THE HEDGEYE EDGE
Hedgeye’s Health Care team utilizes app downloads to track medical claims for interpretation of continuous glucose monitor (CGM) data. App download data is a useful indication of relative share. While we are not able to forecast patient counts using this data, our team pairs the conclusions from our app download data with commercial claims data in order to evaluate the adoption trend for continuous glucose monitoring.
This claims data for the physician interpretation of CGM at the time of the patient’s visit appears to be a reliable tool for forecasting quarterly US revenue. The caveat to the claims data we are tracking is the inability to differentiate between Dexcom’s G6 (DXCM) and Abbott’s Freestyle Libre (ABT). Our team’s solution is the use of an adjustment factor which inflates more recent claim counts to account for the lag between patient visit and the filing of a claim, as well as, the lack of Medicare claims data in the underlying source.
The market’s recent rotation away from momentum and negative reaction to Dexcom’s management commentary on tougher comparisons through 1Q20 are not the end of the company’s woes. The app downloads continue to show G6 and Libre splitting the market evenly.
While this stalemate alone would not provide enough of an explanation for DXCM’s decline, the data has shown a sequential step down in the pace of download activity for both systems in the last several weeks. Given that this data is produced on a more frequent basis, our team can better estimate the quarter before it is released.
Both the claims data and app download data suggest growth has peaked and is decelerating into increasingly difficult comparisons that peak in the first quarter. The results from our analysis, as well as, the recent performance of the stock continues to corroborate our team’s active short position on Dexcom. Nevertheless, our team will continue to update these data sets as new information becomes available and share our findings going forward.
ONE-YEAR TRAILING CHART
