Larry Biegelsen
Good afternoon. I'm Larry Biegelsen, the medical device analyst at Wells Fargo. And it's my pleasure to host this session with DexCom. With us, we have Jereme Sylvain, the CFO. In terms of format, it's going to be a fireside chat. If anybody has a question, please raise your hand. We'll come around with the mic.
Jereme, thanks so much for being here.
Jereme Sylvain
Thanks for having us, Larry. Appreciate it. Yes.
Larry Biegelsen
So obviously, with GLP -- GLP-1 continue to be top of mind for a lot of investors. You guys put out some interesting data yesterday. I'd love to -- for people who haven't seen it, and even people who have -- I'd love to hear from you, kind of what the highlights are from that data and what you think the relevance is?
Jereme Sylvain
Yes. So we get a lot of questions. What is the impact of GLP-1s on therapy? And we've consistently talked about it as really more of, I'll call it, companion or what I would say is something that you expect to be prescribed in conjunction with the GLP-1.
So what we did is we took third-party data. And this is data direct from Optum's pharmacy base. And so this would cover Medicare Advantage as well as their commercial lives. And we looked at something very simple. If you're prescribing a GLP-1, what percentage of those folks were on CGM before and what percentage we're on after? And ultimately, what you're seeing really across the board is an increase in prescriptions for CGM as a result of GLP-1 therapy being prescribed.
And I think it really lends to the either these are not an or story. It's not or this or that. It's really an and. And they really target 2 different things. One is really targeted at understanding your body, understanding behavioral remedies and change as being the CGM and other is related to, obviously, the impact of the drug and how it helps the pancreas produce more insulin. The 2 go really hand in hand as you think behavioral lifestyle changes as well as GLP-1s. So this is third-party data. I think it's really helpful in demonstrating that. They work really well together, and we really want to make sure that folks understand the and, not the or.
Larry Biegelsen
And so why would CGM utilization go up after a GLP-1?
Jereme Sylvain
A lot of folks are looking for ways to maximize therapy. A lot of physicians, first off, they want you to be on a CGM to understand the impact. In the user guide, it asks you to titrate based on glucose levels over a 30-day period, which will be in conjunction with the CGM usage.
And then ultimately, when we survey physicians, 80% say the only way they feel comfortable taking someone off of a GLP-1 and retaining the benefit is if they're on a CGM. And so you're really seeing a lot of the CGM built into the ecosystem of effective GLP-1 usage, and we expect that to continue.
Larry Biegelsen
And it was almost counterintuitive. It looked like the CGM utilization went up as you went -- moved away from digitalizing the chart away from intensive -- type 2 intensive insulin to insulin, basal insulin and non-insulin patients. Why would it go up as you kind of go down the spectrum, if you will?
Jereme Sylvain
Yes. It's a great point. It's something we saw. We scratched our head, but I think it's a little bit of law of big numbers. I think the ones you see at the top, there are some already some larger numbers in there. Hence, the multiplication is a little bit different.
But I think what you're seeing is very powerful in the fact that these -- the prescription of GLP-1s, regardless of your pathology type, CGM prescribed in conjunction with it is really, really taking hold. And it's again, behaviorally is something we would expect to take place going forward.
Larry Biegelsen
And one thing that the data didn't show is if people -- how -- the frequency of use, are people using it every day or people using it intermittently? Do you have any insight into that?
Jereme Sylvain
Yes. So it's going to take a little bit more time to get all of the insights. But the one thing we did because we asked the same question, right, what does this mean for wear patterns. As we looked at our type 2 data and our attrition utilization in our patient population over the past couple of years, and we've seen no changes in our attrition and utilization. So what we're seeing is folks staying on therapy as these have entered into our base. So really positive -- a really positive data, I think it gives us a lot of confidence in this space going forward.
Larry Biegelsen
Is there any other data? I know -- well, are there any other data sets that you guys are trying to pull together that you think would be helpful to investors?
