Diabetes ‘technological wave’ has too much upside to ignore: JP Morgan
New applied sciences for diabetes remedy have gotten important for individuals who undergo from the illness, based on J.P. Morgan, and that would make corporations like Dexcom compelling funding alternatives.
“The diabetes area is at present experiencing its largest technological wave of innovation from glucose measurement (steady glucose monitoring) to insulin dosing (insulin pumps),” analyst Robbie Marcus mentioned in a word to purchasers Friday. “CGM is turning into an important device for sufferers and is now on the degree of sensitivity that it’s eliminating the necessity for fingersticks with blood glucose monitoring.”
Technological advances for glucose checking are so necessary, Marcus added, that medical system corporations like Dexcom are set for “important” upside over the subsequent few years. Marcus upgraded shares of Dexcom to obese and raised his worth goal on the corporate to $115 from $80, implying 28 % upside over the subsequent yr.
Dexcom, which produces gadgets that connect to a affected person’s pores and skin to watch blood-glucose ranges constantly, has the potential to crush consensus income estimates, the analyst added. He predicts that the San Diego, California-based firm may attain $876 million this yr, which might beat expectations of $860 million.
“Therapy is shifting in the direction of built-in pumps the place the CGM dictates insulin dosing, and in our view the CGM is the rather more useful element of that equation than the pump,” Marcus defined. “We expect the Avenue is being too conservative on the near-term sustainability of Dexcom’s enterprise (transmitters and receivers) and assuming a major headwind to each new affected person provides and base enterprise affected person attrition.”
Dexcom’s inventory is up greater than 62 % to this point this yr. Shares prolonged their 2018 good points Friday, climbing practically four %.
“One of many hidden belongings of Dexcom is that this funding we have made in know-how,” chief government Kevin Sayer informed “Mad Cash” host Jim Cramer in November. “Our system gives options that opponents do not. We hook up with telephones. We share knowledge with individuals who watch sufferers. We provide efficiency and accuracy that others do not.”
Supply hyperlink – https://www.cnbc.com/2018/06/08/diabetes-technological-wave-has-too-much-upside-to-ignore-jp-morgan.html