Bill Alpert

If you want to monitor your vital signs like an Olympic athlete, or just someone watching their weight, it will become easier in a few months. Glucose-monitor vendor DexCom announced a pairing Tuesday with the seller of Oura smart rings.

Apps available in the first half of next year will combine DexCom blood-glucose readings with the vital signs that the Oura tracks, including heart rate, activity levels, sleep and stress measures. DexCom will also invest $75 million into Oura's privately held maker URA.

The real-time data available from the devices are part of a trend that's bringing health diagnostics out of the hospital ward and into our everyday lives. A Barron's feature in June presented the outlook for smartwatches and patch sensors from Apple, Abbott Laboratories, DexCom, Alphabet's Google, iRhythm Technologies and others.

Medical-device firms such as DexCom are hoping that their apps can build a consumer user base for their devices that's independent of the health apps of consumer tech giants such as Apple and Google. DexCom and URA will co-market each other's products.

Sales of the patch sensors from DexCom and Abbott grew quickly in recent years, as diabetes patients used them to determine insulin dosing. This summer, both companies began selling sensors available without prescription, for about $90 a month. Insurers only cover the sensors for diabetics who need insulin. So the companies are seeing if Type-2 diabetes patients and health-conscious folks will pay out-of-pocket to track how food and exercise affect their glucose levels.

Once a fast-rising medical-technology stock, DexCom lost altitude in 2023, as new weight-loss drugs from Eli Lilly and Novo Nordisk proved dramatically effective against Type-2 diabetes.

DexCom's over-the-counter sensor Stelo sold at roughly a $90 million annual rate in its launch quarter of September 2024. That's a small contribution to the $4 billion that DexCom's expected to report in 2024 revenue, and unlikely to add much lift to the company's stock. At $76, DexCom shares still command a generous 45-times this year's consensus earnings forecast.

Sales should double this year for Oura maker URA, according to Tuesday's release announcing the DexCom partnership. That will mean revenue of $500 million in 2024. The company says it's profitable and has sold more than 2.5 million rings. The Series D funding round in which DexCom is investing $75 million will value URA at more than $5 billion.

"Working together, URA and Dexcom will help members decide what and when to eat, by surfacing correlations between activities like sleep and exercise and members' glucose levels," said URA CEO Tom Hale, in Tuesday's announcement.

Write to Bill Alpert at william.alpert@barrons.com

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November 19, 2024 12:50 ET (17:50 GMT)

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