Jereme Sylvain
We are. And I think we have access to a lot of data, script data, quite frankly, different cuts from different payers. So we'll look at that. Ultimately, whether it's ours to publish or not, that's something I think we're going to have to work on. But -- we know it's top of mind for investors. We thought this one from a third-party data set, not our data would be really, really helpful. Obviously, Optum is about 18% to 20% of the covered lives in the United States.
So it's a good subset of our population. We thought this would be a good one we have more data, and certainly, there's others working on that data. I think there might be more to be said about this in the future. But for the meantime, we thought this was a great start.
Larry Biegelsen
And then no reason to believe commercial would be different. This is Medicare, you said?
Jereme Sylvain
This is Medicare Advantage and commercial. So it's actually both.
Larry Biegelsen
And not all GLP-1s are created equal. Did you look at kind of Wegovy and Mounjaro versus the older ones?
Jereme Sylvain
So I think that's the more work to be done. And so obviously, we have some of that data through our script data. I think we'll have to take a little bit deeper dive look on that. But I think the key takeaway of what we're trying to get at is -- and by the way, as you move into 2022, that's a heavy Ozempic, Wegovy time period.
I think those are where we'll have to take a look. The Mounjaro data is relatively new. If you think of the most recent data, what we published was 2022. Obviously, we have some preliminary 2023 data. We'll take a look at it. But I think we leave very confident again, in that kind of companion therapy.
Larry Biegelsen
And sorry, I misspoke. Wegovy is obviously the obesity brand; Ozempic, the diabetes brand. So thank you for that. The other -- so there's 2 concerns. There's a near-term concern, which I think your data helps address. And then there's the TAM concern that obesity is a driver of type 2 diabetes, and as these GLP-1s proliferate, obesity rates will come down and diabetes rates will come down. What's your view of that?
Jereme Sylvain
Yes. I'll at least give you our view. Our view is these drugs are going to be very helpful in combating obesity. And the studies all show that. I think we think that there's a real opportunity here to leverage it.
Where we found it works best is in conjunction with lifestyle change. And at the end of the day, we believe the CGM ultimately drives lifestyle changes. We look at physicians, and we've talked a little bit about this in the past, who have been really, really effective in applying GLP-1 therapy. They've done it in conjunction with CGM. The CGM has helped drive behavioral change. And as they started to wean folks off of GLP-1, they kept them on CGM therapy.
So they understood what was happening in their body and whether they would revert back. One of the big challenges with these drugs is as you come off of them, you've got to change your behaviors. Otherwise you kind of fall back into it. And the CGM does an incredible job of doing so.
So if we are effective in starting to limit obesity through these drugs, you're going to do it with these drugs in conjunction with a lifestyle change, which we can provide. So I think we feel pretty good as playing a change agent in this ecosystem regardless of whether it's obesity or whether it's folks, unfortunately, who progressed to diabetes.
Larry Biegelsen
And I'm talking about pre -- before diabetes.
Jereme Sylvain
I get it. I'm talking about, to your point, obesity and prediabetes. Absolutely.
Larry Biegelsen
So is that an area you're going to pursue proactively?
Jereme Sylvain
It's an area that I think is think about the start of this non-insulin product we've talked about launching next year, while that's really targeted folks with type 2 diabetes, it's type 2 diabetes not on insulin, which I think you can extrapolate that to future populations.
And so absolutely, we are looking at it. We believe CGM has a part to play really in all of that. And I'd also point to some of the partnerships we have. We have quite a few partnerships and really the more, I'll say, lifestyle as well as health and wellness apps where they're using CGM kind of on the opposite side of that to help get folks healthier. So we have those partnerships as well. So there's a place to play throughout the continuum of care.
Larry Biegelsen
That's helpful. Jereme, your stock has been under a lot of pressure, primarily from GLP-1 concerns. Why haven't we seen DexCom's buy -- senior management or the company buy back stock?
Jereme Sylvain
Yes. We bought back stock last year, and that was something we certainly did. We always look at it. One of the things that we are doing and you'll see it now, our converts mature here pretty darn soon.
