Dexcom 2Q18 – Record sales of $243 million rise 42% YOY on existing G5 uptake; big guidance raise for 2018: ~$925 million; G6 full US launch underway, payer talks ongoing; pipeline delays – August 1, 2018

Executive Highlights

  • Dexcom’s worldwide 2Q18 sales hit a record-high $243 million, accelerating to 42% YOY growth on a challenging comparison (+24% in 2Q17). This represents three record sales quarters out of the last four, clobbering the previous $221 million record in 4Q17. Worldwide sales grew 32% sequentially, the largest Q2 sequential gain Dexcom has seen since 2010. Notably, the acceleration came from G5, as G6’s full US launch was only ~three weeks long in Q2 (it started in early June) – this bodes extremely well for 2H18. Both geographies saw record-highs: (i) US sales of $190 million grew 35% YOY and 30% sequentially, Dexcom’s strongest US growth in two years and driving 68% of 2Q18 growth; and (ii) international revenue of $53 million grew a robust 78% YOY as reported (+71% operationally) and 36% sequentially, hitting a record 22% of Dexcom’s total sales and driving 32% of growth.

  • In a massive guidance raise, 2018 revenue is now expected at “approximately $925 million,” reflecting 29% YOY growth from 2017. This is up a remarkable ~$70 million from 1Q18’s guidance range for $850-$860 million (+19%) in full-year sales. It also marks two straight guidance raises following the initial $830-$850 million, which we did feel was on the more conservative side.

  • Dexcom reported GAAP net income of $30 million, a 10x improvement from $2.9 million in 2Q17. This reflected $43 million of investment income; notably Dexcom invested $5M in Tandem at $2/share; it’s now at $28/share. Gross margin declined to 63%, down from 65% in 1Q18 and 69% in 2Q17, reflecting G6 manufacturing expenses. In 1Q18, management said to expect 65% to 68% for the year on average; this was reduced to 64% today.

  • Executive Board Chairman Terry Gregg is retiring, and CEO Kevin Sayer will now serve as both CEO and Chairman. This completes one of the best leadership teams and transitions we’ve ever seen in diabetes, going back to their work together at MiniMed back in the day (when Sayer was controller under CEO Al Mann and President Terry Gregg) to the Dexcom CEO transition in 2015. Until recently, Sayer worked on “today” while Gregg worked on “tomorrow.” Gregg’s retirement from Dexcom's Board and role as Chairman is a definite loss.

  • Dexcom’s factory-calibrated, 10-day-wear G6 is now in its full US launch. The call was absent of metrics, though there is “strong demand and “unambiguously positive” feedback so far – we can certainly second this. Management noted there’s been a “strain on the organization to keep up with demand,” and the team is working “around the clock,” “24/7 all the time right now as far as manufacturing” to get product out the door. Still, order delays have consistently been in the ballpark of “3-5 days.” Read a complete G6 test drive here. An OUS launch is still 2H18. There is some controversy around the restart; the accuracy clearly would deteriorate from the 10-day mark, though we do not believe this is a major safety question – it does create a cheaper G6, which makes it more competitive with Abbott from a pricing perspective (though still is not as cheap).

  • Payer discussions are underway for G6. Dexcom has been “very creative and aggressive” in proposing different payment structures – including pharmacy channel and subscription/bundling. Mr. Sayer was candid in saying, “Pricing pressures are not an “if” – they are a ‘when.’” Dexcom remains willing to give up G6 sensor pricing to expand access to the pharmacy. So far, G6 is using G5’s reimbursement structure.

  • Pipeline updates all reflected delays: (i) a lower-cost G6 transmitter is expected to launch “sometime next year” (back from “late 2018 or early 2019”); (ii) Verily gen one sensor remains in validation and verification (no change), but with “no update or timeline right now” for a 14-day wear G6 sensor trial (back from “2H18”); and (iii) the lower-cost, Verily Gen 2 CGM is now slated for launch in “late 2020, early 2021” (back from “2020”).

Dexcom reported record 2Q18 financial results this afternoon in a call led by CEO Kevin Sayer, CFO Quentin Blackford, and EVP Steve Pacelli. Noted CEO Kevin Sayer in concluding remarks, “G6 is not a product launch for us; it’s a generational platform shift. We have the technological foundations to take CGM all across healthcare … This ride isn’t slowing down any time soon.” See the top financial and pipeline highlights below!

