Back to top

Image: Bigstock

Diabetes Management Gains FDA Attention: 3 Stocks in Focus

Read MoreHide Full Article

The FDA has of late been prioritizing approvals for the new-generation and advanced line of diabetes management devices. In December 2019, the FDA gave a go-ahead to the Control-IQ technology of Tandem Diabetes Care (TNDM - Free Report) . The advanced hybrid closed-loop system connects with blood glucose sensors and insulin pumps to automatically customize the level of insulin delivery, according to the glucose level in patients of Type 1 diabetes.

Medtronic (MDT - Free Report) is also drawing the attention of regulatory bodies following the filling of PMA for a non-adjunctive labeling for its Guardian Sensor 3 (a glucose sensor as part of the Continuous Glucose Monitoring [CGM] system) for use with the company’s MiniMed 670G insulin management system. In October 2019, Dexcom (DXCM - Free Report) attained FDA clearance for its G6 Pro CGM System. It is equipped to collect real-time data over a span of 10 days.

While diabetes management companies are coming up with cutting-edge innovation to gain traction in this niche market, there are a few stocks that deserve investors’ attention now. Let us take a closer look.

Diabetes Management Space: Plethora of Prospects

Per a report by Markets and Markets, the global digital diabetes management market is anticipated to reach a worth of $19.9 billion by 2024 from $6.8 billion in 2019, at a CAGR of 23.8%. The key driving factors are growing incidence of diabetes, steadily rising investments in the manufacture and adoption of digital platforms and technological solutions for diabetes management. Favorable reimbursement policies, increasing awareness on self-diabetes management and government programs have also fueled growth.

In emerging nations like India and China, rapid urbanization and fast-growing healthcare infrastructure have been lending support to the diabetes care market. The commercial rollout of generic versions of insulin and robust demand for novel insulin for the regulation of blood sugar levels in both Type 1 and Type 2 diabetes patients has also enhanced diabetes care market prospects.

MedTech companies have been investing in innovation and commercial launches of a growing roster of diabetes management products. These new-age treatment options not only give the assurance of a better quality of life for patients.

A key innovation within the diabetes management field is CGM. These body-worn medical devices are known for offering real-time readings of glucose levels. Medtronic, Abbott (ABT - Free Report) and Dexcom are a few of the leading industry players which have been gaining momentum on their CGM strength. In this regard, Medtronic’s Guardian Connect system is the only standalone CGM system that makes use of smart technology to estimate the future glucose level of a patient.

A few other crucial offerings are smart insulin pens, smart insulin patches and smart glucose meters. The Alternate Controller Enabled (ACE) fusion pump is another path-breaking innovation in this field. It is a device designed to infuse drugs into patients by establishing a secure link with external automated drug dosing systems.

3 Stocks In Focus

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

Dexcom: This Zacks Rank #2 (Buy) company specializes in the design, development and commercialization of CGM. Lately, DexCom's FDA-cleared CGM system — the DexCom G4 Platinum — has been boosting the company’s top line. DexCom has announced that the FDA has granted a De Novo request for the newest generation of CGM — DexCom G6 CGM System — for people with diabetes aged two and above. In September 2019, DexCom started selling G6 in Canada and witnessed solid customer response. In early October 2019, the company started the shipping of G6 to Medicare patients.

In the past three months, the company’s shares have outperformed the industry. The stock has rallied 49.3% compared with the industry’s 10.7% rise.

Tandem Diabetes Care: This Zacks Rank #1 (Strong Buy) company is primarily known for the development of the t:slim X2 Insulin Delivery System. The company commercially launched the t:slim X2 insulin pump with Control-IQ technology in January 2020. The company also plans to launch t:sport Insulin Delivery System, its next-generation hardware platform, in 2020 or 2021.

In the past six months, the company’s shares have outperformed the industry. The stock has rallied 8.7%, compared with the industry’s 6.3% rise.

Insulet (PODD - Free Report) : This is the leading developer, manufacturer and marketer of the Omnipod Insulin Management System. Insulet has achieved several milestones with respect to broadening Omnipod’s market access. In this regard, the company has been consistently gaining from the full commercial launch of the Omnipod DASH system in the United States. In September 2019, the company’s Omnipod DASH Insulin Management System attained FDA approval to be designated as an ACE pump. The company has been seeing significant progress with its Omnipod Horizon clinical development work and the technology is ready to be brought to the market by the second half of 2020. With strong estimate revisions, this Zacks Rank #3 (Hold) stock promises significant upside in near term.

In the past three months, the company’s shares have outperformed the industry. The stock has rallied 24.5% compared with the industry’s 6.5% rise.


7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.” Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.6% per year. So be sure to give these hand-picked 7 your immediate attention.

See 7 handpicked stocks now >>