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DexCom Stock May Gain on Expanded Reach After Stelo's US Launch
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DexCom Inc. (DXCM - Free Report) recently announced the availability of Stelo, the first over-the-counter (OTC) continuous glucose monitoring (CGM) biosensor in the United States. The biosensor is available for purchase without a prescription at Stelo.com.
Dexcom glucose biosensors are a vital and effective tool for managing diabetes as they produce good clinical results independent of medication use and may even be able to slow down the disease's progression. Glucose biosensors, such as Stelo, can increase the efficacy of GLP-1 drugs in a world where their usage is becoming more widespread.
The expansion in the underpenetrated Type 2 diabetes market should support DXCM’s top-line growth going forward, leading to higher investor interests and driving share price higher. However, competition from rival products will be a concern.
More on Dexcom’s Stelo OTC Biosensor
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 found in people aged 45 years and older. However, Type 2 diabetes is now common in children and young adults.
Stelo was developed keeping in mind the unique needs of people aged 18 years and older 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. Stelo’s software is designed to onboard people who have never used a CGM, as well as to educate them about what blood glucose means and how changes throughout the day are normal. The product’s main purpose is to help people manage their diet and activities to lower their average glucose.
Dexcom announced the FDA clearance of its Stelo OTC glucose biosensor to consumers without a prescription in March 2024. The G7, the company's most recent CGM sensor, is presently prescribed. With Stelo's availability for non-prescription use, people without insurance coverage for CGM would have even easier access to state-of-the-art CGM technology.
Abbott’s Libre Rio CGM — Dexcom’s Direct Competitor
While Dexcom’s Stelo CGM is set to target people with Type 2 diabetes who do not take insulin, Abbott (ABT - Free Report) , on the other hand, will split its OTC CGM into two sensors: Lingo, which is intended for people who do not have diabetes, and Libre Rio, which will compete more directly with Dexcom’s Stelo for Type 2, non-insulin users.
Abbott announced the FDA clearance of its Lingo & Libre Rio CGMs, which are based on ABT's world-leading FreeStyle Libre CGM technology, in June 2024. Libre Rio is Abbott's first OTC CGM system for people with diabetes in the United States. It is designed for people aged 18 and older with Type 2 diabetes who do not use insulin and typically manage their diabetes through lifestyle modifications. Libre Rio is the first OTC CGM system with a measurement range of 40-400 mg/dL, allowing for the measurement of extremely low or high glucose events.
Abbott also intends to launch an e-commerce website this summer to offer its wellness-focused Lingo device. The company has not yet revealed any schedule for Libre Rio.
With Abbott launching its CGMs for use in the United States, Dexcom’s Stelo is likely to face competition in securing a major share of the market. Effective marketing techniques and after sale services can prove beneficial to increase revenues and induce customer retention.
Industry Prospects
Per a report by MarketsandMarkets, the global digital diabetes management market size was estimated at $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 availability of Stelo in the United States may lead to higher demand for the product in the CGM segment, thereby generating higher sales. Given the market potential, the availability of Stelo glucose biosensor is likely to provide a significant boost to Dexcom’s business.
DXCM’s Notable Developments
In August 2024, DXCM announced that its G7 CGM System will be added to the Régie de l'assurance maladie du Québec Public Prescription Drug Insurance Plan. Québec residents living with type 1 diabetes who meet the eligibility criteria are now likely to receive coverage for Dexcom G7.
In June 2024, Dexcom announced the integration of its Dexcom G6 CGM system with Insulet’s Omnipod 5 Automated Insulin Delivery System for Type 1 diabetes patients in the Netherlands for an easier diabetes management experience.
The combination system is intended to improve patient's quality of life by providing greater mobility without the concern of dislodging tubes. It is the first Hybrid Closed Loop system without tubes to be authorized for use in children in the Netherlands.
Price Performance
In the year-to-date period, DXCM’s shares have plunged 40.6% against the industry’s growth of 8.5%. The S&P 500 returned 17.8% in the same time frame.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
DXCM carries a Zacks Rank #4 (Sell) at present.
Some better-ranked stocks in the broader medical space are Universal Health Service (UHS - Free Report) and ABM Industries (ABM - Free Report) . While Universal Health Service sports a Zacks Rank #1 (Strong Buy), ABM Industries carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Universal Health Service has an estimated long-term growth rate of 19%. UHS’ earnings surpassed estimates in each of the trailing four quarters, with the average being 14.58%.
Universal Health Service has gained 41.1% compared with the industry's 34.8% growth so far this year.
ABM Industries’ earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 7.34%.
ABM's shares have risen 24.1% so far this year compared with the industry’s 11.9% growth.
