FDA Approval For DexCom's Stelo Opens Continuous Glucose Monitoring To Masses, Analyst Expects Competitive Pricing Against Abbott's

Tuesday, the FDA approved DexCom Inc’s DXCM Stelo Glucose Biosensor System as the first over-the-counter (OTC) continuous glucose monitor (CGM). 

The Dexcom Stelo Glucose Biosensor System is an integrated CGM (iCGM) intended for anyone 18 years and older who does not use insulin.

William Blair states that although initial pricing details for Stelo are undisclosed, it is anticipated to be competitive with Abbott Laboratories ABT current cash-pay price of approximately $80 per month. 

DexCom, historically priced slightly higher than Abbott, is estimated at $90 per month, with potential cost reductions for patients through HSA benefits based on their tax bracket.

The analyst notes the FDA’s suggestion of requiring prior iCGM (integrated Continuous Glucose Monitoring) approval for OTC devices sets a high regulatory standard, favoring established players like DexCom and Abbott. 

Meeting the criteria for iCGM accuracy is expensive and time-consuming, creating a significant hurdle for potential competitors.

The market for Stelo, catering to non-insulin-dependent diabetics (over 25 million patients), offers substantial opportunities beyond the core insulin therapy markets, William Blair highlights. 

With potential applications for prediabetics and metabolic health, the expanding prevalence of obesity and a growing number of type 2 diabetics contribute to a rising demand for CGM technology.

The combined market potential for DexCom and Abbott is estimated to reach over 100 million individuals, including prediabetics and potential metabolic health users, as the companies embark on their next growth phase.

Abbott has considered introducing Lingo, a product potentially receiving OTC approval, focusing on health and wellness. 

However, it’s worth highlighting that Stelo, at least in the short term, stands out as the sole OTC device designed specifically for type 2 non-insulin-dependent diabetics.

Price Action: DXCM shares closed higher by 7.83% at $131.32 on the last check Wednesday.

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