What changed in this filing

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Item 1. Business

2021-02-11 compared with 2020-02-13 · 250 added, 279 removed, 433 unchanged (55% of the section changed)

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and its subsidiaries.

The mailing address of our headquarters is 6340 Sequence Drive, San Diego, California, 92121 and our telephone number at that location is (858) 200-0200.

Our Internet website address is www.dexcom.com.

We provide free access to various reports that we file with or furnish to the SEC through our website, as soon as reasonably practicable after they have been filed or furnished.

These reports include, but are not limited to, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports.

Information on our website does not constitute part of this Annual Report on Form 10-K or other report we file or furnish with the SEC.

The reports are also available at www.sec.gov.

Also available on our website are printable versions of our Audit Committee charter, Compensation Committee charter, Nominating and Corporate Governance Committee charter, and Code of Conduct and Business Ethics.

Stockholders may request copies of these documents by mail or telephone, at the address or phone number provided above.

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

The G7 carries forward many of the same features as our G6 CGM system and adds 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.

In March 2018, we obtained marketing authorization from the FDA for the G6 via the de novo process.

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The G6 is designed to allow our transmitter to run an algorithm to generate a glucose value and to communicate directly to a patient’s compatible mobile device, including iPhone ® , iPod touch ® , iPad ® , and certain Android ® mobile devices.

A patient’s glucose data can also be displayed on wearable devices, like the Apple Watch ® and Wear OS by Google devices.

A patient’s glucose data can also be displayed on wearable devices,

like the Apple Watch ® and Wear OS by Google devices.

The G6 transmitter has a labeled useful life of three months.

Data from the G6 can be integrated with Dexcom CLARITY ® , our cloud-based reporting software, for personalized, easy-to-understand analysis of trends that may improve diabetes management.

In the United States, the G6 is covered by Medicare as well as those commercial insurers that reimburse for the DexCom G5 Mobile Continuous Glucose Monitoring System, subject to satisfaction of certain eligibility and coverage criteria.

In the United States, the G6 is covered by Medicare and Medicaid in the majority of states and by commercial insurers, subject to satisfaction of certain eligibility and coverage criteria for individuals with both Type 1 and Type 2 diabetes.

In June 2018, we received Conformité Européenne Marking, or CE Mark, approval for the G6, which allows us to market the system in the European Union and the countries in Asia and Latin America that recognize the CE Mark, as well as New Zealand, though certain countries may require compliance with certain local administrative requirements and/or additional marketing authorizations (for example, the inclusion of medical devices on the Australian Register of Therapeutic Goods in Australia).

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

Extended 10-day sensor.

• Extended 10-day disposable sensor.

Up to 10-day sensor use allows for 43% longer wear than previous generation Dexcom CGM systems.

Other than with respect to the foregoing, the G6 is equivalent to our prior generation CGM systems in its technical capabilities and its indications.

Other than the foregoing, the features of the G6 are generally consistent with our prior generation CGM systems in its technical capabilities and its indications.

Since the G6 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.

DexCom G5 ® Mobile

In August 2015, we received approval from the FDA for the DexCom G5 Mobile Continuous Glucose Monitoring System, also referred to as the G5 Mobile.

The G5 Mobile is designed to allow our transmitter to run the Software 505 algorithm, and to communicate directly to a patient’s compatible mobile device, including iPhone, iPod touch, iPad, and certain Android mobile devices.

The G5 Mobile transmitter has a labeled useful life of three months.

Data from the G5 Mobile can be integrated with DexCom CLARITY.

In September 2015, we launched the G5 Mobile in certain countries in Europe.

Similar to the G6, the disposable sensor is inserted by the user and is intended to be used continuously for up to seven days, after which it may be replaced with a new sensor.

The related transmitter is reusable until it reaches the end of its use life, and the related receiver is also reusable.

In December 2016, the FDA approved the G5 Mobile as the first CGM system in the United States to have a non-adjunctive indication.

The non-adjunctive indication expands the lawfully permitted use of the G5 Mobile as a replacement to finger stick glucose testing for diabetes treatment decisions.

