Why DexCom Stock Is Rising During Monday's Session

DexCom, Inc. DXCM shares are trading higher by 3.75% to $79.05 Thursday afternoon. Leerink Partners initiated coverage on the stock with an Outperform rating and a $110 price target.

DexCom is otherwise trading lower in recent sessions following the FDA's announcement of the establishment of a Digital Health Advisory Committee. The stock has also been under pressure in 2023, falling some 31% on a year-to-date basis, amid the popularity of weight loss drugs.

What Happened?

The FDA has created a Digital Health Advisory Committee with a focus on dealing with the challenges posed by digital health technologies like AI, augmented reality, and wearables. This committee's goal is to become fully operational by 2024 and offer expertise to help the FDA comprehend the advantages and risks associated with these technologies.

It aims to promote the development of safe and effective digital health solutions, foster innovation, and enhance health equity. The committee will consist of experts from various fields to assist the FDA in regulating these rapidly evolving technologies effectively.

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Why It Matters

Increased regulatory interest from agencies like the FDA in digital health technologies can create uncertainty for companies in this sector. This may concern investors due to the potential impact of new regulations on Dexcom's products and market access, leading to a possible decline in stock value.

Additionally, regulatory scrutiny can impede the development and release of new digital health technologies as companies work to comply with emerging regulations, affecting their innovation and competitive advantage.

According to data from Benzinga Pro, DexCom has a 52-week high of $139.55 and a 52-week low of $74.75.