Dive Brief:

• Diabetes technology leader Dexcom is raising $1.1 billion through an upsized offering of convertible senior notes the company said Wednesday. 
• Dexcom, which ended the last quarter with $2.6 billion worth of cash and cash equivalents, has yet to say how it will use all the money. The company plans to use $188.7 million of the debt financing funds to repurchase Dexcom stock and a portion will support other financial transactions. 
• The financing comes as Dexcom works to scale up its operation to meet anticipated demand for its G7 continuous glucose monitor, which came to market in the U.S. earlier this year.

Dive Insight:

Talking to investors last week, Dexcom CFO Jereme Sylvain said the company was “in a great financial position.” Sylvain went on to outline how that position is supporting activities such as building a factory that will start production in the middle of the year.

“Our balance sheet provides us with significant flexibility to organically support our ongoing growth investments, including the build-out of our Malaysia manufacturing facility and continually assess our strategic uses of capital,” Sylvain said.

With the G7 launch ramping up, and Dexcom fighting for CGM market share around the world, Sylvain and the rest of the leadership team have decided to add to the $2.6 billion that the company had to its name at the end of March. Dexcom had originally sought to raise $1 billion through the debt offering, but priced it at $1.1 billion on Wednesday. 

Discussing its use of the proceeds from the debt security, Dexcom said $89.1 million will pay the cost of the “capped call transactions,” an action intended to reduce the dilution of the company’s stock. It also plans to repurchase about 1.6 million shares of Dexcom stock. The company has yet to discuss how it plans to use the rest of the money.

Dexcom has largely grown organically by releasing new CGMs and expanding its user base, but it was reported last year to be in talks to buy Insulet, an insulin pump manufacturer. Management at Dexcom denied the company was in “active discussions about a merger.”