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Dexcom, Inc. DXCM recently announced that the Dexcom G6 continuous glucose monitoring (“CGM”) system might now be eligible for provincial coverage in British Columbia, Canada through BC PharmaCare. Diabetics who are on intensive insulin therapy and above the age of two may be entitled to the coverage. Customers will now be able to pick up their Dexcom CGM supplies through a participating local pharmacy as part of the BC PharmaCare coverage program.
For investors’ note, British Columbia joins the ranks of Yukon, Quebec and Saskatchewan to offer public coverage of CGM systems under provincial health plans. Moreover, Prince Edward Island and Manitoba have also recently announced funding plans based on their 2021 budget platforms.
It should be noted that patients must meet the coverage criteria, be enrolled in eligible PharmaCare plans and meet any deductible requirements to be eligible for coverage in British Columbia.
With the latest favorable coverage decision, Dexcom is expected to solidify its foothold in the global CGM business.
Significance of the Coverage
The Dexcom G6 CGM System comprises of a small wearable sensor with real-time alerts, including a predictive Urgent Low Soon alert. Thus, the Dexcom G6 can warn the user beforehand about hypoglycemia (lower than normal blood sugar level) during any time of the day.
The CGM aids in better glycemic control (medical term referring to the typical levels of blood sugar in diabetics) for patients. It also gives physicians better insights into patients’ glucose levels and aids in making treatment decisions. Also, using a CGM may help avoid severe hypoglycemic episodes, thus lowering the number of visits to the emergency room.
The coverage expansion is expected to boost accessibility to the CGM technology for diabetes management. It also recognizes the technology’s impact on those who depend on intensive insulin therapy to manage their type 1 and type 2 diabetes. Per management, the improved access to CGM is expected to positively impact all the diabetics’ lives across Canada.
Per a field expert, better access to CGM technology elevates diabetes management for everyone in a patient’s circle of care.
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 coverage announcement is expected to provide a significant boost to Dexcom’s business globally.
Of late, Dexcom has witnessed a few notable developments across its business.
The company, during its first-quarter 2021 earnings call in April, reported solid revenue growth in both domestic and international markets. Dexcom also confirmed advancing the clinical and regulatory path for its next-generation G7 CGM system.
The same month, Dexcom received Health Canada authorization for the Dexcom G6 CGM System, which is to be worn on the back of the upper arm by diabetics above the age of 18. Further in the month, the company announced that it is selling the Dexcom G6 CGM system directly throughout the Netherlands after the termination of its distribution collaboration with Zkope Healthcare.
Shares of the company have gained 4.1% in the past year compared with the industry’s 18.9% growth and the S&P 500's 38.1% rise.
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Zacks Rank & Key Picks
Currently, Dexcom carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Veeva Systems Inc. VEEV, AMN Healthcare Services Inc AMN and National Vision Holdings, Inc. EYE.
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.
AMN Healthcare’s long-term earnings growth rate is estimated at 6.5%. It currently carries a Zacks Rank #2.
National Vision’s long-term earnings growth rate is estimated at 23%. It currently sports a Zacks Rank #1.
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