I see a lot of hype and hoopla, without any number crunching as support. Lets look at what a buyout from J&J, Abbott, or Medtronic might look like. We can see from the Dexcom website that customers can expect to pay about $5,000/year for continuous monitoring throughout an entire year. Some have said few diabetics will do this because it is not reimbursable. I disagree, look at how much money consumers pay into the cosmetics industry (botox, laser, etc.) without be reimbursed. Don�t tell me that at least 5% of all diabetics would not gladly pay $5,000 a year to assist with their condition.
To be extremely conservative lets assume only 1% of the 14.6 million diagnosed diabetics in the US use the Dexcom STS. This gives Dexcom 146,000 customers that pay $5,000 each. Total sales would be around $730 million/year. We know that J&J, Abbott, and Medtronic would be expected to pay about 5X sales, which is about $3.6 billion for such a company. How do we know this? Look at previous acquisitions within this industry. Abbott got Therasense for $1.2 billion, or 5X sales. J&J got Inverness for $1.3 billion, or 6X sales. Medtronic got Minimed for $3.7 billion, or 6x sales. With a pitiful 1% market penetration we see that Dexcom could be bought for about $3.6 billion which is 7X higher than their current market cap of $516 million. This doesn�t even consider the vast prospects of their implantable long term sensor and the Dexcom patent portfolio. At this point the big guys don't care about profit; they will take care of that part. Its all about geting the technology before their competitor gets it.
Hold on to your shares as this one is gonna soar! I�m in at 20 and wont let go without at least a triple.
Give it a rest already! You are one of those people who knows the price of everything and the value of nothing. Your unreasonable comparison of Cygnus to Dexcom is the functional equivalent of comparing a used Chevy to a Mercedes. Good luck my friend, you will be proven wrong!
See, your answer (or lack thereof) says everything. You have no clue about this market. You may have done well for yourself, buying this stock prior to approval, but you don't know anything about how to make a successful product.
Dexcom is where Cygnus was 7 years ago. An approved 'adjunctive' device that requires a 2-hour warm up, calibration finger sticks every 12 hours, 18 yr olds and above, interstitial v. capillary blood, no distribution plan.
Dexcom has gambled that someone will buy them, but frankly, that isn't going to happen until they have $100M in revenues, then the bidding will begin.
A $10 million dollar fire sale of assets for Cygnus tells the whole story if its success. Elaboration is unneccessary, so I I won't waste my time. However, I will tell you that you can't see the forest through the trees on this one. Perhaps you are statistically challenged.
Your cost comparisons are very impressive and logical. However, the basic question is really...Will this technology take off?
Do diabetics really want a sensor implanted in their side? Type 1's have been essentially trained on what, when and how to eat, so what is the real upside to them? They already know their caloric intake and effect on glucose levels before it goes in their mouth. Type 2's are a different story and the true growth prospect (for lack of a better word), but they are also weighing advances in new Rx drugs like byetta. Most type 2's also don't use an insulin pump, so is that really upside to this new technology?
How much of a market is there for this technology in the hospital? Will it communicate with a bedside monitoring system in the ICU? If so, how much will that cost a hospital? Many hospitals already check glucose levels on patients every hour in the ICU. What does this bring to the table? Take the shine off the hype and look at the basics. Does this technology really advance patient care? Please enlighten me?
I think more relevant questions are for those people who has to poke fingers a few times a day, (1) does this new device offer more value? I think yes, with continuous monitoring, trend graph and alarm function; (2) Is it less intrusive? Yes, have you seen diabetics poking their fingers in the restraurants? don't you think they'd like to avoid the "attention" if they can; (3) And is it worth the extra $$$? It depends. Some of them definitely can afford it with no problem at all, while some won't be able to get it unless reimbursement is approved.
So the real question is what the adoption rate will be? I don't know, honestly.