Table of Contents 

Financial and Business Highlights

1. Record sales of $243 million grow 42% YOY and 32% sequentially, actually driven by G5! Record US sales of $190 million (+35%) drive 68% of Q2 growth; OUS sales of $53 million rise 78% YOY

Dexcom Quarterly Sales (1Q12-2Q18) – Global, US, OUS

  • Dexcom’s worldwide 2Q18 sales hit a record-high $243 million, accelerating to impressive 42% year-over-year (YOY) growth on a still-tough comparison to 24% growth in 2Q17. This represents three record sales quarters out of the last four, a remarkable feat considering the previous, blowout $221 million record-high in 4Q17. In a remarkable sign of momentum, worldwide sales grew 32% sequentially, the largest Q2 sequential gain Dexcom has seen since 2010! This strong sales beat prompted many questions, and notably, management emphasized that the acceleration came from G5! Noted EVP Steve Pacelli, “This quarter was all about G5.” Wow! Indeed, G6’s expanded US launch was only three weeks long in Q2 (started in early June). When further pushed in Q&A to force rank among three key drivers in the US, CEO Kevin Sayer was unambiguous: market expansion with G5 was #1; the US Medicare business was #2 (and we think there’s a lot more room here to expand CGM, particularly among type 2 patients on SFUs though that will require advocacy efforts); and G6 was a clear third. Notably, both the US and OUS businesses saw record-high sales, as noted in the graph above and detailed in the bullets below. This was only Dexcom’s second time crossing $200 million in worldwide quarterly sales, a number it handily exceeded here at $242 million. Management repeatedly emphasized the growth was well ahead of expectations in both the US and outside the US, a big plus leading into a full quarter with G6 in 3Q18.

  • Record US revenue of $190 million grew 35% YOY and 30% sequentially, accelerating to its strongest performance in two years. The US drove 68% of Dexcom’s 2Q18 growth, on par with the past three quarters – but still quite meaningful considering the OUS business grew 78% YOY and is now over $50 million per quarter. Management noted that general CGM awareness is “increasing significantly” and “stronger than ever” (especially leaving ADA), in part alluding to Abbott’s promotion of the overall category with FreeStyle Libre – this seems to be helping the entire field, rather than hurting Dexcom, Dexcom as management has previously forecasted. We include more comments on the G6 launch below, but really, the story of 2Q18 sales was uptake of G5 and CGM market expansion – we would not have expected this, but it is a huge win as Dexcom now has all of 2H18 to market the no-calibration, 10-day wear G6.

  • Record international revenue of $53 million grew a robust 78% YOY as reported (+71% operationally), hitting a record 22% of Dexcom’s total sales. Impressively, this came on a difficult comparison to 69% OUS growth in 2Q17, and now marks five straight quarters with 49%+ YOY sales growth internationally. OUS sales also rose 36% sequentially from the previous record-high ($39 million) in 1Q18, an impressive feat and potentially marking a real inflection point in the business (see blue line above, which has now started to grow more meaningfully). Management noted that with CGM still “significantly underpenetrated,” there is a lot of room to grow further OUS.

2. Massive guidance raise: 2018 sales of “approximately $925 million” (+29%), up ~$70 million from previous guidance for $850-$860 million

  • In the largest guidance raise we’ve ever seen from Dexcom, 2018 revenue is now expected at “approximately $925 million,” reflecting 29% YOY growth from 2017. This is up a remarkable ~$70 million from 1Q18’s guidance range for $850-$860 million (+19%) in full-year sales. It also marks two straight guidance raises this year, as the original guidance to start 2018 called for sales of $830-$850 million – whoa, talk about a rise in optimism in just seven months! For context, Dexcom has grown 37% YOY in 1H18 ($427 million), and many analysts pointed out the increased guidance still implies a deceleration in 2H18. Indeed, new guidance for 29% growth (~$925 million) reflects slower 2H18 growth of 23% YOY and we do foresee room for further growth, though presumably this figure reflects expectations of lower pricing. CFO Quentin Blackford noted potential pricing, channel mix shifts (moving to pharmacy, bundling with G6), and competition (FreeStyle Libre’s expanded 14-day label, Guardian Connect) as key factors baked into the implied deceleration. Obviously, there is clear upside if the G6 launch goes better than expected and 1H18 momentum continues. We include a separate highlight on pharmacy and subscription bundling below, commentary that was mostly vague but implied pricing might change as new G6 payer contracts are signed in the coming months with different models – fortunately, these should expand access meaningfully, even if they give up some pricing.

