What changed in this filing

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Item 1A. Risk Factors

2024-11-06 compared with 2024-08-01 · 32 added, 27 removed, 993 unchanged (6% of the section changed)

64 unchanged sentences

Since our inception in January 2006, we have incurred a significant net loss.

As of June 30, 2024, we had an accumulated deficit of $1.0 billion.

As of September 30, 2024, we had an accumulated deficit of $1.0 billion.

To date, we have funded our operations primarily through cash collected from product sales, private and public offerings of our equity securities, and debt financing.

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We currently rely on sales of insulin pump products to generate a significant portion of our revenue, and any factors that negatively impact sales of these products may adversely affect our business, financial condition and operating results.*

We generate nearly all of our revenue from the sale of t:slim X2 insulin pumps and the related insulin cartridges and infusion sets.

In addition, we recently launched our Tandem Mobi insulin pump.

We generate nearly all of our revenue from the sale of our insulin pumps and the related insulin cartridges and infusion sets, including our recently launched Tandem Mobi insulin pump.

Sales of these products may be negatively impacted by many factors, including:

• market acceptance of the insulin pumps and related products manufactured and sold by our key competitors, including Insulet, Medtronic, and Ypsomed;

• market acceptance of the insulin pumps and related products manufactured and sold by our key competitors, including Insulet, Medtronic, Ypsomed and Beta Bionics;

• the potential that breakthroughs for the monitoring, treatment or prevention of diabetes may render our insulin pumps obsolete or less desirable;

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Sales of our products may also be adversely impacted if the CGM products that are compatible with our pumps are not viewed as superior to competing CGM products in markets where our products are sold, or if the price of these products is not competitive with similar products available in the market.

Because we currently rely on sales of our t:slim X2 insulin pump, and expect to rely on sales of our Tandem

Mobi insulin pump, and related products to generate a significant majority of our revenue, any factors that negatively impact sales of these products (or negatively impact the products or components integrated with these products) could adversely affect our business, financial condition and operating results.

Because we currently rely on sales of our insulin pumps, and related products to generate a significant majority of our revenue, any factors that negatively impact sales of these products (or negatively impact the products or components integrated with these products) could adversely affect our business, financial condition and operating results.

Furthermore, any disruption in our supply chain could negatively impact our ability to manufacture or otherwise supply sufficient product quantities to meet current customer demand, or any unexpected increase in demand, which could also have the effect of magnifying the negative impact of any of the factors described above.

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Given these factors, we cannot guarantee that we will be able to compete effectively or continue our level of success.

Our primary competitors are major medical device companies, primarily Insulet, Medtronic, and Ypsomed.

Our primary competitors are major medical device companies, primarily Insulet, Medtronic, Ypsomed and Beta Bionics.

There are also a number of other companies developing and marketing their own insulin delivery systems and/or related software applications, including insulin pumps and Bluetooth-enabled insulin pens to support MDI therapy.

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Abbott also offers glucose sensors which compete with Dexcom CGMs.

Further, we have entered into an agreement with Abbott to develop and commercialize integrated diabetes solutions using Abbott’s glucose sensor.

We have also entered into agreements with Abbott to develop and commercialize integrated diabetes solutions using Abbott’s glucose sensors.

There can be no assurance that our collaborations with Dexcom and Abbott will be successful or that we will not experience delays, business disputes, or other unanticipated challenges.

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Market acceptance and adoption of our products depends on educating people with diabetes, as well as their caregivers and healthcare providers, about the distinct features, ease-of-use, beneficial treatment outcomes, and other perceived benefits of our products as compared to competing products.

If we are not successful in convincing existing and potential customers of the benefits of our products, or if we are not able to achieve the support of caregivers and healthcare providers for our products, our sales may decline or we may achieve sales below our expectations.

If we are not successful in educating existing and potential customers of the benefits of our products, or if we are not able to achieve the support of caregivers and healthcare providers for our products, our sales may decline or we may achieve sales below our expectations.

Market acceptance of our products could be negatively impacted by many factors, including:

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• lack of evidence supporting the safety, effectiveness, ease-of-use or other perceived benefits of our products over competing products or other currently available insulin treatment methodologies;

• perceived risks or uncertainties associated with the use of our products, or components thereof, or of similar products or technologies of our competitors;

• perceived risks or uncertainties associated with the use of our products, or components thereof (including due to any product recalls), or of similar products or technologies of our competitors;

• adverse regulatory or legal actions relating to our insulin pump products or similar products or technologies;

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However, the commercial opportunity in the pharmacy channel will be limited unless a substantial portion of the sales price for Mobi is covered by third-party payors, including private insurance companies, health maintenance organizations, preferred provider organizations, federal and state government healthcare agencies, intermediaries, Medicare, Medicaid and other managed care providers.

Medicare Part D plan sponsors may provide coverage for Mobi under the Medicare Part D prescription drug program, which requires negotiating with third-party payors in order to provide Mobi through the pharmacy channel in the United States.

