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Dexcom, the local maker of continuous glucose monitors, received a warning letter from the Food and Drug Administration last week citing issues at two of its manufacturing facilities. The warning letter follows inspections by the FDA at Dexcom’s manufacturing facilities in San Diego and Mesa, Ariz., and identified concerns in manufacturing processes and quality management.
The local inspection took place in October and November while the Arizona inspection was in June. The San Diego-based company said in an SEC filing that the FDA warning letter on March 4 does not require a recall of any products and it does not restrict its ability to “produce, market, manufacture or distribute products” nor its ability to seek regulatory clearance for new products. Dexcom also reported that it does not expect this warning letter to impact the company’s manufacturing capacity or revenue guidance for the fiscal 2025 year.
The company said in its filing that it takes the matter seriously and has already submitted several responses to the FDA’s investigational observations. While the company continues its communication with the FDA, it “cannot, however, give any assurances that the FDA will be satisfied with its response or as to the expected date of the resolution of the matters included in the warning letter.” The company continued, that until the FDA’s cited issues are resolved, “additional legal or regulatory action may be taken without further notice.
” “Dexcom stands behind the quality of our products and are committed to resolving any outstanding questions from the FDA as soon as possible,” said James McIntosh, senior director of global public relations at Dexcom, in an email. Jayson Bedford, a senior analyst at Raymond James, wrote in a March 9 research note that Dexcom said the sensors are performing as expected; the issues observed by the FDA do not impact the end-user experience and that “the warning letter is more process related.” “Given the recent supply challenges (which we believe are not related to the warning letter), the timing of this announcement is not ideal,” he wrote.
“That said, our conversation with management ...
gives us comfort that this is not a product quality issue, it should not impact supply or revenue, and should ultimately prove manageable.” Bedford’s take is that this will have more of an impact on Dexcom’s expenses — as it works to resolve the FDA’s warning letter — than on its revenue. Dexcom is a leader in the continuous glucose monitor space, which are vital tools for people managing diabetes, offering discreet, wearable sensors that allow users to track their blood sugar levels on a smartphone.
Last year, the company became the first to offer an FDA-approved over-the-counter glucose sensor called Stelo. The company manufactures all of its products for the U.S.
market in San Diego and Arizona. The company announced in June that it would transition all of its San Diego manufacturing operations to Arizona, a facility that opened in 2017. In addition to Dexcom’s headquarters, the local facilities will become its research and development hub.
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