 10.8 events per 100 person-years, respectively (P=0.39). In the secondary analysis (adults randomized to iLet-F or SC) the incidence rates were 10.2 versus 14.2 events per 100 patient-years (P=0.83). Therefore, there were no significant differences in the rates of severe hypoglycemia between any of the iLet or SC groups.

Conclusion

Use of the iLet was associated with lower glycated hemoglobin, lower mean glucose, and increased TIR without an increase in CGM-measured hypoglycemia or the rates of severe hypoglycemia events relative to SC. Patients in the iLet groups had a lower glycated hemoglobin by 0.5% overall and in both the pediatric and adult subgroups using the iLet with insulin lispro or aspart and in adults using the iLet with Fiasp. The largest improvements in glycated hemoglobin were in comparison to MDI, but there was a significant reduction in glycated hemoglobin even when compared to the use of other AID systems. The amount of time with glucose <54 mg/dL and the rates of severe hypoglycemia events were not statistically or significantly different between the iLet and SC groups. The TIR was increased by 2.4 to 3.4 hours per day in the iLet versus the SC, and, on average, this increase occurred within 48 hours of starting use of the iLet. Study participants using the iLet reported a high number of benefits and a low number of perceived burdens, and adults using the iLet reported reduced fear of hypoglycemia and diabetes distress. The majority of participants would recommend the iLet, regardless of what method of glucose management they used before. The results of this trial show that good glycemic control can be achieved by the iLet, with improvements compared to SC that are statistically and clinically significant, with only qualitative meal announcements and without a pre-specified insulin regimen, carbohydrate counting, user-initiated correction doses, or any titration of insulin by the user or HCP.

Comparison between iLet outcomes in the commercial setting and the BPPT

Background

The BPPT was designed to enroll a clinical trial cohort that was as representative as possible of the demographics of people with T1D in the United States with respect to race and ethnicity, socioeconomics, baseline glycemic distribution, educational attainment, and annualized household income. It was hypothesized that the results based on such a cohort would be scalable to the commercial setting. To test this hypothesis, we analyzed the impact of the commercial iLet on glycemic control during the first year after FDA clearance and compared the results of that analysis to the results of the BPPT.

Analysis

iLet CGM data were captured (i) during BPPT1–4 between January 2021 and October 2021 and (ii) from 5,190 commercial iLet users in the first year after FDA clearance of the iLet on May 19, 2023. Of those 5,190commercial iLet users, 3,675 had at least three weeks’ worth of iLet data in the Beta Bionics cloud. Of those 3,675 users, 3,300 had baseline HbA1c values that were compared with GMI values, which were calculated using all available iLet CGM data from among those 3,300 users.

Results

Data from 2,759 adults (≥18 years) and 541 children (<18 years) were included in the analysis of commercial iLet users and compared with data from the 218 adults and 112 children who randomized to the iLet in the BPPT.

The upper left and upper right panels of Figure 13 below show the change from baseline HbA1c for, respectively, 218 adult participants in the BPPT and 2,759 iLet adult users in the post-market setting to the mean GMI after (i) 90 days of iLet usage for each participant in the BPPT and (ii) at least 21 days’ worth of iLet usage for each user in the post-market setting. Histograms showing the distributions of HbA1c and GMI for these two populations are shown superimposed on the bar graphs. The highest and lowest baseline HbA1c values are connected with lines to their corresponding GMI values on the iLet, and the highest and lowest GMI values on the iLet are connected with lines to their corresponding baseline HbA1c values. The corresponding results are shown in the bottom two panels of Figure 13 for children <18 years old.

Figure 14 shows the change in the percentage of time spent with CGM glucose <54 mg/dL during the two-week baseline period to the 13-week period on the iLet in the BPPT in adults (left panel) and children (right panel).

Figure 14. Percentage of Time Spent with CGM Glucose <54 mg/dL at Baseline and Over 13 Weeks on the iLet

Percentage of time spent with CGM glucose <54 mg/dL at baseline and over 13 weeks on the iLet are shown for adults (left panel) and children (right panel) in the BPPT.

An alternative visualization demonstrating the efficacy of the iLet in the commercial setting, in which each of the 3,300 users (adults and children combined) are binned into one of 10 bins according to their baseline HbA1c, as shown below.

