All right, good afternoon. I'm Larry Biegelsen, the medical device analyst at Wells Fargo, and it's my pleasure to host this session with Dexcom. With us, we have Jeremy Sylvain, the CFO. In terms of format, it's going to be a fireside chat. If anybody has a question, please raise your hand. We'll come around with the mic. Jeremy, thanks so much for being here.
Thanks for having us, Larry. Appreciate it.
Yeah. So obviously, with GLP-1s continue to be top of mind for a lot of investors. You guys put out some interesting data yesterday. I'd love to, for people who haven't seen it, and even people who have, hear from you kind of what, you know, the highlights are from that data and what you think the relevance is.
Yeah. Yeah. So we get a lot of questions, you know, what is the impact of GLP-1s on therapy? And we've consistently talked about it as really more of, I'll call it companion, or what I would say is something that you expect to be prescribed in conjunction with the GLP-1. So what we did is we took third-party data, and this is data direct from Optum's pharmacy base. And so this would cover Medicare Advantage as well as their commercial lines. And we looked at something very simple. If you're prescribing a GLP-1, what percentage of those folks were on CGM before, and what percentage were on after? And ultimately, what you're seeing really across the board is an increase in prescriptions for CGM as a result of GLP-1 therapy being prescribed.
I think it really lends to the idea, these are not an or story. It's not or this or that. It's really an and, and they really target two different things. You know, one's really targeted at understanding your body, understanding, you know, behavioral remedies and change as being the CGM, and other is related to, obviously, the impact of the drug and how it helps the pancreas produce more insulin. The two go really hand in hand as you think behavioral lifestyle changes as well as GLP-1s. This is third-party data. I think it's really helpful in demonstrating that they work really well together, and we really want to make sure that folks understand the and, not the or.
And so why would CGM utilization go up after a GLP-1?
You know, a lot of folks are looking for ways to maximize therapy. A lot of physicians, first off, they want you to be on a CGM to understand the impact. In the user guide, it asks you to titrate based on glucose levels over a 30-day period, which would be in conjunction with a CGM usage. And then ultimately, when we survey physicians, 80% say the only way they feel comfortable taking someone off of a GLP-1 and retaining the benefits is if they're on a CGM. And so you're really seeing a lot of the CGM built into the ecosystem of effective GLP-1 usage, and we expect that to continue.
It was almost counterintuitive. It looked like the CGM utilization went up as you went, moved away from visualizing, visualizing the chart, away from intensive, Type 2 intensive insulin to insulin, basal insulin and, and non-insulin patients. Why would it go up as you kind of go down the spectrum, if you will?
Yeah, you know, it's a great point. It's something we saw, and we scratched our head a bit. I think it's a little bit of law of big numbers. I think the ones you see at the top, there's already some larger numbers in there, hence the multiplication is a little bit different. But I think what you're seeing is very powerful in the fact that these, you know, the prescription of GLP-1s, regardless of your pathology type, you know, CGM prescribed in conjunction with it is really, really taking hold. And it's, again, behaviorally, something we would expect to take place going forward.
And one thing that the data didn't show is if people... How the frequency of use. Are people using it every day?
Yeah.
Are people using it intermittently? Do you have any insight into that?
Yeah. So, you know, it's going to take a little bit more time to get all of the insights. But the one thing we did, because we asked the same question, right? What does this mean for wear patterns? I s we looked at our Type 2 data and our attrition utilization in our patient population over the past couple of years, and we've seen no changes in our attrition and utilization. So what we're seeing is folks staying on therapy as these have entered into our base. So really positive feedback, really positive data. I think it gives us a lot of confidence in this space going forward.
Is there any other data? I know, you know... Well, are there any other data sets that you guys are trying to pull together that you think would be helpful to investors?