    • Interestingly, this is the first Dexcom guidance we’ve heard that has provided a single “approximate” number and not a range, a question that was directly posed but not really answered. CFO Quentin Blackford only stipulated the puts and takes noted above. We expect the 3Q18 call will update this guidance based on what happens in the quarter.

3. GAAP net income of $30 million; gross margin of 63% down from 69% in 2Q17, reflecting “natural inefficiencies” as G6 manufacturing ramps

  • Dexcom reported GAAP net income of $30 million in 2Q18, a ten-fold improvement from 2Q17's $2.9 million net income. Net loss on a non-GAAP basis was $9.2 million in 2Q18, reflecting $43 million of income related to investments (presumably the $5 million investment in Tandem earlier this year, given Tandem stock’s tremendous 14x appreciation from $2/share to now over $28) and $3 million in interest expense related to senior convertible notes.

  • Though Dexcom saw record sales, gross margins declined a bit: 63% in 2Q18 compared to 65% in 1Q18 and 69% in 2Q17. Management attributed the margin decline to huge strain placed on the organization – having to bring up G6 production really quickly and all the natural inefficiencies that brings, along with having to support continued demand for G5. Dexcom has brought the new Mesa, AZ manufacturing online really quickly and hired many new people along the way.

    • 2018 gross margin is now expected at ~64% vs. the prior range of 65%-68%. Management clarified that the focus is on getting patients G6 as quickly as possible, at the slight expense of margins and manufacturing efficiencies – definitely the right call.

  • The business again showed outstanding operating leverage - operating expenses of $308 million in 1H18 have grown 16% YOY, less than half the rate of revenue growth (37%). Q2 did see a 6% sequential gain in OpEx ($159 million, +21% YOY), and management raised OpEx growth guidance to 14% YOY – up a bit from the prior 10%. Still, this remains half the rate of revenue growth, a great metric on the profitability front.

  • Dexcom has a remarkable $606 million in cash and equivalents, up from $534 million in 1Q18 – clearly the Tandem investment was very well placed, alongside strong cash-based operating results. Dexcom also has access to a $200 million revolving credit line. Plenty of capital on hand!

4. Board Chairman Terry Gregg retires, CEO Kevin Sayer becomes Chairman; completes a tremendous leadership transition

  • Dexcom also announced that Executive Board Chairman Terry Gregg is retiring, with CEO Kevin Sayer appointed to serve as both Chairman and CEO. This completes one of the best leadership teams and transitions we’ve ever seen in diabetes, going back to the team working together at MiniMed back in the day and then at Dexcom, with Mr. Sayer taking over the CEO position in 2015. Noted Mr. Sayer, “I believe we are making this transition from a position of strength, as you can see from the results we just released. Terry has had an immeasurable impact on Dexcom and the diabetes industry. Terry joined the Board of Directors in 2005 and served as CEO from 2007 to 2015. He has served as Executive Chairman since January 2015. This completes the final step in a vision we shared when I became Dexcom President in 2011. Terry and I have worked together for a long time, and this incredible chapter at Dexcom is one I will always treasure. If Terry were here, he would say ‘enough already,’ get to the results…” Indeed, during Mr. Gregg’s tenure, Dexcom has launched six (!) generations of CGM and grown from “nominal revenues” ($5 million in 2007) to updated guidance for $925 million in 2018. Dexcom’s footprint has expanded to more than 40 countries around the world and to approximately 2,300 full-time employees worldwide. Wow!

  • We thought the press release announcing this news was particularly well-worded. What a dynamic duo:

    • “My retirement and today's transition represent the final steps of the vision we established several years ago. The Company is ideally positioned to drive Continuous Glucose Monitoring (“CGM”) to the objectives we always contemplated - the standard of care for all insulin-using patients and ultimately a key technology across healthcare. Our Board is strong and very excited for Kevin to assume these additional responsibilities.” – Terry Gregg

    • “We all want to express a heartfelt thank you and congratulations to Terry for his many years of dedication to Dexcom. His commitment to ’patients first’ and intense drive to advance CGM technology leave an indelible imprint on Dexcom’s culture. We all understand and participate in his vision for Dexcom. We look forward to achieving those goals and going much further.” – Kevin Sayer