Figure 15. Real-World Results Are Consistent with the BPPT

Conclusion

The baseline HbA1c values of commercial iLet users were higher and the decreases from baseline HbA1c to iLet GMI values were larger than among participants in the BPPT. The time spent <54 mg/dL were comparable in both the BPPT and commercial settings.

iLet device outcomes are independent of the frequency of user interaction

Background

Unlike any other commercially available glucose-monitoring device or insulin-delivery system used in diabetes management, the quality of glycemic control achieved by the iLet is virtually independent of the frequency of user interaction, as measured by the swipe-to-unlock frequency of the iLet lock screen. Beyond observing current device status, users are required to swipe to unlock the iLet lock screen before engaging with their therapy, and as such, the swipe-to-unlock gesture is the best single proxy for user interaction with the iLet. In multiple other large population trials, each with thousands or tens-of-thousands of participants, as well as sponsor-initiated retrospective analyses, it has been observed that a higher frequency of glucose monitoring was strongly associated with a lower HbA1c level, and a higher frequency of user-initiated correction boluses from a sensor-augmented insulin pen or a hybrid closed-loop system correlated strongly with improvements in TIR (although hypoglycemia worsened as the number of user-initiated correction boluses increased). These trials and analyses included: Miller et al. Diabetes Care 1 July 2013; 36 (7): 2009–2014; Dunn et al. Diabetes Research and Clinical Practice, Volume 137, 37 - 46; MacLeod et al. Diabetes Technology & Therapeutics 2024 26:1, 33-39; and Messer and Breton. Diabetes Technology & Therapeutics 2023 25:12, 877-882.

Because the iLet determines and delivers 100% of all insulin doses and therefore does not require the user to make any quantitative assessment, we hypothesized that glycemic and CGM outcomes achieved by the iLet might be independent of the frequency of user interaction with the device. We tested this by capturing the swipe-to-unlock frequency from 324 participants in the BPPT over the 13-week intervention period as well as from 3,295 iLet users in the commercial setting who had baseline HbA1c data available, uploaded at least three weeks’ worth of CGM data to the Beta Bionics cloud, and had device-interaction data available. These data were analyzed using linear regression to assess if correlations existed between user interaction with the iLet (as measured by the swipe-to-unlock frequency) and CGM outcomes.

Analysis and Results

Correlations were quantified with the R2 correlation coefficient, which is an indicator for how strongly correlated two metrics are (such as between average number of swipes to unlock and GMI). An R2 correlation coefficient of “1” represents a perfect one-to-one correlation and an R2 correlation coefficient of “0” represents no correlation. In both the BPPT and the commercial settings, the R2 correlation coefficients associated with the linear regression analysis between the average GMI on iLet therapy and the average daily number of swipes to unlock the screen were <0.01 across both adults and children (see Figure 16 below). In addition to GMI, CGM-measured hypoglycemia on the iLet appeared to be nearly independent of the average daily swipes to unlock the iLet (see Figure 16).

Figure 16. R2 Correlation Coefficients Between Average Daily Swipes to Unlock the iLet and CGM Outcomes

R2 correlation coefficients between average daily swipes to unlock the iLet and each of GMI and time spent with CGM level <54 mg/dL are shown for adults (≥18 years old) and children (<18 years old) from the iLet BPPT and from iLet usage in the commercial setting. The mean GMI and the median time spent with CGM

levels <54 mg/dL on iLet therapy for the BPPT participants and iLet users in the commercial setting are shown in italics under the correlation coefficients.

The bar chart in Figure 17 below also shows that, regardless of engagement level, adults and children in both the commercial and BPPT setting achieved similar GMI levels relative to disparate levels of baseline HbA1c.

Figure 17. Change from Baseline HbA1c to Mean GMI on the iLet

Change from baseline HbA1c to mean GMI on the iLet for 216 adults (≥18 years old) in the BPPT (top left), 108 children (<18 years old) in the BPPT (bottom left), 2,755 adults in the commercial setting (top right), and 540 children in the commercial setting (bottom right). Low engagement (lowest decile) users are shown in blue, intermediate engagement users in purple, and high engagement (highest decile) users are shown in green.

Conclusion

The quality of glycemic control achieved by the iLet, measured in terms of GMI, TIR, or hypoglycemia, is virtually independent of the frequency of user interaction. The users who were least engaged during iLet usage had the highest HbA1c on average before starting iLet therapy, and those who were most engaged during iLet usage had the lowest baseline HbA1c on average before starting iLet therapy. Therefore, we believe that those who were least engaged on iLet therapy were similarly disengaged with their baseline method of diabetes management. We believe this behavior speaks to the iLet’s ability to eliminate nearly all disparities in glycemic control that arise from user engagement with diabetes management. So, in addition to the iLet being nearly agnostic to insulin modality, socioeconomic, racial, and ethnic demographics, it also appears to be similarly agnostic to user interaction.

