A California judge has dismissed several claims against Dexcom (Nasdaq:DXCM) officials related to alleged misrepresentation of sales efforts.
Judge Robert S. Huie of the Southern District of California ruled in the consolidated action, which combines three securities class actions against the San Diego-based continuous glucose monitor (CGM) maker. Huie’s judgment denied Dexcom’s motion to dismiss two statements in the overall complaint, granting the dismissal of the remaining 12.
The original complaints relate to the company’s sales performance after the release of its second-quarter financial results in 2024. Dexcom shares fell more than 40% over the course of about a day after the company’s quarterly performance failed to “meet our high standards,” Chair and CEO Kevin Sayer said at the time.
Dexcom that day lowered its 2024 sales guidance from between $4.2 billion and $4.35 billion to between $4 billion and $4.05 billion.
In the consolidated suit, investors who purchased Dexcom securities between Jan. 8, 2024, and July 25, 2025, seek to recover damages. They claimed Dexcom violated federal security laws by providing material information regarding its expected revenue for 2024. According to one of the initial complaints, investors heard statements regarding the company’s “ability to capitalize on its growth potential.”
“Defendants provided these overwhelmingly positive statements to investors while, at the same time, disseminating materially false and misleading statements and/or concealing material adverse facts concerning the true state of Dexcom’s salesforce; notably, that it was not truly equipped to execute on the company’s perceived growth potential. Such statements absent these material facts caused plaintiff and other shareholders to purchase Dexcom’s securities at artificially inflated prices,” the complaint reads.
Which claims remain in play against Dexcom?
Huie determined that two statements in the consolidated suit — labeled “Statement J” and “Statement K” — were adequately alleged to be false by the plaintiffs in the case.
The first, made by CFO Jereme Sylvain, dated back to Feb. 8, 2024, conference call discussing the company’s Q4 2023 results. Sylvain said that Dexcom was “taking share” in the market with its G7 CGM and reimbursement coverage for basal insulin users.
In the complaint, the plaintiff didn’t identify which portions of Sylvain’s overall statement were misleading and why. The court narrowed focus on a statement related to prescription data and “taking share.”
According to the court filing, Abbott (Dexcom’s main CGM market competitor) secured seven out of 10 prescriptions in the type 2 basal market in January 2024. That remained unchanged in April 2024, the court determined. For those reasons, the court says the plaintiffs plausibly alleged that Dexcom failed to take share in that market.
Statement K, again made by Sylvain, included claims that “a good chunk” of Dexcom’s new patients came through the “basal channel.” Additionally, Sylvain said Dexcom knew it was “taking share” in that category and that the company “typically” won when it had coverage and competed head-to-head.
The court determined that these statements proved “too vague and subjective to be actionable.” Again, given the claim about winning in the basal market, the court found that the allegations plausibly suggest the statement “was false or misleading when made.”
