Dexcom, Inc. · NASDAQ:DXCM
Dexcom — Investor Day (June 2023)
74 slides from Dexcom's investor day presentation, Jun 23, 2023
Slide 1: Dexcom 2023 Investor Day
Dexcom 2023 Investor Day June 2023 CONFIDENTIAL – DO NOT DISTRIBUTE
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains “forward” looking statements that are based on our management’s beliefs and assumptions and on information currently available to management. We intend for such forward-looking statements to be covered by the safe harbor provisions for forward-looking
Slide 3: Kevin Sayer
Kevin Sayer Chairman, President and CEO CONFIDENTIAL – DO NOT DISTRIBUTE
Slide 4: Dexcom Investor Day Agenda
Dexcom Investor Day Agenda Chairman, President and CEO 01 Kevin Sayer Chief Operating Officer 02 Jake Leach Chief Commercial Officer 03 Teri Lawver Chief Financial Officer 04 Jereme Sylvain 4
Slide 5: We are just getting started!
Dexcom Investor Day 2023: We are just getting started! Market access is expanding 01 faster than ever A new sensing experience is 02 coming 03 We are updating our 2025 LRP with upside CONFIDENTIAL – DO NOT DISTRIBUTE 5
Slide 6: Pioneering the CGM industry
Pioneering the CGM industry First hypo alert setting to increase user safety First approval of dedicated app to share glucose data with a caregiver First to deliver single-digit MARD accuracy levels First approval to send glucose data directly to smartphone First to enable users to monitor glucose l
Slide 7: Customer-focused innovation designed to solve real problems
Customer-focused innovation designed to solve real problems Empower customers, clinicians, and caregivers Reduce diabetes distress Enable remote follow Power insulin delivery Simplify clinical workflow Eliminate fingersticks Protect against hypo / DKA CONFIDENTIAL – DO NOT DISTRIBUTE 7
Slide 8: Dexcom is the most connected CGM brand
Dexcom is the most connected CGM brand1 CUSTOMERS Automated Connected Digital Insulin Delivery Pen Health Apps LOVED ONES HEALTHCARE PROVIDERS 1. Dexcom, data on file, 2023. CONFIDENTIAL – DO NOT DISTRIBUTE 8
Slide 9: Empowering people to take control of health
OUR MISSION Empowering people to take control of health CONFIDENTIAL – DO NOT DISTRIBUTE 9
Slide 10: How can we broaden our impact?
Demonstrate economic outcomes Glucose as central to broader health Customized product experiences How can we broaden our impact? CONFIDENTIAL – DO NOT DISTRIBUTE 10
Slide 11: Tailored software experiences address different needs for glucose control
Tailored software experiences address different needs for glucose control Insulin use & hypo risk Gestational diabetes & (IIT, T2 basal, T2 hypo risk) pregnancy Non-insulin (type 2, prediabetes, and beyond) Inpatient care & remote monitoring CONFIDENTIAL – DO NOT DISTRIBUTE 11
Slide 12: Demonstrating glucose as central to cardio-metabolic health
Demonstrating glucose as central to cardio-metabolic health Weight loss Cholesterol & Triglycerides Blood pressure Kidney health Liver health CONFIDENTIAL – DO NOT DISTRIBUTE 12
Slide 13: Addressing the growing cost crisis in diabetes
Addressing the growing cost crisis in diabetes US annual healthcare cost per person with diabetes1 $25,000 People diagnosed with $20,000 ~$20,000 diabetes have ~2.3x higher $16,750 expenses than those without1 $15,000 $13,700 $11,750 $10,000 $5,000 More than 1 in 4 US health care dollars are spent o
Slide 14: Dexcom can be part of the solution
Dexcom can be part of the solution US average annual expense $16,750 per person with diabetes1 Prescription Inpatient care: Outpatient care: Other: medications & insulin: $6,100 $4,300 $5,350 $1,000 36% of total 26% of total 32% of total 6% of total Dexcom CGM has demonstrated: 35% reduction in inpa
Slide 15: We have a long runway in our US market opportunity
We have a long runway in our US market opportunity Intensive Insulin1 Type 2 Basal-Only1 Type 2 Non-Insulin1 4.2M people 3M people >28M people Problematic hypoglycemia Type 1 Type 2 Basal Oral / Injectable medications Type 2 IIT Diet / Exercise Gestational2 Prediabetes1 Hospital3 ~400K births / year
Slide 16: We are early in our international market opportunity
We are early in our international market opportunity Taking international market share Since Investor Day 2020: Significantly expanded reimbursed access Built greater direct presence Entered new markets Formed strategic partnerships 16
Slide 17: Our tiered strategy in international markets is helping expand our reach
Our tiered strategy in international markets is helping expand our reach Broad Limited Tiered Reimbursement Markets Reimbursement Reimbursement G-Series G-Series Dexcom ONE Dexcom ONE • Leading Accuracy • Connected & Higher- • Simple & Accurate • E-Commerce & Connectivity Risk Populations Accessibil
Slide 18: This is our WHY
Commercial Wrap This is our WHY 18
Slide 19: Jake Leach
Jake Leach Chief Operating Officer CONFIDENTIAL – DO NOT DISTRIBUTE
Slide 20: What our product needs to accomplish
Built for scale Proven outcomes Premium performance Simple to use and engages the customer What our product needs to accomplish CONFIDENTIAL – DO NOT DISTRIBUTE 20
Slide 21: What problems are we trying to solve?
