Dexcom Inc Q3 2024 Earnings Call Transcript

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

Question: Danielle Antalffy - UBS - Analyst : Hi, good afternoon, guys. Thanks so much for taking the question and congrats on the filing of the 15-day and the progress in the quarter. And it does sound like a continent and the progress you have made. And US did though, they'll come in a little bit below consensus. I'm sure there's some modeling dynamic there that you just got wrong. But I was just curious, if you get any more color on the progress made everything that is through the quarter in August and September and maybe anything you can say about that a run rate exiting the quarter, what you can say about where you are with DMEs from a share perspective? Any other color you can add would be great. Thanks so much.

Question: Larry Biegelsen - Wells Fargo - Analyst : Good afternoon. Thanks for taking the question. Kevin, when we aggregate your Q3 results with Abbott, it looks like the US CGM market slowed to about 10% from over 20% in the first half of this year and high 20s before that. So there's still concerns that the CGM market is slowing. Is the 10% or so much market growth in Q3, but good number going forward. Are there one-time items in the third quarter that you think depressed the market? Thanks.

Question: Matt Taylor - Jefferies - Analyst : Thank you for taking the question. I was hoping you could help us understand or benchmark your progress a little better versus some of the things that you said in Q2, like you still expect to get the same new starts in Q4 that you did before. And can you talk about whether, do you think the low end of the long-range plan is still in play 2025? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 24, 2024 / 8:30PM, DXCM.OQ - Q3 2024 Dexcom Inc Earnings Call

Question: Jeff Johnson - Baird - Analyst : Thank you and good afternoon guys. Maybe 2 follows -- or two-parter, if I could just first question, just as you talk about the record new starts in the US, is that with or without Stelo's, appreciate understanding that. And then tie into that with volatility last quarter to ensure my patient model is off a little bit. When I look at at least what my model spits out, it's healthier patient volumes in the US, your installed base I'm sorry, in the US is probably up somewhere around 27% 28% year over year. This quarter you did the negative 2% US revenue growth. So I guess I'm -- is there any way to help us bucket tend to that 25 to 30 basis points spread between what I think you evolve your installed base grew in the US and what your revenue grew? I know you talked about the six points of headwind from rebate is there anything else to help us kind of bridge that 25 to 30 basis points gap? Thanks.

Question: Robbie Marcus - JPMorgan - Analyst : Okay, great. Thanks for taking the questions. I wanted to ask in the DME channel, it sounded like you've stabilized your position there. I was just hoping you could give us some more detailed look as to what exactly you're doing there is price effect or how are you changing the relationships? And is it unreasonable to think that you could get back to where you were, two, three, four years ago with your standing with DMEs? Or should we think about just gradual improvement? Thanks to that.

Question: Joanne Wuensch - Citibank - Analyst : Good afternoon and thank you for taking the question. Congratulations on submitting the 15-day G7 to the FDA. Could you please give us a little bit of an update on your thinking as number one, the timing of when that might be approved? And number two, what you think financial impact will be as we think about our 2025 members? Thank you.

Question: Michael Polark - Wolfe Research - Analyst : Good afternoon. My question is on opening Stello to DMEs and doctors directly had been working under the assumptions Stelo in the US would go for your lowest price point? Yeah, $100 per patient among -- $1,200 a year. And now, if you're introducing a channel and dairy, these folks have to earn margins. So can you help me just understand how you're going to price it with DMEs and doctors and two, three years from now, how much is Stelo are you doing direct versus through these partners in your mind? Thank you.

Question: Mathew Blackman - Stifel - Analyst : Good afternoon, everybody can hear me. I'm curious, just how you're thinking about competition type one pump integrated segment, particularly next year when there's going to be more competition. And what I appreciate you probably don't want to be too explicit, but how are you going to defend your position there? You considering doing head to head studies. I'm really just trying to understand what the messaging is going to be to physicians and patients when there's another sensor option out there another sensor option out there probably sometime next year. Thanks.

Question: Travis Steed - Bank of America - Analyst : Thanks for taking the question. I wanted to ask on the 2025, how you're thinking about the US recovery in that '25. I don't know the US is back to double digits. I don't know if there's any first half, second half comments you'd like to throw in and any rebate eligibility in 2025. And I don't know if it includes Stelo or not. Just curious if I want to reiterate that Stelo guide for '24. I just love some color on that.

Question: Marie Thibault - BTIG - Analyst : Good evening. Thanks for taking the questions. I want to follow up on the rebate issue. I think, I heard -- maybe I missed it, but I think I had a six points of impact the growth in Q3. What's being assumed in the Q4 guide for four points of impact from the rebate issue?

