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Will There be More Clarity About the CGM Landscape at ATTD?

Will There be More Clarity About the CGM Landscape at ATTD?
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Canaccord Genuity analyst Kyle Rose gives some insight on what to look for from some companies in the continuous glucose monitoring market ahead of the 2020 International Conference on Advanced Technologies & Treatments for Diabetes.

There could be an opportunity to gain more insight into how the continuous glucose monitoring (CGM) market will pan out this year at the 2020 International Conference on Advanced Technologies & Treatments for Diabetes (ATTD). The leading companies in the space are slated to release data and give investors more clarity about CGM offerings, according to a report from Canaccord Genuity analyst Kyle Rose.

Abbott Laboratories’ upcoming Freestyle Libre 2 will be a major topic in the CGM conversation during ATTD because it will reshape the market’s landscape. Already patients and investors have become impatient for the device.

“We believe the increasingly competitive CGM landscape will be a focal point of investors at the ATTD,” Rose wrote in research notes. “Specifically, we look to better understand physician and patient sentiment regarding Abbott’s Libre 2 and its potential to impact DexCom’s adoption and pricing power moving forward.”

Rose added, “the main focus for investors centers around the timing of Libre 2 FDA approval/clearance. As the low-cost leader in the CGM space, Abbott has quickly captured a large portion of a rapidly expanding market – over two million patients as of the recent Q419 call– with our diligence suggesting strong adoption in the T2 market.”

Abbott won CE mark approval to launch the Libre 2 system in Europe in October 2018. The second-generation system offers optional customizable glucose alarms for patients who need them, using Bluetooth technology. The system can be set up to alert the user if their glucose is low or high, for example, or if there is a signal loss between the sensor and the reader. The user continues to be able to scan their sensor as often as desired to see their glucose reading, trends and patterns, and eight-hour history.

It has often been said the technology would severely impact DexCom in the space. However, the San Diego, CA-based company has held steady sales and earnings.

“Our view continues to be that the worldwide market is large enough to support multiple players, and DexCom’s manufacturing focus and product pipeline (G7, professional use, T2, hospital, and gestational) position the company with a strong line up of fully equipped, lower-cost technologies,” Rose wrote. “We expect additional product iterations on both software (patient/caregiver/physician apps) and hardware (G7 by YE20) to continue driving patient demand and look for updates at ATTD.”

Senseonics is another company that will be a topic of discussion at ATTD. The Germantown, MD-based firm was confounding to some analysts. On one hand, Senseonics scored a significant FDA nod for the Eversense CGM and reimbursement coverage but struggled significantly in its latest quarterly earnings.

“Senseonics struggled in 2019, with the most recent 3Q19 report raising more questions about the timing and pace of [the company’s] commercial ramp in the US,” Rose wrote. “Specifically, despite significant recent market access wins (Medicare, Humana, HCSC), management noted that commercial revenues continue to be challenged by reimbursement access and physician training - something that is assuaged by the EverSense Bridge Program but comes at the expense of revenues and GMs. That said, we note multiple presentations and data sets slated to be released at ATTD focused on utilization in pediatrics as well as elderly populations. Lastly, given Roche acts as Senseonics primary OUS distribution partner, we look for additional insight into the dynamics of OUS market adoption.”

However, all of the players in the space could all have strong gains since there continues to be an uptick and greater acceptance of CGM.

“The industry continues to focus on better metrics to evaluate outcomes, and in particular, continues to shift away from A1c.,” Rose wrote. “Given the increasing accuracy of CGM, many physicians are stressing the importance of transitioning to real-time glucose levels, time-in-range, and time in hypo/ hyperglycemia as the gold-standard patient metrics by which drugs, devices, and therapies are evaluated—something we think points to CGM's value as a broader front-line treatment for diabetes.”

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