Dexcom (DXCM) 10-K risk factor changes: FY2022 vs FY2021

For the fiscal year ended December 31, [removed: 2021][added: 2022]

[removed: ][added: ]

As of June 30, [removed: 2021,] [added: 2022,] the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately [removed: $41.1] [added: $29.1] billion based on the closing sales price of [removed: $427.00] [added: $74.53] per share as reported on the Nasdaq Global Select Market.

| Class | | | | | | Outstanding at February [removed: 7, 2022] [added: 2, 2023] | | |

| Common stock, $0.001 par value per share | | | | | | [removed: 97,065,634] [added: 386,413,690] | | |

Portions of the registrant’s definitive proxy statement relating to its [removed: 2022] [added: 2023] Annual Meeting of Stockholders (the “Proxy Statement”) are incorporated by reference in Part III, Items 10 through 14 of this Annual Report on Form 10-K, as specified in the responses to those item numbers.

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- We are subject to cost-containment efforts by [removed: our] [added: third-party] payors that could result in reduced product pricing and/or sales of our products and cause a reduction in future revenue.

[removed: - Although] [added: Although] many third-party payors have adopted some form of coverage policy [removed: on] [added: for] continuous glucose monitoring devices, our products do not always have [removed: some form of] [added: such] coverage, including simple broad-based contractual coverage, with third-party payors and we frequently experience administrative challenges in obtaining [added: coverage or] reimbursement for our [removed: customers.][added: products.]

If we are unable to obtain adequately broad [added: coverage or] reimbursement [removed: at acceptable prices] for our products or any future products from third-party payors, our revenue may be negatively [removed: impacted.][added: impacted.]

- We are subject to complex and evolving U.S. and foreign laws and regulations and other requirements [added: and policy initiatives] regarding privacy, data protection, security, [added: data access] and other matters.

Many of these laws and regulations are subject to change and uncertain [added: or evolving guidance and] interpretation, and could result in claims, changes to our business practices, [added: product development impacts,] monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.

- Cybersecurity risks and cyber incidents could result in the compromise of confidential data or critical data systems and give rise to potential harm to customers, remediation and other expenses, expose us to [added: costs, negative attention, or] liability under HIPAA, [added: FDA standards and requirements,] consumer protection laws, or other common law theories, subject us to litigation and federal and state governmental inquiries, damage our reputation, and otherwise be disruptive to our business and operations.

- We conduct business in a heavily regulated industry and if we fail to comply with applicable laws and government regulations, we could become subject to [added: government investigation, litigation,] penalties, be excluded from participation in government programs, and/or be required to make significant changes to our operations.

- If we are unable to successfully complete the pre-clinical studies or clinical trials [added: or otherwise develop the data] necessary to support additional [removed: PMA, de novo, or 510(k) applications or supplements,] [added: marketing authorizations,] we may be unable to commercialize [removed: our] [added: additional or modified] CGM [added: candidate] systems under development, which could impair our business, financial condition and operating results.

We [added: received FDA marketing authorization and] launched our latest generation system, the Dexcom G6*®* integrated Continuous Glucose Monitoring System, or G6, in [removed: 2018.][added: 2018 and more recently received marketing clearance from the FDA on the Dexcom G7*®* in December 2022.]

Also available on our website are printable versions of our Audit Committee charter, Compensation Committee charter, Nominating and Corporate Governance Committee charter, [added: Technology Committee charter, Corporate Governance Guidelines] and Code of Conduct and Business Ethics.

The G6 was the first type of CGM system permitted by the FDA to be used as part of an integrated system with other compatible medical devices and electronic interfaces, which may include automated insulin [removed: dosing] [added: delivery] systems, insulin pumps, blood glucose meters or other electronic devices used for diabetes management.

[added: The G6 Pro has many of same features as the G6] and is intended for healthcare professionals to use with their patients ages two years and up.

| | | | [Signatures](#i6eef640963c94f0198129aab5beef55a_106) | | | [94](#i6eef640963c94f0198129aab5beef55a_106) | | |

- Environmental, social and governance, or ESG, regulations, policies, provisions, initiatives and goals, and disclosures related thereto, could expose us to numerous risks, and climate change may have a long-term impact on our business.

