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Dexcom's (DXCM) Digital Network Benefits From Latest FDA Nod

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DexCom, Inc. DXCM recently announced the receipt of the FDA’s clearance for Dexcom Partner Web APIs. The latest nod will enable approved third-party developers to integrate real-time continuous glucose monitoring (“CGM”) data into their digital health apps and devices.

For investors’ note, various renowned diabetes and digital health players have been invited to access the real-time APIs. Many are already in the testing and development phase, including Garmin Ltd. GRMN and Teladoc Health, Inc.’s TDOC Livongo for Diabetes.

With the latest regulatory clearance, Dexcom is expected to solidify its foothold in the global CGM business.

Significance of the Clearance

Per management, the FDA’s approval of its real-time APIs provides Dexcom users a wider choice of viewing and interacting with their glucose data. The new APIs will aid in seamlessly integrating the real-time Dexcom CGM data into some of the leading diabetes and digital health solutions.

The clearance expands connectivity and interoperability of the Dexcom CGM digital ecosystem. It also allows invited third-party developers to connect applications and devices to real-time CGM data.

Industry Prospects

Per a report by Grand View Research, the global CGM device market size was valued at $3,929.7 million in 2019 and is expected to reach $10.4 billion by 2027 at a CAGR of 12.7%. Factors like rising cases of diabetes and increasing adoption of CGM devices are likely to drive the market.

Given the market potential, the latest FDA approval is expected to provide a significant boost to Dexcom’s business globally.

Notable Developments

Of late, Dexcom has witnessed a few notable developments across its business.

The company, in June, announced that the Dexcom G6 CGM system might now be eligible for provincial coverage through BC PharmaCare. Diabetics who are on intensive insulin therapy and above the age of two, maybe entitled to the coverage.

The same month, Dexcom announced that people with diabetes below the age of 18 living in Saskatchewan, Canada may now receive provincial coverage for the Dexcom G6 CGM System through Saskatchewan Health.

In May, the company announced that people with type 1 diabetes above the age of two may now receive provincial coverage for the Dexcom G6 CGM System by the Régie de l'Assurance Maladie du Quebec.

Price Performance

Shares of the company have gained 3.8% in the past year compared with the industry’s 12.5% growth and the S&P 500's 34.6% rise.

Zacks Investment Research
Zacks Investment Research

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Zacks Rank & Stock to Consider

Currently, Dexcom carries a Zacks Rank #5 (Strong Sell).

A better-ranked stock from the broader medical space is Veeva Systems Inc. VEEV.

Veeva Systems’ long-term earnings growth rate is estimated at 15.8%. The company presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Garmin Ltd. (GRMN) : Free Stock Analysis Report

DexCom, Inc. (DXCM) : Free Stock Analysis Report

Veeva Systems Inc. (VEEV) : Free Stock Analysis Report

Teladoc Health, Inc. (TDOC) : Free Stock Analysis Report

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