Commercial Strategy

To fully realize the opportunity presented by the iLet, we have developed an integrated commercial and overall corporate strategy to drive adoption across the T1D population, establish and maintain customer loyalty through customer service and education programs, maximize profitability through a disciplined, capital-efficient approach to cost management and reinvestment, and maintain our long-term competitive position with continuous innovation.

We are promoting sales of the iLet through our internal sales organization, initially focusing direct sales efforts on high-volume endocrinology practices located within geographic territories defined by the sites of our pivotal clinical trial. We optimize these efforts with an internal customer support team and supplement them with strategic marketing initiatives. We believe that initially focusing on endocrinologists will facilitate their experience with the iLet and encourage them to become advocates for our solution.

We also intend, over time, to target the larger, but more dispersed, PCP market. These generalist physicians treat approximately 50% of the T1D population in the United States but do so among a broader PWD base. We believe iLet’s aforementioned core value proposition of marrying effective glycemic control with the simplicity of use that is brought about by adaptive closed-loop algorithm insulin dose determination may resonate particularly well among PCP who do not possess the subspecialty-level of expertise, the resources, or the clinical bandwidth that is needed to initiate insulin-pump therapy or hybrid closed-loop therapy or for the continual demand (such as adjustments at quarterly visits) those systems place on clinical practices in follow-on care.

The key elements of our commercialization strategy are:

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Identify: We have developed a target customer profile of those PWD whose glycemic control is either equivalent to or worse than guideline levels who would prefer a more hands-off approach to their daily disease management.

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Attract: We have 43 field sales teams divided into geographic territories that will engage in direct physician marketing and education campaigns to raise awareness of the iLet among PWD and high-prescribing caregivers.

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Fulfill: We have a system to integrate lead capture, ordering, manufacturing, distribution, and returns for iLet, streamlining these processes for both PWD and caregivers.

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Educate: We offer comprehensive education and training programs to both PWD and HCPs to ensure that all iLet users are trained by a certified trainer and have the resources needed to answer any questions they may have about the device or its user experience.

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Support: We offer comprehensive, 24/7 technical support to assist both PWD and HCPs during device initialization and throughout its lifetime, with a goal of answering 90% of calls within the first 30 seconds of receiving them.

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Retain: We utilize both direct and social media communication strategies to build the iLet community of users, caregivers, and KOLs and use feedback from this community to continuously upgrade both current and future device generations.

Multi-Channel Coverage and Reimbursement Strategy

To maximize access to the iLet within the T1D population and flexibility for PWD in choosing their device, advantageous coverage, and reimbursement terms, we are pursuing a multi-channel coverage and reimbursement strategy. We are working with payors to establish coverage and reimbursement under both the DME and PBP channels as we believe that this strategy increases access and optimizes the potential for better medical outcomes for PWD through the adoption of the iLet.

The majority of durable insulin pumps have traditionally been reimbursed by both private and government payors through the DME channel. The iLet currently enjoys DME reimbursement with third-party payors covering a portion of the current T1D population.

Third-party payors that cover the iLet through the DME channel typically require a large, upfront payment (in the thousands of dollars). Under the DME channel, the PWD’s medical insurance will not provide reimbursement for an additional durable pump until the four year warranty period of the device has expired. This channel ensures the broad availability of pumps but places potentially significant financial constraints on PWD’s ability to access the improved outcomes provided by innovative technology. For PWD of certain socioeconomic backgrounds, the size of the upfront payment is often beyond their means, and, for most PWD, the typical four-year commitment may deter them from immediately adopting any innovative device that emerges within four years of their prior selection. However, this model does mean that each year, a large number of existing, commercially insured pump users may obtain coverage for a new insulin pump upon the expiration of their warranty period, which allows us to present these existing pump users with the opportunity to switch to the iLet.

As an alternative to covering insulin pumps through the DME channel, certain payors allow their members to access insulin pump technology under their PBP coverage. This structure, which follows a “pay as you go” model, eliminates the need for a large upfront payment and removes time-based constraints on accessing new technologies or switching pumps. However, the PBP channel does require higher payments by the insurance carrier for the purchase of single-use products required to use the iLet over the expected life of the iLet, which we generally expect to be four years. Payors have demonstrated a willingness to absorb these potentially higher costs on behalf of their T1D members to subsidize higher pump utilization, which can improve overall disease management, reduce long-term morbidity and mortality, and decrease total lifetime costs per member.