With the new label indication, the G5 Mobile only requires two finger sticks per day for calibration.

In the countries and regions outside of the United States that recognize the CE Mark, as well as the United States and Canada, the G5 Mobile also does not require confirmatory finger sticks when making treatment decisions, although a minimum of two finger sticks a day remain necessary for calibration.

Approval of the non-adjunctive indication was also an important and necessary step in enabling people with Medicare to access CGM.

Except with respect to the foregoing, the G5 Mobile is functionally equivalent to our earlier generation CGM systems in its technical capabilities and its regulatory requirements and indications.

DexCom G4 ® PLATINUM

The DexCom G4 PLATINUM CGM system, or G4 PLATINUM, replaced our DexCom SEVEN PLUS system beginning in 2012, when it was approved for up to seven days of continuous use by adults with diabetes.

Since 2012, we have marketed the G4 PLATINUM under a CE Mark in the European Union, the countries in Asia and Latin America that recognize the CE Mark, New Zealand and Australia, and in the United States with approval from the FDA.

We received approvals for a pediatric indication under the CE Mark in February 2013 and from the FDA in February 2014, enabling us to market and sell this system to persons two years old and older who have diabetes.

In June 2014, we received approval from the FDA for an expanded indication for the G4 PLATINUM for professional use, which allows healthcare professionals to purchase the G4 PLATINUM system for use with multiple patients.

Healthcare professionals can use the insights gained from a G4 PLATINUM professional

session to adjust therapy and to educate and motivate patients to modify their behavior after viewing the effects that specific foods, exercise, stress and medications have on their glucose levels.

In October 2014, we launched our Software 505 algorithm for the G4 PLATINUM, an algorithm which enabled our systems to achieve a single digit MARD, a measure of the accuracy of continuous glucose monitoring.

Global revenues associated with the sales of our previous commercial products, the Dexcom G4 ® Platinum CGM system and G5® Mobile CGM system, or G5 Mobile, amount to less than 10% of our revenue for the fiscal year ended 2020 and we anticipate phasing out these commercial products by the end of 2021.

Dexcom Share ®

In 2015, we received approval from the FDA for the G4 PLATINUM with DexCom Share, or Share, and began commercializing this product in the United States in the first quarter of 2015 using a secure wireless connection between a patient’s G4 PLATINUM receiver and an app.

We now offer this feature through the G6 and the G5 Mobile apps as well as the Share2 app, which works with the G4 PLATINUM receiver with Share.

The Share remote monitoring system uses an app on the patient’s iPhone, iPod touch, iPad or Android mobile device to transmit glucose information to the cloud and then to apps on the mobile devices of up to five designated recipients, or “followers,” who can remotely monitor a patient’s glucose information and receive alert notifications anywhere they have an Internet or cellular connection.

The Dexcom Share remote monitoring system, offered for use with any current Dexcom system, uses an app on the patient’s iPhone, iPod touch, iPad or Android mobile device to securely and wirelessly transmit glucose information to the cloud and then to apps on the mobile devices of up to five designated recipients, or “followers,” who can remotely monitor a patient’s glucose information and receive alert notifications anywhere they have a wireless connection.

A patient’s glucose data can also be displayed on a patient’s or follower’s wearable device, such as the Apple Watch and Wear OS by Google devices, when used in conjunction with the patient’s or follower’s iPhone or Android mobile device.

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The general purpose of these development and commercial relationships is to integrate our technology into the insulin pump or pen product offerings of the respective partner, enabling the partner’s insulin delivery device to receive and display glucose readings from our transmitter and, in some cases, use the glucose readings for semi-automated insulin delivery.

Currently, we have announced significant insulin delivery partnerships with Eli Lilly, Insulet, Novo Nordisk and Tandem Diabetes.

Currently, we have announced significant insulin delivery partnerships with Eli Lilly, Insulet, Novo Nordisk, Tandem Diabetes and The Ypsomed Group.

