As the daughter of an insulin-dependent mother who receives 24-hour treatment via catheter insulin pump therapy, diabetes management and technology is a topic I follow closely and celebrate the small victories along the way. Sometimes it is a nice change to examine a company from a different perspective and take the financial analysis out of the stock and look at the goals and milestones achieved. A major FDA approval for Dexcom's (DXCM) continuous glucose monitor (CGM) device for children with diabetes was announced a couple of days ago, and this is one such event that will revolutionize the industry and improve the quality of life affecting so many families dealing with diabetes, often referred to as the "silent disease". For full disclosure, I do not own a single share of DXCM or any other stock, for that matter, because of my editorial role at TheStreet, my securities licenses and the restrictions around that, but this is a great story to be aware of.
Here is an excerpt from the DXCM press release:
"Dexcom, Inc., (NASDAQ:DXCM), the leader in continuous glucose monitoring (CGM), announced today that it has received U.S. Food and Drug Administration (FDA) approval for its CGM device: Dexcom G4® PLATINUM (Pediatric) for use in children ages 2 to 17 years with diabetes. Already approved for adults 18 and older, the Dexcom G4 PLATINUM (Pediatric) is now the only CGM system approved for children as young as two years old.
Continuous glucose monitoring is considered the most significant breakthrough in diabetes management in the past 40 years.1 The traditional standard-of-care for blood glucose measurement has been a blood glucose meter. CGM is important because it can help educate kids on how to best learn to manage their diabetes into adulthood.
The Dexcom G4 PLATINUM tracks glucose levels continuously for 7 days throughout the 24-hour period using wireless technology, enabling users to view their glucose levels on demand. The system allows persons with diabetes to program personalized information, such as glucose targets and alerts, and it has an alarm feature to alert the user if glucose levels rise or fall to dangerous levels. This is important as uncontrolled glucose can cause health complications and even death.4 The Dexcom G4 PLATINUM is the only CGM that comes with a built-in alarm that notifies users when glucose levels fall to critically low levels for an additional level of awareness no other CGM brand offers." According to the FDA, 215,000 children under the age of 20 deal with diabetes management. The FDA announcement not only improves quality of life for these kids, but it offers a new way to help their parents understand and recognize symptoms and make it better.
I had the opportunity to speak with DXCM CEO Terry Gregg on Wednesday (I have interviewed him in the past at the NASDAQ market site), and out of all the CEOs I have interviewed for TheStreet, Terry Gregg is one of the most passionate and involved regarding the fundamental cause behind the company. Yes, the stock reacted positively to the news and made a lot of long positions happy in a down tape, but that is secondary to the real life impact to the families, medical community and industry.
Gregg explained, "This is the first time a diabetes trial of this type was designed specifically for kids because it is very difficult to have children participate in a limited, controlled trial. This opens the doors for DXCM to call on 800-1,000 pediatric endocrinologists with this new indication. This indication is for the same use as it is for adults. Children can sleep with this device, go to school, play sports and have a perfectly normal life.
Furthermore Gregg looks at the FDA approval from a parent's standpoint, "A young child can barely effectively communicate physical feelings as it is, but this monitoring system alleviates the frustration, angst and worry parents experience while dealing with the effects diabetes has on children. Now parents can see real time if glucose levels are dangerously high or low and understand and treat their children, day or night. The Dexcom G4 PLATINUM is the only CGM that comes with a built in alarm that notifies users when glucose levels enter danger zones."
From a stock perspective, DXCM had great numbers for 2013 and Gregg expects that trajectory to continue in 2014 as he indicated at the 2014 JPMorgan Health Care conference. The company sees $205-$225 million in sales for the DXCM and to be cash flow profitable in 2014. Regardless of the stock's performance, I suspect his pride is in helping the diabetic community with the DXCM ground breaking research that leads to a better quality of life for children and adults. OptionsProfits can be followed on Twitter at twitter.com/OptionsProfits
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