What problems are we trying to solve? Type 1 Type 2 IIT Type 2 Basal-Only & Hypo Risk Type 2 Non-Insulin Prediabetes DIRECT CUSTOMER FEEDBACK I’ve always stuck my fingers and almost gave up because it was getting too painful to finger stick. Dexcom G6 has been a life saver. Dexcom has probably saved
Slide 22: The new standard in CGM technology
is the new standard in CGM technology Most Accurate1 Incredible Simplicity Engaging 1. Dexcom, data on file, 2023. 22
Slide 23: Our differentiated CGM experience delivers outcomes
Our differentiated CGM experience delivers outcomes Predictive Delayed onset Follow Dexcom Clarity hypoglycemia alert hyperglycemia alarm 33-40% decrease in 20% decrease in rebound Reduced diabetes distress4 55% higher retention6 hypoglycemia1 hypoglycemia3 Fewer episodes of Up to 15% greater time S
Slide 24: Dexcom CGM provides exceptional safety and cost savings
Dexcom CGM provides exceptional safety and cost savings Stockport NHS Foundation Trust, Greater Manchester, Outcomes for Case Study 20 participants after transitioning from Abbott is-CGM to Dexcom CGM1 100% reduction in hospitalizations (15 to 0) Estimated cost-savings of 51% reduction in GP visits
Slide 25: Dexcom's safety and outcomes evidence is unmatched in AID
Dexcom’s safety and outcomes evidence is unmatched in AID Number of published clinical studies demonstrating AID outcomes1: 34 27 0 Dexcom CGM has powered over 1.1 million patient years on automated insulin delivery…and counting1 1. Source: Peacock et al. Diabetes Ther (2023) 14:839–855 https://doi.
Slide 26: Hypoglycemia is the greatest source of fear among insulin users
Hypoglycemia is the greatest source of fear among insulin users The largest controlled, observational COACH Study CGM outcomes study1 Prior to starting on Dexcom, at baseline there was a 21x greater incidence of severe hypoglycemia than DKA… 42 2 Severe Hypo Events DKA Events …and DKA events went to
Slide 27: Dexcom addresses the core issue of hypoglycemia
Dexcom addresses the core issue of hypoglycemia Randomized, controlled trial HypoDE Study of 158 adults1 Dexcom CGM effectiveness for individuals with severe hypoglycemia or impaired awareness of hypoglycemia: 72% reduction in hypoglycemic events 50%+ reduction in nighttime hypo events Reduced risk
Slide 28: Problematic hypoglycemia within the non-insulin type 2 population
Problematic hypoglycemia within the non-insulin type 2 population is a significant challenge in the US 4M+ 3-4M2 ~3M1 The level 2 and level 3 hypo population is at least as large as the basal population in the US…and covered by Medicare IIT Type 2 Basal Non-Insulin Hypo 1. Estimate base on third-par
Slide 29: We need to show glucose control leads to broader cardio-metabolic outcomes
We need to show that glucose control is leading to broader cardio-metabolic outcomes People with type 2 diabetes are often dealing with Weight management is a significant concern for multiple comorbidities. On average these people with type 2 diabetes and the clinicians that individuals are managing
Slide 30: Dexcom CGM enables broader cardio-metabolic outcomes
Dexcom CGM enables broader cardio-metabolic outcomes We are seeing indicators of outcomes beyond traditional blood glucose metrics ADA 2023 300-person survey assessing impact of Dexcom CGM 8 months post-initiation1 For the basal population, we recently demonstrated: Clinically significant reduction
Slide 31: Our growing scale is key to our long-term success
Our growing scale is key to our long-term success Innovative manufacturing Software Ability to leverage platforms to enable infrastructure designed to existing platforms for broad scale create efficiencies future design iterations CONFIDENTIAL – DO NOT DISTRIBUTE 31
Slide 32: Expanding and diversifying our global manufacturing infrastructure
Expanding and diversifying our global manufacturing infrastructure Announced newest manufacturing facility in Athenry, Galway Scaling G7 production in San Diego and Mesa Now producing commercial product in Malaysia CONFIDENTIAL – DO NOT DISTRIBUTE 32
Slide 33: Efficiently expanding hardware scale to support growth and cost ambitions