Question: Matthew O'Brien - Piper Sandler - Analyst : Good afternoon. Thanks for taking my question. And maybe just to follow up on the '25 outlook, Jereme, $4.6 billion that's about, I don't know, something like $500 million of growth absolute year-over-year. You've done that before, you would have done that this year without the mix headwinds. But this time around, you're going to be trying to do that growth with no patients that maybe aren't going to use products as much basal, Stelo, et cetera. So how do you deconstruct getting that absolute growth next year on top of the fact that you're going to have some competition on the pump side of things and then maybe a little bit of price on the DME side of things. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 24, 2024 / 8:30PM, DXCM.OQ - Q3 2024 Dexcom Inc Earnings Call

Question: Bill Plovanic - Canaccord Genuity - Analyst : Great. Thanks. Good evening. Thanks for taking my question. Just on a Stelo, I think the original guide was $40 million this year. Just commentary on that. And then are you seeing with initial usage -- can -- I think this as a potential as a gateway product for you. Have you seen any Stelo be diagnosed prediabetes, or type two in transfer into the G7 product. And if so what are your expectations for that as well? Thanks.

Question: Jayson Bedford - Raymond James - Analyst : Good afternoon. I have a few questions that require short answers. I just wanted to come back to the new user add commentary just for clarification. And this was a record for 3Q or any quarter. The comment apply to both US and international and have you seen any notable change in attrition? Thanks.

Question: Joshua Jennings - TD Cowen - Analyst : Hi, thanks for taking the question. I just was hoping you could help us think through the risk of persistent channel mix shift from DME to pharma with to pump players looking to access the pharmacy channel for their own products. I guess a two-part question is one, I mean, is the Omnipod five share gains and and that access to the pharmacy channel driving some of the the mix shift you're seeing. And do you think it's a risk that these other two players are going to be accessing the pharmacy channel over the next 12, 18, 24 months? Thanks a lot. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 24, 2024 / 8:30PM, DXCM.OQ - Q3 2024 Dexcom Inc Earnings Call

Question: Shagun Singh - RBC Capital Markets - Analyst : Great. Thank you so much. So I just given the leadership transition in the US, can you talk about your confidence in the commercial strategy getting into 2025? And then, more specifically on Stelo what's your plan for accelerating this plant in 2025? And then on the G7 15 day center, you know how you're preparing ahead of the launch, including with respect to supply. Thank you for taking the question.

Question: Chris Pasquale - Nephron Research - Analyst : Thanks. I want to ask a couple of questions about the 15-day sensor. Jereme, are there any incremental costs associated with that product or a scale? Should it has the same cost profile as the current version? And then I know you guys took your time moving that forward because you really wanted to optimize durability. Do you expect the survival to full wear time to be similar to what patients are experiencing today? .

Question: Mike Kratky - Leerink Partners - Analyst : Hi, everyone. Thanks for taking my question. To what extent did you benefit from competitor CGM shortages towards the end of the quarter in the US? Can you help quantify how much of an impact this may it had on your US growth in 3Q, if any? And is your current revenue guidance assume any potential contribution from that dynamic in 4Q? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 24, 2024 / 8:30PM, DXCM.OQ - Q3 2024 Dexcom Inc Earnings Call

Question: Steve Lichtman - Oppenheimer - Analyst : Thank you. Hi, guys. You talked about part of the improved international performance in the quarter, coming from the turn in Japan. As you guys took over. Looking into 2025, you talk about what you see is the biggest drivers internationally?

Question: Patrick Wood - Morgan Stanley - Analyst : Brilliant. Thank you for taking the question. Just curious for the record new starts and just what you've seen in the business overall. If you give any qualitative commentary between what you've seen within type one versus type two? I know Stelo mixes that up a little bit, but just the sources of growth and how those markets split and the health of them. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 24, 2024 / 8:30PM, DXCM.OQ - Q3 2024 Dexcom Inc Earnings Call

Question: Issie Kirby - Redburn-Atlantic - Analyst : Hi, good evening. Thanks for taking my question. I appreciate it is only a couple of months since the launch with Stelo, but would love to hear any early insights you have around reordering retention rate. And also any color you can give on returns and reliability of the product. Thank you.

Question: Macauley Kilbane - William Blair - Analyst : Hi, everyone. This is Macauley on for Margaret. Thanks for taking our question. Just a follow-up on some of the earlier questions on the LRP. You previously mentioned, call it, 70, 30 US, OUS sales split. Does that imply a larger OUS contribution now in order to hit the low end at the $4.6 billion? And maybe just a follow-up on the 15-day durability. Stelo, I think, achieved the roughly 80% in the studies, but how does that compare to what you've seen in the first couple of months of the launch? And commentary on if the 15-day G7 was able to exceed that.