Dexcom Reports First Quarter Results
Listening to this afternoon conference call for Dexcom’s (NASDAQ:DXCM) first quarter results it appaers the company is beginning to get on the right track. Based on comments made by the company it appears the many problems experienced with early verisons of the prodcut are solved or well on the way to being solved. Manufacturing yields are approaching 90%, customer complaints are down and invetory levels are ample. Diabetic Investor isn’t surprised by these improvement as it is a rare occurance for any company to introduce a first generation device without issues.
Now comes the really hard part, getting patients and physicians to believe in the product and gaining reimbursement. There is no question that there is a market for continuous glucose monitoring particularly with insulin pump patients. It is also true that as CGM gains more wide spread usage and phsyicians learn how to use the data gained from CGM additional market applications will emerge. Futhermore, with Medtronic (NYSE:MDT) already in the market and Abbott (NYSE:ABT) set to enter the market reimbursement will eventually become a reality.
Still in the near term Diabetic Investor sees the CGM market as a niche market. Even with reimbursement it is highly unlikely that a non-insulin patient would use a CGM and usage in the insulin using community beyond insulin pump patients will be limited. For this reason we maintian our belief that Dexcom will follow a well traveled path for diabetes device companies and be acquired by larger player in the future. With the improvements the company has made they have taken a big step towards making this an even greater possibility.
David Kliff
Publisher
847-634-4777
847-634-4646 Fax
800-783-3712
224-715-3761 Mobile
dkliff@diabeticinvestor.com
www.diabeticinvestor.com