We are, and I think, you know, we have access to a lot of data, script data, you know, quite frankly, different cuts from different payers. So we'll look at that. Ultimately, whether it's ours to publish or not, that's something I think we're going to have to work on. But we know it's top of mind for investors. We thought this one from a third-party data set, you know, not our data, would be really, really helpful. Obviously, Optum's about 18%-20% of the covered lives in the United States, so it's a good subset of our population. We thought this would be a good one. We have more data, and certainly there's others working on that data. I think there might be more to be said about this in the future, but for the meantime, we thought this was a great start.
No reason to believe commercial would be different. This is Medicare, you said?
This is Medicare Advantage and commercial.
And commercial.
It's actually both. Yeah.
Got it. You know, not all GLP-1s are created equal. Did you look at kind of Wegovy and Mounjaro versus the older ones?
I think there's more work to be done. And so obviously, we have some of that data through our script data. I think we'll have to take a little bit deeper dive look on that. But I think the, the key takeaway of what we're trying to get at is... And by the way, as you move into 2022, that's a heavy Ozempic, Wegovy, you know, time period. I think those are where we'll have to take a look. The Mounjaro data is relatively new.
Yeah.
If you think of the most recent data, you know, what we published was 2022. Obviously, we have some preliminary 2023 data. We'll take a look at it, but I think we leave very confident, again, in that kind of companion therapy.
Yeah, sorry, I misspoke. Wegovy is obviously the obesity-
Right
- Brand, Ozempic, the diabetes brand.
Yep.
Thank you for that. You know, the other, so there's two concerns. There's a near-term concern.
Yep.
Which I think your data, you know, helps address, and then there's the TAM concern, that, you know, obesity is a driver of Type 2 diabetes, and as these GLP-1s proliferate, obesity rates will come down and diabetes, you know, rates will come down. What's your view of that?
Yeah. I'll at least give you our view. You know, our view is these drugs are going to be very helpful in combating obesity, and the studies all show that. I think we think that there's a real opportunity here to leverage it. Where we found it works best is in conjunction with lifestyle change. At the end of the day, we believe the CGM ultimately drives lifestyle changes. We look at physicians, and we've talked a little bit about this in the past, who have been really, really effective in applying GLP-1 therapy. They've done it in conjunction with CGM. The CGM has helped drive behavioral change, and as they started to wean folks off of GLP-1, they kept them on CGM therapy, so they understood what was happening in their body and whether they would revert back.
One of the big challenges with these drugs is as you come off of them, you've got to change your behaviors, otherwise you kind of fall back into it, and the CGM does an incredible job of doing so. So if we are effective in starting to limit obesity through these drugs, you're going to do it with these drugs in conjunction with a lifestyle change, which we can provide. So I think we feel pretty good as a change agent in this ecosystem, regardless of whether-
Right.
It's obesity or whether it's folks, unfortunately, who progress to diabetes.
I'm talking about pre, before diabetes.
I get it. I, I get it. I'm talking about, to your point, obesity and prediabetes.
Right.
Absolutely.
Okay. So is that an area you're going to pursue proactively?
It's an area that I think as you think about the start of this non-insulin product we've talked about, you know, launching next year, while that's really targeted at folks with Type 2 diabetes, it's Type 2 diabetes, not on insulin, which I think you can extrapolate that to future populations. And so absolutely, we are looking at it. We believe CGM has a part to play really in all of that. And I'd also point to some of the partnerships we have. We have quite a few partnerships, and really the more, you know, I'll say, lifestyle as well as, you know, health and wellness apps, where they're using CGM kind of on the opposite side of that to help get folks healthier. So we have those partnerships as well. So there, there's a place to play throughout the continuum of care.
Okay, that's helpful. Jeremy, your stock's been under a lot of pressure, primarily from GLP-1 concerns. Why haven't we seen, you know, Dexcom buy their senior management or the company buy back stock?
