Wake Up
Gauging by investor reaction you just might think that’s it’s all over for Dexcom (NASDAQ: DCXM). As we write shares are down some 33% and the trading day is not over yet. You just might get the impression that since Libre was approved by the FDA, that overnight Abbott (NYSE: ABT) became king of the CGM castle. Well you could think that but you would be wrong to do so.
First and we should not have to overstate what is obvious but Dexcom just got a lot cheaper and all of sudden a very attractive takeover candidate.
Second, Abbott has yet to announce their US strategy for Libre and I’m sorry just based on their history it does not exactly inspire confidence. Remember this the same company that launched the Navigator.
Third, it is true Abbott did a very good job overseas but it is also true that Dexcom could have done a much a better job. This is one time when this talented team swung and missed. Hey it does happen.
Fourth, it would have been much worse had Verily dumped Dexcom when the exact opposite is true. Verily is deeply committed to Dexcom and this cannot be overstated.
Fifth, Abbott still has lots of heavy lifting to do as the majority of diabetes specialists see Dexcom as the better system.
We hate to use yet another sports analogy, sorry we get this from the Wizard Momma Kliff’s hubby, but this isn’t a sprint this is a marathon and the race has really just started. Now that Libre is approved in the US the ball as the Wizard liked to say is now in their court. Dexcom isn’t dense they know what’s coming and they are ready.
So, go ahead and believe it’s game, set and match but that in our opinion would be a huge mistake. Remember last years Superbowl when the Patriots seemed deader than a doornail facing a huge deficit with time running out. Well it seems to me they weren’t dead after all or as Mark Twain used to say reports of his death have been greatly exaggerated.
