DexCom (DXCM) Declines on Potential Competition for Stelo (revised)

Core Insights - DexCom's shares declined nearly 3% on June 3 due to rising competition following the FDA's approval of Abbott's competing product Lingo [1][2] - DexCom's Stelo, approved in March 2024, is the first over-the-counter continuous glucose monitoring (CGM) device, allowing users to track glucose levels via smartphone without a prescription [1][4] - Abbott's Lingo, also an over-the-counter glucose monitor, is already available in the UK and poses a competitive threat to DexCom in the OTC CGM market [2][4] Company Performance - DexCom's shares have decreased by 7.2% year-to-date, contrasting with a 5% growth in the industry and a 10.9% rise in the S&P 500 Index [3] - The company has seen strong contributions from its Sensor segment and growth in both domestic and international revenues, which are expected to continue through 2024 [7] Competitive Landscape - Both DexCom and Abbott compete in the CGM market with their respective devices, G6 & G7 and Libre, but the new OTC devices Stelo and Lingo target a broader audience, including non-diabetic individuals [4][5] - Abbott's extensive resources in healthcare product markets may provide it with a competitive edge over DexCom as both companies launch their OTC products [5][6] Notable Developments - DexCom announced compatibility of its G6 and G7 CGM sensors with Tandem Diabetes Care's Mobi insulin pump, enhancing predictive capabilities for glucose levels [7] - A new feature allowing direct connection of the G7 CGM to Apple Watch is set to launch gradually by the end of Q2 2024, potentially increasing user convenience [8]