In addition to these major partners, we are working with other companies that are pursuing varying strategies surrounding semi-automated insulin delivery and data analytics to improve outcomes and ease-of-use in diabetes management.

We have also entered into collaborations with several organizations that are currently using, or are developing, programs for the treatment of Type 2 diabetes that utilize our current CGM systems.

These collaborations align with the strategy to seek broader access to our CGM systems for people with Type 2 diabetes, including those who are not treated with intensive insulin therapy.

Verily Collaboration

On November 20, 2018, we entered into an Amended and Restated Collaboration and License Agreement with Verily Life Sciences LLC (an Alphabet Company) and Verily Ireland Limited (collectively, Verily), which we refer to as the Restated Collaboration Agreement.

This replaced our original Collaboration and License Agreement with Verily from August 2015, as amended in October 2016, and eliminated any future royalty obligations under the original agreement.

Pursuant to the Restated Collaboration Agreement, we and Verily have agreed to continue to jointly develop a certain next-generation CGM product, and potentially one or more additional CGM products, for which we will have exclusive commercialization rights.

The Restated Collaboration Agreement also provides us with an exclusive license to use intellectual property of Verily resulting from the collaboration, and certain Verily patents, in the development, manufacture and commercialization of blood-based or interstitial glucose monitoring products more generally (subject to certain exclusions, which are outside the CGM field as it is commonly understood).

Our Restated Collaboration Agreement with Verily Life Science LLC (an Alphabet Company) and Verily Ireland Limited (collectively, Verily) provides us with an exclusive license to use intellectual property of Verily resulting from the collaboration, and certain Verily patents, in the development, manufacture and commercialization of blood-based or interstitial glucose monitoring products more generally (subject to certain exclusions, which are outside the CGM field as it is commonly understood).

It also provides us with non-exclusive license rights under Verily’s other intellectual property rights to develop, manufacture, and commercialize those kinds of glucose monitoring products and certain CGM product companion software functionalities.

The Restated Collaboration Agreement requires us to use commercially reasonable efforts to develop, launch, and commercialize the CGM product(s) that are the subject of the collaboration according to certain timing and other objectives, and provides for one executive sponsor from each of us and Verily to meet periodically and make decisions related to the collaboration (within a limited scope of authority) by consensus.

In consideration of Verily’s performance of its obligations under the joint development plan of the Restated Collaboration Agreement, the licenses granted to us and the amendment of the original agreement, we have made upfront and incentive payments, and will make potential future milestone payments upon the achievement of certain goals, as follows:

On December 28, 2018, we made an initial payment of $250.0 million in shares of our common stock, calculated under the Restated Collaboration Agreement to be 1,840,943 shares of our common stock, allocated between Verily and Onduo, LLC, subject to certain transfer restrictions.

During 2019, we paid $3.2 million for the completion of certain development obligations before the agreed-upon deadline.

Additional milestone payments of up to $275.0 million may become due and payable by us upon the achievement of future product regulatory approval and revenue milestones.

At our election, we may make these milestone payments in shares of our common stock, also allocated between Verily and Onduo, LLC, with the number of shares being calculated based on the same share value that was used for purposes of the initial payment, adjusted for stock splits, dividends, and the like, subject to customary closing conditions, including any required antitrust approvals applicable to the issuance of such shares.

Alternatively, at our election, we may make any of these milestone payments in cash.

Any such cash

payment would be equal to the number of shares that would otherwise be issued for the given milestone payment (calculated as described above) multiplied by the value of our stock on the date the relevant milestone is achieved, adjusted for stock splits, dividends, and the like.

Future Products

We plan to develop future generations of technologies focused on improved performance and convenience and that will enable intelligent insulin administration.

We are also exploring how to extend our offerings to other opportunities, including for people with Type 2 diabetes that are non-insulin using, people with pre-diabetes, people who are obese, people who are pregnant, and people in the hospital setting.

We will continue to develop a networked platform with open architecture, connectivity and transmitters capable of communicating with other devices and software systems.

We also intend to expand our efforts to accumulate CGM patient data and metrics and apply predictive modeling and machine learning to generate interactive CGM insights that can inform patient behavior.