Figure 18. Benefits of Pharmacy Pay-As-You-Go

We are pursuing our multi-channel coverage and reimbursement strategy by negotiating with pharmacy benefit managers (PBMs) and payors to expand PBP coverage and reimbursement for the iLet from their provider. We believe that as PWD experience the quality of life and disease management benefits of iLet, they will have a sufficiently high probability of long-duration utilization to offset the potential risk of short-term discontinuation associated with this model. Over time, we expect sales through the PBP channel will have a more favorable economic impact on our financial results over the lifetime of the iLet. We have contracts with PBMs covering a portion of people with T1D in the United States.

Streamlined and Efficient Manufacturing and Quality Control

Both the iLet and our ready-to-fill insulin cartridges are assembled from readily available standardized components that require minimal customization and are centrally manufactured at our facilities in Irvine, California. Any potential future upgrades to the iLet’s functionality, we believe, will be enabled by innovative refinements to our proprietary algorithms without the need for fundamental alterations to the iLet’s form factor, components, or manufacturing processes. We believe our utilization of a standardized bill of materials provides us with insulation from component shortages and is designed to enable us to efficiently scale our production levels to accommodate our material anticipated increases in iLet demand.

Our standards-based model also provides us with numerous benefits to our per-unit cost structure, which may allow us to achieve higher gross margins than have been previously attained at launch by other insulin pumps within our industry. Among these benefits are the ability to achieve competitive pricing by actively sourcing from multiple vendors, the avoidance of costly alterations or customizations to either the iLet or to our manufacturing facilities, and full utilization of the depreciable life span of our manufacturing equipment. By assembling and testing our subassemblies and products in-house, we believe we can also maintain high quality control, ensure compliance with applicable regulatory standards and our internal specifications, and limit outside access to our proprietary technology.

We occupy and set up production at our leased Hughes building located in Irvine, California. This 50,000 square foot facility includes 11,500 square feet of warehouse and production space. The iLet is assembled via manual and semi-automated equipment, while cartridge production and packaging utilize industry standard automation. We anticipate that our current annual manufacturing capacity at the Hughes building is sufficient to fulfill our internally projected demand for at least the next 12 months.

We are subject to and maintain compliance with ISO manufacturing standards, including ISO 13485 certification, current good manufacturing practices (cGMP), and the relevant Quality System Regulation requirements. Our manufacturing operations are led by a team whose members have extensive experience in the commercial manufacture of medical devices, including other technological advances in diabetes treatment.

Product Development Pipeline and Future Initiatives

Patch Pump

We are in the early stages of developing an insulin pump that is designed to adhere directly to the skin and administer insulin without the need for tubing, commonly known in the diabetes industry as a “patch pump.” Our patch pump features a two-component design: a durable part that contains the electronics and motor and a disposable part that includes the insulin reservoir, adhesive, insertion device, and cannula. This design is intended to enable efficient manufacturing and provide a convenient pump-change experience. Our patch pump is intended to unlock a new pool of PWD who are looking to receive the many benefits of the iLet, but prefer the patch pump form factor. We are initially focused on T1D but plan to expand to T2D.

We have currently designed a prototype of the patch pump and, following product development, we plan to seek FDA 510(k) clearance for the patch pump in T1D and T2D. We believe patch pump will require 510(k) clearance as an alternate controller enabled pump (ACE pump) prior to commercialization and that clinical trials will not be required for an ACE pump 510(k) clearance. The iLet algorithm, which the patch pump will leverage, has already obtained a 510(k) clearance as an interoperable automated glycemic controller (iAGC). Subject to receiving 510(k) clearance for our patch pump, we expect to launch our patch pump commercially using our existing iLet iAGC algorithm by the end of 2027.

Bihormonal iLet

The iLet is designed and configured to potentially administer both insulin and glucagon, the hormone responsible for maintaining minimum BG levels, with adaptive closed-loop algorithms where all doses of both hormones are autonomously determined. We believe this bihormonal capability could offer a meaningful additional benefit to PWD, as it would allow the active raising of glycemic levels when they fall too low, in addition to the iLet’s existing capability of actively lowering glycemic levels when they elevate too high. Currently, there are no commercially available automated devices to raise BG when it is too low, and many people living with T1D live with an ever-present fear of hypoglycemia.