Yeah, you know, we bought back stock last year, and that was something we certainly did. We always look at it. One of the things that we are doing, and you, you'll see it now, our converts mature here pretty darn soon. And so, you know, I think what you're going to see is, we're going to be using some of that stock or that cash to take out some of the existing debt. We've already taken out the dilution associated with it. So the way we've thought about it is we really put our cash into managing that dilution. You know, if the stock trades off, we'll certainly take a look at it. It's always something top of mind. Make no mistake, we have conversations about it.
Look, if the time makes sense, we're spinning off positive cash flow. It may make sense, so we'll look at it.
All right. So I was actually going to transition away from GLP-1s unless there's some questions in the audience here on GLP-1s. I'm sure we didn't cover everything, but if not, if I don't see any hands, we're going to move on to basal adoption. Love to hear, Jeremy, from you what you're seeing with basal adoption.
Yeah. Really encouraged by it, to date, and I'll kind of reference back to our last call. You know, the PBMs and the health insurance companies have really taken basal adoption and really aggressively approved it. And so you saw 60% of commercial lives covered as of our last call for basal, and with Medicare coverage, so comes Medicare Advantage. And so now you've actually got a majority of the basal population, a significant majority of the basal population covered. And where there's coverage, we've always taken share, and you see us taking share in that space. So we feel pretty good about, one, taking share, two, driving adoption through the market. And again, record new patients in the second quarter. Part of that as a result of some of that basal.
You know, we expect to continue to do well in that market, and, you know, I think we talked about it. Our base case is 25% adoption from sub 10%. Obviously, we're incentivized to go a little faster.
The contribution this year, you're not breaking it out anymore, but I think on the Q2 call for the U.S., you said it would contribute more than 1.5% to growth?
That's right, more than 1.5% to growth. So by math, more than $50 million. Remember, this is a recurring revenue business, and so as you think about that, really nice jumping off point for future years. And again, we'll give you guys kind of an update as the year goes on around guidance and where we're going, but really bullish on that part of the business.
You know, you're in the middle of two big launches, G7 as well.
We are.
Now, how is that going?
You know, I think G7's gone really well, as we expected. I think when you start to see some of the telling points within G7, you know, over 50% of G7 users are new to Dexcom. That's a big thing, right? That's a lot of either new users who have come into CGM for the first time, but quite frankly, it's a lot of share taking. And what we see is we're taking share across Type 1, Type 2, intensive, and basal, really across the board as you look at total scripts. And so very excited about what G7's done, that form factor, that usage, that easy out-of-box and that app experience. So far, it's done really well, and, and I look forward to all the improvements we continue to make off that chassis. You know, you mentioned two launches right now.
There's another one coming at the beginning of next year, which is Dexcom ONE on G7 form factor. A lot of really good things coming out of the organization.
You know, it's about 20% of TRXs in the U.S. right now, G7. Where do you see that going over the next year or two?
... Yeah, I think it's gonna eventually get to a point where, you know, it's gonna start getting to 60, 70, 80 over time. The big linchpin is going to be really around AID transition. And then, you know, I think you're gonna see a lot of folks make that migration over, and at that point, you can really push pretty hard. You can push today, but when you talk about a payer group that has both folks connected and not connected, you have to be really mindful of that. We want people to be on the G7 platform, and so the focus is going to be moving folks over time. We believe it's a longer term. It's a better platform, longer term. It's a scalable platform.
It's a platform that over time, we can manufacture high volumes at low cost, and so it's a real interest for us to do so. And of course, we're working on 15-day in that platform, and so that's the platform ultimately we want folks to move to. Beyond that, I think, I think we're really excited about it, and I think you'll see G6 folks will move there. There'll be a point when we have to push folks over, like we had to do with the G5 to G6 transition, the flip phone kind of issue, but we'll ultimately address that when it comes.