Diabetes is a disease with significant adverse consequences for human health throughout the world.

The International Diabetes Federation, or IDF , estimates that in 2019, 463 million adults (aged 20-79) around the world had diabetes, including 31 million in the United States.

IDF estimates that by 2045, the worldwide incidence of people suffering from diabetes will reach 700 million.

According to the Centers for Disease Control and Prevention’s National Vital Statistics Reports for 2017, diabetes was the seventh leading cause of death by disease in the United States, excluding comorbidities associated with the disease.

According to the Congressional Diabetes Caucus website, diabetes is the leading cause of kidney failure, adult-onset blindness, lower-limb amputations, and a significant cause of heart disease, stroke, high blood pressure and nerve damage.

According to the IDF , there were an estimated 4.2 million deaths attributable to diabetes globally in 2019 between the ages of 20 and 79 years.

The American Diabetes Association, or ADA , Fast Facts, revised in August 2017, states that diabetes is the primary cause of death for more than 80,000 Americans each year, and contributes to the death of more than 250,000 Americans annually.

Among people of all ages, 2017 data indicated the following:

An estimated 24.7 million people or 7.6% of the U.S.

population had been diagnosed with diabetes.

In addition to those newly diagnosed, the Congressional Diabetes Caucus website reports that every 24 hours there are:

238 amputations in people with diabetes, 120 people who enter end-stage kidney disease programs, and 48 people who go blind.

According to the ADA , one in every four healthcare dollars was spent on treating people with diabetes in 2017, and the direct medical costs and indirect expenditures attributable to diabetes in the United States were an estimated $327 billion, an inflation-adjusted increase of approximately 26% since 2012.

Of the $327 billion in overall expenses, the ADA estimated that approximately $237 billion were direct costs associated with diabetes care, chronic complications and excess general medical costs, and $90 billion were indirect costs.

The ADA also found that in 2017, average medical expenditures among people with diagnosed diabetes were 2.3 times higher than for people without diabetes.

According to the IDF , 2017 expenditures attributable to diabetes were estimated to be $760 billion globally.

The IDF estimates that expenditures attributable to diabetes will grow to $845 billion globally by 2045.

Continuous Glucose Monitoring

We believe continuous glucose monitoring has the potential to enable more people with diabetes to achieve and sustain tight glycemic control with minimal disruption to their daily lives.

The landmark 1993 Diabetes Control and Complications Trial , or DCCT, demonstrated that improving blood glucose control lowers the risk of developing diabetes-related complications by up to 50%.

The study also demonstrated that people with Type 1 diabetes achieved sustained benefits with intensive management.

However, according to an article published in The New England Journal of Medicine in November 2014, in two national registries, only 13% to 15% of people with diabetes met treatment guidelines for good glycemic control, and more than 20% had very poor glycemic control.

Various clinical studies and real world evidence also demonstrate the benefits of continuous glucose monitoring in the management of Type 1 diabetes and insulin-requiring Type-2 diabetes, when compared to regimens relying on self-monitoring of blood glucose.

Results of several early clinical trials established that CGM usage was associated with improved glycemic outcomes.

For instance, a Juvenile Diabetes Research Foundation, or JDRF , study published in the New England Journal of Medicine in 2008, and the extension phase of the study, published in Diabetes Care in 2009, demonstrated that continuous glucose monitoring improved A1c levels and reduced incidence of hypoglycemia for patients over the age of 25 and for all patients of all ages who utilized continuous glucose monitoring regularly.

In 2016, the first randomized, controlled study focusing solely on the benefit of continuous glucose monitoring for diabetes patients using multiple daily injections insulin therapy showed DexCom CGM system users on multiple daily injections of insulin therapy achieved a one percent average A1c reduction after 24 weeks of regular use, compared to their baseline.

Study participants also increased time spent in their target

A1c range and spent less time in hypoglycemia and hyperglycemia when they used a DexCom CGM system compared to those who used only a standard blood glucose meter to monitor their glucose.