Hypoglycemia, if untreated, can lead to a range of acute medical complications, including tissue and organ damage, seizures, and coma, and death. Analysis of hospital admission code data has shown that hypoglycemic episodes are responsible for over half of all emergency room visits by PWD each year, despite their relatively low frequency. According to the ADA and the National Institutes of Health, approximately 25-40% of people living with T1D can also be classified as “hypo unaware,” a condition that prevents them from sensing a pending hypoglycemic event and puts them at increased risk for suffering a severe hypoglycemic episode without warning. Due to these primary risks and other secondary risks, such as losing consciousness while driving an automobile, many people living with T1D tend to live with perpetual fear of a severe hypoglycemic episode. These fears can reduce quality of life, as they may lead to a restriction of otherwise necessary and beneficial activities like exercise in order to avoid the risk of a catastrophic hypoglycemic episode.

In six pre-pivotal outpatient clinical trials conducted from 2012 to 2017, we observed participants utilizing our bihormonal configuration to achieve reduced hypoglycemia and increased TIR relative to both standard-of-care treatment and our insulin-only bionic pancreas configuration. Prior to conducting clinical trials with the new glucagon formulation, we plan to evaluate the compatability of glucagon for pumping, and whether its concentration in the body is consistent with our expectations. If these evaluations are successful, we plan to initiate at least one pre-pivotal clinical trial and a pivotal clinical trial before submitting the device and algorithm to the FDA for 510(k) clearance as well as submit an NDA seeking approval for the pump compatible glucagon for chronic use. Glucagon is currently only approved in an acute formulation for rescue from acute hypoglycemia, so approval of a new drug application will be required for this chronic use glucagon, in addition to FDA clearance for the algorithm and bihormonal configuration of the iLet device, in order for the bihoromonal system to be used as we intend.

To realize the full commercial potential of this opportunity, we have signed an exclusive collaboration and license agreement with Xeris to develop and commercialize a pump-compatible glucagon formulation utilizing Xeris’ XeriSol technology for use in our proprietary bihormonal pump and pump systems. Under the commercial terms of the and collaboration and license agreement, we will receive all revenue from any sales of the system and glucagon, and pay Xeris a tiered, low double-digit royalty on glucagon sales.

Type 2 Diabetes

We intend to pursue expanded use of the iLet to treat people with insulin-dependent T2D, as we believe the size and composition of this population make it a compelling opportunity. We believe our planned expansion for the iLet’s use in T2D will require an additional 510(k) clearance. We expect we will need to conduct studies to determine the iLet’s applicability for T2D and in order to obtain the additional 510(k) clearance. Although we continue to analyze the timing related to this expansion, we do not currently have a specific timeline. While there are certain differences in how T2D is treated relative to T1D, these differences primarily relate to the amount and rate of insulin delivered. Among the T2D population, approximately 1.8 million require intensive insulin therapy, but fewer than 10% have adopted pump technology to date. This is based on our internal estimates factoring epidemiologic data from government and leading industry organizations such as the CDC as well as industry sales data from public filings and disclosures made by the leading device manufacturers (Medtronic, Tandem and Insulet) and aggregated by third-party data service providers. We believe these PWD, who span socioeconomic and educational levels, and their HCPs, 90% of whom are PCP, may find the iLet’s combination of simplicity and efficacy particularly appealing, if authorized for marketing for this use.

Competition

The medical device industry is intensely competitive, subject to rapid change, and highly sensitive to the introduction of new products, treatment techniques or technologies, and other market activities of industry participants. We primarily compete with a number of companies that manufacture and sell insulin pumps, such as Medtronic, Tandem, and Insulet. The iLet has certain characteristics that other insulin pumps manufactured by such competitors, as far as we are aware, do not currently have, such as the ability to be initialized with only the user’s body weight, being enabled by algorithms that determine 100% of the user’s insulin doses, no carb counting, an option for pay-as-you-go pharmacy reimbursement and prefilled cartridges. For more information regarding the current commercial landscape for the iLet, see the section titled “Business—The Commercial Opportunity for the iLet Bionic Pancreas to Address the Unmet Need” above. Outside of the insulin pump market, we face competition from a number of companies, medical researchers and pharmaceutical companies that offer or are pursuing competing delivery devices, technologies and procedures, such as prefilled insulin syringes, insulin pens and inhalable insulin products, as well as companies with approved therapeutics or in-development therapeutic candidates impacting diabetes.

Many of our competitors are either publicly-traded companies or divisions or subsidiaries of publicly-traded companies that have several competitive advantages over us, including greater market share and name recognition, greater financial and human resources for sales and marketing and product development, more well-established relationships with HCPs, customers and third-party payors, greater experience, additional lines of products with the ability to offer rebates or bundle products, and larger and more established distribution networks. In some instances, our competitors also offer products that include features that we do not currently offer. For example, Insulet offers a product with a patch form factor.

