Stock Market

Dexcom Pummeled After Abbott Gains A Key FDA Clearance


Dexcom (DXCM) stock toppled Monday after the Food and Drug Administration cleared Abbott Laboratories (ABT) to pair its body-worn glucose monitors with automated insulin pumps.


The move puts Abbott on equal footing with Dexcom in the diabetes market, Evercore ISI analyst Vijay Kumar said in a report. Previously, only Dexcom’s continuous glucose monitors could connect with automated insulin pumps. Now, Abbott’s Freestyle Libre has joined the mix. And, importantly, Freestyle Libre costs less than Dexcom’s G6 and G7 devices, Kumar said.

This “raises the question whether Libre could get a preferential formulary placement going forward,” he said. “Formulary placements can have an impact on patient out-of-pocket payments. A preferential tiering for Libre could position it for better share gains in the larger type 2 market.”

In midday action on the stock market today, Dexcom stock skidded 7.9% to 113.21. Abbott stock fell 0.2% to 104.20.

Dexcom Stock Dives On Abbott’s Good News

Specifically, the FDA cleared Abbott’s Freestyle Libre 2 and Freestyle Libre 3 continuous glucose monitors, or CGMs, for pairing with automated insulin delivery systems. The devices are now allowed in children as young as age 2, for use by pregnant women and for up to 15 days at a time.

“Our goal is to make diabetes care as easy as possible,” Jared Watkin, senior vice president for Abbott’s diabetes care, said in a written statement.

Evercore’s Kumar noted the Abbott devices were already cleared in the U.S. But Abbott had to run an additional study to prove they could be paired with automated insulin pumps.

“Given the timing of FDA clearances, the Street had expected an (automated insulin delivery) clearance of Libre 2 first, with Libre 3 potentially being in the second half of 2023,” he said. “Libre 3 getting an (automated insulin delivery) clearance along with Libre 2 is ahead of Street expectations and is a positive.”

He kept his outperform rating and 114 price target on Abbott stock.

Highly Rated Medical Stock

The news sent Dexcom stock falling close to its 50-day moving average, according to Shares are consolidating with a buy point at 125.65.

Dexcom shares also have a strong IBD Relative Strength Rating of 93. This puts them in the top 7% of all stocks in terms of 12-month performance. The Composite Rating of 95 puts Dexcom stock among the leading 5% when it comes to technical and fundamental measures.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.


BridgeBio Soars And Breaks Out After Smashing Expectations In A Dwarfism Study

Dexcom Nears Breakout On A Surprise Medicare Decision For Its Devices

Want More IBD Insights? Subscribe To Our Investing Podcast!

Find Today’s Best Growth Stocks To Watch With IBD 50

Profit From Short-Term Trends With SwingTrader


Share this news on your Fb,Twitter and Whatsapp

File source

Times News Network:Latest News Headlines
Times News Network||Health||

Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button