This DIaMonD (Multiple Daily Injections and Continuous Glucose Monitoring in Diabetes) study is the first-of-its-kind in demonstrating the impact of CGM only, without insulin pumps or other therapeutic interventions, on A1c and hypoglycemia in participants using a multiple daily injection insulin regimen.

Real-time alerts and multi-device integration further differentiate CGM-based and self-monitoring of blood glucose, or SMBG, based diabetes regimens.

Alerts triggered by existing or impending abnormal glucose values are associated with less exposure to hypo- and hyperglycemia in large real-world data sets, and multi-device integration allows some CGM systems to communicate with automated insulin delivery systems.

One such automated insulin delivery system that uses the G6 was studied in a large clinical trial that associated its use with numerous quality-of-life and glycemic benefits.

In late 2019, the ADA, in its Standards of Medical Care in Diabetes, recognized CGM as a useful tool in diabetes management, citing level “A” evidence in Type 1 diabetes and level “B” evidence in Type 2 diabetes and pregnancy.

The ADA recommends continued access and use “as close to daily as possible” for maximal benefit.

We believe Dexcom’s CGM technology contributes to better glycemic outcomes and improved quality of life by allowing informed diabetes treatment decisions.

A 2019 white paper from IQVIA also outlines the potential benefit offered by use of CGM systems, suggesting that increasing time-in-range to industry standards for Type 1 and Type 2 insulin-using patients would result in significant cost savings to the economic system and the prevention of major complications.

Our current target market consists primarily of people with Type 1 and Type 2 diabetes who utilize insulin pump therapy or who utilize multiple daily insulin injections.

We continue to target people with Type 2 diabetes on multiple daily injection therapy and expect to expand our target market to include all people with diabetes, people with pre-diabetes, people who are obese, people who are pregnant, and people with diabetes in the hospital setting.

Although the majority of our revenue has been generated in the United States, we have expanded our operations to include certain countries in Africa, Asia, Europe, Latin America, and the Middle East, as well as Australia, Canada, and New Zealand .

Commercial Operations

We have built a direct sales organization in the United States, Canada and certain countries in Europe to call on healthcare professionals, including endocrinologists, physicians and diabetes educators, who can educate and influence patient adoption of continuous glucose monitoring.

We believe that focusing efforts on these participants is important given the instrumental role they each play in the decision-making process for diabetes therapy.

To complement our direct sales efforts, we have entered into distribution arrangements in the United States and internationally that allow distributors to sell our products.

We believe our direct, highly specialized and focused sales organization and our domestic and international distribution agreements are sufficient for us to support our sales efforts for at least the next twelve months.

Product revenues are generated from the sale of our CGM systems through a direct sales force in the United States, Austria, Canada, Germany, Switzerland and the United Kingdom as well as through distribution arrangements in the United States, Australia and New Zealand, and certain countries in Africa, Asia, Europe, Latin America, and the Middle East .

In consideration of Verily’s performance of its obligations under the joint development plan of the Restated Collaboration Agreement, the licenses granted to us and the amendment of the original agreement, we have made upfront and incentive payments, and will make potential additional milestone payments of up to $275.0 million that may become due and payable by us upon the achievement of future product regulatory approval and revenue milestones.

At our election, we may make these milestone payments in shares of our common stock or cash.

See Note 2 to the consolidated financial statements in Part II, Item 8 and Exhibit 10.31 of this Annual Report for a further description of the Restated Collaboration Agreement.

Market Opportunity

Diabetes is a chronic, life-threatening disease for which there is no known cure.

Diabetes is a chronic, life-threatening disease for which there is no known cure and which has other significant adverse consequences for human health throughout the world.

The disease is caused by the body’s inability to produce or effectively utilize the hormone insulin.

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Type 1 and Type 2.

The International Diabetes Federation, or IDF, estimates that in 2019, 463 million adults (aged 20-79) around the world had diabetes.

IDF estimates that by 2045, the worldwide incidence of people suffering from diabetes will reach 700 million.

