Only about 13% of TAM is DXCM’s TAM to make quick use of acronyms. For the other 87%, as Nilvest describes, CGM use is still in the future if ever. In fact a CGM device is mostly an unnecessary expense for the vast majority of the TAM if the patient follows through w Livongo.
Even w this said, Livongo has many patients as customers who are using CGM devices and there is much more to this than just communicating the stats. If there was not DXCM would have no need to bring in a Livongo to add more value to their product.
Dexcom G6 also costs $299 per month. Livingo $75 per month. So Dexcom would also need to come down considerably in cost. Not sure what economies of scale Livongo could leverage across the multiple vendors so that any individual one could not compete with Livingo on price. This is also Roku’s argument that any individual TV maker will not be able to provide their own OS as good as Roku given Roku has their costs spread across many many more households and gets economies of scale no tv maker could match. Same is possible with LVGO maybe.
I believe this thread is missing the mark because it is comparing the two companies as if it were an apples to apples comparison. It is not as can be discerned from Yahoo!'s Profile Descriptions:
DexCom, Inc., a medical device company, focuses on the design, development, and commercialization of continuous glucose monitoring (CGM) systems in the United States and internationally. The company offers its systems for use by people with diabetes, as well as for use by healthcare providers… https://finance.yahoo.com/quote/DXCM/profile?p=DXCM
Livongo Health, Inc. provides an integrated suite of solutions for the healthcare industry in North America. Its solutions promote health behavior change based on real-time data capture supported by intuitive devices and insights driven by data science… https://finance.yahoo.com/quote/LVGO/profile?p=LVGO
DexCom is traditional medicine while Livongo is a paradigm shift from intervention to healthy living. There are two outcomes that DexCom cannot match, reversal of type 2 diabetes and other illnesses and more important from an investors point of view, a radical healthcare cost reduction which is a principal driver for institutional clients.
I agree, Denny, I wasn’t focused directly on the two as direct partners or direct competitors when I threw the number up to start the thread.
But, I do think the amount of growth Dexcom just reported is indicative of how much traction there is in improving diabetes management by individuals. So, I do expect Livongo to report big growth numbers. It reinforces my confidence in what we’re about to get from Livongo.
-Another Rob
(I also had some questions about just how much the two are partners/competitors in the space, and the thread as taken up by others, has really fleshed out my understanding of both of those things. Thanks, all.)
I agree with Denny’s post regarding the distinct businesses of DXCM and LVGO. Also, since January of this year the companies are in partnership with Dexcom’s device for glucose monitoring integrated with LVGO’s platform. It seems the companies products and methods are complimentary rather then directly competing.
12x: Dexcom G6 also costs $299 per month. Livingo $75 per month. So Dexcom would also need to come down considerably in cost.
The Dexcom G7 was due to have a several-hundred-people study soon, but that’s been delayed, possibly for 6 months. The actual release was to have been in early 2021, so now that’s pushed too unfortunately. (Drat, I want one!)
Dex intends to use the G7 for its push to gain more of the T2 market. The G7 is smaller than a Libre, lasts 14 days, and costs less. Don’t know how much less though. But the UnitedHealth and other studies show that there are great savings for a T2 from wearing a cgm … can be up to $5000/year. So the cost of a cgm easily is worth it for T2s.
That said, I still think Livongo is synergistic rather than competitive. Many people know what they should be doing but just need the encouragement and guidance. That’s why WeightWatchers, now WW, has been around so long. CGMs are fantastic to tell you your glucose numbers, not what to do with them. Services like Livongo, I think, are terrific for people who need to get under control and even those who were, but went off the path and need help getting back on. (I see those last people on the FB boards all the time!)
I don’t worry about DXCM as a LVGO competitor, but in a few years I’d worry about others getting into the game, like UnitedHealth which just developed it’s own LVGO-like service and gives a G6 to their members for free!
thats right, United seems to have done good job of building that LVGO… it is something a determined large player can do… however, I think this will be a few and far in-between examples…
someone said above as ROKU example, it is hard for a TV manufacturer to build and sustain a good OS… yet Samsung and LG has done but you can see that is a matter of time at-least one of them will fold back…
so I think this not a systematic concern for LVGO…
LVGO to its credit is not just resting on diabetes success… its already showing strong effectiveness on weight reduction and behavioral health… and those things are not big part of their numbers yet… so there is a looooong runway for LVGO…
And ofcourse Denny’s point, it save cost to insurers which is a big big deal…
Someone on Seekingalpha had a title of an article comparing LVGO to AMZN of healthcare… my first reaction was thats too much to expect and I hate that type of blowing out of proportion enthusiasm… but as more I think about it, more I feel that there is real potential LVGO will impact healthcare in somewhat large manner as AMZN has impacted on retail business… time will tell…
it is something a determined large player can do… however, I think this will be a few and far in-between examples…
I do hope you’re right since I’m 8% long LVGO! But I’m actually not worried about it…my opinion was that others could be more of a concern than DXCM, but I too don’t think they’re much of a concern at this point.