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Digital Diabetes Management Gains Momentum: 3 Stocks in Focus

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The alarming rise in cases of diabetes globally has prompted the National Institute of Health (NIH) to tag it as the biggest epidemic of the 21st century. Going by the figures published by the International Diabetes Foundation, around 463 million adults (in the range of 20-79 years) are living with diabetes and this is expected to rise to a staggering 700 million by 2045. In fact, according to the same report, so far in 2019, diabetes has led to at least $760 billion in health expenditure and resulted in 4.2 million deaths.

Needless to say, detection and prevention of diabetes has been the top most priority for healthcare companies worldwide. This has put major diabetes management companies like Insulet Corporation (PODD - Free Report) , Tandem Diabetes Care, Inc. (TNDM - Free Report) and Roche Holding AG (RHHBY - Free Report) on the radar of the investors.

Digital Diabetes Management: The Latest Buzz

With technology becoming an integral part of the healthcare sector and rapidly changing the very face of healthcare, interest in digital diabetes management is palpable. The global digital diabetes management market size was valued at $6.3 billion in 2018. According to Grand View Research, this is projected to witness a CAGR of 19.4% till 2026 courtesy of to all technological advancements and innovations.

Needless to say, investors can take a look at the space as digital diabetes management presents alluring prospects for the MedTech players.

Prospects of Digital Diabetes Management Tools

Continuous Glucose Monitory System (CGM)

This method of tracking glucose levels is fast becoming standard-of-care for diabetes patients. In this regard, Medtronic’s FDA approved Guardian Connect System deserves a mention. The system is intended for continuous or periodic monitoring of glucose levels in the tissue fluid under the skin, in persons 14 years of age and older with Type I or Type II diabetes.

Per a report by MarketWatch, the global CGM market size is estimated to reach $1.33 billion by 2025 at a CAGR of 15.8%.

Smart Insulin Pens

Per a report by Medgadget, the global smart insulin pens market was worth $70 million in 2018 and is projected to reach over $140 million by 2025 at a CAGR of 10.4% during the forecast period of 2019-2025. In fact, bluetooth connected Smart insulin pen segment is anticipated to make up the largest market share during the forecast period. Apart from the growing incidence of diabetes, lower cost of insulin pumps and painless injections will further drive the market.

Smart Glucose Meters

Given the arrival of non-invasive devices, the global blood glucose meters market is projected to expand significantly in the coming years as evident from Fortune Business Insights’ report, which states that this market is likely to reach $15.42 billion by 2026 at a CAGR of 9.6%. Some of the leading companies in this space are Lifespan, Braun Medical, Ascensia Diabetes Care to name a few.

Digital Diabetes Management Stocks to Keep an Eye On

Here are three MedTech stocks that have been exhibiting significant potential in the digital diabetes management space:

DexCom, Inc. (DXCM - Free Report) : DexCom was the first company to have a CGM system approved by the FDA, which was the primary reason behind it becoming a major player in the market. The company’s FDA-cleared CGM system — the DexCom G4 Platinum — has been contributing significantly to the company’s top line. In 2018, the FDA approved marketing of the Dexcom G6 integrated continuous glucose monitoring (iCGM) system for determining blood glucose (sugar) levels in children aged two and older and adults with diabetes.  

For 2019, this Zacks Rank #1 (Strong Buy) company’s Zacks Consensus Estimate for revenues is pegged at $1.44 billion, indicating an improvement of 40% from the year-ago period. You can see the complete list of today’s Zacks #1 Rank stocks here.

Over the past year, DexCom’s shares have gained 75.1%, outperforming the industry's growth of 8.2%.

Medtronic plc (MDT - Free Report) : Medtronic’s, which has a dominating presence in the MedTech space, FDA approved Guardian Connect System helps identify trends and track patterns in their glucose levels. In fact, the company’s initiatives have been intensifying competition for quite some time now.

This Zacks Rank #2 (Buy) company has a long-term earnings growth rate of 7.4%. For fiscal 2020, the Zacks Consensus Estimate for revenues is pegged at $31.52 billion, indicating an improvement of 3.2% from the year-ago period.

Over the past year, Medtronic’s shares have gained 16.5%, outperforming the industry’s rally of 4.7%.

Abbott Laboratories (ABT - Free Report) : Abbott’s Freestyle Libre Flash CGM device has been making waves in the digital diabetes management space. The device is utilized for management of diabetes in persons age 18 and older.

This Zacks Rank #3 (Hold) company has a long-term earnings growth rate of 10.7%. For 2019, the Zacks Consensus Estimate for revenues is pegged at $31.88 billion, indicating an improvement of 4.3% from the year-ago period.

Over the past year, Abbott’s shares have gained 16.6%, outperforming the industry’s rally of 4.6%.


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