), a provider of continuous glucose monitoring systems, recently
announced that the U.S. Food and Drug Administration (FDA) has
cleared its new continuous glucose monitoring system, the DexCom G4
Platinum. The company has started taking orders and will start
shipments in the coming weeks.
DexCom received the CE Mark for its G4 system in June 2012 and
already markets the product in the European Union as well as
certain Latin American and Asian nations, where the CE Mark is
Clinical data validates the improved performance of G4 Platinum
over the company's Seven Plus with a 19% increase in overall
accuracy for glucose monitoring. Trials also indicate a 30%
improvement in accuracy when blood glucose level is below 70mg/dl
(for hypoglycemia relevance range).
The inbuilt features of the G4 Platinum make it the most innovative
system for continuous glucose monitoring in the market. The
increased accuracy for hypoglycemic range and ease of use will
enhance the standard of care for diabetic patients.
Given the burgeoning diabetes population in the U.S., the G4
Platinum presents considerable market opportunity. The
commercialization of G4 in the U.S. could just be the catalyst that
the company needs to gain share in the market it serves.
Increased awareness and acceptance of the need for continuous
glucose monitoring and international expansion should help drive
sales of DexCom's products. The company expects to introduce its
products in India by year end. It also plans to expand its
footprint in China and Japan next year.
In addition to upgrading and enhancing the functions of existing
products, DexCom has also been active on the collaboration front,
through which it is looking to leverage its technology with its
collaborator's product offerings.
Competition in the glucose monitoring market is fierce. DexCom
competes with Roche Diabetes Care, a division of
) and LifeScan under
Johnson & Johnson
) for its Seven Plus offering. Additionally,
) have gained FDA approval for continuous glucose monitoring
We believe that the company's move to buy healthcare IT company
SweetSpot Diabetes may allow it to compete more effectively through
better data management systems.
Despite increasing revenues, DexCom remains a loss making entity
and its efforts are made more difficult by a stringent regulatory
environment. We currently have a long-term Neutral recommendation
on the stock, supported by a short-term Zacks #3 Rank (Hold).
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