Wall Street is slamming blood glucose monitor maker Dexcom Inc.DXCM) sharply cut its full-year outlook after missing profit expectations last week.
But Dexcom’s troubles don’t seem to be related to the weight-loss or diabetes drug frenzy.ABT) and Medtronic (MDTC) was not under pressure from unexpected losses, again easing Wall Street concerns.
The company explained that the outlook was due to a failed sales strategy.
“This has been a much more disruptive expansion than we’ve experienced in the past and there was a lot of disruption, particularly early in the quarter, but things improved toward the end,” CEO Kevin Sayer said on the earnings call.
In the past, the market had been pressuring food and beverage stocks due to concerns about long-term declines from GLP-1 use, but that has proven not to be the case, even though the GLP-1 market is expected to reach $130 billion by 2030.
Still, medical device stocks have experienced a roller coaster of ups and downs over the past year, in part due to Wall Street’s reaction to data and updates about GLP-1.
for example, June Announcement Eli Lilly (LilyAstraZeneca, the pharmaceutical company that makes the weight-loss drug Zepbound, said its GLP-1 compound helps reduce the incidence of sleep apnea. Data showed a greater reduction in people who use pressurized breathing masks, known as CPAP machines, but the news sent shares of CPAP makers plummeting.
This includes ResMed (rate), a leader in the space, CEO Mick Farrell told Yahoo Finance that he doesn’t see the news as a sign of trouble, but rather as a tailwind.
“They’re going to bring more patients into my funnel and we’re going to continue to grow,” Farrell said.
He sees further opportunities as tech companies like Apple continue to grow.AAPL), Google (Google, GoogleSamsung and Oura Ring offer sleep-monitoring software in their devices, which he said could help raise awareness of sleep apnea and increase the number of people suffering from it.
Unpenetrated Market
Over the past year, there have been multiple instances of Wall Street predicting doom for the sector based on GLP-1 data, but experts argue that in reality, any potential enthusiasm is being primarily contained by supply constraints.
“Many patients have not yet committed to lifelong GLP-1 use, but unless they do, they will likely move on to bariatric surgery, which still has a very low uptake rate,” JPM analysts wrote in an August 2023 note after one company’s earnings showed a drop in quarterly bariatric surgery volume.
The underpenetrated market concept also applies to continuous glucose monitoring, CPAP devices and bariatric surgery, as well as GLP-1, which has previously only been available in a limited number of countries and markets as both market leaders work to increase their manufacturing capacity.
Wall Street’s worries are also affecting GLP-1 makers Eli Lilly and Novo Nordisk.Norbo) is being threatened by hundreds of clinical trials of competing GLP-1s.RHBY-san), Amgen (AmGN), Pfizer (Personal consumption tax), biotechnology company Viking Therapeutics (movie).
Roche recently announced positive data from an early-stage clinical trial, while Viking has begun late-stage clinical trials. The news over the past week has caused Eli Lilly’s stock to plummet; the company’s shares have fallen 14% in eight days, wiping $120 billion from its market cap. But the same news has not caused Novo’s stock to fall as much.
Anjali Khemrani Anjali is a senior health reporter at Yahoo Finance, covering everything from pharma, insurance, long-term care services, digital health, PBMs, health policy & politics, etc. Follow Anjali on all social media platforms. translation:.
Read the latest financial and business news from Yahoo Finance