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DexCom Stock May Gain on Expanded Reach After Stelo's US Launch
DexCom Inc. (DXCM - Free Report) recently announced the availability of Stelo, the first over-the-counter (OTC) continuous glucose monitoring (CGM) biosensor in the United States. The biosensor is available for purchase without a prescription at Stelo.com.
Dexcom glucose biosensors are a vital and effective tool for managing diabetes as they produce good clinical results independent of medication use and may even be able to slow down the disease's progression. Glucose biosensors, such as Stelo, can increase the efficacy of GLP-1 drugs in a world where their usage is becoming more widespread.
The expansion in the underpenetrated Type 2 diabetes market should support DXCM’s top-line growth going forward, leading to higher investor interests and driving share price higher. However, competition from rival products will be a concern.
More on Dexcom’s Stelo OTC Biosensor
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 found in people aged 45 years and older. However, Type 2 diabetes is now common in children and young adults.
Stelo was developed keeping in mind the unique needs of people aged 18 years and older 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. Stelo’s software is designed to onboard people who have never used a CGM, as well as to educate them about what blood glucose means and how changes throughout the day are normal. The product’s main purpose is to help people manage their diet and activities to lower their average glucose.
Dexcom announced the FDA clearance of its Stelo OTC glucose biosensor to consumers without a prescription in March 2024. The G7, the company's most recent CGM sensor, is presently prescribed. With Stelo's availability for non-prescription use, people without insurance coverage for CGM would have even easier access to state-of-the-art CGM technology.
Abbott’s Libre Rio CGM — Dexcom’s Direct Competitor
While Dexcom’s Stelo CGM is set to target people with Type 2 diabetes who do not take insulin, Abbott (ABT - Free Report) , on the other hand, will split its OTC CGM into two sensors: Lingo, which is intended for people who do not have diabetes, and Libre Rio, which will compete more directly with Dexcom’s Stelo for Type 2, non-insulin users.
Abbott announced the FDA clearance of its Lingo & Libre Rio CGMs, which are based on ABT's world-leading FreeStyle Libre CGM technology, in June 2024. Libre Rio is Abbott's first OTC CGM system for people with diabetes in the United States. It is designed for people aged 18 and older with Type 2 diabetes who do not use insulin and typically manage their diabetes through lifestyle modifications. Libre Rio is the first OTC CGM system with a measurement range of 40-400 mg/dL, allowing for the measurement of extremely low or high glucose events.
Abbott also intends to launch an e-commerce website this summer to offer its wellness-focused Lingo device. The company has not yet revealed any schedule for Libre Rio.
With Abbott launching its CGMs for use in the United States, Dexcom’s Stelo is likely to face competition in securing a major share of the market. Effective marketing techniques and after sale services can prove beneficial to increase revenues and induce customer retention.
Industry Prospects
Per a report by MarketsandMarkets, the global digital diabetes management market size was estimated at $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 availability of Stelo in the United States may lead to higher demand for the product in the CGM segment, thereby generating higher sales. Given the market potential, the availability of Stelo glucose biosensor is likely to provide a significant boost to Dexcom’s business.
DXCM’s Notable Developments
In August 2024, DXCM announced that its G7 CGM System will be added to the Régie de l'assurance maladie du Québec Public Prescription Drug Insurance Plan. Québec residents living with type 1 diabetes who meet the eligibility criteria are now likely to receive coverage for Dexcom G7.
In June 2024, Dexcom announced the integration of its Dexcom G6 CGM system with Insulet’s Omnipod 5 Automated Insulin Delivery System for Type 1 diabetes patients in the Netherlands for an easier diabetes management experience.
The combination system is intended to improve patient's quality of life by providing greater mobility without the concern of dislodging tubes. It is the first Hybrid Closed Loop system without tubes to be authorized for use in children in the Netherlands.
Price Performance
In the year-to-date period, DXCM’s shares have plunged 40.6% against the industry’s growth of 8.5%. The S&P 500 returned 17.8% in the same time frame.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
DXCM carries a Zacks Rank #4 (Sell) at present.
Some better-ranked stocks in the broader medical space are Universal Health Service (UHS - Free Report) and ABM Industries (ABM - Free Report) . While Universal Health Service sports a Zacks Rank #1 (Strong Buy), ABM Industries carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Universal Health Service has an estimated long-term growth rate of 19%. UHS’ earnings surpassed estimates in each of the trailing four quarters, with the average being 14.58%.
Universal Health Service has gained 41.1% compared with the industry's 34.8% growth so far this year.
ABM Industries’ earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 7.34%.
ABM's shares have risen 24.1% so far this year compared with the industry’s 11.9% growth.