Dexcom plans to add two independent board directors through an agreement with activist investor Elliott Investment Management. The maker of continuous glucose monitors announced the planned appointments ahead of a Thursday investor day.
Elliott, an activist investment firm that has recently become involved in other medtech firms, such as Medtronic, disclosed that it holds a large stake in Dexcom. CEO Jake Leach told investors the company has had “very productive conversations with Elliott,” and that Dexcom has started a search for directors, particularly people with experience in medtech and high-volume operations.
As part of the agreement with Elliott, Dexcom has also changed the board’s technology committee to the operations and innovation committee, adding quality to its focus.
Marc Steinberg, a partner at Elliott, said the changes should help Dexcom realize its potential.
“We are one of Dexcom’s largest investors because of our conviction that the CGM market remains meaningfully underpenetrated and that the company is poised to deliver sustained double-digit growth for years to come,” Steinberg said in a statement.
The changes follow a tumultuous time for Dexcom, which recently underwent a CEO change, grappled with quality problems, and has seen its shares decline by more than a quarter in the past year. J.P. Morgan analyst Robbie Marcus wrote in a research note that the governance announcement “in our view is aimed squarely at shoring up confidence in execution, quality, and scaling.”
Dexcom’s shares rose more than 6% to $61.69 Friday morning.
New products, CMS coverage
Leach also used the investor day to provide updates on an expected Medicare coverage expansion and future products.
Dexcom plans to share a clinical trial readout at the American Diabetes Association’s Scientific Sessions in June that would support use of its CGMs by people with Type 2 diabetes who don’t take insulin.
“Based on this strong clinical data, we do expect a Medicare coverage decision anytime between now and the end of this year,” Leach said.
The company is factoring in coverage starting mid-next year into its plans. Expanded Medicare and Medicaid coverage is expected to double Dexcom’s U.S. covered lives to 30 million people, Leerink Partners analyst Mike Kratky wrote in a research note.
Dexcom is in the process of rolling out a 15-day version of its latest sensor, the G7. Leach announced the company plans to launch the next iteration of its CGM, the G8, in late 2027 or early 2028. The device is expected to be smaller than the G7 and provide more accurate readings.
Following the G8 launch, Dexcom also plans to unveil support for multiple analytes, starting with glucose and potassium. With continuous potassium readings, the company sees an opportunity to support people with diabetes and chronic kidney disease, who can be at risk for a condition with higher than normal potassium levels in the bloodstream.
Abbott, Dexcom’s main competitor, has focused on glucose and ketones for multi-analyte sensing, and plans to launch the technology this year. Dexcom plans to add ketone sensing to the G8 platform in the future, but the feature will not be available at launch.