Jeremy, if we go back, you know, before all these GLP-1 concerns, after the Q2 results, the stock, you know, was a little bit weak after you reported earnings, partly because of this whole U.S. dynamic, where people were looking at growth on a stack two-year basis, and it slowed on a stack two-year basis. And people are asking, you know, you're launching G7, you're launching basal. You know, why would we have seen, you know, growth slow on a stack two-year basis? And the IQVIA scripts are showing, you know, 50% year-over-year, you know, growth in sensors.
Yeah. You know, the way we think about it, and I disagree with the assessment, right? When you think about it, record new patients, and we were very emphatic about that. Record new patients. So we were very positive about that. And when you look at dollar volume growth, it's the largest U.S. dollar volume growth in any quarter in the history of Dexcom. One of the challenges, of course, is a new patient in the quarter isn't worth a new patient from last quarter, right? And so you stack these new patient adds on top of each other, and it's a recurring revenue business, quite frankly, is a pretty darn large base at this point. And so I think, we were really happy with the quarter, really happy with the performance on new patients.
We were really happy with the performance on existing patients. So I understand the concerns. I look at it and say, "What a wonderful quarter, sequentially solid, year-over-year dollar growth solid, a re-acceleration of revenue," and the lifeblood of future growth is new patients and another record new patients. So, I get it. People are looking at stacks and looking at reasons. I, I would say look at the positive that took place, and I think we left the quarter thinking very positively of it.
Well, certainly international was very strong, and we'll-
As well.
-Get there. When I look at... I feel like, you know, we publish every week on the IQVIA data, still looks good.
Mm-hmm.
We show your rolling four-week year-over-year growth. It's hovering around 50%, maybe even trending up a bit. I mean, it looks like the momentum has continued, at least based on the script data. Any reaction?
You know, I'll. I know you publish it. It's probably for you to say that, and I think you just said it, so nice statement. I think the way I would look at it is, record new patients, and we see no reason why we wouldn't continue to do well and take share. We've been waiting for G7 for a long time. It's met the expectations. We've been waiting for coverage for a long time. It's met our expectations, and so we're very excited about it and, you know, I'll let you comment on the IQVIA data, but I think you're excited about it.
Yeah, it looks good.
Okay.
You talked about enhancements to G7. What are some of the enhancements you're making?
Yeah. So I think what you'll find, and by the way, you'll, you won't see a lot of them public, you know, announced publicly, but I think we've already launched five or six versions of the app. And so, you know, some of the early concerns, "Well, hey, what's going on with the Bluetooth," for example? Well, we introduced, like, something called Fast Reconnect, and so it just reconnects faster. It's a simple software update, and so, so these are some of the tweaks you generally find. It's interesting. We launched G7. We expected to have some of this. If you look at kind of some of the complaint rates on G7, it was right in line with G6 when we launched G6. So these are the things we always work on. It's really part and parcel for what we do post-launch.
These are all things that we know are going to really excite people. We don't need to announce them, but they're going to come out, and you're going to find that the experience continues to get better and better. And I think what's really exciting for us internally at Dexcom is I think we launched one software update in 2022. Again, we've already launched five or six here in 2023. Expect that cadence with all of these rollouts, including, for example, the snooze feature that we removed when the FDA required it to pull it out. That's already been rolled into new feature apps. Things like those, enhancements, they're out there and available for folks to use today.
Better adhesion?
510(k) approval on adhesion, so that will be cutting into line two soon.
Okay. International was really the standout in the second quarter, 40% organic growth, up from 27 in the first quarter. What drove the acceleration? And, you know, Jeremy, we've talked about this before. Historically, it's been kind of lumpy, because of the distributor markets. Is this sustainable, this growth?
Yes. Let me talk about the growth, and then, you know, I'll answer your question with... The growth was not because of distributors, and there's no change in stocking. In fact, all of the growth was driven by direct markets. And so those direct markets where we ship directly to the end customer, there's no stocking or anything along those lines. And so what you saw was just really a lot of things that we have put in place strategically that really played out well on the quarter. A couple examples. You know, the Germany, we ultimately eliminated a lot of the restriction, or the friction there in approvals, and as a result, we got increased volume. But the one thing we took was a little bit of price. This was back in the back half of 2021 and into early 2022.