Mergers and acquisitions in the medical device industry may result in even greater resource concentration among a smaller number of competitors. Smaller or early-stage companies may also prove to be significant competitors, either alone or through collaborative arrangements with large and established companies.

Key competitive factors affecting our success are likely to be health efficacy, safety, ease of use (including complexity and disease management burden), price, reimbursement, user retention, and ability to continue to effectively innovate.

Intellectual Property

Our success depends in substantial part on our ability to obtain, defend and enforce patents, maintain trade secrets and operate our business without infringing the proprietary rights of others, both in the United States and abroad. We rely on a combination of patents, trademarks, trade secrets, and confidentiality and invention assignment agreements to protect our intellectual property rights. We license from third parties certain patent rights and proprietary know-how that we believe to be necessary or useful to our business.

We also rely upon trade-secret protection for certain confidential and proprietary information and take active measures to control access to that information. There is also substantial proprietary know-how surrounding the iLet development and manufacturing processes that remains a trade secret, which we protect by maintaining and implementing appropriate policies and procedures for ensuring secrecy and confidentiality.

Our U.S. and foreign patents and patent applications generally relate to alternate controller enabled (ACE) insulin and bihormonal pumps, software and algorithms for modular blood glucose control systems, graphical user interfaces (GUIs) including animations and transitional GUI screens, and/or communication interfacing including disposables and wearables for connecting pumps to infusion sets. As of December 31, 2024, our owned and licensed patent estate contains approximately 61 issued U.S. patents, 21 pending U.S. nonprovisional patent applications, 101 issued foreign patents (including 9 issued European patents and their national validations), and 43 pending foreign patent applications. The 101 issued foreign patents include one or more issued patents in jurisdictions such as Australia, Canada, China, France, Germany, Great Britain, Hong Kong, Italy, Japan, Mexico and Spain. The 43 pending foreign patent applications include one or more pending applications in jurisdictions such as Australia, Canada, China, Europe, Israel, Japan, Mexico, and Saudi Arabia. Assuming payment of all appropriate maintenance, renewal, annuity or other governmental fees, as applicable, our owned or licensed issued U.S. patents expire between 2026 and 2042.

As set forth in tabular form below, of the 61 total U.S. issued patents in our patent estate, 20 contain one or more claims that cover the currently commercial iLet BIONIC PANCREAS system.

Jurisdiction Patent Number Expiration Ownership Type of Patent

Depending on circumstances, we intend to file and prosecute patent applications for our technology in jurisdictions where we believe that patent protection is available and commercially important. Generally, for investigational devices that we believe are appropriate for patent protection, we will attempt to obtain patents in the United States, as well as key markets in Europe. However, depending on circumstances, we may not apply for patents in all or any of those jurisdictions, or we may pursue patent protection elsewhere. We plan to enforce our issued patents and our rights to proprietary information and technology as circumstances permit. We review third-party patents and patent applications in our fields of endeavor, both to shape our own patent strategy and to identify useful licensing opportunities.

Notwithstanding the foregoing, the patent positions of medical device companies, including our company, are uncertain and involve complex and evolving legal and factual questions. The coverage sought in a patent application can be denied or significantly reduced either before or after the patent is issued. Consequently, there can be no assurance that any of our pending patent applications will result in an issued patent. There is also no assurance that any existing or future patent will provide significant protection or commercial advantage, or that any existing or future patent will not be circumvented by a more basic patent, thus requiring us to obtain a license to produce and sell the product. Generally, patent applications can be maintained in secrecy for at least 18 months after their earliest priority date. In addition, publication of discoveries in the scientific or patent literature often lags behind actual discoveries. Therefore, we cannot be certain that we were the first to invent the subject matter covered by each of our pending U.S. patent applications or that we were the first to file either U.S. or non-U.S. patent applications for such subject matter.

If a third party files a patent application relating to an invention claimed in our patent application, we may be required to participate in an interference or derivation proceeding declared by the U.S. Patent and Trademark Office to determine who is entitled to the patent rights. Such a proceeding could involve substantial uncertainties and cost, even if the eventual outcome is favorable to us. There can be no assurance that our patents, if issued, would be upheld as valid in court.

