Rolling along
Momma Kliff taught us many things over the years but one thing she never told us was to be shy. Yes, she noted there are times to sit back and enjoy the ride but there are other times when it’s ok to toot your own horn. Or as she “Heck if you don’t do it who will”. Well today we take great enjoyment over how well Dexcom (NASDAQ: DXCM) is doing if for no other reason that everyone had given them for dead.
Today the company announced they have received a CE mark for the G6 and yesterday the U.S. Centers for Medicare & Medicaid Services (CMS) announced they were updating their policy on mobile device compatibility for the Dexcom G5® CGM System. Not surprisingly shares are up this morning and now are approaching the $100 level.
It seems like just yesterday that all the analysts and many of the pundits were proclaiming that Abbott (NYSE: ABT) and the FreeStyle Libre was the king of the CGM castle. That Dexcom had been dethroned and now would face an uphill fight. Shares of Dexcom suffered with each Libre announcement. Diabetic Investor on the other hand noted that while Dexcom had made some mistakes they were by no means dead.
Now the question is how will Abbott respond? Well we should find out soon with the ADA conference coming up at the end of next week.
Yet what everyone continues to forget is that the CGM market is not a winner take all market, that there is plenty of upside here and room for multiple players. Is it possible that Dexcom could become what Medtronic (NYSE: MDT) is in the insulin pump market? For sure. Is it possible that Abbott and Medtronic – who just entered the stand-alone CGM market – will have to be content picking up the scraps that Dexcom leaves behind? This could happen. Will this prevent others from entering the market? Nope.
The fact is, yes, those pesky facts again, is that Dexcom is playing offense and everyone else is playing defense. With their multiple insulin pump and insulin company partnerships the company is well positioned for growth. And let’s not forget they are also partnered with that little company in Mountain View who has something called an internet search engine. Oh, and they also have a nice relationship with that other little company in the valley who just built a swanky new headquarters.
Now let’s give Abbott the credit they deserve as the Libre has exceeded everyone’s expectations. Let’s also state for the record that just as Dexcom was not dead before Libre is not dead now. Just as Dexcom had no intention of going quietly into the night neither does Abbott. The same can said for Medtronic. As Medtronic noted during their analyst day this is going to be a $2 billion plus market which has lots of upside.
Folks CGM is transformative technology. It is quickly becoming the standard for glucose measurement. It is not a question of if non-insulin using patients will use CGM but when and how often they will use it. The future is very bright for the CGM market. Unlike the insulin pump market which in the early days was growing like crazy only to plateau later on we don’t see this happening in CGM for many years. Or to put it another way what we are seeing today is just the tip of the iceberg, what’s above the water. The bigger and far more lucrative market is below the water line unseen but very large.
So, kudos to the good people at Dexcom and remember as good as it feels today the race isn’t over yet.