G6 Launch Highlights

1. US launch of G6 underway, “Strong Demand” and “Working Around the Clock” to get product out; broader patient mix

  • Following FDA clearance in March and a limited launch in May, Dexcom’s factory-calibrated, 10-day-wear G6 is now in its full US launch. The call was notably absent of metrics, though management cited “strong demand and “unambiguously positive” feedback so far. The biggest complaint? “When am I going to get my G6?” – a good problem to have. Both Mr. Blackford and Mr. Sayer noted there’s been a “strain on the organization to keep up with demand,” and the team is working “around the clock,” “24/7 all the time right now as far as manufacturing” to get product out the door. Dexcom “expects to get ahead of this by the end of Q3,” and clearly bringing on automation, new manufacturing in Mesa, Arizona, and hiring new people is not an overnight flip of the switch. Said Mr. Sayer, “We didn’t make it easy for anybody here” with the G6 launch following faster-than-expected G6 clearance in March. Dexcom has repeatedly emphasized that this is the most complicated operational launch in its history, particularly with the new applicator.

    • Read diaTribe’s complete G6 test drive here. Adam and Kelly found the product delivers on every front, particularly the applicator and terrific accuracy. The one glitch on scanning the sensor code with a smartphone camera was quickly resolved – it works flawlessly.

  • When pressed specifically in Q&A on G6 ordering wait times, management said the delays have actually not been big – on the order of “3-5 days,” rather than weeks or months – and Dexcom has been “meeting demand at this point” and is “not missing opportunities.” Adam’s new G6 system shipped in July within 48 hours, pretty quick including the reimbursement process. It’s also possible a key factor in perceived delays (from patients) is waiting for their existing G5 transmitters (three months each) and receiver warranties (one year) to reset. For instance, if someone was shipped G5 transmitters in March, they might not be eligible to upgrade to G6 until the fall.

  • Analysts pressed in Q&A for metrics on sensor utilization (with the 10-day hard shutoff) and patient mix, but management emphasized it’s too early to know. Though some DIY users have found at least four ways to restart the G6 sensor, it’s not nearly as intuitive as with G5. There was one particularly notable comment on the new patient mix with G6: “Our G6 new customers are everybody. If anything, G6 is a little bit different, as it is reaching a broader base of people – more users who have not experienced CGM before. When we walk into caregivers, the no calibration, easy insertion, smaller profile is more attractive to a broader market of patients. We are seeing a broader user group.”

2. G6 payer discussions underway, with potential shift on pricing, pharmacy channel, subscription bundling (“we’ve been very creative and aggressive”); comments on competition

  • With G6 launching, pricing, pharmacy distribution, and subscription bundling came up more than ever on today’s call. Payer discussions are underway for G6 (no specifics given), and CEO Kevin Sayer said Dexcom has been “very creative and aggressive” in proposing different payment structures. Mr. Sayer was refreshingly candid in saying, “Pricing pressures are not an “if” – they are a ‘when.’” In line with prior calls, Dexcom is willing to give up some G6 sensor pricing to expand access in the pharmacy channel, a move we think would be welcomed in the patient community and keep G6 competitive with FreeStyle Libre. Given comments around the margin guidance, Dexcom appears to expect some of this to materialize in Q4 and into 2019 – how much, through what payers, and what the terms are remains unclear. See relevant quotes below on this topic.

  • “With respect to these contracts with managed care, we’ve used G6 to get in front of people. It’s an educational process with the payers. We have to go beyond pricing to our outcomes, including protection from dangerous lows and A1c improvement in our studies that our competitors do not see. We’ve been very creative and aggressive in structures. A lot of those are pending, some have been accepted. We have a goal to make this accessible to everybody at a price that is acceptable to Dexcom. We’re going to try several models to see what works…It’s a process, and the pricing headwinds will be more in Q4 and into 2019. We’re not impacted this year as much as we originally planned … We’re aggressively proposing new structures to make this easier.” – Mr. Sayer

  • “Some payers look at cost per day, some look at per-member, per-month, and some look at annual therapy. We gear our discussions to the people we meet with, and some are geared to Medicare. We tailor our approach and we’ll see how things play out over the next couple of months. While we’re selling G6, a lot of G6 reimbursement is grandfathered in from G5. We got paid per sensor per day, and that will change over time with these new arrangements. We’re being strategic in each and every individual meeting. This is very much a widescale effort. Unfortunately I’d love to not be shotgun approach, but we have to address each audience.” – Mr. Sayer

