A Game-Changing Company Fighting One Of America’s Most Expensive Diseases
Today’s essay is a little personal for me.
The opportunity I’m about to tell you about stems from a condition I suffer from, along with millions of other Americans. But as I’ll explain in a moment, there are several companies quietly working on game-changing treatments that could not only offer relief — but also a windfall of profits to investors.
If you don’t take care of yourself, they keep telling me, you can’t take care of anyone else.
#-ad_banner-#And lately, I’ve been thinking about my own personal medical condition, diabetes mellitus, also commonly referred to as “Type I,” “insulin-dependent” or “juvenile-onset” diabetes.
Diabetes is a metabolic disorder characterized by a malfunctioning pancreas. All food turns into sugar through digestion, but diabetics are unable to absorb the sugar the body needs to feed itself. Insulin, a hormone secreted by the pancreas’ beta cells, helps usher glucose through the cell’s semi-permeable membrane.
Without insulin, sugar builds up in the bloodstream, causing a condition called hyperglycemia. Too much insulin (or not enough sugar) and the blood sugar goes too low, which is known as hypoglycemia.
Type I diabetics must carefully monitor their carbohydrate intake and inject insulin to keep their blood sugar in its target range. There’s no cure for Type I — it is thought to be genetic and its numbers appear to be holding steady. Pancreatic transplants hold some promise for Type I diabetics, and excellent control can be achieved by the use of a mechanical insulin pump that delivers the medicine continually. I’ve had one for years.
Type II diabetes, which is brought on by obesity, is much more common than Type I diabetes. Type II diabetics who are especially vigilant about food and exercise can often manage their condition without any medicine, though there are several non-insulin oral medications that can make a big difference and yield excellent results.
Today, two-in-three Americans are categorized as overweight or obese and nearly half of adults have either pre-diabetes or diabetes, as reported by recent article in USA Today.
Diabetes cost the U.S. economy $245 billion in 2013, according to the American Diabetes Association.
Let me be clear: Every meal a diabetic eats affects the way he or she feels. So does every step a diabetic takes, every ounce of stress, every common cold and tummy bug. Diabetes is a relentless and insidious disease.
The key is blood sugar control.
Type I diabetics are instructed, as a matter of course, to test their blood as frequently as possible. For me this means four-to-six times a day. For some time, conventional wisdom held that Type II diabetics didn’t need to monitor quite so closely. That’s changing. The standard of care for Type II diabetics looks every day a little more like the standard of care for Type I diabetics.
Recently, I told readers of my premium newsletter, Game-Changing Stocks, about four publicly-traded companies that are bringing excellent new products to the diabetes market. These companies will continue to see phenomenal growth as the nation ages and remains on its unfortunate trend toward obesity.
Out of fairness to my paid subscribers, I can’t reveal all of the names to you today. But I’ll tell you about one — a company called DexCom (Nasdaq: DXCM).
DexCom is a $3 billion company that produces continuous glucose-monitoring systems.
For years, testing blood sugar meant using fingersticks. You prick your finger and put a sample of blood on a test strip. Then you’d use a little squeeze bottle of water to clean off the strip, which would go into an electronic meter to be read. It took about three minutes. Now, the fingerstick and blood sugar test takes about five seconds.
The top meters use Bluetooth technology to “beam” blood sugar results to other devices. For instance, when I do a blood sugar test, my meter sends the result to my insulin pump. My insulin pump calculates a dose to correct my blood sugar to its target level, and the pump will also ask how many grams of carbohydrates I will be eating. This will keep my blood sugar fairly steady. It’s a good system.
But DexCom has a great system. Its diabetes monitors take blood glucose readings all the time — not four or five times a day but every four or five minutes. That way, if I were to consume, say, 90 grams of carbs instead of the 70 I had planned on, the meter will see my blood sugar rising and alert me to take more insulin. For diabetics, this is the best thing since sliced (multi-wholegrain) bread. The use of these meters allows for control very nearly to the degree that a human pancreas affords.
This technology is expensive. But as continuous glucose monitoring (CGM) systems gain popularity, their prices are falling.
The tipping point for any diabetic product is when it moves from the relatively small Type I market to the vastly larger Type II market. This market, comprised of mainly older people, includes Baby Boomers. They’re entering retirement, they’re well-heeled, and they want to feel good. The key to feeling good is tight blood sugar control — a perfect storm for DexCom.
This stock has a history of outperformance that I think will continue. Its shares have beaten the S&P 500 over the last year, and for the past five years. And we’re talking outperformance by a pretty solid margin, too: 412%-to-83% for the past five years; 45%-to-15% for the past 12 months. Revenue is gaining by leaps and bounds, to $160 million last year from less than $50 million in 2010, with the company on pace to take in $200 million in 2014.
Sometimes the best ideas come from personal experience. And as a diabetic myself, it’s not hard to see that DexCom makes an outstanding product that offers exceptional results being sold to a nearly limitless (and still ever-growing) market. It’s a solid long-term hold for any aggressive growth portfolio.
As I mentioned earlier, I identified three other outstanding companies that offer game-changing treatments for diabetics in a recent issue of my premium newsletter, Game-Changing Stocks. And in my new report, “The 11 Most Shocking Investment Predictions For 2015,” I reveal some of my biggest ideas with the highest potential for investors in the coming year. My previous predictions have delivered 89%… 92%… 293%… and even 310% gains in a year. To see my latest report, click here.