We've lapped those contracts, so what you're now seeing is some of that unit volume play through. In the U.K., G7 approval certainly contributed to Q1. Those patients are worth more in Q2, certainly contributed to Q2 as well, as well as the launch of Dexcom ONE on formulary through pharmacy. So that was all part of a strategic, you know, effort there. Certainly plays out similar with Spain tenders. Those tenders are now in place on Dexcom ONE in Spain, as well as additional approvals for coverage in Australia. And you're seeing all of these direct markets really contributing there, and it's all about patient growth and share taking, and we're seeing in all major markets, and we're taking share. All of that really contributed on the quarter.
So yes, I think it's sustainable, whether it's at 40 or something, you know, a little bit less than that, you know, we'll let our guidance speak to that. But ultimately, that's a sustainable book of business. This is our direct business.
Okay. And how are you thinking about? That's good to hear. How are you thinking about the second half of the year? Yeah, without splitting hairs, it looks like, you know, the implied growth for the second half of the year, eh, it's a touch lower at the midpoint than the first half. I mean, people are looking at it. You got basal, you got building momentum, G7, you know, you should have less price, you know, channel mix shift. Why would the second half look like the first half?
You know, at the midpoint, that's where it is. At the high side, it's a bit of an acceleration from the first half. So I think, you know, at the end of the day, and I get it, you know, folks will expect us to move towards the higher end here. But, you know, I, there's nothing structurally that prevents us from performing well into the back half of the year. I think the international business we expect to continue to perform well. I think the U.S. business, again, we expect to continue to perform well. What we did want to do, though, is we always want to make sure we put out a base case in there, considering we only had about two and a half months of basal when we closed up June.
So we wanted to make sure we provided that base case to folks versus getting ahead of ourselves. Don't let any of that get in the way of our bullishness on the business. I think we're very excited about the back half of the year and into 2024.
Well, that was my next question. You mentioned 2024.
Exciting.
Okay, what are some of the things you're excited about?
So first off, I think we are excited about G7 getting a full year under its belt and all the things we talked about, those general enhancements. I think those are delighters, and you're going to see them start coming out. I think folks are really going to appreciate that. I love how Dexcom ONE on a G7 form factor stacks up against our competition. And with that launch coming in next year, we're very excited about that. And then I think as we think about this non-insulin product that comes out in the back half of next year, really filing by the end of this year, you know, it really provides us an opportunity to play in the space where historically we haven't taken share, which is the non-insulin cash pay market. And that's an area where our competition has done really, really well.
We have an opportunity with what we think is a superior product, targeted for the user needs there, to go in there and take share from there as well. So it's really stacking up, in our opinion, to be another really strong year. But, you know, we'll see.
How do you want people to think about the ramp for the CGM for non-insulin users?
Yeah, you know, I think, you know, we think it's going to launch. Obviously, we're going to submit for FDA approval at the end of this year, so that's going to be in there. The timing of when it launches is in some ways going to be dependent upon that, and so we're thinking about it in the back half of the year. Like most of our business, we do think it's one of those recurring revenue businesses, and so we do think that it grows over time. I think as we get closer to it, we'll be able to give you a little bit more data around it in terms of even product specifics, price points, and all of that. But for now, what I would say is I'd expect it to be one of those ramps, kind of similar to what you're seeing in basal.
It's a base population that grows. This one might be a little bit different, just given cash pay market, but one—and so, you know, a little bit easier. You don't have to go through insurance, but one, we'll give you a little bit more of an update as time goes on.
What's embedded for pricing headwinds this year, and how—what should we expect next year?
