A recent class action lawsuit brought G7 into the spotlight, demanding a jury trial for claims that Dexcom’s representations for G7 were false, misleading, and deceptive to consumers.
The lawsuit says G7 places users at risk of severe hypoglycemia, hyperglycemia, seizure, coma, or death due to its design. It also alleges that software defects caused inaccurate blood glucose readings and suppressed, delayed or failed alerts. Additionally, users claim the CGM failed to last the intended 10-day wear period as advertised at the time.
FDA recalls in June and September of this year are referenced in the lawsuit. The agency labeled both Class I, the most serious kind. These recalls came just months after the company faced an FDA warning letter as well.
On the company’s third-quarter earnings call, interim CEO (and CEO-designate in the new year) Jake Leach and EVP, CFO and Chief Accounting Officer Jereme Sylvain outlined the issues identified by G7 users and shared more information on Dexcom’s future.
DXCM shares were down more than 14%, to $58.62 apiece in morning trading today.
(See the full Dexcom Q3 2025 earnings results here.)
(And want to learn Dexcom’s share of the CGM market — and how it’s expected to grow in the coming years? Buy our extensive Medtech Market Intelligence Report covering CGMs.)
“We feel really good about the quality of the sensors that we’re producing, both from accuracy, reliability and also addressing those deployment challenges that we ran into at the beginning of the year,” Leach said. “Our team has learned a tremendous amount about those and been able to really solve them in the factory. We’re feeling great about the product. I’ve actually been out in the field recently talking to customers, spending quite a bit of time with both prescribers and those using our products and really listening and making sure that we’re addressing all their concerns and understanding what they’re experiencing. I am hearing from all of them that things have improved since those deployment challenges we experienced in the front half of the year. We feel really good about where we’re headed.”
What was the source of the CGM issues at hand?
Dexcom’s June recall related to potential issues with the receiver component for certain CGMs. The reason centered around an error that may cause the receiver speaker to lose contact with the printed circuit board. FDA classified the cause as a “nonconforming material/component.”
In September, the FDA said Dexcom told customers that it identified a design error in app versions. The company said the error leads to a missed “Sensor Failed” alert when the sensor’s transmitter encounters a hardware/firmware failure.
On the earnings call, Sylvain answered BTIG analyst Marie Thibault’s question about the G7 issue. She said it sounded like the complaints related to materials around deployment, specifically with the inserter. Additionally, Thibault asked if this can be “put in the rearview going into 2026” ahead of Dexcom’s 15-day sensor rollout.
“It’s how the needle ultimately drops off the sensor into the skin,” Sylvain said. “I think you can expect to see that really playing out, and we’re expecting some of that to dissipate here into Q4. When you look at the underlying standard performance and the standard costs and margin, that’s been really, really solid year-over-year.”
Leach mentioned efforts to address complaints around Bluetooth connectivity and adhesives along with accuracy. Sylvain said the company sees a potential opportunity with those issues fixed. He said the company expects “to be in a good position” going into 2026.
“Some work to be done here, but I think we’re putting it behind us,” Sylvain said.
Leach added that any experience for users and prescribers that fails to meet their expectations “is not good enough for us.”
“We’re always listening and we’re always making improvements,” Leach said. “Through this ongoing work, our product continues to get better. Status quo has not and will never be our guiding light. I’m confident to say that the quality of the sensors coming off our lines today is exceptional and meets our high standards and the expectations of our customers.”
Work in the field to remedy the issues as financial performance remains solid
Leach and Sylvain say Dexcom continues to address questions, with the latter saying the company is “getting out in the field and making sure folks understand what happened.”
“We are out in the field,” Leach added. That’s one of our primary communication points with customers, both prescribers and our users. We’re out there making sure they understand all the things we’ve done to address this issue.”
Leach said the company maintained a stable complaint rate over time. At the beginning of the year, it saw complaints around “out-of-box failures” increase. However, increases in rates there were offset by decreases in accuracy complaints, Bluetooth complaints and other things the company said it’s been working on.
“We fixed the issue with deployment,” Leach said. “We really do anticipate seeing those complaint rates come down overall, which has really been our goal for a while. When it comes to engaging with customers, we’re really looking at how we make sure that the message is clear on exactly what performance looks like and how much we’ve done to improve things.”
The executives noted some minor impact to new patient starts in this past quarter related to the issues. However, new starts still remained strong and came in just below record levels.
Sylvain added that the sales force at Dexcom continues to offer educational samples, while supply remains in a good position as well.
“The good news is, we’re still [seeing] hundreds of thousands of new customer starts in the U.S. and [it’s] certainly strong outside the U.S. as well,” Sylvain said. “While the quarter was impacted, [it’s] still really strong performance over the course of this quarter and [we’re] really proud of that. I’m really excited about what happens now as we’ve addressed any of these concerns out there.”
Updates on 15-day sensor launch, market opportunity
While the highly anticipated 15-day sensor remains in a limited launch with Dexcom’s “Warrior” community, a wider rollout remains on the horizon.
The company plans on shipping with channel partners “in the next couple of weeks” to begin a broader launch. A lot of work ahead of time centered around making sure the company got coverage, too, Leach said. Dexcom also continues working with insulin delivery partners on integrations to ensure a successful introduction of the new offering.
“We are incredibly excited about this product launch, and it is in the Warrior community today,” Leach said. “We’ve got a number of folks on the sensors and we’re getting great feedback both about the performance of the sensors as well as the new extended duration and the accuracy of the product.”
As the company looks to reach more customers, Sylvain says it continues to see strong performance across all type 2 diabetes markets, including insulin-intensive users. Dexcom reports “a lot” of new patients on type 2 intensive basal and non-insulin, thanks to coverage wins.
The company continues to see type 1, although it remains a smaller population with significant penetration already. Sylvain said Dexcom is not stopping when it comes to looking for new opportunities.
“Our teams are constantly looking at where we call, who we call on, which channels we market in and where folks go,” he said. We think about it a little bit differently. I often compare it to shaking a tree. Sometimes, you shake a tree, you’ve got to move to the next tree to shake it. We are doing those kinds of things as we look at where the opportunities are.
“When you look at how much coverage is out there, there are many more people with coverage than there are people that are already using CGM. There’s a lot of opportunity out there to go get.”
Dexcom also talks about future coverage hopes
Leach said that the company’s guidance for 2026 includes reimbursement coverage that it already has today amid the current landscape. Sylvain said the company expects to “point out the wins” when significant throughout the year.
“There’s always little wins here and there, but [we’ll point out] the wins that are significant,” Sylvain said. “There’s some potential big wins out there, across non-insulin, basal and even as you get into some more emerging markets. A lot of opportunities for wins, but our base case won’t include those.”
Dexcom maintains an expectation that coverage is on the way for type 2 non-intensive insulin users. Jefferies analyst Matthew Taylor suggested the timeline for that coverage remains by the end of 2026. However, he cited some chatter that the coverage could come earlier.
Leach says the company’s view remains the same regardless of when coverage may come.
“It’s not if, it’s just when this coverage is going to come,” Leach said. “The benefits for users are so clear in this population of non-insulin users as we continue to see further expansion, whether you look at it from the cost-savings perspective to a payer in the first year or you look at the results patients get.”
“Timing is hard to predict, but we’re going to be ready for it when that coverage comes.”