And so I think what you're going to see is we're going to be using some of that stock -- that cash to take out some of the existing debt. We've already taken out the dilution associated with it. So the way we thought about it is we really put our cash into managing that dilution. If the stock trades off, we'll certainly take a look at it. It's always something top of mind. Make no mistake, we have conversations about it. And look, if the time makes sense, we're spinning off positive cash flow, it may make sense. So we'll look at it.
Larry Biegelsen
All right. So obviously, actually going to transition away from GLP-1s unless there's some questions in the audience here on GLP-1s. I'm sure we didn't cover everything. But if not, I don't see any hands, we're going to move on to basal adoption. Love to hear, Jereme from you what you're seeing with basal adoption?
Jereme Sylvain
Yes. I'm really encouraged by it to date. And I'll kind of reference back to our last call, the PBMs and the health insurance companies have really taken basal adoption and really aggressively approved it. And so you saw 60% of commercial lives covered as of our last call for basal and met with Medicare coverage so comes Medicare Advantage.
And so now you've actually got a majority of the basal population, a significant majority of the basal population cover. And where there's coverage, we've always taken share, and you see us taking share in that space. So we feel pretty good about one, taking share; two, driving adoption through the market. And again, record new patients in the second quarter, part of that as a result of some of that basal and we expect to continue to do well in that market. And I think we talked about it, our base case is 25% adoption from sub-10%. And obviously, we're incentivized to go little faster.
Larry Biegelsen
And the contribution this year, you're not breaking it out anymore, but I think on the Q2 call, for the U.S., you said it would contribute more than 1.5% to growth.
Jereme Sylvain
That's right, more than 1.5% to growth. So by math, more than $50 million. Remember, this is a recurring revenue business. And so as you think about that, really nice jumping off point for future years. And again, we'll give you guys kind of an update as the year goes on around guidance and where we're going, but really bullish on that part of the business.
Larry Biegelsen
And you're in the middle of 2 big launches, G7 as well.
Jereme Sylvain
We are.
Larry Biegelsen
Now how is that going?
Jereme Sylvain
I think G7 has gone really well as we expected. I think when you start to see some of the telling points within G7, over 50% of G7 users are new to DexCom. That's a big thing, right? That's a lot of either new users who have come into CGM for the first time, but quite frankly, it's a lot of share taking.
And what we see is we're taking share across type 1, type 2 intensive and basal really across the board as you look at total scripts. And so very excited about what G7 done, that form factor, that usage that easy out-of-box and that app experience. So far, it's done really well. And I look forward to all the improvements we continue to make off that chassis. You mentioned 2 launches right now. There's another one coming at the beginning of next year, which is DexCom ONE on G7 form factor. So a lot of really good things coming out of the organization.
Larry Biegelsen
It's about 20% of TRxs in the U.S. right now, G7. Where do you see that going over the next year or 2?
Jereme Sylvain
Yes. I think it's going to eventually get to a point where it's going to start getting to 60%, 70%, 80% over time. The big linchpin is going to be really around AID transition. And then I think you're going to see a lot of folks make that migration over. And at that point, you can really push pretty hard. You can push today, but when you talk about a payer group that has both folks connected and not connected, you have to be really mindful of that. We want people to be on the G7 platform.
And so the focus is going to be moving folks over, over time. It's -- we believe it's the longer term, it's a better platform longer term. It's a scalable platform. It's a platform that, over time, we can manufacture high volumes at low cost. And so it's a real interest for us to do so. And of course, we're working on 15 day in that platform. And so that's the platform ultimately we want folks to move to.
Beyond that, I think we're really excited about it. And I think you'll see G6 folks will move there. There'll be a point when we have to push folks over like we had to do with the G5 to G6 transition, the flip phone kind of issue. But we'll ultimately address that when it comes.
