{ "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": 51, "pageCount": 83, "prevPage": 50, "nextPage": 52, "slideType": "market_sizing", "function": "size_opportunity", "density": "overcrowded", "nDataPoints": 24, "notes": "The slide uses a 'before-after' style comparison of market sizing assumptions to argue that the TAM is overstated.", "elementsJson": [ "headline_text", "paragraph", "pie_chart", "data_table" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-916758668d1f/51", "deckHref": "/decks/019dd923-622c-750b-8b98-916758668d1f", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-916758668d1f.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-916758668d1f#slide-51", "components": [ { "bbox": null, "kind": "callout", "text": "The sell side believes that Dexcom's target U.S. market is 25% penetrated, leaving significant room for continued CGM adoption. However, under Spruce Point's view of Dexcom's optimal market opportunity, Dexcom's current market is already ~50% penetrated.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd952-f5d2-7501-bd8c-658ffaed51f6", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.22, "w": 0.28, "x": 0.05, "y": 0.45 }, "kind": "chart", "text": "Sell Side Perception Pie Chart", "attrs": null, "subkind": "pie", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "459b929b-f45d-4f51-8a84-0f72c6927fe6", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.22, "w": 0.28, "x": 0.36, "y": 0.45 }, "kind": "chart", "text": "T1 U.S. Population Pie Chart", "attrs": null, "subkind": "pie", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "925cd43e-8e32-4f2a-8e55-fa16f881162f", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.22, "w": 0.28, "x": 0.67, "y": 0.45 }, "kind": "chart", "text": "Insulin-Dependent T2 U.S. Population Pie Chart", "attrs": null, "subkind": "pie", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a559087a-b6e0-4b93-bcda-7715e7913bf4", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "metric", "text": "market penetration: 25%", "attrs": null, "subkind": "primary", "toolName": "Quantification", "toolSlug": "quantification", "confidence": null, "componentId": "019dd952-f5d2-7501-bd8c-69e6ac13b1da", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.94, "x": 0.03, "y": 0.86 }, "kind": "paragraph", "text": "The sell side believes that Dexcom's target U.S. market is 25% penetrated, leaving significant room for continued CGM adoption. However, under Spruce Point's view of Dexcom's optimal market opportunity, Dexcom's current market is already ~50% penetrated. We also believe that T1 penetration will likely top out between 70-80% in the near-to-medium term. Accordingly, Dexcom's remaining target U.S. TAM may be as little as ~300K patients. We believe that the rate of CGM adoption among T1 diabetics has already peaked or will peak in the near future. The vast majority of the remaining market opportunity is in the T2 market, to which the Libre is far better suited at current prices.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "0111b5b5-d421-4128-aca5-f5353670f959", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.94, "x": 0.03, "y": 0.16 }, "kind": "paragraph", "text": "Analysts see Dexcom's core U.S. TAM as T1 and insulin-dependent T2 diabetics. While they acknowledge that T1 patients value Dexcom's purported technological advantages more than T2 diabetics, they say that the Libre is a “market-opening product” which will promote wider adoption of the superior G-Series. However, given that the Libre 2 is set to close much of the technological gap between itself and the G-Series, and given the overwhelming cost benefits of the Libre, we believe that, at current prices, Dexcom's current CGMs make little sense for T2 diabetics, insulin-dependent included. This view is informed by extensive conversations with expert medical professionals. Accordingly, we believe that the sell side's view of Dexcom's near-term TAM is aggressive and unrealistic despite the appearance of accelerating adoption.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5d204512-1e8f-4f71-adaf-9ffcb03669ba", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.94, "x": 0.03, "y": 0.72 }, "kind": "table", "text": "Market share tables for the three scenarios", "attrs": null, "subkind": "data", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "4acd1da6-39b0-425f-81dd-67567b4a18f4", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.55, "x": 0.31, "y": 0.03 }, "kind": "title", "text": "Dexcom's Likely TAM Smaller Than The Market Believes", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "09035507-e54f-4bf0-8a4d-002481108fcb", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "comparison_frame", "slug": null, "matchId": "b65cecb4-7726-4803-98ef-3ef2e3e45e9d", "evidence": "Contrasting sell-side vs. Spruce Point market sizing", "confidence": 0.9 } ], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }