After the latest in a series of successful quarters (with $171.2 million in revenue, up 31 percent year over year), DexCom is queuing up some big product launches. On yesterday’s Q4 earnings call, CEO Kevin Sayer provided more detail about the forthcoming G6 continuous glucose monitor as well as the first products to come out of DexCom’s partnership with Verily.
“In a year of much confusion and turmoil in the diabetes industry, DexCom grew revenues more than 40 percent, an annual increase of approximately $170 million in worldwide revenue, a number that's, quite frankly, more amazing than the percentage when you compare DexCom to everybody else in our industry,” Sayer said on the call.
Good news from the FDA, which approved DexCom CGMs for non-adjunctive use, and CMS, which recently announced it will reimburse some CGMs including DexCom’s, has the company feeling bullish about the future, though Sayer admitted the CMS rule would likely not translate to profits for the company for a little while as the ruling kicks in and they adapt their sales strategy to target the Medicaid population.
But the biggest news on the call was updates on DexCom’s product pipeline. The company plans to release an updated version of the G5 transmitter, which is currently under review, later this year. The update will include a new, more reliable touchscreen receiver, a new insertion system and corresponding smaller transmitter, an Android platform, and additional app features including incorporation of insulin data.
The company is targeting its next generation transmitter, the G6, for a Q3 2017 FDA submission and a 2018 launch.
“As I mentioned earlier, the early data from G6 has been very impressive,” Sayer said. “Assuming this performance is replicated in the pivotal trial, we believe G6 will represent the next major paradigm shift in continuous glucose monitoring performance standards. G6 will allow us to reduce calibrations initially and provide the foundation for our no-calibration technology.”
DexCom’s partnership with Verily is aiming to produce a tiny dime-sized CGM that requires no calibration and can be marketed to people with both type 1 and type 2 diabetes. Because that platform is based on G6 sensor technology, Sayers said, it can’t launch until after the G6. The company is anticipating that the first product to come out of that partnership will be commercialized by the end of 2018, with a second generation due out in 2020.
“We continue to conduct human pilot studies with first-generation device and we have completed our initial feasibility studies for the secondarily Verily product and remain excited about continued progress on our collaboration this year,” Sayer said.
Sayer also indicated that the company is very aware of the recent surge of interest in smart insulin pens as an alternative to insulin pumps and is forging partnerships in both spaces.
"We're very bullish on the opportunity for smart pens," Sayer said. "...The real value in these systems will be integrating that insulin onboard information from a smart pen, together with our CGM data, in a single unified app on the phone. We can do some pretty powerful stuff there. So, when you start demonstrating outcomes with a smart pen together with CGM data and providing patients with dosing support information, behavior modification information, really, at a fraction of cost of some more complex systems, I think we really have a home run there."