Third parties may claim that our products infringe their patents and other intellectual property rights. Some companies in the medical device industry have used intellectual property infringement litigation to gain a competitive advantage. If a competitor were to challenge our patents, licenses or other intellectual property rights, or assert that our products infringe its patent or other intellectual property rights, we could incur substantial litigation costs, be forced to make expensive changes to our product designs, license rights in order to continue manufacturing and selling our products or pay substantial damages. Third party infringement claims, regardless of their outcome, would not only consume our financial resources but also divert our management’s time and effort. Such claims could also cause our customers or potential customers to defer or limit their purchase or use of the affected products until resolution of the claim.

In addition to patents, we rely on trademarks, trade secrets, and know-how relating to our proprietary technology and programs, continuing innovation, and in-licensing opportunities to develop, strengthen and maintain our proprietary position and protect our product brands. As of December 31, 2024, our trademark portfolio consists of four (4) registered trademarks and seven (7) pending trademark applications. For example, our trademark portfolio includes: house marks (BETA BIONICS, stylized), product marks (iLet® bionic pancreas system) and tag-lines (DIABETES WITHOUT NUMBERS).

We rely on trade secret protection for certain unpatented aspects of other proprietary technology. There can be no assurance that others will not independently develop or otherwise acquire substantially equivalent proprietary information or techniques, that others will not gain access to our proprietary technology or disclose such technology, or that we can meaningfully protect our trade secrets. We have a policy of requiring key employees and consultants to execute confidentiality agreements upon the commencement of an employment or consulting relationship with us. Our confidentiality agreements also require our employees to assign to us all rights to any inventions made or conceived during their employment with us. We also require our consultants to assign to us any inventions made during the course of their engagement by us. There can be no assurance, however, that these agreements will provide meaningful protection or adequate remedies for us in the event of unauthorized use, transfer or disclosure of confidential information or inventions.

The laws of foreign countries generally do not protect our proprietary rights to the same extent as do the laws of the United States. In addition, we may experience more difficulty enforcing our proprietary rights in certain foreign jurisdictions. We work with subject matter experts internationally, and our licensing partners to best manage foreign intellectual property matters, with their advice and consent to assure that our business and proprietary data strategies are co-extensive and consistent.

These intellectual property statements are subject to a number of risks, uncertainties, factors and assumptions described under Part I. Item IA. “Risk Factors—Risks Related to Our Intellectual Property.”

License and Collaboration Agreements

Device License Agreement with Boston University

In December 2015, we and BU, entered into a device license agreement, which was amended in December 2017, September 2020, February 2022 and November 2024 (collectively, the Device License Agreement). Under the Device License Agreement, we received a royalty-bearing license (with the right to sublicense) under certain of BU’s patent rights related to a system and individual components thereof for delivering multiple medicaments to a patient without medicament mis-channeling to make, use, sell, and import products, and practice processes covered by the licensed patent rights (collectively, the Licensed Products and Licensed Processes). The rights granted to us by BU under the Device License Agreement are exclusive, subject to certain reserved rights, including BU’s right to practice and/or use the licensed patent rights for non-profit purposes such as sponsored research and collaborations, government rights and other third party rights. Furthermore, at BU’s request, we will be required to negotiate a sublicense in good faith with a third party if we are unable or unwilling to use the patent rights licensed to us under the Device License Agreement to address theunmet needs of neglected people or geographic areas that such party is willing and able to address. The exclusivity may be terminated by BU if we fail to meet a specified percentage of the applicable minimum royalty amount for a given calendar year. The minimum royalty amount is a non-material amount.

Pursuant to the Device License Agreement, we agreed to use commercially reasonable efforts to market Licensed Products in the United States and elsewhere in the world. Additionally, we are obligated to meet certain diligence milestones under the Device License Agreement. We have satisfied all the milestones set forth under the Device License Agreement required to be achieved to date, with regulatory milestones relating to our marketing applications to the FDA remaining to be achieved in connection with our development of the Licensed Products and Licensed Processes.

In consideration for the licensed patent rights and other rights granted to us under the Device License Agreement, we issued 1,160 shares of our Class B common stock to BU, representing a specified ownership percentage on a fully diluted basis at the time of entering into the Device License Agreement, subject to anti-dilution adjustments, which have been satisfied and extinguished by the issuance of additional shares of Class B common stock. We are also required to pay (i) quarterly royalties of a mid-single-digit percentage based on net sales of all Licensed Products and Licensed Processes by us or our affiliates, (ii) quarterly royalties of a low double-digit percentage based on net sales by our sublicensees (in each case (i) and (ii), which royalties are creditable against the minimum royalty amount) and (iii) agreed to make quarterly lump sum payments of a low-double-digit percentage based on certain non-royalty sublicensing revenue received by us from our sublicensees. The foregoing payments are subject to customary increase under certain specified circumstances. We also granted BU board observer rights and agreed to bear the patent costs, including prior patent costs incurred by BU in respect of the licensed patent rights. Additionally, if we assign the Device License Agreement in connection with the sale of all or substantially all of our assets relating to the licensed patent rights, we will be required to pay BU an assignment fee to be agreed on with BU at the time of such assignment.