Yeah. So, you know, as you think about last year, last year was about $200 million in the U.S., and then outside the U.S., it was about $50 million. In both the U.S. and outside the U.S., we expect those to come down. Well, we haven't given a number-
In 2023, sorry.
In 2023, correct.
Down from 2022.
From 2022. And, and you're already seeing that really playing out. And so we really hit a peak in Q4 of 2021, Q1 of 2022, the delta between unit volume and growth. You're seeing that come down over time, and we'd expect that pricing headwind, same store sales year-over-year, to come down into 2023. I'll always be mindful, make sure you carve out Dexcom ONE revenue separately.
Right.
But just pure price, most of our contracts, we don't have a ton of pure price at this point. It's really that mix shift, annualizing it, and any sort of drift you get as some folks maybe migrate to the pharmacy, some new patients migrate to the pharmacy.
Does that come down more in 2024?
The expectation is it continues to come down.
So I guess big picture, just thinking about broad strokes for 2024, any reason why growth would be slower next year than 2023?
Not going to give guidance other than just simply saying bullish there. I know you got to try, but, you know, nothing to say that we'd expect it to go the other way. Certainly bullish on the business, but not, not willing to provide guidance in terms of a growth number yet.
But nothing that would suggest it would go the other way?
No, no, no, no structural issues in the business that would give-
Such as Libre, AID integration?
Already contemplated in our long-range plans and already contemplated in this year's guidance. So I think, we've been thinking about that. Certainly, we know that it could have a potential impact, although we feel very, very confident in our AID base, as well as new patients come in, that those folks will ultimately choose Dexcom. And all the history and the capability that we've built in that connectivity, it's hard to connect. It really is. And I've seen some of— We have some incredible software engineers and some incredible folks that work on our CGM platforms. And as you start to think about all the nuances in connecting there, there's a lot to think about. I think our experience is really going to shine through here next year.
Margin, what can takes for 2024?
We expect from an operating margin perspective to keep trending towards that long-range plan. So I'd expect us to make significant steps there. Part of it will be the scaling of our business from a gross margin perspective, which again, same story as we make that trajectory from 2023 all the way to 2025. Again, we'd expect to move towards that 65%. So it's not going to be a 2025 back-end-loaded story. We think it's going to be pretty ratable.
... Got it. And it sounds like, so the non-CGM for non-insulin users, you have not submitted it yet?
We have not.
What, what still needs to be done? Because I think you've said you've completed a clinical study.
We've completed a clinical study on the G7 form factor at 15 days, and so that will, that will support—you know, that will ultimately be the baseline. What you do, though, in a filing is you have to package everything. So software, you have to, you know, user acceptance or user acceptance, I use bringing the term human factors. We have to do all of those studies and then submit them as a package. So what you want to do is make sure you do all of those, submit them as a package. Ultimately, that will form the basis for, you know, what goes to the FDA.
How are you thinking about bringing this product or any CGM product over the counter? Like, Abbott is, I think, going to do with Linkup.
You know, it's really going to depend on regulation. I think at the end of the day, the FDA has said, "We see, you know, CGM as a regulated device, and as of now, it requires a script." I completely understand that. We work with the agency and often have a great relationship with them. You know, there may be a time when the agency looks at it a little bit differently, and if so, we'll certainly be ready at that point. You know, I think it's something that I know that there's some interest from the FDA, ultimately longer term, in doing so, but it has to be done in a safe way. I think that's the big concern they have, and it's the right concern.
I'd hate to see somebody dose off of something that they are inappropriately doing so. But make no mistake, I mean, we are prepared if and when it has to go there. You know, I think it's something that the FDA certainly will want to talk about.
What's the clinical rationale for a non-insulin patient to use the CGM?
So a non-insulin, so you're effectively Type 2, prediabetes.
