Dexcom proposes Class I recall fix, 'on track' with Verily for next-gen glucose monitors

Sensor (1), transmitter (2), and a smartphone showing glucose data (3)--Courtesy of Dexcom

Dexcom is working to refocus in the wake of a recent Class I recall for its speakers that applied across several models of its continuous glucose monitors (CGM). The company has submitted a filing for a replacement speaker and related manufacturing changes with the FDA, it said on an April 27 earnings call.

It also has a "completely new speaker" in the pipeline that it expects to submit to the FDA before the end of this quarter, which is expected to "greatly improve the patient experience," said the company's President and CEO Kevin Sayer.

The Dexcom ($DXCM) recall was originally classified as Class II by the FDA, but was later upgraded by the agency to Class I Sayer said, due to the "extreme importance of alerts and alarms in CGM." He noted that warranty related expenses had increased and that it has a "large number of receivers" already stocked up, which could result in a worst-case scenario of writing off about $5 million in receiver inventory.

On its partnership with Verily, a business within Google parent company Alphabet ($GOOG), Sayer was more upbeat.

"Our partnership with Verily is going extremely well," said Sayer. "Verily has already completed a first generation transmitter, it is beginning to test its performance with both G5 and G6 sensors. Initial results have been very promising. And launch of our first combined product appears to be very much on schedule."

Dexcom has previously said it expects to launch a miniaturized continuous glucose monitor from the Verily partnership in 2018, with a disposable, inexpensive Band Aid-sized glucose monitor to follow in 2020 or 2021.

Continued Sayer: "Our advanced sensor research program remains on track to deliver a sensor intended to work with the targeted bandage-sized disposable transmitter that we are co-developing with Verily."

Overall, Dexcom reported $116.2 million in first quarter revenue, up 60% from the same quarter a year earlier. It had a net loss of $19.2 million, translating into a $0.17 per share loss, during the quarter.

- here is the earnings release
- and here is the transcript