BBNX

Business Context and Reporting Period

Beta Bionics, Inc. (BBNX) is a commercial-stage medical device company focused on the iLet Bionic Pancreas, an automated insulin delivery system cleared by the FDA for Type 1 Diabetes (T1D) in adults and children six years and older. The company launched commercially in May 2023. This 10-K covers the fiscal year ended December 31, 2025. The company completed its Initial Public Offering (IPO) in January 2025, raising approximately $190.4 million in net proceeds, alongside a concurrent private placement of $15.6 million.

Key Financial Metrics

Key Operational Metrics:

• Installed Customer Base: 35,011 (as of Dec 31, 2025), up from 15,298 in 2024.
• New Patient Starts: 19,713 in 2025, up from 12,994 in 2024.
• Revenue Mix: 76% from Durable Medical Equipment (DME) channel and 24% from Pharmacy Benefit Plan (PBP) channel in 2025 (compared to 90% DME and 10% PBP in 2024).

Material Changes vs. Prior Period

• Revenue Growth: Net sales increased 54% year-over-year, driven by a 52% increase in new patient starts and higher sales of single-use products (cartridges and infusion sets) due to the expanding installed base.
• Expense Increases: Total operating expenses rose 57% to $127.2 million. Sales and marketing expenses increased 66% due to headcount expansion, and General and Administrative expenses increased 74% due to public company costs and increased headcount.
• Channel Shift: A strategic shift toward the PBP channel is underway. While PBP sales represent a smaller portion of upfront revenue, they are expected to generate higher cumulative gross margins over the device lifecycle due to higher recurring revenue from single-use products.
• Capital Position: Cash and investments increased significantly following the January 2025 IPO and private placement, providing a runway to fund operations through the first half of 2028.

Guidance, Outlook, and Risks

Outlook and Strategy: Management expects to continue incurring operating losses as it scales commercialization and invests in R&D for the bihormonal iLet (insulin and glucagon) and a patch pump ("Mint"). The company aims to expand its sales force into primary care settings and increase PBP channel penetration.

Regulatory and Operational Risks:

• FDA Warning Letter: In January 2026, the company received an FDA Warning Letter following an inspection of its Irvine facility. The letter cited deficiencies in the Quality Management System, Medical Device Reporting, and Correction and Removals. The company is preparing a response and implementing corrective actions.
• Post-Market Surveillance: The iLet is subject to a mandatory FDA post-market surveillance order (Section 522) requiring a one-year prospective study of 1,875 users, with a final report due by June 2027.
• Supply Chain: The company relies on single-source suppliers for critical components (infusion sets, cartridge connectors, pump motors). Disruptions could delay production.
• Reimbursement: Success depends on maintaining and expanding coverage with third-party payors. Changes in CMS policies or payor contracts could impact pricing and revenue.

Investor Verification Checklist

• FDA Warning Letter Resolution: Verify the status of the company's response to the January 2026 FDA Warning Letter and the timeline for resolving cited deficiencies.
• PBP Channel Economics: Monitor the actual gross margin realization from the PBP channel versus the DME channel to validate the long-term profitability thesis.
• Installed Base Retention: Track patient attrition rates and the conversion of new patients from Multiple Daily Injections (MDI) to the iLet.
• Bihormonal Development: Review progress on the bihormonal iLet clinical trials (Phase 2a feasibility) and the regulatory pathway for the glucagon component.
• Supplier Concentration: Assess the company's progress in qualifying alternative suppliers for single-source components to mitigate supply chain risk.