Dexcom Inc at JPMorgan Healthcare Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Well, you guys preannounced fourth quarter results earlier today and you gave some 2023 guidance. So I want to start there. Fourth quarter beat the Street by a little bit, maybe not as big as the third quarter, but still really good trends. What kind of color can you give us in terms of how new patients trended? Was there any impact from G7 deferral or as people are thinking about getting a G7 and any U.S. versus international commentary?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Occasionally, you guys will give us a year-end patient number. The patient numbers are a lot bigger now. So it might be a little more difficult to get to at this point so soon after the quarter, but any...

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : And that split between U.S. versus OUS?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Okay. So as we take that growth and I'm not good at mental math, but it's a big number, year-over-year, you're at 75% in the pharmacy. So the mix shift headwind in the U.S. is pretty much done on a quarter-over-quarter basis, but still a little bit incremental in 2023 on a year-over-year basis. How do we reconcile that really strong patient growth, which I imagine will continue with all the tailwinds you talked about up here relative to the 15% to 20% sales growth?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : And that $20 million to $30 million cost you talked about, is that the contra revenue, is that on the top line that we'll see it?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Okay. Does that go away as you get some of those commercial plans moving forward?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Makes sense. Type 2 basal, which is the numbers show a huge new market opportunity for you, just opened up reimbursement or should open up end of first quarter, second quarter you talked about. And it looks like there's about a percentage point of growth in the 15% to 20% for a type 2 basal. How should we think about that? Is that more of a -- it's a new market. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 09, 2023 / 7:15PM, DXCM.OQ - Dexcom Inc at JPMorgan Healthcare Conference

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : How should we think about commercial plans moving to basal type 2? And do you think you'll get as good kind of a label or an opening from the commercial plans as Medicare gave you?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Down the P&L, you also gave some 2023 guidance, I believe, 62%, 63% gross margin, 16.5% operating margin. Both of those came in just a hair below where consensus was. So maybe you could talk to us about some of the things we were overlooking and how we think about the cadence of that.

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Our G6 margins probably pretty good if you strip out all the preparation for G7 and that was in there over the past year.

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Do we get down as low as the high 50s and maybe first quarter, which is typically the lowest sales quarter?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Okay and then progress sequentially throughout the year.

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : And same down on operating margin?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Great. I want to open it up to see if there are any questions in the room. Okay. I'll keep going. International, you also had a slide about the really good reimbursement improvements you've had over the year. I believe it was 1/4 of new patients, was it overall or just...

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : So if I think about that 1/3, how does that play into the margin profile we just talked about? And is that a negative, neutral or positive?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Yes. And when do we think about a Dexcom ONE on a G7 platform?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : When we will see it in action?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Right. Are you seeing in markets where there is reimbursement in Europe or outside of Europe, that there is a demand for a Dexcom ONE as well or almost all those better reimbursed markets moving to the G-Series? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 09, 2023 / 7:15PM, DXCM.OQ - Dexcom Inc at JPMorgan Healthcare Conference

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Kevin, with the 2 minutes left, I'm going to give you a big question. So take (inaudible). G7 just got approved, so maybe a little greedy here, but what's the future of Dexcom? These devices are getting really small, really accurate. Where do you see the business moving over the next 5, 10 years? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 09, 2023 / 7:15PM, DXCM.OQ - Dexcom Inc at JPMorgan Healthcare Conference

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Well, great. We're out of time. Thanks so much, and thanks, everyone.