Terr y GreggThanks Steve. Now Jess will provide you with a financial review of the quarter, then I'm going to move into the commercial overview of the quarter including clinical and regulatory partnerships update on looking to the present and future of our technology by concluding remarks and then we will provide you with the opportunity to ask us a few questions, Jess? Jess Roper Thank you, Terry. DexCom reported product revenue with approximately $9.0 million for the second quarter of 2010, compared to $4.1 million for the same quarter in 2009, an increase of 120%. Sequentially, product revenue for Q2 increased by 34% from the prior quarter, during Q2 we sold over 3,500 systems. Sequentially, essential revenues were up 37% from the prior quarter. Total revenues for the second quarter of 2010 was $11.8 million, compared to 6.8 million for the same quarter in 2009, and included $2.7 million in development grant and other revenue from our development and collaboration agreements. Cost of sales including both product and non-product totaled $7.3 million for the quarter. Product cost of sales totaled $6.3 million for Q2 2010, compared to $4.6 million for the same quarter in 2009. Sequentially, product of cost of sales increased by $1.2 million from to Q2 2010, due to the increased number of units sold during the quarter. The corresponding improved product gross margin totaling $2.7 million in Q2, compared to $1.6 million in the prior quarter was due mainly to additional product revenue. Development grants and other cost of sales totaled $0.9 million for the second quarter of 2010, compared to $3.2 million during the same quarter of 2009. The decline was due to lower expenditures related to the development of our hospital-based system. Sequentially, development in other cost of sales remained flat quarter-to-quarter. Research and development expense increased $2.0 million in total $5.4 million for Q2 of 2010, compared to $3.5 million in Q2 of 2009. The increase in R&D cost was attributable to additional efforts associated with their next generation ambulatory products. Sequentially, R& D cost increased by approximately $0.7 million in the prior quarter, as a reminder R&D cost associated with our development and collaboration agreements Animus and Edwards, included within development and other costs of sale.
Selling general and administrative expense totaled $10.4 million in Q2 of 2010, compared to $9.0 million in Q2 of 2009. The increase was primarily due to additional selling, customer service and information technology cost to support revenue growth. Sequentially, SG&A increased $0.6 million over the prior quarter due to the additional selling and marketing costs.Our net loss for the quarter totaled $11.7 million, compared to $15.3 million during the same quarter in 2009 and included $3.9 million in non-cash charges. The decrease in the net loss was primarily due to additional revenue and the corresponding positive gross margin. Sequentially quarter-to-quarter, our net loss decreased by $8.6 million, primarily due to lower non-cash charges relating to the extinguishment of debt and increased revenue and gross margin. During the second quarter, we converted an additional $2 million of our $60 million of convertible debt, and after quarter end we converted another $1 million of debt into common shares and have just $3 million of the original $60 million in convertible debt remaining outstanding as of August 3rd. The loss per share for the quarter was $0.20 and we ended the quarter with $42 million in cash, restricted cash and marketable securities. I would like to now turn back to out President and CEO, Terry Gregg. Terry Gregg Thanks Jess. We were extremely pleased with our performance in the second quarter of 2010 as we delivered yet another quarter of sequential growth. We again exceeded analyst consensus estimate for product revenue and we achieved a positive product gross margin of 30%. Highlighting some key metrics from the second quarter, total product revenue grew approximately 34% sequentially from Q1 2010 to Q2 2010, and was up 120% compared to the second quarter of 2009. Read the rest of this transcript for free on seekingalpha.com