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DexCom (DXCM) Gets FDA Approval for G6 CGM Monitoring System

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DexCom, Inc. (DXCM - Free Report) recently announced that the FDA has granted a de novo approval for the marketing of the new Dexcom G6 CGM monitoring system to check blood sugar levels in children and adults without pricking fingers for diabetes management.

This is the first glucose monitoring system permitted by the FDA that can be used as a standalone Continuous Glucose Monitoring (CGM) and for integration into automated insulin dosing (AID) systems.

What is ‘de novo’?

Per FDA, a de novo classification for a particular product/platform establishes a new device type along with classification, necessary controls and product code.

Further, a device that has de novo approval is eligible for a 510(k)-approval submission.

The large and expanding diabetes market, strong product portfolio and positive tidings at the regulatory front are likely to provide DexCom with a competitive edge in the U.S. MedTech sector.

CGM – a Prominent Space in MedTech

CGM provides continuous insight into glucose levels throughout the day and night.

Per CISION, the global CGM market is estimated to reach $4 Billion by 2024. Per the report, United States is the leader in the global CGM market.

DexCom is a leading player in the global CGM markets.

Other than G6 CGM, DexCom's FDA-cleared G4 Platinum platform is significantly boosting the company’s top line. The inbuilt features of the G4 Platinum make it the most innovative system in the market.

In 2017, DexCom announced the receipt of FDA’s approval of the DexCom G5 mobile app for android devices.

By the end of fourth quarter of 2017, the company confirmed the development of a fully disposable real-time CGM system with Verily. This is expected to be completed by the end of 2017. The company is confident about its G6 sensor.

Lacklustre Price Performance

DexCom’s price movement in the past year has been unimpressive. The company reported a negative return of 17.8%, comparing unfavorably with the industry’s rally of 21.9%.

The current level is also lower than the S&P 500 Index’s gain of 14.3%.

 

Zacks Rank & Key Picks

DexCom carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader medical sector are Bio-Rad Laboratories (BIO - Free Report) , athenahealth, Inc. and Edwards Lifesciences Corporation (EW - Free Report) .

Bio-Rad Laboratories sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The company has a long-term expected earnings growth rate of 20%.

athenahealth is a Zacks #1 Ranked player. The company has a long-term expected earnings growth rate of 21.5%.

Edwards Lifesciences has a long-term expected earnings growth rate of 15.1%. The stock carries a Zacks Rank of 2 (Buy).

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