People have been riding the GLP-1 wave to achieve quick and significant weight loss. But given the drug’s effect on controlling type 2 diabetes, it’s no surprise that DexCom CEO Jake Leach wants to ride that wave as well. DexCom makes continuous glucose monitoring devices (CGMs) that are worn 24/7 by patients. They were initially used for the type 1 population that needed them to know when to take insulin and manage their disease but — as evidence of their efficacy has grown — CGMs are now prescribed for type 2 diabetes patients as well.
“So we’ve kind of been in this business of how do we use the CGMs to optimize pharmaceutical therapies, insulin being the first, [but] there’s opportunities with GLP-1s,” Leach said in a recent interview. “There’s all kinds of opportunities for us to guide therapy for both the physician and the patient to work together to get a better outcome faster.”
CGMs give diabetics an estimate of their glucose levels by measuring glucose in the interstitial fluid surrounding cells. Blood tests give you A1c results that are considered a better metric but the constant pricks and blood draws are burdensome to say the least. Nor is it possible to constantly do fingerpricks to get real-time data. CGMs that have to be prescribed by providers have a tiny sensor that is inserted under the skin to give an accurate sense of glucose levels throughout the day.
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Like obesity, type 2 diabetes is a metabolic disease, and GLP-1s are effective at suppressing appetite, thereby impacting metabolism and insulin levels.
“GLP-1s drive great outcomes. But I feel and have seen in all the data we look at that when you use CGM and GLP-1 together, you get a better outcome [mainly because] they work on different things,” Leach said. “CGM works on understanding how different nutrition and different diet choices, activity levels, all those things, how it actually impacts your glucose. If you’re taking a GLP-1, the CGM is going to show you how much better you’re doing when you’re taking it.”
Whereas if you are on GLP-1s alone and not monitoring glucose levels, “the only real feedback you have on how you’re doing is your weight” and that impact could take up to 90 days when you measure your A1c, Leach pointed out.
CGMs can also help in tailoring one’s diet.
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“I think that some of the learnings that are so important about proper nutrition don’t come from a GLP-1. It comes from CGM,” he declared, although he wasn’t able to say how big the universe of type 2 diabetes patients with GLP-1s is.
Leach also noted that the use of CGMs in tandem with GLP-1s in people battling type 2 diabetes is economically viable too.
“I think the CGM is such a cost-effective solution,” he said. “When you think about the cost of CGM, for somebody to use CGM for a year, we’re talking about a $1,000, right? That’s a pretty compelling financial argument when you look at the healthcare savings.”
Indeed, a study to determine whether CGM use for GLP-1 patients is cost-effective for payers appears to echo Leach. That study was done by a physician consultant of Abbott and two of its employees. Abbott is a DexCom competitor and has its own CGM product, the FreeStyle Libre. Though Abbott’s technology differs from DexCom’s — Kevin Sayer, the previous CEO of DexCom, once described the FreeStyle Libre as not a true CGM — the product has been gaining market share.
To counter that and cement Dexcom’s position as the leading innovator in the world of CGMs, the San Diego-based company is planning to launch the DexCom G8 sensor, which is expected make the latest DexCom wearable CGM device the smallest CGM in the world, when available.
“It’s going to be the most advanced wearable system we’ve ever produced,” Leach said, according to the webcast of his remarks on Jan 12 at the annual J.P. Morgan conference. “The design changes will ensure improved sensing as well as error detection. The sensor will also be 50% smaller in size than the G7 sensor, which means the wearable device will be the smallest CGM available on the market when it launches.”
No launch date has been specified yet.
Whatever the driver — international sales expansion, jumping on the GLP-1 bandwagon, or the advanced, smallest CGM launch — DexCom and its stock price badly need a winning story. The stock reached its peak in November 2021 when it traded over $160. The market has since slashed its value to less than half due to a variety of missteps, including a sales restructuring that didn’t go as planned and an FDA warning letter over the condition of two manufacturing plants.
The stock currently trades near $70. The markets will weigh in again on Feb 12 when the company reports its fourth-quarter and fiscal 2025 earnings.