Larry Biegelsen
So Jereme, if we go back before all these GLP-1 concerns, after the Q2 results, the stock was a little bit weak after you reported earnings, partly because of this whole U.S. dynamic where people are looking at growth on a stack 2-year basis, and it slowed on a stack to year basis. And people are asking, you're launching G7, you're launching basal. Why would we have seen growth slow on a stack 2-year basis? And the IQVIA scripts are showing 50% year-over-year growth in sensors.
Jereme Sylvain
Yes. The way we think about it, and I disagree with the assessment, right? When you think about it, record new patients, and we were very emphatic about that. Record new patients.
So we were very positive about that. And when you look at dollar volume growth, it's the largest U.S. dollar volume growth in any quarter in the history of DexCom. One of the challenge is of course, is a new patient in the quarter isn't worth a new patient from last quarter, right? And so you stack these new patients adds on top of each other. And it's a recurring revenue business, quite frankly, is a pretty darn large base at this point.
And so I think -- we were really happy with the quarter, really happy with the performance on new patients. We're really happy with the performance on existing patients. So understand the concerns. I look at it and say, what a wonderful quarter, sequentially solid year-over-year dollar growth solid and reacceleration of revenue and the lifeblood of future growth is new patients and another record new patients. So I get it. People are looking at stacks and looking at reasons. I would say, look at the positive that took place. And I think we left the quarter thinking very positively of it.
Larry Biegelsen
Certainly, international was very strong, and we'll get there...
Jereme Sylvain
Well, yes.
Larry Biegelsen
When I look at, I feel like we publish every week and the IQVIA data still looks good. We show your rolling 4-week year-over-year growth. It's hovering around 50%, maybe even trending up a bit. I mean it looks like the momentum has continued at least based on the script data, any reactions?
Jereme Sylvain
I know you publish it. It's probably for you to say that. And I think you just said it, so nice statement. I think the way I would look at it is record new patients, and we need to see no reason why we wouldn't continue to do well and take share. We've been waiting for G7 for a long time. It's met the expectations. We've been waiting for coverage for a long time. It's met our expectations. And so we're very excited about it. And I'll let you comment on the IQVIA data, but I think you're excited about it.
Larry Biegelsen
It looks good. And you talked about enhancements to G7. What are some of the enhancements you're making?
Jereme Sylvain
Yes. So I think what you'll find -- and by the way, you won't see a lot of them announced publicly, but I think we've already launched 5 or 6 versions of the app. And so some of the early concerns well, hey, what's going on with the Bluetooth, for example.
Well, we introduced like something is called fast reconnection. And so it just reconnects faster, it's a simple software update. And so these are some of the tweaks you generally find. It's interesting. We launched G7. We expected to have some of this. If you look at kind of some of the complaint rates on G7, it was right in line with G6 when we launched G6, so these are the things we always work on.
It's really part and parcel for what we do post launch. These are all things that we know are going to really excite people. We don't need to announce them, but they're going to come out and you're going to find that the experience continues to get better and better. And I think what's really exciting for us internally at DexCom is I think we launched 1 software update in 2022.
Again, we've already launched 5 or 6 here in 2023. Expect that cadence with all of these rollouts, including, for example, the snooze feature that we removed when the FDA required it to pull it out. That's already been rolled into new feature apps, things like those enhancements that are out there and available for folks who needs this today.
Larry Biegelsen
And better adhesion?
Jereme Sylvain
510(k) approval on adhesion. So that will be cutting into line services.
Larry Biegelsen
Okay. International was really the standout in the second quarter, 40% organic growth, up from 27% in the first quarter. What drove the acceleration? And Jereme, we've talked about this before. Historically, it's been kind of lumpy because of the distributor markets. Is this sustainable this growth?
Jereme Sylvain
Yes. Let me talk about the growth. And then I'll answer your question with -- the growth was not because of the distributor and there's no change in stocking. In fact, all of the growth was driven by direct markets. And so those direct markets where we ship directly to the end customer, there's no stocking or anything along those lines. And so what you saw was just really a lot of things that we have put in place strategically that really played out well in the quarter.
