DexCom Inc. DXCM recently announced the FDA clearance of its Stelo glucose biosensor, available over-the-counter to consumers without a prescription.
The company’s latest Continuous Glucose Monitoring (CGM) sensor, G7, is currently available on prescription. As an alternative for people without insurance coverage for CGM, Stelo's approval for non-prescription use would further facilitate this population's access to cutting-edge CGM technology.
Price Performance
For the past six months, DXCM’s shares have gained 17.3% compared with the industry’s rise of 9.5%. The S&P 500 increased 14.2% in the same time frame.
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When combined with other diabetes and weight-management drugs or used on its own, continuous glucose monitoring has been shown to provide significant benefits in the treatment of Type 2 diabetes. CGM using Dexcom is linked to a clinically significant improvement in quality of life for those with Type 2 diabetes.
Stelo, created by the markers of Dexcom G7, was developed keeping in mind the unique needs of people over 18 years with Type 2 diabetes who do not use insulin. The device is a small, wearable sensor worn on the back of the upper arm that provides glucose insights directly to a user’s smartphone.
Per CDC, about 38 million people living in the United States are diagnosed with diabetes and approximately 90-95% of people have Type 2 diabetes. It is most commonly found in people over 45 years. However, Type 2 diabetes is now common in children and young adults.
Since insurance frequently does not cover CGM devices for people who are newly diagnosed with Type 2 diabetes or are not using insulin, Stelo offers a chance to offer important information on how well people manage their diabetes.
Stelo is likely to be available for purchase online without a prescription starting in the summer of 2024.
Industry Prospects
Per a report by MarketsandMarkets, the global digital diabetes management market size was estimated to be $18.9 billion in 2023 and is expected to reach $35.8 billion by 2028 at a growth rate of 13.6%.
The market is being driven by escalating diabetes care solutions and technological developments that have made it possible to introduce highly adaptable solutions. Other significant drivers include the increasing popularity of the use of connected devices and apps as well as the growing adoption of cloud-based solutions.
The FDA approval for Stelo may lead to higher demand for the product in the CGM segment, thereby generating higher sales. Given the market potential, the latest FDA clearance for its Stelo glucose biosensor is likely to provide a significant boost to Dexcom’s business.
Notable Developments
In December 2023, Dexcom announced the Dexcom G7 CGM System connectivity with the t: slim X2 insulin pump by Tandem Diabetes Care in the United States, marking the first AID integration with the Dexcom G7 CGM.
Dexcom also unveiled its new state-of-the-art manufacturing facility located in Athenry Co. Galway. With the ability to produce millions of Dexcom rtCGM sensors annually, the new plant is likely to contribute to the betterment of diabetes patients throughout Europe, the Middle East, and Africa.
DexCom, Inc. Price
DexCom, Inc. price | DexCom, Inc. Quote
Zacks Rank & Other Stocks to Consider
DXCM carries a Zacks Rank #2 (Buy) at present.
Some other top-ranked stocks in the broader medical space are DaVita Inc. DVA, Cardinal Health, Inc. CAH and Cencora, Inc. COR.
DaVita, sporting a Zacks Rank #1 (Strong Buy), has an estimated long-term growth rate of 12.1%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 35.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have gained 58.3% compared with the industry’s 18.9% rise in the past year.
Cardinal Health, flaunting a Zacks Rank of 1 at present, has an estimated long-term growth rate of 14.2%. CAH’s earnings surpassed estimates in each of the trailing four quarters, with the average being 15.6%.
Cardinal Health has gained 51.9% compared with the industry’s 3.2% rise in the past year.
Cencora, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 9.8%. COR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6.7%.
Cencora’s shares have rallied 51.5% compared with the industry’s 3.6% rise in the past year.
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