DexCom rises as Medicare updates coverage for continuous glucose monitors
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DexCom (NASDAQ:DXCM) added ~7% on Thursday after the Centers for Medicare and Medicaid Services (CMS) updated its policy on continuous glucose monitors to expand coverage for a broader group of diabetes patients.
The change, expected to take effect in April, is a âwelcome surpriseâ as it included a broader language and came earlier than expected, JPMorgan analyst Robbie Marcus wrote, citing its potential to double the CGM market.
As a result, Marcus sees an opportunity for DexCom (DXCM) as well as Abbott Laboratories (NYSE:ABT), the maker of FreeStyle Libre CGM systems. âWe see a clear path to commercial coverage, opening up a significant opportunity for both Dexcom and Abbott over the next ~1-2 years,â the analyst wrote. Senseonics Holdings (SENS) also competes in the market for CGM devices.
An earlier draft of guidance indicated CGM coverage only for people with diabetes taking daily insulin and those with problematic hypoglycemia. According to the update, CMS will cover patients with non-insulin-treated diabetes and patients with a history of recurrent level 2 or at least one level 3 hypoglycemic event, MedTech Dive reported.
On CGM coverage for type 2 patients taking daily insulin, DexCom (DXCM) Chief Financial Officer Jereme Sylvain said during the companyâs recent earnings call that the agency is expected to finalize its decision by mid-2023. âWe expect this population to contribute approximately 1% of our total revenue in 2023,â he added.