A couple of examples. The Germany, we ultimately eliminated a lot of -- the friction there and approvals. And as a result, we got increased volume. But the one thing we took was a little bit of price. This was back in the back half of 2021 and into early 2022. We've lapped those contracts. So what you're now seeing is some of that unit volume play through.
In the U.K., G7 approval certainly contributed to Q1. Those patients are worth more in Q2, certainly contributed to Q2 as well, as well as the launch of DexCom ONE on formulary through pharmacy. So that was all part of a strategic effort there, certainly plays out similar with Spain tenders. Those tenders are now in place on DexCom ONE in Spain as well as additional approvals for coverage in Australia.
And you're seeing all of these direct markets really contributing there. And it's all about patient growth and share taking, and we're seeing in all major markets, and we're taking share. All of that really contributed in the quarter. So yes, I think it's sustainable, whether it's at 40% or something, a little bit less than that. We'll let our guidance speak to that. But ultimately, that's a sustainable book of business. This is our direct business.
Larry Biegelsen
Okay. And how are you thinking about -- that's good to hear. How are you thinking about the second half of the year? Without splitting here, it looks like the implied growth for the second half of the year and it's a touch lower at the midpoint than the first half. I mean people are looking at it. You've got basal, you've got building momentum, G7, you should have less price channel mix shift why would the second half look like the first half?
Jereme Sylvain
At the midpoint, that's where it is at the high side, it's a bit of an acceleration from the first half. So I think at the end of the day, and I get it, folks will expect us to move towards the higher end here. But -- there's nothing structurally that prevents us from performing well into the back half of the year.
I think the international business, we expect to continue to perform well. I think the U.S. business, again, we expect to continue to perform well. What we did want to do, though, is we always want to make sure we put out a base case in there, considering we only had about 2.5 months of basal when we closed up June. And so we wanted to make sure we provided that base case to folks versus getting ahead of ourselves. But don't let any of that get in the way of our bullishness on the business. I think we're very excited about the back half of the year and into 2024.
Larry Biegelsen
That was my next question. You mentioned 2024 exciting. Okay. What are some of the things you're excited about?
Jereme Sylvain
So first off, I think we are excited about G7 getting a full year under its belt and all the things we talked about, those general enhancements. I think those are delighters, and you're going to see them start coming out.
I think folks are really going to appreciate that. I love how DexCom ONE on a G7 form factor stacks up against our competition. And with that launch coming in next year, we're very excited about that. And then I think as we think about this non-insulin product that comes out in the back half of next year, really filing by the end of this year, it really provides us an opportunity to play in the space where historically, we haven't taken share, which is the non-insulin cash pay market.
And that's an area where our competition has done really, really well. We have an opportunity with what we think is a superior product targeted for the user needs there to go in there and take share from there as well. So it's really stacking up in our opinion, to be another really strong year, but we'll see.
Larry Biegelsen
How do you want people to think about the ramp for the CGM for non-insulin users?
Jereme Sylvain
Yes. I think -- we think it's going to launch obviously -- we're going to submit for FDA approval at the end of this year. So that's going to be in there. The timing of when it launches, is in some ways, going to be dependent upon that. And so we're thinking about it in the back half of the year.
Like most of our business, we do think it's one of those recurring revenue businesses. And so we do think that it grows over time. I think as we get closer to it, we'll be able to give you a little bit more data around it in terms of even product specifics, price points and all of that.
But for now, what I would say is I'd expect it to be one of those ramps kind of similar to what you're seeing in Basel. It's a base population that grows. This one might be a little bit different just given cash pay market, but 1 -- and so a little bit easier. You have to go through insurance, but one will give you a little bit more of an updated time and so on.
Larry Biegelsen
And what's embedded for pricing headwinds this year? And how -- what should we expect next year?
Jereme Sylvain
So as you think about last year, last year was about -- in the U.S. was about $200 million. And then outside the U.S., it was $50 million. In both the U.S. and outside the U.S., we expect those to come down. Well, we haven't given a number...
