Dexcom forecasts total annual revenue of $4.6bn for 2025, up from the $4bn generated in 2024. Image credit: Shutterstock/MichaelVi.
Dexcom is still expected to hit 2025 revenue despite the diabetes device giant receiving a warning from the US Food and Drug Administration (FDA) after site inspections, according to market analysts.
Dexcom received a warning letter from the FDA on 4 March, detailing shortcomings in the company’s manufacturing processes and quality management systems found by the FDA during an inspection of facilities.
Shares in the Nasdaq-listed company are trading 6% down since it made the announcement via a SEC filing on 7 March.
“Given that Dexcom’s 2025 guidance does not assume any share gain throughout the year, we remain confident in its ability to deliver on its revenue guidance, with any incremental US share gains potentially driving upside to estimates,” said William Blair analysts in a report following the news.
Dexcom forecasts total annual revenue of $4.6bn for 2025, up from the $4bn generated in 2024.
The report pointed to electrocardiogram (ECG) monitor developer iRhythm Technologies, whose business saw little impact despite being issued with FDA warnings in 2022 and 2023.
“While we anticipate additional remediation expenses throughout the year (similar to iRhythm’s approximately $15m expected in 2025), we believe margins should not be meaningfully impacted,” the report added.
A warning letter usually comes after a Form 483 is issued. Form 483s are used by the FDA after inspections to communicate conditions that may violate the Food Drug and Cosmetic (FD&C) Act. Companies usually respond to the notice with corrective plans.
The two facilities indicted in the warning were Dexcom’s headquarters in San Diego, California and its industrial facility in Mesa, Arizona.
Dexcom stated it “takes the matters identified in the warning letter seriously, has already submitted several responses to the Form 483 and is in the process of preparing a written response to the warning letter.”
“[Dexcom] intends to continue to undertake certain corrections and corrective actions and will also continue to provide regular updates to the FDA,” the company added.
Production ongoing
Whilst the FDA cited deficiencies at the facilities, it has not told Dexcom to stop producing, marketing, manufacturing or distributing products. There is also no mention of any device recall requirements, meaning patient access to products should not be hindered.
The company added it “does not expect a material impact” from the warning letter.
William Blair analysts commented: “Though the warning letter adds a new wrinkle in the near term, we believe consecutive quarters of improving durable medical equipment (DME) relationships and market share stabilisation indicate that issues the company faced in 2024 should be transient as execution continues to improve. We continue to believe that Dexcom is well positioned for durable long-term growth with an expanding portfolio of products.”
The FDA warning comes after a significant business shift for Dexcom, having laid off more than 500 workers in San Diego in 2024 as part of manufacturing relocation efforts. Reported at the time by The San Diego Union-Tribune, Dexcom transitioned its manufacturing efforts to Arizona, whilst converting its San Diego to an innovation hub. The Mesa site was originally opened in 2017 and all the company’s US manufacturing was either done there or in San Diego.
Dexcom occupies around 74% of the CGM market share in the US, according to analysis by GlobalData. It is known for its continuous glucose monitors (CGMs) – gaining particular spotlight when it received FDA-approval for the first over-the-counter CGM in March 2024. The company also made headlines when it partnered with ŌURA, pumping $75m into the smart-ring developer’s Series D financing round to integrate their respective technologies.
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