Diabetes patients are clamoring to get their hands on DexCom's newest gadget, the G6 continuous glucose monitoring (CGM) system.
FDA approved the device in March and the company decided to get the product into customer's hands as soon as possible, even though it had originally planned to launch the device in the second half of the year, CEO Kevin Sayer explained Wednesday during DexCom's second-quarter earnings call.
The company ended up launching the new device with about three weeks left in the second quarter. The device is the CGM to score approval as an interoperable CGM, meaning that it can work with other automated insulin dosing systems.
While the G6 launch might seem rushed, investors would hardly be able to find fault with that decision after seeing DexCom's second-quarter results. The company posted record revenue performance with sales up 42% compared to the same period last year. DexCom's revenue growth outpaced the increase in operating expenses by more than two times for the first half of the year.
But the decision to launch the G6 device ahead of schedule has put a strain on the organization on a number of fronts, Sayer admitted during the call, according to Seeking Alpha transcripts. Strong demand has driven delays in processing and fulfilling orders, he said, but DexCom expects to "get ahead of this" strain by the end of the third quarter.
"To our patient and physician customers, please rest assured the team is working around the clock to get [the] product to you," Sayer said.
Sayer described the feedback on G6 since the launch as "unambiguously positive so far." He also reiterated to investors that the device represents the most important and complex launch in DexCom's history.
"The biggest complaint that I've received so far is 'when am I going to get my G6 system?' We get it. DexCom's CGM technology can have a major impact on diabetes management," Sayer said.
Interest in DexCom's CGM systems has prompted the company to increase its growth outlook for the year. DexCom now anticipates total revenue of about $925 million for 2018, or growth of 29% rather than its previous guidance of 15% to 20%, CFO Quentin Blackford said during the call.
"Obviously, Q2 was much stronger than what we had anticipated," he said. "We like the set up going into the quarter, but the $243 million of revenue was far beyond our expectations. And I think we're at the very early stages of significant awareness being captured around the value of CGM, and just how quickly that penetration goes into the marketplace is yet to be seen but we're incredibly bullish around it."
When asked by one analyst during the call to describe the characteristics of the company's new G6 customers compared to earlier customers, Sayer said that the G6 new customers are "everybody."
The device is reaching a broader base of people, he explained. "It is reaching more users who have not experienced CGM before because as they walk into their caregivers [offices] and learn about its features with no calibrations and the easy insertion ... it is more attractive to a broader market of patients than what we've offered in the past."
Perhaps what makes DexCom's second-quarter results even more remarkable is the fact that the company achieved these results in an increasingly competitive market environment. Earlier this week Abbott Laboratories, one of DexCom's biggest competitors in the diabetes device space, received FDA approval for its Freestyle Libre 14-day Flash Glucose Monitoring System. Last year FDA approved the company's 10-day Freestyle Libre CGM.