The Device License Agreement remains in effect for the Licensed Products and Licensed Processes on a country-by-country basis until the expiration, invalidation or termination of the last to expire, terminate, or invalidated licensed patent right, unless earlier terminated by BU. BU may terminate the Device License Agreement (i) for our uncured material breach, including our failure to meet any diligence milestone by the specified achievement date or our failure to make a payment due pursuant to the Device License Agreement, (ii) our breach of certain representations and warranties, (iii) upon our challenge of the validity of the licensed patent rights, or (iv) upon our bankruptcy or insolvency. BU may also terminate the agreement if it determines we are not diligently pursuing commercialization of the Licensed Products. We may terminate the Device License Agreement upon advance written notice to BU.

Control Algorithm License Agreement with Boston University

In December 2015, we and BU entered into a control algorithm license agreement, which was amended in December 2017, September 2020, and February 2022 (collectively, the Control Algorithm Agreement). Under the Control Algorithm Agreement, we received a royalty-bearing license (with the right to sublicense) to (i) make, use, sell, and import products, and practice processes, covered by certain of BU’s patent rights related to automated control systems for treatment of T1D and similar conditions, involving monitoring and/or delivering insulin, glucagon, and glucose (collectively, the Automated Control System Technology); and (ii) use, reproduce, prepare derivative works, perform, display, and distribute all or any part of the software, source code, object code and/or related documentation, covered by certain copyright rights, and related to (a) the Automated Control System Technology and (b) the iLet control algorithm. The licenses granted by BU to us pursuant to the Control Algorithm Agreement are exclusive, subject to certain reserved rights including BU, BU’s third party licensors’ and other not-for profit institutions’ rights to practice and/or use the patent rights for non-profit purposes such as sponsored research and collaborations and to permit other academic, government and not-for-profit institutions to make use of the same for educational purposes. Furthermore, at BU’s request, we will be required to negotiate a sublicense in good faith with a third party if we are unable or unwilling to use the technology licensed to us under the Control Algorithm Agreement to address the unmet needs of neglected people or geographic areas that such third party is willing to address. The exclusivity may be terminated by BU if we fail to meet a specified percentage of the applicable minimum royalty amount for a given calendar year. The minimum royalty amount is a non-material amount. Additionally, under the Control Algorithm Agreement, we granted a perpetual, non-exclusive, royalty-free license back to BU with respect to the copyrights and patents covering any derivative works of the licensed software for BU’s educational and academic purposes and to practice their reserved rights.

Pursuant to the Control Algorithm Agreement, we agreed to use commercially reasonable efforts to market Licensed Products in the United States and elsewhere in the world.

In consideration for the licensed patent rights and other rights granted to us under the Control Algorithm Agreement, we issued 1,140 shares of our Class B common stock to BU, representing a specified ownership percentage on a fully diluted basis at the time of entering into the license agreement, subject to anti-dilution adjustments, which have been satisfied and extinguished by the issuance of additional shares of Class B common stock to BU. We are also required to pay BU (i) quarterly royalties of a mid-single-digit percentage based on net sales by us and our affiliates, (ii) royalties of a low double-digit percentage of net sales by sublicensees (in each case (i) and (ii), which royalties are creditable against the minimum royalty amount) and (iii) agreed to make quarterly lump sum payments of a low double-digit percentage of the non-royalty sublicensing revenue received by us from our sublicensees. The foregoing payments are subject to customary increase under certain specified circumstances. We also granted BU board observer rights and agreed to bear the patent costs, including prior patent costs incurred by BU in respect of the licensed patent rights. Additionally, if we undergo a change of control (as defined in the Control Algorithm Agreement) we will owe BU a one-time change of control payment of $65,000. We will also be required to pay BU an assignment fee to be agreed on with BU at the time of such assignment if we assign the Control Algorithm License Agreement in connection with the sale of all or substantially all of our assets relating to the licensed patent rights and copyright.

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BBNX · 10-K · period ended 2024-12-31

Item 1. Business.

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BBNX · 10-K · period ended 2024-12-31

Item 1. Business.

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