- Integration with the world’s largest connected CGM ecosystem (including Apple Watch, Garmin and other digital health apps).

- Medication blocking. Allows for more accurate glucose readings without interference from common medications taken at typical indication doses, such as acetaminophen.

In March 2022, we obtained CE Mark approval for G7.

In December 2022, we obtained marketing authorization from the FDA for the G7 via the 510(k) review process.

Like the G6, the G7 is an iCGM, is classified as a Class II device by the FDA, and is subject to special controls.

The glucose value algorithm, ability to communicate with approved display and mobile devices, and compatibility with CLARITY® are all substantially equivalent in technical performance and capability to the G6.

We are working to obtain reimbursement coverage by Medicare and Medicaid and by commercial insurers in the United States.

Dexcom G7 is now cleared in the United States for all people with diabetes ages two years and older, giving more people than ever access to a powerfully simple diabetes management solution.

With an overall Mean Absolute Relative Difference, or MARD, of 8.2%, Dexcom G7 is the most accurate CGM cleared by the FDA, and is clinically proven to lower A1C (a blood test that provides information about average levels of blood glucose, over the prior three months), reduce hyper- and hypoglycemia and increase time in range.

The G7 carries forward important features of prior generation Dexcom CGM systems:

- Finger stick elimination. No finger sticks are needed for calibration or diabetes treatment decisions, consistent with the instructions for use, unless symptoms do not match readings.

- Continuous glucose readings. Automatically sends glucose readings to a Dexcom receiver or compatible display device every five minutes.

- Mobile app and sharing. Compatibility with mobile device applications allows for sharing glucose information with up to 10 other people for added support and care coordination.

- Designed to integrate with the world’s largest connected CGM ecosystem (including insulin pumps and smart insulin pens, Apple Watch, Garmin and other digital health apps).

- Customizable alarms and alerts. Personalized alert schedule immediately warns the user of pending dangerous high and low blood sugar levels.

- Easy sensor application. Complete redesign of the sensor applicator allows for one-touch, simple self-insertion.

- Predictive low alert. Alert feature intended to predict hypoglycemia before it hits to help avoid dangerous low blood sugar events.

- Extended 10-day disposable sensor.

The G7 also has a number of new or improved features compared to our prior generation devices.

- An even more discreet and low profile. A redesigned transmitter makes for an all-in-one wearable combining our sensor and transmitter that is 60% smaller than the G6, making it even more comfortable and easier to wear under clothing.

- Faster warm up. 30-minute sensor warm up, fastest of any CGM on the market.

- Expanded time to replace sensors. 12-hour grace period to replace finished sensors for a more seamless transition between sessions.

- New mobile app. Redesigned and simplified mobile app with Dexcom Clarity integration.

- Improved alert settings for enhanced discretion at the user’s option.

- Redesigned receiver. The optional receiver is smaller, with a more vibrant, easier to read display.

- New indications for use. Indicated in the United States for wear on the back of the upper arm for ages 2 years and older or the upper buttocks for ages 2-17 years old.

- Less waste. Smaller plastic components and packaging, resulting in less waste than the G6.

Other than the foregoing, the G7 is generally consistent with our prior generation CGM systems in its technical capabilities and its indications.

Since the G7 is classified by the FDA as a Class II device, it is subject to special controls and modifications of, or revisions to, the device may be made under the 510(k) process.

Real-Time API is not permitted for use in environments not currently cleared for the Dexcom CGM System (e.g., hospital inpatient care), and is not intended to be used by automated insulin delivery systems.

This growing diabetes prevalence and its associated health outcomes also result in sobering economic burdens for global health systems.

professionals and patients are knowledgeable about our products and their functionality.

In addition, our direct sales efforts include the use of e-commerce resources in certain international markets where we have not built a sales force.

We are also aware of companies outside the traditional medical device sector that are attempting to develop competitive products and services, including for the general health and wellness, or population health space.

We are also near completion of the initial phase of construction of a new facility in Malaysia that we anticipate will add substantial manufacturing capacity.