Larry Biegelsen
In '23, sorry...
Jereme Sylvain
In '23, correct.
Larry Biegelsen
Down from '22.
Jereme Sylvain
From '22. And you're already seeing that really playing out. And so we really hit a peak in Q4 of 2021, Q1 of 2022, the delta between unit volume and growth. You're seeing that come down over time, and we'd expect that pricing headwind same-store sales year-over-year to come down into 2023.
I'll always be mindful, make sure you carve out DexCom ONE revenue separately. But just pure price, most of our contracts, we don't have a ton of pure price at this point. It's really that mix shift annualizing it and any sort of drift you get as some folks maybe migrate to the pharmacy. Some new patients migrate to pharmacy.
Larry Biegelsen
So does that come down more in '24?
Jereme Sylvain
The expectation is it continues to come down.
Larry Biegelsen
So I guess, big picture, just thinking about broad strokes for '24, any reason why growth would be slower in next year than '23?
Jereme Sylvain
Not going to give guidance other than just simply saying bullish there. I know you got to try, but nothing to say that we'd expect it to go the other way, certainly bullish on the business, but not willing to provide guidance in terms of a growth number yet.
Larry Biegelsen
But nothing that would suggest would go the other way?
Jereme Sylvain
No Structural issues in the business that would give...
Larry Biegelsen
Such as Libre AID integration...
Jereme Sylvain
Already contemplated in our long-range plans and already contemplated in this year's guidance. So I think we've been thinking about that. Certainly, we know that it could have a potential impact, although we feel very, very confident in our AID base as well as new patients come in that those folks will ultimately choose DexCom and all the history and the capability that we've built in that connectivity.
It's hard to connect. It really is. And I've seen some of -- we have some incredible software engineers and some incredible folks that work on our CGM platforms. And as you start to think about all the nuances and connecting there, there's a lot to think about it. I think our experience is really going to shine through here next year.
Larry Biegelsen
And margin puts and takes for '24?
Jereme Sylvain
We expect, from an operating margin perspective to keep trending towards that long-range plan. So I'd expect us to make significant steps there. Part of it will be the scaling of our business from a gross margin perspective. Which again, same-store as we make that trajectory from 2023 all the way to 2025, again, we'd expect to move towards that 65%. So it's not going to be a 2025 back-end loaded story. We think it's going to be pretty ratable.
Larry Biegelsen
Got it. And it sounds like -- so the new -- the non -- CGM for non-insulin users, you have not submitted it yet?
Jereme Sylvain
We have not.
Larry Biegelsen
What still needs to be done? Because I think you've said you've completed a clinical study.
Jereme Sylvain
We've completed a clinical study on the G7 form factor at 15 days. And so that will ultimately be the baseline. What you do, though, in a filing as you have to package everything.
So software -- you have to I think user acceptance or yes, user acceptance, they use freely the term, human factors. We have to do all of those studies and then submit them as a package. So what you want to do is make sure you do all of those submitting them as a package. Ultimately, that will form the basis for what goes to the FDA.
Larry Biegelsen
And how are you thinking about bringing this product or any CGM product over-the-counter like Abbott, I think, going to do with LinkUp?
Jereme Sylvain
It's really going to depend on regulation. I think at the end of the day, the FDA has said, we see CGM as a regulated device. And as of now, it requires a script. I completely understand that. We work with the agency, often have a great relationship with them. There may be a time when the agency looks at it a little bit differently.
And if so, we'll certainly be ready at that point. I think it's something that I know that there's some interest from the FDA ultimately longer term in doing so, but it has to be done in a safe way. I think that's the big concern they have. And it's the right concern. You'd hate to see somebody dose off of something that they are inappropriately doing so. But make no mistake, I mean, we are prepared if and when we have to go there. And I think it's something that the FDA certainly will want to talk about.
Larry Biegelsen
And what's the clinical rationale for a non-insulin patients to use CGM?