Medicare Part D plan sponsors may provide coverage for Mobi under the Medicare Part D prescription drug program, which requires negotiating with third-party payors to provide Mobi through the pharmacy channel in the United States.

If our efforts to enter into additional contracts with intermediaries and third-party payors are not successful, our ability to offer Mobi through the pharmacy channel will be limited.

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These and other economic factors could have a material adverse effect on our business, financial condition, and results of operations.

In October 2023, Hamas initiated an attack against Israel, provoking a state of war and the risk of a larger regional conflict.

In October 2023, Hamas initiated an attack against Israel, provoking a state of war and subsequently a larger regional conflict.

While we cannot predict the broader consequences, these conflicts and retaliatory and counter-retaliatory actions could materially adversely affect global trade, currency exchange rates, inflation, regional economies, and the global economy, which in turn may disrupt sales through our local distributor in Israel.

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We may need or otherwise determine to raise additional funds in the future and if we are unable to raise additional funds when necessary or desirable, we may not be able to achieve our strategic objectives.*

As of June 30, 2024, we had $452.4 million in cash, cash equivalents and short-term investments.

As of September 30, 2024, we had $473.3 million in cash, cash equivalents and short-term investments.

Our management expects the continued growth of our business, including the expansion of our customer service infrastructure to support our growing base of customers, our plans to continue expanding commercial sales of our products outside of the United States, the growth of our manufacturing and warehousing operations, and the increase of our facility footprint to accommodate additional headcount and R&D activities, will continue to increase our expenses.

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These laws may be, or in some cases have already been, subject to legal challenges and changing interpretations, which may further complicate our efforts to comply with these laws.

Our employees and personnel use Artificial Intelligence (“AI”) technologies (including generative AI) to perform their work.

Our employees and personnel may use Artificial Intelligence (“AI”) technologies (including generative AI) to perform their work.

The use and disclosure of personal data in AI technologies is subject to various data privacy laws and other data privacy obligations.

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bans on processing of personal data;

orders to destroy

or not use personal data;

orders to destroy or not use personal data;

and imprisonment of company officials.

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Vulnerabilities could be exploited and result in a security incident.

In addition to vulnerabilities, the reliance of our insulin pumps and other products on software and hardware exposes us and our customers to risks that may impact the performance of our products.

For example, in March 2024, we issued a recall of our Apple iOS t:connect mobile app in the United States relating to an issue that could cause rapid depletion of a user’s t:slim X2 insulin pump battery (the “March 2024 Recall”).

On August 20, 2024, we released an updated version of the impacted app to correct the issue described in the March 2024 recall.

Any of the previously identified or similar threats and risks could cause a security incident or other interruption that could result in the unauthorized, unlawful or accidental disclosure, access, acquisition, modification, destruction, loss, alteration, or encryption of our sensitive information or our information technology systems or those of the third parties with whom we work.

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We experienced a breach of our information technology systems in January 2020.*

On January 17, 2020, we learned that an unauthorized person gained access to a few employees’ email accounts through a cyber-attack commonly known as “phishing.” As a result, we have been defending a lawsuit entitled Joseph Deluna et al.

On January 17, 2020, we learned that an unauthorized person gained access to a few employees’ email accounts through a cyber-attack commonly known as “phishing.” As a result, we defended a lawsuit entitled Joseph Deluna et al.

Tandem Diabetes Care, Inc.

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• pay substantial damages to the party whose intellectual property rights we are allegedly infringing.

For example, in November 2023, at the Unified Patent Court (the “UPC”), we filed a revocation action and an action for a declaration of non-infringement of EP Patent No.

For example, in November 2023, at the Unified Patent Court (“UPC”), Paris Central Division (the “UPC Paris”), we filed a revocation action and an action for a declaration of non-infringement of EP Patent No.

2 196 231 B1 (the “’231 patent”) against Roche Diabetes Care GmbH.

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Furthermore, we contend that the claims of the ‘231 patent are invalid over the prior art and should be revoked.

In February 2024, Roche filed an infringement action against Tandem and one of its distributors at the UPC contending that Tandem’s t:slim X2 pump infringes the ‘231 patent.

On November 6, 2024, the UPC (Paris Central Division) will hold a hearing on Tandem’s motion to revoke the claims of the ‘231 patent.

In February 2024, Roche filed an infringement action against Tandem and its distributor in Germany at the UPC, Hamburg Local Division (“UPC Hamburg”) contending that Tandem’s t:slim X2 pump, and the offering, marketing, using, importing, possessing, and supplying of such devices, infringes the ‘231 patent.

Roche seeks, among other things, damages and other monetary relief, costs and expenses of the legal proceedings, and an order to cease and desist the allegedly infringing activities.

At the UPC Hamburg, Tandem has asserted that the t:slim X2 pump does not infringe the claims of the ‘231 patent and Tandem’s distributor has asserted that the t:slim X2 pump does not infringe the claims of the ‘231 patent and that the claims of the ‘231 patent are invalid and should be revoked.

On November 6, 2024, the UPC Paris will hold a hearing on Tandem’s action to revoke the claims of the ‘231 patent.

