Close

Not a member yet? Register now and get started.

lock and key

Sign in to your account.

Account Login

Forgot your password?

Dexcom and Tandem Idea Proposal (DXCM, TNDM )

Dexcom and Tandem Idea Proposal (DXCM, TNDM )
 

Will any headwinds derail the growth trends for Dexcom and Tandem over the next six to 12 months?

Report Available: October 23, 2019

 

Blueshift’s continued research of both DXCM and TNDM showed each company executing exceptionally well with great first-half 2019 performances. TNDM continues to post record revenues and achieve significant milestones, though it faces a customer group that is not brand loyal and chases the latest technology, of which there is plenty given the effort of competitors. DXCM saw another quarter of record new patient additions and is ahead of pace for 2019 full year revenue guidance, though growth slowed for the second straight quarter, it faces Q3 comp headwinds, and the threat of competition from ABT’s Freestyle Libre 2 is looming.

 

Observations

  1. DXCM reported outstanding Q2 results, beating revenue and earnings expectations while increasing full year guidance. Revenue grew 39% year to year, but growth slowed for the second straight quarter. New patient additions drove growth and reached record levels. DXCM is on track to double its G6 production as its two new production facilities are now on line. DXCM said progress is being made on its new-gen G7 which is scheduled for limited launch in late 2020. The company did not comment on anticipated competition from ABT’s Libre 2, refusing to give it any air time until it is approved.
  2. TNDM reported Q2 results that beat expectations for revenue and earnings while increasing its full year 2019 guidance. Revenue jumped 173% year to year. TNDM did report a loss of $0.03 per share, but the Street was expecting a loss of $0.25. TNDM’s worldwide insulin pump shipments totaled 21,258, a 290% year-to-year increase. TNDM announced that it was increasing its sales and support teams modestly from 70 territories to 80. It also is expanding its internal sales and support teams by adding a facility in Boise, ID to support customers’ technical and insurance verification needs.
  3. DXCM does face some headwinds. According to EVP and CFO Quentin Blackford, growth will continue to be “depressed” as the company faces Q3 comp headwinds. During the Q2 earnings call DXCM said it expects pricing pressure from Medicare and because of its ongoing switch from DME designation to pharmacy. The company also acknowledge that its outsourced customer support organization is not performing up to its expected standards, but they are acting to correct it. The possibility of capacity constraints was discussed by investors, but DXCM downplayed the issue, saying it is building inventory prior to its G6 Canadian and Medicare launch later this year.
  4. TNDM’s growth challenges include a customer group that is not brand loyal. Insulin pump users will switch insulin pumps at the end of their warranty period to chase the latest technology. Also, the insulin pump market is highly competitive with PODD offering a popular pump that interfaces with DXCM, while MDT is collaborating with Tidepool, the popular DIY diabetes treatment community, to develop a next-gen system. Another challenge for TNDM is gaining insurance coverage from United Healthcare which has an exclusive coverage agreement with MDT for both adult and juvenile diabetics. Finally, a question was raised by sources in Blueshift’s June report about TNDM’s ability to scale to meet demand.
  5. Blueshift’s April 25 DXCM report found that growth and adoption of its G6 CGM will continue this year despite looming competition from ABT’s FreeStyle Libre 2, which is available in Europe but not yet approved by the FDA. The G6 is a highly sophisticated and popular CGM that is considered best in class for Type 1 diabetics, especially if patients interface the device with an insulin pump. Sources praised the G6’s accuracy which they said was superior to Libre’s in reading high and low glucose levels. In the insulin pump market, MDT, PODD, and TNDM were discussed as the main players. DXCM’s interoperability with PODD and TNDM provides a CGM advantage, and the products are well liked.
  6. Blueshift’s June 19 TNDM report found that its growth trend can continue as its t:slim insulin pump is highly regarded and demand for pump therapy is growing. Endocrinologists, nurse educators, TNDM competitors, and industry specialists all offered praise for TNDM and its products. Sources cited ease of use, innovation, a highly accurate pump, new Basal-IQ technology, a new remote Device Updater, and integration with CGM leader DXCM’s G6 as advantages for TNDM.

 

 

Can TNDM and DXCM continue their growth trend over the next six to 12 months? What headwinds exist that could derail each company’s growth over the next six to 12 months? Can DXCM and TNDM successfully navigate the challenges that threaten their growth? Are DXCM and TNDM innovating enough to match or exceed competitors’ offerings? Is there a new technology or feature that could disrupt the CGM and or insulin pump markets? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: Diabetes centers, Nurse educators, Endocrinologists, Competitors, and Distributors.  

 

 

Companies: Dexcom Inc. (DXCM), Tandem Diabetes Care Inc. (TNDM), Abbott Laboratories (ABT), Insulet Corp. (PODD), Medtronic plc (MDT), Eli Lilly and Co. (LLY), Nemaura Medical Inc. (NMRD), Senseonics Holdings Inc. (SENS), MicroPort Scientific Corp. (MCRPF), Novo Nordisk A/S (NVO), Sanofi (SNY), Valeritas Holdings Inc. (VLRX)

 

Research Begins: October 7, 2019

 

To see other ideas Blueshift Research is currently working on, please click here.

 

 

Blueshift Research’s sister company, Intro-act, has launched the Intro-act Scorecard, the C-suite’s standard, ongoing measure of corporate investor engagement.

 

The Scorecard optimizes the ROI on corporate access by measuring: Concentration, Directionality, Breadth, Impact, Depth, and Duration

 

See the sample Scorecard. Watch the Scorecard video.