In December 2021, CMS published a final rule expanding the classification of DME under Medicare Parts B & C to also include adjunctive CGMs (i.e., CGMs do not replace standard blood glucose monitors for treatment decisions) and related supplies.

| Sustainability | | | | | | | | | | | | | | |

We believe that taking into account the interests of our various stakeholders – including patients, caregivers, employees, investors, and our communities – enables us to operate in a sustainable manner, supports the success of our business and drives long-term value.

| | | | | | | | | |

| | | | [Signatures](#i15862298089b493198685c5d6204a6cb_91) | | | [91](#i15862298089b493198685c5d6204a6cb_91) | | |

Product Candidates

We are pursuing regulatory approvals for our next generation G7 CGM system.

The G7 is designed with the goal of carrying forward many of the same features as our G6 CGM system and adding several new or improved features, including:

- Reduced size.

A 60% reduction in size of the on-body wearable.

- Fully disposable.

Sensor and transmitter combined into a single, disposable wearable.

- Simple application.

New application process streamlines the number of steps required.

- Faster warmup.

Warmup period expected to be reduced from the current two-hour warmup for G6.

- Reduced packaging waste.

Significant reduction to the product packaging waste profile on a per unit basis.

The G6 Pro has many of same features as the G6

on the broader Type 2 population that does not utilize mealtime insulin, a group that we estimate to be greater than 30 million people in the United States alone.

We directly market our products in the United States, Austria, Canada, Germany, Ireland, Switzerland, and the United Kingdom primarily to endocrinologists, physicians and diabetes educators.

Our campaigns target people with diabetes.

As of December 31, 2021, those single sources include

In September 2016, Germany’s Federal Joint Committee agreed to provide reimbursement for continuous glucose monitoring systems under certain conditions which we believe we meet.

them from bringing the proprietary rights of third parties to us.

| Corporate Responsibility | | | | | | | | | | | | | | |

We strive to advance the interests of all our stakeholders – including patients, caregivers, employees, investors, and our communities – by operating in an ethical and sustainable way.

Our Nominating and Governance Committee of the Board of Directors oversees and reviews annually (a) our policies and programs concerning (i) corporate social responsibility and (ii) our participation and visibility as a global corporate citizen; (b) our sustainability performance; and (c) the assessment and management of environmental, sustainability and governance risks affecting our business.

- changes in governmental regulations or administrative actions applicable to our trial protocols;

tam” actions.

It remains unclear what, if any, additional modifications will be made to the CPRA by the California legislature or how it will be interpreted.

Other states are also seeking to regulate consumer privacy stringently, and both Virginia and Colorado signed comprehensive privacy legislation into law in 2021.

These laws (the Virginia Consumer Data Protection Act and the Colorado Privacy Act) are set to come into force in 2023 and a number of other state legislatures are actively considering passing similar consumer privacy laws, including those in New York and Washington.

In addition, there has been a recent trend of increased federal and state regulation of payments and other transfers of value provided to healthcare professionals and entities.

As of December 31, 2021, we have approximately 6,300 full-time employees and approximately 700 contract and temporary employees around the globe.

| United States | | | | | | 2,000 | | | | | | 2,500 | | | | | | 4,500 | | | | | | 2,800 | | |

None of our employees are represented by a labor union or covered by a collective bargaining agreement, except for our employees in our Mainz, Germany location that are represented by a Works Council.

We have never experienced any employment-related work stoppages and we consider our employee relations to be good.

We are optimistic about the potential to expand our global workforce and create a more inclusive environment for all of our employees.

We are proud of the additional ground we have gained in 2021 to advance our efforts and the external recognition received in *Forbes* magazine, landing on its *Best Employers for Women*, *Best Employers for Diversity* and *Best in State Employer* lists for the U.S. offices, and the Investors In People Silver Certification awarded to our Dexcom Philippines office.

We established diversity, equity, and inclusion, or DEI, as a corporate objective under our 2021 corporate goal related to the employee experience and commitment.

We have also added several more employee resource groups for our employees globally.

In 2021, we launched an interactive foundational training program on DEI for our managers, in each of Dexcom’s global locations.