Dexcom Up’s The Ante
Late this afternoon the FDA approved the G6 system from Dexcom (NASDAQ: DXCM). Per a company issued press release;
“DexCom, Inc. (NASDAQ: DXCM), the leader in continuous glucose monitoring (CGM) is pleased to announce that the U.S. Food and Drug Administration (FDA) has granted a De Novo request for the Dexcom G6® CGM System, the newest generation of CGM for people with diabetes ages 2 and up. The Dexcom G6 is indicated by the FDA for use as both a standalone CGM and for integration into automated insulin dosing (AID) systems. The powerful and revolutionary new Dexcom G6® is the first CGM to receive this classification by the FDA.”
As we predicted the G6 would be approved needing NO calibration along with an improved more patient friendly insertion device. There are other notable improvements which are outlined in the press release which can be found on the Dexcom website.
While most will concentrate on the NO calibration we’re more impressed with the De Novo request as per the FDA’s press release;
“The FDA reviewed data for the device through the de novo premarket review pathway, a regulatory pathway for novel, low-to-moderate-risk devices that are not substantially equivalent to an already legally marketed device. Along with this authorization, the FDA is establishing criteria, called special controls, which outline requirements for assuring iCGM devices’ accuracy, reliability and clinical relevance as well as describe the type of studies and data required to demonstrate acceptable iCGM performance. These special controls, when met along with general controls, provide reasonable assurance of safety and effectiveness for this device. “
We suspect the FDA will publicly release these new standards and we further believe Dexcom will easily meet them.
Now it goes without saying a big loser here is Abbott (NYSE: ABT) as the G6 not just levels the playing field with the FreeStyle Libre it ups the ante. Abbott can no longer claim they are the only CGM that does not require fingerstick calibrations or has a user-friendly sensor insertion device. The bottom line here is the bottom line as this news will force Abbott into the price war no one wants but now has become a foregone conclusion.
A bigger loser is Medtronic (NYSE: MDT) who’s getting set to launch their Guardian Connect stand-alone CGM targeted at patients following multiple daily injection (MDI) therapy. Even without this news Medtronic had a Herculean task ahead of them as they were not just late to the market, they are coming to market with an inferior product. Think of it this way Medtronic is bringing out a flip-phone while Abbott and Dexcom are selling smartphones.
We hate to say we told you so, but we must. Yes, Dexcom may have underestimated Libre and yes, they made mistakes but as Mark Twain used to say the reports of their death were greatly exaggerated. The G6 combined with the new standards from the FDA ups the ante and right now Dexcom has two Aces in the hole. Abbott can try and buy the pot by over-betting their hand while Medtronic would be wise to fold and wait for the next hand.
This game isn’t over but as it stands today Dexcom has recovered from the standing eight count and is punching back.