  • “We have an opportunity to go to the pharmacy and increase access and availability to patients, and we are willing to give some price to increase volume and get the technology to more peopleMedtronic said they will price lower than us [with Guardian Connect; see ADA], and Libre is priced much lower. Medicare got approved in 2017, and that pricing is lower than where we’ve been in the past. Pricing pressures are not an ‘if’ – they are a ‘when.’ But at the end of the day, look at the numbers we just put up – they are pretty strong.” – Mr. Sayer

  • “There is nothing that Libre does that we don’t do better. I can leave it at that. With physicians we meet with, G6 has so many features – connectivity performance in high and low ranges, form factor, ease of insertion – this product is a home run for us. This growth this Q was without G6. Another thing to remember: there are a lot of patients out there with diabetes, and the world is not just going to be one CGM company. There are opportunities for all of us. The market is really underpenetrated, and we have a lot of room to grow. This platform with G6 really gives us an opportunity to grow into areas we haven’t gone before. Not sticking your finger, combined with the performance of the system – we’re excited with what we have going on. We’re not going to spend a lot of time worrying about the others.” – Mr. Sayer (Editor’s note – we don’t think the insertion is quite as easy although they are now much more similar than they were earlier, and data management is better with Dexcom in the US.)

  • “We do not have any difficulty explaining to third party payers our product vs. others. Our product with no-cal, connectivity, sharing, ease of use, has a feature set anything as good in others. It’s not difficult to explain that with G6.” – Mr. Sayer

3. G6 International Launch in 2H18, following CE Mark in June

  • Following Dexcom’s CE Mark in June for G6, the company is “formulating its OUS launch plans for the balance of the year.” This was slightly more vague than what we last heard, where Dexcom said G6 would be available in the UK and Ireland in June and launch in other European countries later this year. Clearly Dexcom has its hands full in the US, but is seeing no shortage of adoption OUS given the 78% YOY international growth.

4. No G6 Medicare timing update, but big win in allowing smartphone communication with G5

  • There was no update on a G6 Medicare decision –expected this fall as of 1Q18– though management did note the huge CMS victory in June: G5 Medicare users can now use the Dexcom G5 app along with the durable receiver. Mr. Sayer speculated that “this will help us drive more Medicare interest,” though he admitted he is “not sure how many were sitting on the fence” and specifically holding out on G5. Still, the ability to market share and remote monitoring – especially relative to FreeStyle Libre, which does not have smartphone apps is the US – “can be very powerful.” We agree and were relieved to see CMS come to its senses! We do strongly believe that far more patients should be included in reimbursement, including all type 2 patients on SFUs that put them at risk of hypoglcyemia.

5. Will anyone else get iCGM indication? FreeStyle Libre 14-Day still falls well short on hypoglycemia

  • Is anybody close to obtaining an iCGM designation like G6? EVP Steve Pacelli in Q&A: “In reviewing data from Abbott on the next-gen Libre (14 day, 1-hour warmup, approved on Friday, FDA summary now posted), clearly in hypoglycemia the performance is not good enough to meet the iCGM standard. We’ve looked at Guardian Connect standalone, and it also falls a little short. At this point I don’t think there is anybody coming.” (We’d note that Senseonics seems to be the closest to iCGM levels of accuracy, as shown in our analysis.)

    • Indeed, see the FDA letter here for Abbott’s just-approved 14-day Libre, which indeed still falls well short of the iCGM hypoglycemia accuracy threshold for >85% of points within ±15 mg/dl for values <70 mg/dl (lower bound of 95% CI). As table 5 pasted below shows, 38%-53% of Libre 14-day’s points are within this range for <80 mg/dl, and these are not even the lower-bound of the 95% confidence interval. In fact, the hypoglycemia performance seems to have deteriorated a bit from the 10-day version, which had comparatively higher 44.7%-72.2% within ±15 mg/dl for hypoglycemia. Interestingly, the FDA document also says the MARD is “10.1%” (table 9), not the “9.4%” Abbott shared on Friday – we’re not sure what the discrepancy is and we’re following up with Abbott on this front. Finally, the FDA document is clear about inaccuracy in hypoglycemia: Libre 14-day actually missed hypoglycemia <70 mg/dl a fairly high 29% of the time, and it gave a false notification rate a frustrating 72% of the time (i.e., displaying glucose was low when it actually wasn’t). As noted on Friday, FreeStyle Libre 14-day is approved non-adjunctively with a shorter one-hour warmup, but it is labeled for adjunctive use during the first 12 hours after insertion.