Jereme Sylvain
So non-insulin, so you're effectively type 2 pre-diabetes et cetera. The clinical rationale and you can see it, it's -- call it the Hawthorne effect, right? Someone's watching it, even if it's yourself. As you're going through and monitoring the food you eat, the exercise, the logging of all of that over time, it does a couple of different things.
One, it allows your physician to ultimately make good determinations as to what you need to do to change your lifestyle. Much of that revolves around diet -- and so if you think about how many spikes you might have in a day, that's an important thing, but also your resting glucose level, which is a good indication of insulin resistance. And so there's a big piece of that, and that's not insulin outside that internal body insulin produced resistance.
That becomes a big part of ultimately your regimen, your food, your diet and maybe most importantly, then your exercise that needs to come with it. So as you wear it and you glean insights around your body, you can then change behavior as needed associated with it. You can also use it in combination with medication. And so ultimately, if the medication you're taking, instead of prescribing 4 medications and coming back a year later and taking an A1c, you can see in real time as folks are moving up or down on dosing, you can see how that ultimately plays out.
You can really tailor medicine, much more to the person. And as you think about share follow, you can share that information in real time with your physician as needed. Those all become really important parts of it. Mentally and behaviorally, it changes the way people do react. So while this information is all important, mentally, as you -- when you know this is happening, you rethink the cookie or you might get up and go for a walk.
I have plenty of personal experiences in my family and folks that wear CGM that have just literally got up and walked around the block and come back, didn't know where they went. It was because they saw their glucose spiking and it ultimately changed their behavior, never would have done that before.
Larry Biegelsen
And you've talked about this product being cash pay, reimbursed eventually, I think, but initially cash pay. Abbott is doing well there with Libre. But they have a cash -- a co-pay like a systems program, it's like a pay down. And it's the relay health. It looks like it's covered. But -- so how are you guys going to compete if you don't utilize such a program?
Jereme Sylvain
So there's a copay -- so the way -- I mean, effectively, you can do the same thing. It's really how you adjudicate the product. And if you adjudicated through the pharmacy, effectively what they're saying is, and they're saying a copay pay down, they're just paying down their list price down to what they want the end user...
Larry Biegelsen
Will you do something...
Jereme Sylvain
Absolutely. We can look at that, absolutely.
Larry Biegelsen
Because if you don't, then you'll be at the disadvantage.
Jereme Sylvain
We're going to make sure that -- correct, we're going to make sure that this product is interesting from both a product's feature perspective, but also an access perspective. So we'll get to the price here when our commercial team is comfortable launching. But make no mistake, we're not going to make this unaccessible.
Larry Biegelsen
Okay. All right. That's good to hear. On the next-gen G series. So you're starting a trial, I think, by the end of this year. What are the key updates here, not in terms of time lines, but the benefits of this product?
Jereme Sylvain
So the benefits of this one, and we're really focusing on its extended life, and so this is one I think Kevin referenced, 15 days and beyond.
I think there's an opportunity to even go beyond that. And it's higher performance throughout the period. And so there's an opportunity to even reduce things like MARD or otherwise and reduce sensor failures. So when you think about all those things together, there's a COGS benefit associated with that, there's a user performance benefit associated with that. Whether or not that's embedded into G7 as a kind of a product enhancement on G7 or a new product, that's really more of a marketing decision on how we ultimately do that. But the technology that we're putting in place, the plan is to start a clinical trial on that by the end of this year, very interesting novel technologies.
Larry Biegelsen
And so while the name, we've been kind of call [indiscernible] We calling it G7 Plus.
Jereme Sylvain
We'll come up with something...
Larry Biegelsen
And the 15-day wear -- I mean, obviously, we talked about it at the analyst meeting. You're going the 15-day wear on the non-insulin product first. There must be some hurdles to get it on to the G7 product because that's your core. Have you addressed -- where are you in addressing those issues on the core G series?