Right
... Et cetera. You know, the clinical rationale, and you can see it, it's called the Hawthorne effect, right? Someone's watching you, even if it's yourself. You know, as you're going through and monitoring the foods you eat, the exercise, the logging of all of that over time, it does a couple different things. One, it allows your physician to ultimately make good determinations as to what you need to do to change your lifestyle. Much of that revolves around diet, and so if you think about how many spikes you might have in a day, that's an important thing. But also your resting glucose level, which is a good indication of insulin resistance. And so there's a big piece of that, and that's not insulin outside, that's internal body insulin-produced resistance.
That becomes a big part of ultimately your regimen, your food, your diet, and maybe most importantly, then your exercise that needs to come with it. So as you wear it and you glean insights around your body, you can then change behavior as needed associated with it. You can also use it in combination with medication. And so ultimately, if the medication you're taking, instead of prescribing four medications and coming back a year later and taking an A1C, you can see in real time as folks are moving up or down on dosing, you can see how that ultimately plays out. You can really tailor medicine much more to the person. And as you think about Share, Follow, you can share that information in real time with your physician as needed. Those all become really important parts of it.
Mentally and behaviorally, it changes the way people do react. So while this information is all important, mentally, it as when you know this is happening, you rethink the cookie, or you might get up and go for a walk. I have plenty of personal experiences in my family of folks that wear CGM that have just literally got up and walked around the block and come back. Didn't know where they went. It was because they saw their glucose spiking, and it ultimately changed their behavior. Never would have done that before.
You've talked about this product being cash pay. Reimbursed eventually, I think, but initially cash pay.
Mm-hmm.
Your Abbott is doing well there with Libre.
Yeah.
But they have a cash, a co-pay, like, assistance program, where it's like a pay down and, you know-
Yeah
... It's the RelayHealth.
Yep.
You know, it looks like it's covered, but you know.
Yeah.
How are you guys gonna compete if you don't utilize such a program?
So there's a co-pay. So the way... I mean, effectively, you can do the same thing. It, it's really how you adjudicate the product. And if you adjudicate it through the pharmacy, effectively what they're saying is, and they're saying a co-pay pay down, they're just paying down their list price down to what they want the end user to be.
Right. Will you do something?
Absolutely. We can, we can look at that, absolutely. We're gonna make sure-
Because if you don't, then you'll be at a disadvantage.
Correct.
I think.
We're gonna make sure that this product is interesting from both a product feature perspective, but also an access perspective. So we'll get to the price here when our commercial team is comfortable launching it. But make no mistake, we're not gonna make this unaccessible.
Okay. All right. That's good to hear. On the next gen, G series-
Mm-hmm
... So you're starting a trial, I think, by the end of this year. What, what are the key updates here? Not in, not in terms of timelines, but the benefits of this product.
Yeah. So the benefits of this one, and we're really focusing on, it's extended life, and so, you know, this is one I think Kevin referenced, 15 days and beyond. I think there's an opportunity to even go beyond that. And it's higher performance throughout the period, and so there's an opportunity to even reduce things like MARD or otherwise, and reduce sensor failure. So when you think about all those things together, there's a COGS benefit associated with that. There's a user performance benefit associated with that. Whether or not that's embedded into G7 as a kind of a product enhancement on G7 or a new product, that's the, you know, that's really more of a marketing decision on how we ultimately do that.
But the technology that we're putting in place, the plan is to start a clinical trial on that by the end of this year. A very interesting novel technologies.
Well, the name we've been kind of colloquially-
Yeah
... Colloquially calling it G7 Plus.
Yeah.
Um.
We'll come up with something snappy.
Okay. And the 15-day wear, I mean, obviously, we talked about it at the analyst meeting. You're going in the 15-day wear on the non-insulin product first. There must be some hurdles to get it onto the G7 product, because that's your core.
Yeah.
Have you addressed where you are in addressing those issues on the core G7 series?