Efficiently expanding hardware scale to support growth and cost ambitions Our scale journey Enabling commercial & financial flexibility Allows us to support years of strong demand Nearly 20x Enables more aggressive expansion into international markets Creates efficient platform to support portfolio
Slide 34: Well positioned to meet key cost and product initiatives
Well positioned to meet key cost and product initiatives On track for our Dexcom ONE to the G7 $10 sensor standard cost form factor in Q1 2024 CONFIDENTIAL – DO NOT DISTRIBUTE 34
Slide 35: New software infrastructure designed to provide additional scale efficiencies
New software infrastructure designed to provide additional scale efficiencies S I M P L I F I E D S O F T WAR E INFRASTRUCTURE Single app platform Dexcom ONE on same software infrastructure Global app infrastructure across languages G7 updates since launch Silence All Easy to iterate Streamlined Acc
Slide 36: Teri Lawver
Teri Lawver Chief Commercial Officer CONFIDENTIAL – DO NOT DISTRIBUTE
Slide 37: Commercial Runway is Unparalleled
Expand into new markets Continue to drive greater access and awareness globally Deliver outcomes for customers and health systems Commercial Runway is Unparalleled CONFIDENTIAL – DO NOT DISTRIBUTE 37
Slide 38: Everything starts with the user
Everything starts with the user… Our Warrior program provides a forum for our users’ voices 20,000+ Warriors at the end of 2022 38
Slide 39: Customer retention rates
Customer Retention Rates1 Dexcom Libre …which generates Dexcom retention rate high brand is more than 20% higher after 12 loyalty and months in comparable patient populations retention 1 Month 12 1. IQVIA data for Type 1 and Type 2 Intensive cohorts, through February 2023. 39
Slide 40: Dexcom is the most covered CGM with lowest out-of-pocket cost in the US
Dexcom is the most covered CGM with lowest out-of-pocket cost in the US Pharmacy Comparative Monthly Out-of-Pocket Costs1 Most Common Claim2 Majority of Claims $0 <$20 Libre $80-90 $70+ 1. Based on IQVIA data, paid sensor claims January 2022 through February 2023. 40 2. Most frequent out of pocket c
Slide 41: Our commercial model empowers our customers
Our commercial model empowers our customers We have established broad channel access to enable long-term growth and customer choice Pharmacy • Simple to prescribe • Broad customer access • Efficient service model Enabling Durable Medical Equipment Customer Choice • Consolidated supply • History of s
Slide 42: Evolving our commercial force to meet end market demand
Evolving our commercial force to meet end market demand The majority of Dexcom prescriptions are now written by primary care physicians1 52% 41% 34% 2018 2020 2022 PCPs & Specialists 1. IQVIA data, includes both retail and DME channels. 42
Slide 43: US market leadership provides a near and long-term growth runway
US market leadership provides a near and long-term growth runway Market US Market Size1 Current CGM Penetration2 Gestational Diabetes 400K per year (recurring) Type 1 1.8 million ~55% Type 2 IIT 2.4 million ~40-45% Type 2 Basal 3 million ~10% Type 2 Hypo Risk 3-4 million <5% (non insulin) Type 2 Non
Slide 44: Maintaining leadership in automated insulin delivery
Maintaining leadership in automated insulin delivery Clinician Most Preferred1 Customer Choice Called upon clinicians indicate a preference Dexcom was the #1 factor in customer for Dexcom citing: choice of Tandem’s Control-IQ or Omnipod 5 Greatest accuracy 93% of customers note Dexcom CGM as key fac
Slide 45: Extending leadership into basal
Extending leadership into basal Dexcom outcomes data is clear for type 2 basal population M O B I L E S T U D Y R E S U LT S 1 Significant improvements in A1C levels, 01 time-in-range, hypoglycemia, and hyperglycemia 94% of participants Driven by behavior changes, not changes wanted to continue 02 t
Slide 46: In recognition of these outcomes, coverage is building quickly
In recognition of these outcomes, coverage is building quickly June December October March June 2021 2021 2022 2023 2023 MOBILE RCT Updated ADA CMS proposed CMS LCD finalized 3 large PBMs now published Standards of Care LCD to broaden covering basal-only in JAMA coverage to customers all insulin use
