{ "docId": "019dd923-622c-750b-8b98-916758668d1f", "docSlug": "34401c2968d1", "documentTitle": "Dexcom, Inc. (DXCM)", "authorId": "54_Spruce_Point_Capital", "authorName": "Ben Axler", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2019-03-21 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 38, "pageCount": 83, "prevPage": 37, "nextPage": 39, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "dense", "nDataPoints": 2, "notes": "Uses a call-and-response format between an analyst and the CEO to frame the activist's thesis.", "elementsJson": [ "headline_text", "paragraph", "quote_block" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-916758668d1f/38", "deckHref": "/decks/019dd923-622c-750b-8b98-916758668d1f", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-916758668d1f.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-916758668d1f#slide-38", "components": [ { "bbox": { "h": 0.08, "w": 0.96, "x": 0.02, "y": 0.87 }, "kind": "callout", "text": "Abbott management is aware that, given current G-Series prices and its own production cost advantages, offering the Libre at a lower price point allows it to take overwhelming incremental market share while still earning attractive margins. We should expect management to continue to price the Libre aggressively with respect to the G-Series.", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "feb24244-de54-4401-b3f1-109fa8e8b6e8", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "callout", "text": "Abbott management is aware that, given current G-Series prices and its own production cost advantages, offering the Libre at a lower price point allows it to take overwhelming incremental market share while still earning attractive margins.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd952-f5d2-7501-bd8b-c5dcdb56bf87", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.14, "w": 0.96, "x": 0.02, "y": 0.16 }, "kind": "paragraph", "text": "Rather than maintain a low price on the Libre 2 to attempt to pressure Dexcom into cutting G-Series prices to unsustainable levels, might Abbott management instead raise prices on the technologically-advanced Libre 2 to increase its own margins? As management has already priced the Libre 2 in line with original Libre prices in Europe, we suspect that the Libre 2 will be priced in line with the original Libre in the U.S. as well. Further, and importantly, when asked about the possibility of competing with Dexcom at the “upper end” of the market, Abbott management made it clear that it is well-aware of the cost pressures facing Dexcom, and that it is prepared to leverage its cost advantage to keep prices low and take share.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6c872884-2bb7-4962-97a2-5ea58e976c3e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.16, "w": 0.65, "x": 0.04, "y": 0.4 }, "kind": "quote", "text": "And maybe a follow-up on Libre. This is a product that's been wildly successful. You're now over $100 million run rate in the U.S., over $1 billion globally, and you really have one major competitor here that's -- let's call it at the upper end of the technology scale. And Abbott, I view as the low-cost, easy-to-access, very easy-to-use product in continuous glucose monitoring. So, as we think about the evolution of Libre over the next few years, how do you think about Libre staying at the lower end of the cost and ease-of-use curve versus moving up and trying to compete with your main competitor there? Thanks. - Robbie Marcus – Analyst, J.P. Morgan", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "0b3054eb-7552-4a9a-bdce-2ebbb5697264", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.22, "w": 0.65, "x": 0.32, "y": 0.58 }, "kind": "quote", "text": "Well, I'll tell you, interestingly enough, I don't actually look at it the way you just described. I think Libre is a pretty different product. It's got tremendous capability, but given that value point that we have it priced at, it is accessible to patients all over the world.... And in our case, we have a much lower cost and far greater automated manufacturing capability to not only allow that cost, but to allow for mass production. And that's the path we've taken.... So I'd say, at this point, we're making healthy profits on this product. We have no intention of changing the value proposition at all. And your question sort of suggests that we would raise price in order to be competitive, I'd say, you want to be asking the other side, what they're going to do to make themselves a value proposition, because this product is incredibly good value proposition, which is why it's got such high demand. - Miles White – CEO, Abbott Laboratories", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5600504b-cf6c-459c-b89f-c4ba8e8ec09c", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"And maybe a follow-up on Libre. This is a product that's been wildly successful. You're now over $100 million run rate in the U.S., over $1 billion globally, and you really have one major competitor here that's -- let's call it at the upper end of the technology scale. And Abbott, I view as the low-cost, easy-to-access, very easy-to-use product in continuous glucose monitoring. So, as we think about the evolution of Libre over the next few years, how do you think about Libre staying at the lower end of the cost and ease-of-use curve versus moving up and trying to compete with your main competitor there? Thanks.\" — Robbie Marcus, Analyst, J.P. Morgan; \"Well, I'll tell you, interestingly enough, I don't actually look at it the way you just described. I think Libre is a pretty different product. It's got tremendous capability, but given that value point that we have it priced at, it is accessible to patients all over the world.... And in our case, we have a much lower cost and far greater automated manufacturing capability to not only allow that cost, but to allow for mass production. So I'd say, at this point, we're making healthy profits on this product. We have no intention of changing the value proposition at all. And your question sort of suggests that we would raise price in order to be competitive, I'd say, you want to be asking the other side, what they're going to do to make themselves a value proposition, because this product is incredibly good value proposition, which is why it's got such high demand.\" — Miles White, CEO, Abbott Laboratories", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd952-f5d2-7501-bd8b-cb8db7b409a3", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.68, "x": 0.28, "y": 0.03 }, "kind": "title", "text": "Abbott Aware Of Superior Cost Structure And Prepared To Take Advantage", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "664a37b3-dc50-41bf-ac86-e1b87541d27c", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "call-and-response", "slug": null, "matchId": "47b75438-4ece-4aef-be97-29647e20ca51", "evidence": "The slide uses a direct quote from an analyst followed by a direct quote from the CEO to frame the argument.", "confidence": 0.9 } ], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }