Trying to hit a moving target
As Diabetic Investor suspected the warning letter the FDA issued to Dexcom (NASDAQ:DXCM) has more to do with the changing environment at the FDA rather than anything fundamentally wrong with the Dexcom system. While the company will address the issues in the letter and make changes to the product label, THIS IS NOT A SERIOUS ISSUE AND SHOULD HAVE NO IMPACT WHATSOEVER ON SALES OR THE FUTURE DIRECTION OF THE COMPANY.
The reality for Dexcom, as they did address during this afternoon’s call, is that dealing with the FDA is not exactly easy. As we have noted on several occasions and this is just one more example, the FDA is becoming overly cautious and issues, no matter how small or inconsequential, are now commanding greater attention. Although no company would risk offending the agency by stating that it’s hard to play the game when they keep changing the rules, this is exactly what’s happening with devices and drugs.
On the bright side the agency has created a buying opportunity for investors who are smart enough to buy more shares of Dexcom. Diabetic Investor continues to see Dexcom as the leader in CGM with a very bright future.