Slide 47: Dexcom has the right product for the non-insulin type 2 hypo population
Dexcom has the right product and approach for the non-insulin type 2 hypo population Dexcom is the clear leader in hypoglycemia prediction and prevention CMS has created actionable criteria for this population to access CGM We need to drive awareness 47
Slide 48: US Summary
US Summary Leading customer Most covered Expanded and Unparalleled growth experience CGM and lowest effective commercial opportunity out-of-pocket cost infrastructure 48
Slide 49: We are early in our international opportunity
Moving into new geographies Meeting the needs of each market with the right portfolio Expanding access globally We are early in our international opportunity CONFIDENTIAL – DO NOT DISTRIBUTE 49
Slide 50: The right portfolio approach to unlock new geographies
The right portfolio approach to unlock new geographies & expand share Broad Limited Tiered Reimbursement Markets Reimbursement Reimbursement G-Series G-Series Dexcom ONE Dexcom ONE EXAMPLES: EXAMPLES: EXAMPLES: Germany United Kingdom Spain Italy Bulgaria Japan Romania Canada Lithuania 50
Slide 51: Extending our commercial reach internationally
Extending our commercial reach internationally Building greater direct presence Forming strategic partnerships Since 2020, we have moved from distribution We have extended our partnership with to direct in 8 countries: Roche into Argentina, benefiting from their established commercial footprint Aust
Slide 52: We are growing fast and taking share internationally
We are growing fast and taking share internationally Access wins, product portfolio, and flexible commercial infrastructure position us for continued growth Gaining international share1 International will continue to grow as 40% percent of total revenue 35% 30% 2020 2025E Organic Growth Rates 25% 20
Slide 53: What is next?
T O TA L A D D R E S S A B L E M A R K E T There is another 25+ million people1 What is next? in the US with type 2 diabetes that have not Extending our growth runway into non-insulin yet progressed to insulin therapy and are not using people with type 2 diabetes at high-risk of hypoglycemia We see
Slide 54: A multifaceted approach to reach this sizable population
We are taking a multifaceted approach to reach this sizable population Leveraging Pursuing Building software digital health partnerships reimbursed access to create customized experiences 54
Slide 55: Solving a different problem in non-insulin using type 2 diabetes
Solving a different problem in non-insulin using type 2 diabetes Common characteristics for this population1: Challenge maintaining Fear of progressing consistency in diet & to medications exercise Fear of long-term Desire to complications feel normal ~80% receiving care More likely to make through
Slide 56: 2024: Dexcom's first product designed for people not on insulin
2024: Dexcom’s first product designed for people not on insulin PREVIEW A unique glucose sensing solution designed for people who are not on insulin 15-day Custom software wear period Launching Cash pay option in 2024 56
Slide 57: This is our WHY
Commercial Wrap This is our WHY 57
Slide 58: Jereme Sylvain
Jereme Sylvain Chief Financial Officer CONFIDENTIAL – DO NOT DISTRIBUTE
Slide 59: We have a long runway in our US market opportunity
We have a long runway in our US market opportunity Intensive Insulin1 Type 2 Basal-Only1 Type 2 Non-Insulin1 4.2M people 3M people >28M people Problematic hypoglycemia Type 1 Type 2 Basal Oral / Injectable medications Type 2 IIT Diet / Exercise Gestational2 Prediabetes1 Hospital3 ~400K births / year
Slide 60: Dexcom has a track record of efficient growth
Dexcom has a track record of efficient growth… Total Revenue ($ in millions) Non-GAAP Operating Margin1 Free Cash Flow2 ($ in millions) CAGR 32% 2,260 basis point expansion 64% CAGR – 2x the rate of revenue $3,000 $2,910 20.0% $350 16.7% $305 15.0% $2,400 $280 10.0% $1,800 $210 5.0% $1,200 $140 0.0%
Slide 61: Enabled by embracing challenges to the status quo