Jereme Sylvain
Yes. So to give you a little comfort, the clinical trial we ran to get to 15 day was on G7. Starts there, because that's really helpful in knowing we can get there on G7 and the technology is already there. The question is then going to be survivability embedded in that. One of those things are getting to survivability is you saw was approved in the 510(k) updated patch.
So that's one reason to do so. The big driver is just really sensor survival rate. What we want to do is make sure that it lasts the full 15 days for folks that have glucose levels that move. What you'll find is that someone's taking insulin and their glucose levels move generally, what you find is your intensive insulin user.
It moves enough where it can ultimately take the iCGM as it gets a little loose. And the iCGM will turn it off and say, "Look, this might be a sensor failure." Generally, it's not a just a loosening on -- and so you can change that through algorithm changes and patch adhesion. So we're working on both of those things.
We're not -- it's not one of those things where it's a long way off, Larry. I think the technology is already there. It's really how do we extend that sensor life. It's really important for us as we launch that into a space where people have come to rely on us for sensor life, meeting the advertiser.
Larry Biegelsen
That's helpful. Abbott seems pretty excited and endocrinologists as well about a dual glucose ketone monitor, especially for type 1 patients. I feel like you guys have been skeptical.
Jereme Sylvain
We always start with the problem you're trying to solve. And what you find in a lot of cases where you have somebody on type 1 that's got their glucose and control is DKA is less of an issue.
In fact, we've seen in a lot of the studies we've done as DKA events go to 0. And so while there's an interesting marketing claim there, the reality is, we look to solve problems. And I think some of the other analytes that we're looking to put together actually do solve problems.
And so while we're not willing to release what those are now, we are working on other analytes where they do solve issues, that's maybe more appropriate for us. And that's ultimately what we're looking at.
Larry Biegelsen
What are some of these other analytes?
Jereme Sylvain
At a future day, we'll let you know.
Larry Biegelsen
So you don't think there's an unmet clinical need for a ketone monitor, dual glucose ketone monitor, for type 1.
Jereme Sylvain
The biggest issue you find with type 1s are folks that aren't on sensors yet. That's when you find what the U.S. doses takes place. And so once folks are on a sensor and they're in control, you generally find that you don't see a lot. In fact, again, like I said, our study show it goes to 0.
Larry Biegelsen
Some of the docs they want to be able to prescribe an SGLT2 inhibitor to a type 1 patient. Do you think that's a small minority of doctors.
Jereme Sylvain
It is. It's a small minority. And I think at the end of the day, again, it's a very small case. I understand the question and the comment. But again, I think we still think about larger problems to solve markets. And I think we're solving those in a different way. We've just gone a different path.
Larry Biegelsen
And DexCom ONE on the G7 platform seems like a pretty good catalyst for you guys next year. How are you thinking about that ramp?
Jereme Sylvain
Yes. Look, we're really excited. I mean, it's a product I'm very excited about. It's not too often. We've always prided ourselves on accuracy and having an app and a connectivity experience that's interesting. The one thing we haven't had is a form factor advantage, which this will have against Libre 2, where we compete head to head. And so we're really excited about how this stacks up.
I think it provides all of the form factor features of G7, obviously in the package of a DexCom ONE, which is really more targeted to those users. Those users aren't on pumps. They're generally on MDI or otherwise. And so it's really targeted for them, really exciting. I'm very excited about it. I know our international team is really excited about getting that out into the market.
Larry Biegelsen
How about head to head versus Libre 3. I understand versus Libre 2, but how about versus Libre 3?
Jereme Sylvain
So generally, Libre 3 competes against G7. It may -- that's the categories we're in and G7 comes with all the connectivity in the form -- and all the features that we offer as part of that.
And so obviously, some form feature factor perspective, again, we like the way those stack up as well. And so 2 different categories of products, again, we do like G7. And where we have G7 competing against Libre 3, like Germany, we're taking share.
Larry Biegelsen
All right. Great. Well, we're out of time. Jereme, really appreciate you taking time...
Jereme Sylvain
Thank Larry. Appreciate everybody. Thanks for your time.
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