In December 2023, F.

Hoffman-La Roche AG and Roche Diabetes Care GmbH (collectively, “Roche”), filed an infringement action at the UPC against multiple defendants including Tandem Diabetes Care, Inc.

Hoffman-La Roche AG and Roche Diabetes Care GmbH (collectively, “Roche”), filed an infringement action at the UPC, Dusseldorf Division (“UPC Dusseldorf”) against Tandem Diabetes Care, Inc.

and Tandem Diabetes Care Europe B.V.

and Tandem’s distributors in Germany, France, the Netherlands and Denmark.

Roche alleges our t:slim X2 insulin pump, and the offering, marketing, using, importing, possessing, and supplying of such devices, infringe EP Patent No.

1 970 677 B1 (the “‘677 patent”).

While Roche contends that Tandem’s t:slim X2 pump infringes the ‘677 patent, we contend that our t:slim X2 pump does not infringe the ‘677 patent.

Furthermore, we contend that the claims of the ‘677 patent are invalid over the prior art and should be revoked.

Roche seeks, among other things, damages and other monetary relief, costs and expenses of the legal proceedings, and an order to cease and desist the allegedly infringing activities.

On April 9, 2025, the UPC Dusseldorf will hold a hearing on Roche’s action asserting infringement of the ‘677 patent, Tandem and its distributors’ counterclaims that the t:slim X2 pump does not infringe the ‘677 patent, and Tandem and its distributors’ actions to revoke the claims of the ‘677 patent.

As the UPC is a new court system that came into effect in 2023, enforcement and litigation under the UPC is new and we cannot accurately predict the outcome of such proceedings.

If any of our dosing devices is found to infringe Roche’s patents and Roche’s patents are also found to be valid, we could be required to redesign our technology or obtain a license from Roche to continue importing, marketing and selling our dosing devices in certain countries in Europe.

If any of our products are found to infringe Roche’s patents and Roche’s patents are also found to be valid, we could be required to redesign our technology or obtain a license from Roche to continue importing, marketing and selling our dosing devices in certain countries in Europe.

However, we may not be successful in the redesign of our technology or able to obtain any such license on commercially reasonable terms or at all.

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If we are unable to obtain or maintain favorable pricing and reimbursement status in EU Member States for our medical devices or medical devices that we may successfully develop and for which we may obtain certification, any anticipated revenue from and growth prospects for those products in the EU could be negatively affected.

In addition, the exit of the UK from the EU, commonly referred to as “Brexit” could lead to regulatory divergence between the EU and the UK.

In addition, the exit of the UK from the EU, commonly referred to as “Brexit” could lead to further regulatory divergence between the EU and the UK.

On May 26, 2021, the MDR became applicable in the EU.

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• authorize the issuance of preferred stock with powers, preferences and rights that may be senior to our common stock, which can be created and issued by the board of directors without prior stockholder approval;

• provide for a staggered board of directors whereby the board is currently divided into three classes, although our board and stockholders have approved the phased declassification of the board of directors such that the board structure will be completely declassified by our 2024 annual meeting of stockholders;

• provide for the removal of a director only with cause and then by the affirmative vote of the holders of a majority of the outstanding shares;

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Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.*

Under current law, federal net operating losses (NOLs) incurred in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal NOLs is limited to 80% of taxable income.

As of December 31, 2023, we had accumulated federal and state NOL carryforwards of approximately $168.0 million, and $262.4 million, respectively.

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Similar rules may apply under state tax laws.

In addition, there may be other limitations under state law on our ability to utilize NOLs, including temporary suspensions or other limitations on the use of NOLs to offset taxable income.

In addition, there may be other limitations under state law on our ability to utilize NOL carryforwards, including temporary suspensions or other limitations on the use of NOL carryforwards to offset taxable income.

We believe we experienced at least one ownership change that significantly reduced our ability to utilize our pre-2018 NOL and research credit carryforwards before they expire.

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In March 2024, we completed the offering of $316.25 million aggregate principal amount of 1.50% Convertible Senior Notes due 2029 (the 2029 Notes and, together with the 2025 Notes, the Notes), which are governed by the terms of an indenture (the 2029 indenture and, together with the 2025 Notes, the indentures).

In March 2024, we used the proceeds from the offering of the 2029 Notes to repurchase approximately $246.7 million aggregate principal amount of the 2025 Notes in privately negotiated transactions with holders of the 2025 Notes and as of June 30, 2024, we had approximately $40.8 million aggregate principal amount of the 2025 Notes outstanding.

In March 2024, we used the proceeds from the offering of the 2029 Notes to repurchase approximately $246.7 million aggregate principal amount of the 2025 Notes in privately negotiated transactions with holders of the 2025 Notes and as of September 30, 2024, we had approximately $40.8 million aggregate principal amount of the 2025 Notes outstanding.

The Notes are our senior unsecured obligations, and interest on the Notes is payable in cash semi-annually at a rate of 1.50% per year.

49 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors