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  "documentTitle": "Dexcom, Inc. (DXCM)",
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  "authorName": "Ben Axler",
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  "presentationDate": "2019-03-21 00:00:00",
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  "notes": "The slide uses a quote from a JP Morgan research note to illustrate the 'guesswork' being performed by the sell-side.",
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      "text": "Are these back-of-the-envelope calculations correct? It's impossible to know without management's patient base disclosure. Yet management continues to lead analysts to believe that the patient base is growing robustly without disclosing the size of its patient base explicitly. We find that, in reality, (1) Abbott is taking overwhelming incremental market share, and (2) higher effective sensor prices and G4 / G5 sensor stockpiling helped to fuel recent sales growth, flying in the face of management's claim that revenue per customer has been falling. We call on management to once again disclose the size of its patient base rather than issue oblique, unverifiable claims about trends in revenue per customer. Why leave breadcrumbs for investors to estimate the size of the patient base when you can disclose this figure outright?",
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      "kind": "callout",
      "text": "This morning, Dexcom management presented and hosted a Q&A break-out session at the J.P. Morgan Healthcare Conference. In the break-out session, CFO Quentin Blackford provided incremental color on the company's outlook for 2019, specifically that guidance contemplates $20-25M in revenue headwinds per quarter from the transition from the DME to the pharmacy channel, similar to the ~$20M headwind that the company saw impact sales in 4Q18. This accounts for a ~10% top-line headwind and implies that underlying volume guidance is +25-30%, versus the +15-20% overall revenue guidance issued ($1.175-1.225B).",
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      "text": "While management no longer explicitly discloses its patient base, it has been communicating to the sell side through the last several quarters that it expects revenue per customer to fall due to (1) the shift in distribution from the DME (Direct Medical Equipment) channel to the pharmacy channel, (2) rising uptake among Medicare patients, and (3) growth into international markets, where average revenue per customer is lower. Some analysts have been extrapolating from guided headwinds in revenue per customer to back out strong implied patient growth guidance - yet management refuses to provide the actual figures even amidst the widespread sell-side guesswork.",
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      "text": "\"This morning, Dexcom management presented and hosted a Q&A break-out session at the J.P. Morgan Healthcare Conference. In the break-out session, CFO Quentin Blackford provided incremental color on the company's outlook for 2019, specifically that guidance contemplates $20-25M in revenue headwinds per quarter from the transition from the DME to the pharmacy channel, similar to the ~$20M headwind that the company saw impact sales in 4Q18. This accounts for a ~10% top-line headwind and implies that underlying volume guidance is +25-30%, versus the +15-20% overall revenue guidance issued ($1.175-1.225B).\" - JP Morgan Research Note (1/4/19)",
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      "text": "\"This morning, Dexcom management presented and hosted a Q&A break-out session at the J.P. Morgan Healthcare Conference. In the break-out session, CFO Quentin Blackford provided incremental color on the company's outlook for 2019, specifically that guidance contemplates $20-25M in revenue headwinds per quarter from the transition from the DME to the pharmacy channel, similar to the ~$20M headwind that the company saw impact sales in 4Q18. This accounts for a ~10% top-line headwind and implies that underlying volume guidance is +25-30%, versus the +15-20% overall revenue guidance issued ($1.175-1.225B).\" — JP Morgan Research Note (1/4/19)",
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      "text": "Management Leaving The Sell Side To Do Potentially Misleading Guesswork On Patient Base Growth",
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