Simplified devices, pharmacy access among 2020 catalysts for diabetes tech: analysts

Dive Brief:

Analysts at Baird Equity Research predict continued strong adoption of insulin pumps and continuous glucose monitoring systems in 2020, backed by up to seven expected major product approvals and launches, simplified devices, increased manufacturing capacity, better insurance reimbursement and evidence of improving patient outcomes.
The analysts believe continuous glucose monitor use could reach 80% of the U.S. market over the next three to five years, up from about 44% now. They see adoption of insulin pumps approaching 50% in five to seven years, up from 38% now, as more patients move toward stricter management of the condition.
Baird picked Dexcom as its top stock in the diabetes sector and called Insulet the best positioned of any pump company.

Dive Insight:

The stage is set for another year of meaningful diabetes tech advancements, according to the Baird analysts, who expect greater automation of functions and interoperability between devices to drive market expansion.

The analysts said this year could represent "an even greater technological leap forward than in 2018" which they said they previously considered the most significant new product launch year in more than a decade for the diabetes sector.

Dexcom is projected to generate revenue growth topping 25% in 2020, propelled by expanding share for its G6 CGM and the expected introduction later in the year of its G7 device, according to Baird. Furthermore, analysts at Stifel, in a note to clients Monday, said the G7 version of Dexcom’s glucose monitor should further cement the company’s market-leading position among Type 1 diabetes patients as well as boost use among Type 2 patients.

Baird sees Insulet as benefiting most from increasing demand for pump technology, due to its focus on device simplification, strong clinical data and ease of access through a selling shift into the pharmacy channel.

As for Tandem, which gained FDA approval for its Control-IQ algorithm last month, its tSport device is expected to launch in mid-2020. Analysts at Craig-Hallum Capital Group said in a note Thursday they expect Tandem, with 15% of the pump market currently, to take additional share from Medtronic in 2020 as broader demand for insulin pumps drives market penetration beyond 30%.

Medtronic is pushing ahead with an expected launch of its 780G advanced hybrid closed loop system in 2020. The Stifel analysts said despite Medtronic's share losses on both the CGM and pump fronts last year, they sense "a potential plateau in negative [Medtronic] sentiments" based on conversations with key opinion leaders, citing a transmitter change that has improved device performance.

Other anticipated product introductions include Beta Bionics' breakthrough-designated iLet device, which it calls a bionic pancreas, in 2021. Abbott's submission of its CE-marked second-generation FreeStyle Libre CGM remains under review by FDA. Executives said on the company's most recent earnings call that its bid for U.S. marketing authorization has taken longer than expected.