The "high" and "lows" of the constant glucose monitoring markets


Over the years, patients with diabetes have seen a tremendous improvement in the devices they use to help manage their diabetes. Today, patients using insulin pump therapy can now choose from several “smart pumps”. Blood glucose monitoring, while still a chore, has been made less painful with the advent of alternate site testing systems. Insulin injection systems have also improved with the increasing popularity of insulin pens. In addition, needle technology has reached a point where injecting insulin is actually less painful than blood sugar testing.

Recently two systems have come to market which should take diabetes management to the next level. The Guardian RT from Medtronic (NYSE:MDT) and Dexcom’s (NASDAQ:DXCM) STS are part of new generation of devices that monitor glucose levels on a continuous basis. Abbott (NYSE:ABT) also has device called the Navigator which is awaiting Food and Drug Administration (FDA) approval. Unlike a href=&quo../diabetes/information/blood_sugar_management/testing/blood-sugar-testing.html" title="conventional monitors">conventional monitors, these systems provide users with as many as 288 glucose readings a day.

Although only recently approved, early field reports are encouraging. While not approved as a replacement to conventional monitors, continuous monitors have provided users with valuable information. Armed with this information, patients are gaining a better understanding of their glucose trends and how factors such as food intake and exercise affect levels. Several users have reported that they been able to make adjustments to their daily treatment regimen which has resulted in greater control.

Being new on the market, the systems do have some issues, not the least of which is cost. Sensors, which are changed every three days, cost $35 a piece and are not currently covered by insurers. It’s possible for a user to spend upwards of $4,000 per year just for sensors. An expensive proposition, especially when the cost comes directly out of the user’s pocket. While some believe these systems will eventually receive reimbursement, most experts don’t see this coming for another two or three years.

Given the epidemic growth rate of diabetes and the potential for continuous monitoring to improve outcomes, it’s not surprising that many have given thought to investing in the companies that make continuous monitors. Based on past experience, this isn’t a bad idea. Some recall that Medtronic purchased MiniMed for over $4 billion, Abbott purchased Therasense for $1 billion, Johnson and Johnson (NYSE:JNJ) recently bought insulin maker Animas for over $500 million and purchased Inverness Medical for $1.2 billion. All of these transactions resulted in some very nice profits for shareholders of the company being acquired.

Based on the size of Medtronic and Abbott, it’s unlikely either company would be acquired. However Dexcom is another story. Currently the company has the only continuous monitoring system which is not aligned with either an insulin pump or blood glucose monitoring company. Many analysts have speculated that, due to the size and complexity of this market, Dexcom too will eventually be acquired.

However before everyone races to buy shares of Dexcom, it’s important to look some other notable examples of medical device companies involved in diabetes. Some may recall Cygnus, the makers of the GlucoWatch, once considered a promising investment opportunity only to fall on hard times. Or how about. Amira who developed the AtLast blood glucose monitor. Many expected the AtLast to revolutionize glucose monitoring yet just as the GlucoWatch failed to live up to expectations, Amira also fell on hard times. And who could forget about the many attempts at developing a non or minimally invasive glucose monitor that failed to make it to market and cost investors millions.

This is not to say that Dexcom isn’t a good investment but rather that before investing, one must be careful. For every success story like Therasense, there are numerous examples where investors lost their hard earned money. Too often, investors get caught up in a products potential and forget about the complex dynamics of the diabetes marketplace. Just as controlling diabetes can be a difficult process with its ups and downs, investing in the many companies involved in the diabetes market can be equally difficult.

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Diabetic Investor

NOTE: The information is not intended to be a replacement or substitute for consultation with a qualified medical professional or for professional medical advice related to diabetes or another medical condition. Please contact your physician or medical professional with any questions and concerns about your medical condition.

Last Modified Date: November 28, 2012

All content on is created and reviewed in compliance with our editorial policy.

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by Brenda Bell
As I mentioned in an earlier post, one of the benefits that made it cost-effective for me to go with the real healthcare (HSA) plan rather than the phony (HRA) plan is that my company is now covering "preventative" medicines at $0 copay. The formulary for these, as stated by CVS/Caremark (my pharmacy benefits provider), covers all test strips, lancets, and control solutions. I dutifully get my doctor to write up prescriptions for all of my testing needs, submit...
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