Amid rising concerns that advanced diabetic treatments could reduce the need for blood glucose monitoring devices, recent financial reports indicate a contrasting trend. Companies such as Abbott Laboratories (NYSE:ABT) and DexCom are experiencing a surge in demand for continuous glucose monitors (CGMs), driven by the side effects of diabetes medications that can induce hypoglycemia, thus requiring more vigilant blood sugar tracking.
The third-quarter financials have been particularly telling of this unexpected boon. Abbott Laboratories reported a 30% increase in sales for its FreeStyle Libre system, reaching $1.4 billion. Similarly, DexCom witnessed a 27% revenue rise to $975 million. These figures underscore a growing reliance on CGMs by patients using diabetic treatments, including Ozempic, Eli Lilly’s Mounjaro, Wegovy, Rybelsus, and Zepbound. While these medications are lauded for their effectiveness in managing diabetes and obesity and reducing cardiovascular disease risks, they also necessitate closer glucose monitoring due to the risk of hypoglycemia they pose.
Insurance claims data analyses have corroborated this trend, revealing that patients on intensive insulin regimens have doubled their use of monitoring devices. Even more striking is the quadrupled usage among non-insulin-dependent users. This increased dependence on CGMs is anticipated to persist and may even contribute positively to the share prices of companies like Abbott and DexCom.
As these firms capitalize on the synergy between drug therapy and device monitoring, industry experts predict a redefinition of diabetes care dynamics. The enhanced use of CGMs in conjunction with diabetic medications appears to be shaping a new landscape in diabetes management where device monitoring plays an integral role in ensuring patient safety and efficacy of treatment protocols.
InvestingPro Insights
As the landscape of diabetes management evolves, Abbott Laboratories and DexCom are making significant strides in their respective markets. According to InvestingPro data, Abbott Laboratories boasts a robust market cap of 172.82B USD and a P/E ratio of 33.69 as of Q3 2023. The company has also witnessed a revenue growth of -11.26% over the last twelve months as of Q3 2023.
InvestingPro Tips highlight that Abbott Laboratories yields a high return on invested capital and has raised its dividend for 10 consecutive years. This is a testament to the company's financial stability and consistent growth.
On the other hand, DexCom, with a market cap of 40.56B USD and a P/E ratio of 107.95 as of Q3 2023, has seen a remarkable revenue growth of 21.85% over the last twelve months as of Q3 2023. InvestingPro Tips indicate that DexCom's revenue growth has been accelerating, and that 19 analysts have revised their earnings upwards for the upcoming period.
These insights underscore the potential of both companies in the CGM market. For more detailed analysis and tips, consider subscribing to InvestingPro, which is now on a special Black Friday sale with a discount of up to 55%. With over 30 additional tips available for each company, InvestingPro offers invaluable insights for savvy investors.
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