Yeah. So to give you a little comfort, the clinical trial we ran to get to 15-day was on G7. Start there, because that's really helpful in knowing we can get there on G7, and the technology is already there. The question is then going to be survivability embedded in that. One of those things in getting to survivability is, and you saw it was approved in the 510(k), updated patch. So that's one reason to do so. The big driver is just really sensor survival rate. What we want to do is make sure that it lasts the full 15 days for folks that have glucose levels that move. What you'll find is, if someone's taking insulin and their glucose levels move, generally, what you'll find is your intensive insulin user.
It moves enough where it can ultimately take the ICGM as it gets a little loose, and the ICGM will turn it off and say, "Look, this might be a sensor failure." Generally, it's not. It's just a loosening on, and so you can change that through algorithm changes and patch adhesion. So we're working on both of those things. It's not one of those things where it's a long way off, Larry. I think the technology is already there. It's really, how do we extend that sensor life? It's really important for us as we launch that into a space where people have come to rely on us for sensor life, meaning the advertised amount.
That's helpful. You know, Abbott seems pretty excited, and endocrinologists as well, about a dual, you know, glucose ketone monitor, especially for Type 1 patients.
Yeah.
I feel like you guys have been, you know, skeptical.
You know, we always start with the problem you're trying to solve. You know, what you find in a lot of cases where you have somebody on Type 1 that's got their glucose in control is DKA is less of an issue. In fact, we've seen in a lot of the studies we've done is DKA events go to zero. And so, you know, while there's an interesting marketing claim there, the reality is we look to solve problems. And I think some of the other analytes that we're looking to put together actually do solve problems. And so while we're not willing to release what those are now, we are working on other analytes where they do solve issues. That's maybe more appropriate for us, and that's ultimately what we're looking at.
What are some of these other analytes?
Well, at a future date, we'll let you know.
So you don't think there's a high unmet clinical need for a ketone monitor, a dual glucose ketone monitor for Type 1?
You know, the biggest issue you find with Type 1s are folks that aren't on sensors yet. That's when you find, you know-
Right
... Where the ketoacidosis takes place. And so once folks are on a sensor and they're in control, you generally find that you don't see a lot of it. In fact, again, like I said, our studies show it goes to zero.
Some of the docs, they want to be able to prescribe an SGLT2 inhibitor to a Type 1 patient.
Yeah.
You think that's a small minority of doctors?
It is, yeah. It's a small minority, and I think, at the end of the day, again, it's a, it's a very small case. I, I understand the question and the comment. But again, I, I think we still think about larger problems to solve markets, and I think we're solving those in a different way. We've just gone a different path.
Dexcom ONE on the G7 platform seems like a pretty good catalyst for you guys next year. How are you thinking about that ramp?
Yeah, look, I-- we're really excited. I mean, it's a product I'm very excited about. It's not too often... You know, we've always prided ourselves on accuracy and, you know, having an app and a connectivity experience that's interesting. You know, the one thing we haven't had is a form factor advantage, which this will have against Libre 2, where we compete head-to-head. And so we're really excited about how this stacks up. I think it provides all of the form factor features of a G7, obviously, in the package of a Dexcom ONE, which is really more targeted to those users. Those users aren't on pumps.
Right.
They're generally on, you know, MDI or otherwise. And so it's really targeted for them. Really exciting. I'm very excited about it. I know our international team is really excited about getting that out into the market.
How about head-to-head versus Libre 3? I understand versus Libre 2-
Yeah
... But how about versus Libre 3?
So generally, Libre 3 competes against G7. It may, you know, that's the categories we're in, and G7 comes with all the connectivity and the form and all the features that we offer as part of that. And so I, you know, obviously, from a form, feature, factor, perspective, we, again, we like the way those stack up as well. And so two different categories of products. Again, we do like our G7, and where we have G7 competing against Libre 3, like Germany, we're taking share.
All right. Great. Well, we're out of time. Jeremy, really appreciate you being here.
Thanks for having us, Larry. Appreciate it, everybody. Thank you for your time.