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DXCM

Dexcom

$67.47

-0.45 (-0.66%)

, ABT

Abbott

$54.34

2.19 (4.20%)

11:37
09/28/17
09/28
11:37
09/28/17
11:37

Dexcom plunges after competing glucose monitoring system approved

Shares of Dexcom (DXCM) are sliding after Abbott Laboratories (ABT) announced that the Food and Drug Administration has approved its FreeStyle Libre Glucose Monitoring System. Several analysts commented on the news this morning, with JPMorgan, Raymond James and Northland downgrading Dexcom to Neutral-equivalent ratings. LIBRE FDA APPROVAL: Last night, Abbott announced that the FDA has approved the FreeStyle Libre Flash Glucose Monitoring System as a replacement for blood glucose monitoring for adults with diabetes in the U.S. This new glucose sensing technology eliminates the need for routine finger sticks and is the only personal continuous glucose monitor that does not require finger stick calibration, the company stated. The FreeStyle Libre reads glucose levels through a sensor that is worn on the back of the upper arm for up to 10 days, making it the "longest lasting personal glucose sensor available in the U.S.," the company added. STREET REACTION: Following the announcement, Barclays analyst Matthew Taylor told investors that the FDA approval came a bit earlier than consensus expectations with a significantly better than expected label as it allows for dosing or a replacement claim. The analyst noted that he believes Abbott's entry into the U.S. market with this label could be disruptive. Further, Taylor argued that Libre could be both market expanding for glucose monitoring devices and take share from other players, including Dexcom. The analyst reiterated an Overweight rating on Abbott's shares and raised his price target on the stock to $60 from $57. DEXCOM DOWNGRADES: Meanwhile, his peer at JPMorgan downgraded Dexcom to Neutral from Overweight, pointing out that Libre's label came in better than expected, Abbott's pricing strategy is even more aggressive than thought, and an aggressive Abbott commercial strategy with the five largest pharmacies is already lined up for distribution starting in December. While not "game over" for Dexcom's CGM, the approval introduces low priced competition into the MDI segment of the population where the company was previously the sole competitor, analyst Michael Weinstein contended. He lowered his price target on Dexcom's shares to $71 from $93. His peer at Raymond James also downgraded Dexcom to Market Perform from Outperform, citing increased competitive concerns. Analyst Jayson Bedford noted that Abbott's approval was expected, but the broader label was not. Bedford expects Libre to receive Medicare reimbursement and for Abbott to be more aggressive on pricing, impacting DexCom's growth outlook. Additionally, Northland analyst Suraj Kalia downgraded Dexcom to Market Perform and lowered his price target on the stock to $60 from $85. Like his peer, the analyst sees Libre's concomitant nonadjunctive to fingersticks label as a surprise that removes a key competitive advantage for Dexcom. WILLIAM BLAIR MORE POSITIVE ON DEXCOM: Also commenting on the news, William Blair analyst Margaret Kaczor argued that while she did not think Abbott's Libre would receive a dosing claim given the product's "inferior accuracy," it still lacks Dexcom's alerts and alarms that proactively protect the patient from glycemic excursions. Libre's dosing may shift the competitive dynamic "modestly in Abbott's favor versus Street expectations," but more importantly, its approval should be market expansive as it creates a new type of glucose monitoring category in the U.S., Kaczor contended. The analyst believes Dexcom will retain a "material technological and brand advantage." PRICE ACTION: In morning trading, shares of Abbott have gained over 4% to $54.28, while Dexcom's stock has plunged over 36% to $42.95.

DXCM

Dexcom

$67.47

-0.45 (-0.66%)

ABT

Abbott

$54.34

2.19 (4.20%)

  • 18

    Oct

DXCM Dexcom
$67.47

-0.45 (-0.66%)

09/28/17
COWN
09/28/17
NO CHANGE
Target $64
COWN
Outperform
Dexcom price target lowered to $64 from $90 at Cowen
Cowen analyst Doug Schenkel lowered his price target on Dexcom (DXCM) to $64 from $90 and lowered his estimates to reflect the approval of the Abbott (ABT) Libre, with a dosing claim, at least a year earlier than expected. The claim is important because it is a precursor for CMS reimbursement, said Schenkel. He keeps his Outperform rating on Dexcom pending additional details and based on the magnitude of its glucose monitoring opportunity.
09/28/17
NORL
09/28/17
DOWNGRADE
Target $60
NORL
Market Perform
Dexcom downgraded to Market Perform from Outperform at Northland
Northland analyst Suraj Kalia downgraded Dexom (DXCM) to Market Perform and cut its price target to $60 from $85 following the surprise PMA approval of Abbott's (ABT) Libre flash glucose monitor for a 10-day use. The analyst said Libre received a concomitant nonadjunctive to fingersticks label, which came as a surprise, and removes a key competitive advantage for Dexcom.
09/28/17
WBLR
09/28/17
NO CHANGE
WBLR
Outperform
William Blair sees Dexcom retaining advantage over Abbott
William Blair analyst Margaret Kaczor says that while she didn't think Abbott's (ABT) Libre Flash Glucose Monitoring device would receive a dosing claim given the product's "inferior accuracy," Libre still lacks DexCom's (DXCM) alerts and alarms that proactively protect the patient from glycemic excursions. Libre's dosing may shift the competitive dynamic "modestly in Abbott's favor versus Street expectations," but more importantly, its approval should be market expansive as it creates a new type of glucose monitoring category in the United States, Kaczor tells investors in a research note. The analyst believes DexCom will retain a "material technological and brand advantage." Further, the company has a "rich product pipeline" including its own 10-day G6 sensor that is nearing approval, the analyst adds. She keeps an Outperform rating on Dexcom. Kaczor thinks the stock, at last night's price between $55 and $56, adequately prices in risk of share loss in the category. Dexcom in premarket trading is down 29% to $47.93.
09/28/17
09/28/17
DOWNGRADE

On The Fly: Top five analyst downgrades
Catch up on today's top five analyst downgrades with this list compiled by The Fly: 1. Dexcom (DXCM) was downgraded to Market Perform from Outperform at Raymond James and Northland and to Neutral from Overweight at JPMorgan. 2. Pier 1 Imports (PIR) downgraded to Hold from Buy at Loop Capital with analyst Anthony Chukumba saying near-term visibility will remain low as investors await management's new turnaround plan and the retailer's profitability will remain under pressure due to increased competition. 3. trivago (TRVG) downgraded to Equal Weight from Overweight at Morgan Stanley with analyst Brian Nowak saying he believes online travel agencies Priceline (PCLN) and Expedia (EXPE) are reducing their spending with the company, which he sees making comparables tough until the second half of next year. 4. AutoNation (AN) downgraded to Neutral from Positive at Susquehanna. 5. Bunge (BG) and Archer Daniels (ADM) were downgraded to Neutral from Buy at Citi. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.
ABT Abbott
$54.34

2.19 (4.20%)

09/28/17
BMOC
09/28/17
NO CHANGE
BMOC
Dexcom price target lowered to $62 from $90 at BMO Capital
BMO Capital analyst JoanneK.Wuensch lowered her price target on Dexcom (DXCM) after Abbott (ABT) received FDA approval for a competing product. The analyst says the approval was unexpected, but she says that Dexcom's product is "materially superior." She thinks that the company's "long-term growth story remains intact," and she keeps an Outperform rating on the shares.

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