SAN FRANCISCO--DexCom ($DXCM) is a medical device standout with its aggressive revenue growth profile at the JP Morgan Healthcare Conference in San Francisco, CA. It prereported upbeat fourth-quarter and 2014 results with unaudited 2014 product revenues up a whopping 64% to $257 million from the prior year.
It also laid out guidance for continued substantial revenue growth of 35% to 40% in 2015 to reach $340 million to $360 million. Investors anticipated good news from the continuous glucose monitor (CGM) maker, driving the company's shares up about 6% in the last week.
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| Kevin Sayer |
DexCom has emerged as the leader thus far in mobile CGM monitoring, and its popularity with Type 1 diabetes patients really took off last year. "Our patient base in the U.S. grew more than 50% last year. And with international revenues more than doubling, you can see that base grew more than 50% as well," said DexCom President and CEO Kevin Sayer at the conference. Its revenues are split with about 70% coming from disposable products and the remaining 30% based on durable sales.
Sayer was recently promoted from his prior position as president and COO, replacing Terry Gregg who remains as executive chairman.
To grow demand, DexCom plans in 2015 to expand its sales force by 20% to 25%, and it's also taken over an additional 90,000-square-foot building next to its existing San Diego, CA, campus. Perhaps most importantly for long-term growth, DexCom is also committing to a clinical trial strategy that aims for securing reimbursement and simplifying product distribution.
"One of our focuses now is finger stick replacement," Sayer said. "And we've had several meetings with the agency [the FDA] to discuss that, and we're working on ways to run a clinical trial and what that trial would look like to replace finger sticks so it's no longer an adjunctive claim. There are no standards yet. But we do know CMS has asked for this before they'll give us Medicare reimbursement." Finger sticks are required both for calibration and to support any reading prompting insulin dosage.
In addition, DexCom plans to provide enough data to payers for the benefits of its product to move into a pharmacy channel from direct equipment sales. This allows patients to get a prescription at their physician's office and to fill it at a local drug store. It also results in a lower patient copay and a reduction in waiting time to one to two days from about 21 days, Sayer said in a question-and-answer session after the presentation. Some payers are already transitioning to this classification.
The company is in the midst of its first outcomes study to support clinical reimbursement. The idea is to quantify the patient benefit of CGM in a very large patient population. The trial is for 6 months and at more than 20 centers and also tracks cost data.
On the new technology front, mobility is the top priority, Sayer said. He said DexCom will file with the FDA for a fifth-generation CGM system during the first quarter. The new system will transmit data directly to a smartphone and from the phone to a secure system; it then connects to the existing infrastructure that DexCom recently rolled out for its Share system, a cradle to make its existing CGM monitors compatible with the iPhone.
Sayer also said that DexCom is looking into being a developer for the Apple iWatch, thereby making its CGMs compatible for data transmission to the smartwatch. He also noted that out of the more than 20 independent artificial pancreas studies that are ongoing globally, almost all rely on DexCom's CGM technology. An artificial pancreas would monitor blood glucose levels and automatically adjust insulin and other hormone levels.
DexCom is almost exclusively focused on the Type 1 diabetes market, which it sees as low-hanging fruit, but expects to focus more on Type 2 diabetics within the next few years.
- here is the release on Sayer's promotion