  • Today’s call again highlighted the advantage of G6’s integrated CGM (iCGM) indication (510(k)) pathway, noting June’s FDA approval of Tandem’s Basal-IQ with G6 far earlier than expected. “This represents a great example of why the agency took the step for iCGM, and we applaud the FDA for approving the Tandem system within three months of G6.” – EVP Steve Pacelli

Pipeline Highlights

1. Lower-cost G6 transmitter to launch “sometime next year”, “working really hard” on validation and verification

  • An updated Dexcom G6 transmitter with a new electronics redesign and cost advantage is expected to launch “sometime next year,” slightly back from the 1Q18 plan to launch in “late 2018 or early 2019.” Dexcom is currently “working really hard to get through validation and verification.” This slight delay is not too surprising, considering Dexcom is trying to keep up with manufacturing for the initial G6 launch. Management noted that this design update may have more consistent communication performance than the current G6 transmitter.

2. Verily gen one remains in validation/verification, no launch timing; no timing on 14-day wear clinical trial, given iCGM standards

  • The Verily gen one disposable sensor remains in validation and verification (in line with 1Q18); however, there is now no timing guidance on the 14-day wear clinical trial, previously expected to run in “2H18.” Mr. Sayer only said that Dexcom is “working on that right now…but there is no update or timeline right now.” This is definitely a step back from 1Q18, and it seems the iCGM considerations have kind of painted Dexcom into a corner here – a 14-day wear G6 will need to show robust accuracy to hit the iCGM special controls out to 14 days. This is going to be pretty tough, though presumably it’s possible. We wonder if Dexcom would instead choose to launch the Verily gen one disposable sensor with a 10-day wear indication… Given this update, we Verily gen one seems like a 2019 launch at the very earliest. This also means the Verily partnership is very likely to miss the original 2015 timeline for a launch within 2-3 years (i.e., 2017-2018). Of course, the CGM world is MUCH different in 2018 vs. 2015.

3. Verily Gen 2 now slated for “late 2020, early 2021” launch, delayed from previous “2020” launch goal

  • In another step back, the lower-cost, penny-sized Verily Gen 2 CGM is now slated for a commercial launch in “late 2020, early 2021,” well back of the “2020” expectation we heard on the 1Q18 call. This is also now running on the very late side of the original 2015 goal to launch this product within five years (i.e., by September 2020).

  • Mr. Sayer again noted that Dexcom is running some pilots in the type 2 non-intensive diabetes business, (e.g., with UHC), focused on defining the business model and cadence of CGM wear: “It’s a very large market, and we believe CGM can be a very, very powerful tool. The question is on what models to use where the tool is used most efficiently. The current structure for a type 2 non intensive of wearing CGM all the time at today’s price is not feasible. But wearing CGM intermittently – 1, 2, 4, 6 times per year – evaluating whether the medications being taken are appropriate, diet and exercise. We have the UHC pilot and other pilots we’re working on, including Sanofi’s Onduo joint venture. Our API platform could also provide data feeds to some of these programs, through which we could develop entire new business model. But the big question is ‘what is the business model, how do we monetize it, how do we make it so those who pay the bills get returns and we’re not just throwing devices at people? It’s going to take a while, but it’s going to be a very large market for us.”

4. No update on G6 receiver-optional FDA filing; as of 1Q18, Dexcom was “putting plans in place”

  • There was surprisingly no update on filing a receiver-optional indication with the FDA for G6. As of 1Q18, Dexcom was currently “putting plans in place” to file this with FDA. Right now, the receiver must be purchased, just like with G5. Medtronic received the first US approval for smartphone-only display with Guardian Connect in March, followed quickly by Senseonics’ Eversense approval in June. The 1Q18 call said this application consists of “risk mitigation and human factors,” and considering that Dexcom has done all the hard work on standalone CGM apps for G5 and G6, this hopefully has fairly clear steps. Certainly, we would point out that Dexcom has the strongest and most productive FDA relationship of any company in diabetes tech. Dexcom already has this indication in Europe, and as of 1Q18, only ~40% of patients purchase the receiver, even where there is reimbursement. This will be a nice advantage for reducing the upfront cost of starting on CGM, since it will move a G6 start to transmitter, sensors, and the free app.


--by Adam Brown and Kelly Close