4 Best Diabetes Device Stocks to Focus on Amid Coronavirus Crisis
The coronavirus pandemic has taken a severe toll on the U.S. economy. Amid the ongoing market meltdowns where only a handful of sectors are outperforming others, the diabetes market seems to have held its ground. Given that this sector is essential and treatment cannot be deferred, investing in companies engaged in diabetes management seems to be a safe bet for now.
In this regard we note that, with respect to research, treatment and prevention funding, the earlier $2.2-trillion emergency relief package provided $27 billion to the Public Health Social Services Emergency Fund to support the development of vaccines, therapies and diagnostics to treat and prevent COVID-19. It also included $80 million for the FDA’s emergency use authorizations of medical products. Further, financial aid was provided for ventilators, masks and other medical supplies along with Medicare health program for seniors. However, there was not much to note about diabetes sector-specific relief packages at that time.
Meanwhile, per a report by The New York Times, the U.S. treasury suggested in September that a stimulus package of approximately $1.5 trillion might be released. Many investors are of the belief that this yet-to-be sanctioned stimulus may contain a more comprehensive package for the MedTech space, especially for the sectors ignored in the earlier stimulus bill, like diabetes management.
Diabetes Market Momentum Picks Up
Diabetes control is an essential way of preventing any untoward health emergency. Given the widespread lockdown restrictions, physical activities of the diabetics and their diets (due to limited food supplies) have gone for a toss. Also, limited access to anti-diabetic medications amid the pandemic might have been an added concern.
Per the International Diabetes Federation, people suffering from diabetes appear to be at a higher risk of falling prey to COVID-19. Further, when people with diabetes develop a viral infection, it becomes difficult to treat them due to fluctuations in blood glucose levels and, possibly, the presence of diabetes complications. This has highlighted the importance of telehealth and telemedicine which can be effectively utilized for interim diabetes management.
Moreover, with the lockdown restrictions being gradually relaxed right now, companies engaged in diabetes management are gearing up to meet the pent-up demand from the diabetics. Companies like Tandem Diabetes Care, Inc. TNDM are making important strides to cater to both existing and new customers. Over the past year, the company’s share price has surged 62.3% compared with the industry’s 16.1% rise.
Stocks to Keep an Eye on
Here we have listed four stocks which are currently serving the diabetes management market and have been delivering robust performances of late. These stocks might turn out to be profitable for investors over the upcoming months
Medtronic plc MDT, a Zacks Rank #3 (Hold) company, has been strengthening its diabetes arm over the past few months. The company’s MiniMed 770G System received FDA approval for use in young pediatric patients per the regulatory body’s Aug 31 announcement. In August, Medtronic announced plans to acquire privately-held manufacturer of InPen, Companion Medical. Notably, smart insulin pen system InPen is the only FDA-cleared system paired with an integrated diabetes management app currently available in the market. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company announced entering into a non-exclusive patent cross-license agreement with Tandem Diabetes for certain technologies in diabetes management. In the same month, Medtronic launched an easy-to-use insulin infusion set, MiniMed Mio Advance, for insulin-dependent diabetic patients in the United States. In June, Medtronic announced the receipt of CE Mark for its next generation closed loop insulin pump system, MiniMed 780G AHCL, for the treatment of type 1 diabetes in the age range of seven to 80 years. Medtronic projects 7.8% earnings growth for the next five years. Over the past three months, the company’s share price has rose 12.2% compared with the industry’s 5.4% growth.
Abbott Laboratories ABT has been making concerted efforts to strengthen its diabetes arm as well. The Zacks Rank #3 company launched the world's first glucose sport biosensor, Libre Sense Glucose Sport Biosensor, this month. Notably, the biosensor has been designed to help athletes continuously measure glucose levels. In the same month, Abbott’s next-generation FreeStyle Libre 2 integrated continuous glucose monitoring (iCGM) system received Medicare coverage.
Abbott, in June, finalized the diabetes care deal (proposed in October 2019) with Tandem Diabetes, which enabled the companies to integrate Abbott's FreeStyle Libre CGM technology with Tandem Diabetes’ insulin delivery systems for enhanced diabetes management. In the same month, the company received the FDA’s approval for its next-generation FreeStyle Libre 2 iCGM system for use in diabetic patients aged four and above. Abbott projects 11% earnings growth for the next five years. Over the past year, the company’s share price has risen 27.4% against the industry’s 4.5% fall.
Insulet Corporation PODD, a Zacks Rank #3 company, recently announced that it is commercially launching its Omnipod DASH Insulin Management System in additional countries. The Omnipod DASH System is now available in Sweden, Finland, Norway, and Denmark and will be offered in France, Belgium, Germany, Austria, Switzerland, and Israel in the coming weeks. Insulet already offers the Omnipod DASH System in the United States, United Kingdom, Netherlands and Italy.
The company continues to gain traction from the recent commercial launch of the Omnipod DASH Insulin Management System, which secured the FDA approval last year, only to be designated as an ACE pump. Insulet’s current-year earnings growth rate is estimated at 73.7%. Over the past year, the company’s share price has risen 41.7% against the industry’s 4.5% fall.
DexCom, Inc. DXCM is another renowned player in the diabetes management market. This month, the Zacks Rank #3 company announced the first-ever registry committed toward keeping a track on the outcomes of patients and healthcare professionals using CGM in hospitals to combat the COVID-19 pandemic.
In July, Health Canada temporarily authorized the adjunctive use of the Dexcom G6 CGM system by pregnant women with Type 1, Type 2 or gestational diabetes. During the second quarter, the company received the CE Mark for use of the Dexcom G6 CGM system on the back of the upper arm. Dexcom projects 37.8% earnings growth for the next five years. Over the past year, the company’s share price has risen 152.2% compared with the industry’s 16.1% growth.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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