…Enabled by embracing challenges to the status quo Several key examples demonstrate ways we have welcomed change to position our business to scale Channel Optimization Global Business Service Infrastructure Manufacturing and Process Automation Design to Value Enhancements Direct International Operat
Slide 62: Increasing our 2025 revenue range
Increasing our 2025 revenue range 2025 Revenue Considerations Total Revenue • Upside driven by strong • Upside driven by strong PREVIOUS UPDATED performance in core US performance(DEC in core US business and international 2020) (JUN 2023) business and international market share gains $ 4.0 to 4.5 ma
Slide 63: 2025 gross margin target on track
2025 gross margin target on track 2025 Non-GAAP Gross Margin1 Considerations Total Revenue • Expanding manufacturing with • Upside driven by strong PREVIOUS UPDATED automated G7 lines performance(DEC in core US 2020) (JUN 2023) ✓On track for $10 sensor business and international standard cost market
Slide 64: Increasing our 2025 operating and EBITDA margin targets
Increasing our 2025 operating and EBITDA margin targets 2025 Non-GAAP Operating Margin1 Total Revenue PREVIOUS UPDATED Considerations • Upside driven by2020) (DEC strong (JUN 2023) • Operating expense leverage performance in core US is enabling balance of margin market share gains 20% business and i
Slide 65: Operational efficiency is a growth driver
Maximum growth and global customer impact Flexible go-to-market strategies and product offerings that drive health outcomes Collective responsibility for scalable business functions: Innovate everywhere OUR VISION Operational efficiency is a growth driver CONFIDENTIAL – DO NOT DISTRIBUTE 65
Slide 66: Cost to Execute: Dexcom's strategy for operational excellence
Cost to Execute | Dexcom’s strategy for operational excellence Our leaders work together to ensure that all functions support scalable efforts aligned to our long-term strategic ambitions C O S T T O Manufacture Develop Acquire Serve Support Total cost to Total R&D and UX Costs associated Costs asso
Slide 67: Cost to Manufacture | Examples
Cost to Manufacture | Examples 15-day wear Fully automated, Optimized regional Qualifying new Insourcing vs. high throughput manufacturing suppliers outsourcing lines CONFIDENTIAL – DO NOT DISTRIBUTE 67
Slide 68: Cost to Support | Examples
Cost to Support | Examples Dexcom Global Business Service Units Leverage Global Business 01 Services infrastructure Lithuania Vilnius 02 RPA and AI to automate repetitious factors Philippines Manila and Cebu 03 Facilities and IT reevaluation 04 Efficient org design GBS employees now make up over 15%
Slide 69: Our capital deployment strategy and value creation opportunities
Our capital deployment strategy and value creation opportunities Optimal capital structure Positioning the business to maximize organic growth and customer impact • Flexibility to access capital markets at low cash cost • Maintain significant liquidity position to capitalize on opportunities to enha
Slide 70: We are executing a plan for value creation
We are executing a compelling plan for value creation Top-tier Operating leverage Significant free Increasingly global Capital structure organic growth to maximize our cash flow generation presence to enable positioned to customer impact and growth efficient tax structure enable flexibility CONFIDEN
Slide 71: This is our WHY
Commercial Wrap This is our WHY 71
Slide 72: Kevin Sayer
Kevin Sayer Chairman, President and CEO CONFIDENTIAL – DO NOT DISTRIBUTE
Slide 73: Dexcom Investor Day 2023: We are just getting started!
Dexcom Investor Day 2023: We are just getting started! Building market access Expanding product portfolio Updating our 2025 LRP faster than any time in history to serve new markets with upside Basal coverage (public & G-Series leadership Increasing revenue target private) Problematic hypoglycemia De
Slide 74: What is next?
Dexcom has a bright future ahead Broader Type 2 Other Analytes What is next? Gestational Advanced Algorithms We have a long runway of growth Hospital Longer Wear Times Prediabetes Software Innovation 74