Dexcom continues to execute
This morning Dexcom (NASDAQ:DXCM) announced they received FDA approval for their new continuous glucose monitoring system, the Dexcom G4™ PLATINUM. These days anytime a diabetes device receives FDA approval it’s a monumental achievement given the nature of the agency. This approval also shows what happens when a diabetes device company truly works with the agency and actually listens to what the agency wants. As has been pointed out before, as difficult as it can be dealing with the FDA too many diabetes device companies waste their time and resources fighting city hall rather than trying to find a way to work within the system that exists.
As the data shows the G4™ Platinum is not just more accurate than the 7plus system, it’s less expansive to manufacture which should improve margins even further. Terry Gregg, Dexcom’s CEO also noted during today’s call which covered the G4 approval, margins will get even better in the future as the company isn’t standing pat with this approval and is actively working with the FDA to eliminate the need for a transmitter and have the sensors readings transmitted to a smartphone. Nor has this approval slowed down the company in their continuing quest to make sensors even more accurate which should eventually eliminate the need for the patient to use a conventional glucose meter.
Ironically the approval comes right after the EASD conference where it was learned that Abbott (NYSE:ABT) has re-launched their much beleaguered and given up for dead continuous system, the Navigator. According to industry sources who attended the conference this silent launch in Europe was designed to test the waters on bringing an improved version of Navigator back to the US. Given that Dexcom and Medtronic (NYSE:MDT) currently dominate the CGM market and that Navigators has considerable baggage to overcome Diabetic Investor doubts this new and improved version will gain much, if any, market traction. Realistically it’s Medtronic who has more to worry about than Dexcom, as their CGM system is now well behind Dexcom’s in terms of accuracy and longevity.
Today’s approval shows what happens when a diabetes company actually goes out and executes. Far too many diabetes companies are using the FDA as scapegoat for what really is their inability to execute. How can it be that companies like Dexcom and TelCare, tiny when compared to the behemoths in the diabetes device world, can get their systems through the FDA, when all we here from the behemoths is the FDA is standing in their way. Let’s get real as this doesn’t even come close to passing the smell test.
Congrats to Dexcom for doing what a diabetes device company is supposed to do, improving the lives of patients with diabetes and delivering solid results for their stakeholders. It’s only a matter of time before one of the behemoths recognizes the value Dexcom has created and makes stakeholders happier still.
