UPDATE: March 14, 2022: Dexcom's much anticipated G7 continuous glucose monitoring system has received CE mark, allowing for the product to be launched in Europe after facing delays throughout last year.

The company said in a Monday announcement that G7 will be launched in the next several weeks, stating that it "is also working closely with its insulin pump partners to integrate Dexcom G7 into current and future automated insulin delivery systems as quickly as possible."

CEO Kevin Sayer told MedTech Dive in January that Dexcom would first target bigger markets like Germany and the UK before rolling the device out in other European countries.

BTIG analysts wrote that features of the G7, such as improved accuracy and a smaller footprint, will "allow Dexcom to compete more effectively, especially in the Type 2 market." The analysts added the CGM awareness in Europe overall is likely to improve as G7 launches and as rival Abbott Laboratories' FreeStyle Libre 3 CGM system expands in Germany and enters new countries like the UK and France.

Dexcom is now awaiting a decision from the FDA after filing a 510(k) for G7 late last year. However, the agency has been forced to prioritize work related to the pandemic over the last two years, which has created uncertainty for product review timelines across the medical device industry.

Dexcom's stock price was up nearly 5.5% when the market opened Monday.

Dive Brief:

• Dexcom grew revenue year over year by 23% in the final quarter of 2021, reporting another strong performance despite pressure from the pandemic, which the continuous glucose monitor maker has not experienced for much of the last two years.
• Executives said that the rising COVID-19 cases and the reintroduction of pandemic protocols limited the company's interactions with physicians in the fourth quarter, and the omicron variant carried over those same challenges into 2022. CFO Jereme Sylvain told investors Thursday that limited interactions with primary care physicians slowed new patient additions in January and the beginning of February, but the effects are already beginning to ease. Sylvain added that it's a matter of when, not if, the business normalizes.
• Dexcom's fourth-quarter performance came in line with its pre-announcement in January, and the company outlined a range of $2.82 billion to $2.94 billion of revenue for 2022, representing growth of 15% to 20%. J.P. Morgan analysts called the guidance "highly conservative," adding that they are "confident this initial guide represents another highly achievable starting point that should support continued Dexcom beat and raises throughout 2022."

Dive Insight:

Diabetes technology has been one of the most resilient markets during the pandemic, with companies like Dexcom, Tandem Diabetes Care and Insulet growing revenues and users as the adoption of wearable devices and digital health technologies have taken off.

Along with the recent pandemic pressure, and some seasonal slowdown from the company's strategy shift to distributing CGMs through pharmacies rather than the durable medical equipment channel, Dexcom has been forced to push back the launch of its upcoming G7 CGM system.

Dexcom's newest product was expected to receive a CE mark and limited launch in the final months of 2021 but was pushed back due to a delayed regulatory review. CEO Kevin Sayer said, once again, that the CE mark decision is "very close" but did not give any specific timeline for when the product would be approved for the European market.

The CEO added that the company is working with the FDA on a 510(k) review and does not anticipate any delays. However, the agency has been forced to prioritize COVID-19 work amid surges over the last two years, which has delayed a return to normal and pushed back product review timelines. For example, Insulet's Omnipod 5 insulin pump was originally expected to be cleared and launched in the first half of 2021, but it was not cleared until late January.

William Blair analysts projected an FDA decision in the first half of 2022 and wrote that Dexcom's current strategic investments will help the product's eventual U.S. launch.

"While awaiting approval, the company continues to invest in market development, commercialization, and manufacturing scale effort, which can help the company quickly ramp G7 adoption once approved," the analysts wrote. "In the U.S., we believe G7 can be a major catalyst by not only spurring patient demand for its new and improved form factor, but increasing PCP utilization of G7 given its more simplistic disposable design, coupled with advanced software features that can help with patient management."

Amid the pandemic challenges and regulatory delays, Dexcom's stock price has dropped over the last several months. After peaking over the last year at roughly $651 in November, the stock has dropped by 32%. Dexcom's stock was down by nearly 2% when the market opened Friday.

SVB Leerink analysts remained bullish on Dexcom in the longer term despite the combined pressure of COVID-19 protocols, labor shortages and some challenges from switching to the pharmacy channel.

"Based on the regular work we do in the CGM space, we do not think this signals any slowing adoption momentum, and we remain bullish on the market opportunity for all players within the space," the analysts wrote.

While acknowledging that COVID-19 protocols slowed new patient additions, Sylvain reminded investors that the company nearly had a record number of additions last quarter.

Diabetes tech adoption, for both CGMs and insulin pumps, is projected to keep growing over the next several years. And Wall Street believes that users overall will grow as new products like Dexcom's G7, Insulet's Omnipod 5 and Abbott Laboratories' FreeStyle Libre 3 CGM hit the market or expand.

Abbott, Dexcom's key rival, has reported strong success for its Libre products. In January, CEO Robert Ford said that Libre CGMs brought in $3.7 billion in sales last year, representing growth of over 35%. The company projected another year of $1 billion sales growth for 2022.

Overall, Dexcom brought in roughly $2.5 billion in revenue last year, growth of 27% compared to the prior year. The company had a successful year in international markets, with revenues growing year over year by 44% compared to 33% in 2020, but U.S. revenue growth slowed. Domestic revenue grew year over year by 23% in 2021, compared to 30% in 2020.

Sayer has highlighted the importance of international markets going forward, telling MedTech Dive in January that Dexcom is transitioning to a more international company.