Credit: Shutterstock photoShare price of DexCom, Inc.DXCM jumped 4.8% on Aug 25, following the FDA approval of the DexCom G5 Mobile Continuous Glucose Monitoring (CGM) System. The fully portable product is the first and solitary CGM system permitted by the FDA for use in both adults and children above two years of age.
The transmitter, with in-built Bluetooth, sends essential glucose information directly to an app on iOS-enabled devices for instantaneous diabetes supervision. The company intends to launch the app for android devices in early 2016.
Per the company's management, shipment of the G5 Mobile system will commence in late September, this year. Meanwhile, the upgrade charge will be low for systems under warranty period. However, purchasers of DexCom's G4 Platinum with Share system, from Aug 1, 2015 till the shipment of G5 Mobile system, will be able to upgrade without incurring extra cost.
Like its forerunner, the G5 system allows users to choose up to five recipients or 'followers', who can distantly keep tabs on a patient's glucose information and receive alerts from anywhere.
DexCom, of late, has been reasonably focused on improving diabetes management by rolling out technologies for continuous glucose monitoring devices. In January this year, the company received the FDA approval for its DexCom G4 PLATINUM Continuous Glucose Monitoring System with Share. Following that, the company launched the app for Apple AAPL watch in April. In the month of June, the app was made available for the android community as well.
We believe that the G5 system will allow DexCom to gain better market traction. The company has already raked in good business on the back of its G4 Platinum platform. Moreover, the glucose monitoring market represents significant commercial opportunity for DexCom as the diabetes market is large and growing. Prevalence of the disease has increased as a result of the ageing population, inappropriate diet and increasingly sedentary lifestyles.
DexCom also boasts an extensive product pipeline including the next generation G6 system (expected to launch in the first half of 2017), insulin dose plan for current system (under FDA consideration) and insertion system.
However, on the flip side, higher product development costs, R&D and marketing expenses are expected to hurt margins in the near term.
Zacks Rank
Currently DexCom carries a Zacks Rank #3 (Hold). Better-ranked stocks in the medical sector include Masimo MASI and Thoratec THOR . Both the stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
THORATEC CORP (THOR): Free Stock Analysis Report
APPLE INC (AAPL): Free Stock Analysis Report
DEXCOM INC (DXCM): Free Stock Analysis Report
MASIMO CORP (MASI): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
