It’s appropriate that as we move towards football season that Dexcom (NASDAQ:DXCM) reported second quarter results. Since taking over as CEO 13 months ago Terry Gregg is exciting the playbook he put together and perfected while he was running MiniMed. Understanding the company needed a clearer focus and greater financial discipline he has executed well on both fronts. Although the company is still not where it wants to be, the ultimate goal of selling to larger player in the industry is no longer a dream but a realistic possibility. While Diabetic Investor does not see any deal in the near future the pieces to the puzzle are beginning to take shape.
First, as expected reimbursement is beginning to trickle in as more insurers make favorable coverage decisions. While it will take some time before reimbursement is universal as it is with conventional blood glucose monitors the trend is favorable.
Second, just as the head coach of a football team wants to chose his assistant coaches, Mr. Gregg is upgrading Dexcom’s management team with some experienced and talented individuals he has worked with in the past.
Third, the much anticipated deal for their hospital system is almost completed. While Diabetic Investor believes that Edward LifeSciences (NYSE:EW) will be the partner, the company has several options here. Look for a decision to be announced before the end of the month.
Fourth, the company announced that their partnership with Animas is progressing well and a working product could be ready by next summer. The company also hopes to have a working product for Insulet (NASDAQ:PODD) before the end of 2009.
Finally, the company continues to improve the product with third, fourth and fifth generation sensors under development.
Diabetic Investor is not surprised that Dexcom is progressing well under Mr. Gregg’s leadership. Coming from MiniMed he understands the diabetes market and what it takes for a medical device company to achieve commercial success. Taking the longer term view it appears he will follow the same exit strategy with Dexcom as he did with MiniMed. Between now and then look for the company to continue to execute the playbook and take control of the CGM market.