Dexcom (NSDQ:DXCM) shares fell today after the company issued conservative guidance for its expected revenue in 2018. The company also posted Street-beating preliminary results for its fourth quarter and full-year 2017 revenues.
The company is facing competition in the new year after the FDA approval of Abbott‘s (NYSE:ABT) continuous glucose monitor, the FreeStyle Libre. But chief executive Kevin Sayer points to the company’s many partnerships and growing sales numbers as evidence that the CGM-maker is doing just fine.
“We are very pleased with our full year performance, with momentum building as worldwide revenue growth accelerated in the fourth quarter. Dexcom also accomplished a number of key milestones during 2017, including a signficiant increase in international sales, our initial Medicare launch and the initiation and expansion of a number of key strategic partnerships,” Sayer said in prepared remarks.
Dexcom reported that it plans to reel in $218 million in revenue for the fourth quarter of 2017, up 27% compared to the same period last year. For the full year, the company anticipates posting $715 million in sales, up 25% over 2016.
Looking ahead to 2018, Dexcom said it expects to see total sales between $830 million and $850 million – below the consensus prediction at $853 million. The company noted that its year-over-year growth is largely due to the expansion of its global user base, international sales and strength in sensor volumes.
“Our near-term outlook contemplates a number of variables in 2018, including our no-calibration G6 launch and continued expansion into the Medicare and OUS markets, offset by the departure of one of our pump partners and the impact of ongoing competition,” Sayer said. “We are confident in our team’s ability to execute in the coming quarters and remain bullish on our growth prospects as we advance our priorities.”
“After speaking with the management, it is our sense that the 4Q outperformance is largely driven by commercial patients, as the U.S. delivered the strongest commercial growth and international grew over 50%. While ABT’s Libre drives awareness on CGMs, management noted that doctors are writing record high prescriptions for DXCM as they are very well educated on G5 products. By and large, this datapoint supports our view that Libre is likely to expand the market more than drive patient switches,” Leerink analysts Danielle Antalffy and Rebecca Wang wrote in a note to investors.
“Despite the 4Q beat, DXCM today provided a below consensus FY18 guidance, with total revenue in the range of $830M to $850M (implying 16.1% – 18.9% y/y growth) vs. consensus at $853M. Management commentary suggested that they expect to grow commercial net new patient adds in 2018, adding 50K-60K to the installed base. As management factored in some pricing pressure, we’re inclined to think the FY18 guidance is not only very achievable but likely very beatable, with very limited downside risk.”
DXCM shares were trading at $53.44 apiece today in mid-afternoon activity, down -3.6%.