According to the Centers for Disease Control and Prevention, or CDC, in its National Diabetes Statistics Report, 2020, or the 2020 CDC Report, crude estimates for the prevalence of diabetes in the United States as of 2018 include 34 million people with diabetes, of which 26.9 million people have diagnosed diabetes.

The 2020 CDC Report also lists diabetes as the seventh leading cause of death by disease in the United States, excluding comorbidities associated with the disease.

According to the IDF, there were an estimated 4.2 million deaths attributable to diabetes globally in 2019 between the ages of 20 and 79 years.

The American Diabetes Association, or ADA, Fast Facts, revised in February 2020, states that diabetes is the primary cause of death for more than 83,000 Americans each year, and contributes to the death of more than 270,000 Americans annually.

According to the ADA, one in every four healthcare dollars was spent on treating people with diabetes in 2017, and the direct medical costs and indirect expenditures attributable to diabetes in the United States were an estimated $327 billion, an inflation-adjusted increase of approximately 26% since 2012.

The ADA also found that in 2017, average medical expenditures among people with diagnosed diabetes were 2.3 times higher than for people without diabetes.

According to the IDF, 2019 expenditures attributable to diabetes were estimated to be $760 billion globally.

The IDF estimates that expenditures attributable to diabetes will grow to $845 billion globally by 2045.

Type 1 Diabetes

According to the ADA, as of 2017 there were an estimated 1.3 million people with Type 1 diabetes in the United States.

According to the 2020 CDC Report, as of 2018 there were an estimated 1.6 million adults and youth with diagnosed Type 1 diabetes in the United States.

Type 1 diabetes is an autoimmune disorder that usually develops during childhood and is characterized by an absence of insulin, resulting from destruction of the insulin producing cells of the pancreas.

Individuals with Type 1 diabetes must rely on frequent insulin injections in order to regulate and maintain blood glucose levels.

According to JDRF, 40,000 people are diagnosed with Type 1 diabetes each year in the United States and between the years 2001 and 2009 there was a 21% increase in the prevalence of Type 1 diabetes in people under the age of 20.

According to JDRF, greater than 60,000 people are diagnosed with Type 1 diabetes each year in the United States and 5 million people in the U.S.

are expected to have Type 1 diabetes by 2050.

In addition, according to the ADA in 2019, nearly 18,000 youth are newly diagnosed with Type 1 diabetes every year in the United States.

Type 2 Diabetes

According to the ADA, in 2012 there were approximately 27.8 million people in the United States with Type 2 diabetes.

Type 2 diabetes is a metabolic disorder which results when the body is unable to produce sufficient amounts of insulin or becomes insulin resistant.

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Type 2 diabetes is occurring with increasing frequency in young people, with the increase in prevalence related to an increase in obesity amongst children.

According to the Centers for Disease Control and Prevention, as of 2016, approximately 18.5% of children and adolescents aged 2-19 years, or 13.7 million children, in the United States were obese.

According to the CDC, as of 2016, approximately 18.5% of children and adolescents aged 2-19 years, or 13.7 million children, in the United States were obese.

Childhood obesity has more than doubled in children and quadrupled in adolescents in the past 30 years.

Diabetes and Glucose Management in the Hospital Setting

There are various subgroups of people with diabetes, including in-hospital patients, who present significant management challenges.

According to the ADA, diabetes-related inpatient hospitalizations totaled 40.3 million days and 22.2 million outpatient visits in 2017, with outpatient visits increasing 48% since 2012.

Additionally, market research shows that over 1.6 million patients are admitted with hyperglycemia prior to elective surgery, which results in delays and increased length of stay.

Once admitted, studies conducted by Hospital Health Network in 2013 and AACE in 2011 suggest that approximately 28% of patients experience hyperglycemia and 5% of patients experience hypoglycemia, both of which are preventable.

After discharge, patients who experienced hyperglycemia or hypoglycemia in the hospital have a higher rate of readmission within 30 days.

Approximately 30% of all health care expenditures incurred by people with diabetes come from higher rates of hospital admission and longer average lengths of stay per admission, constituting the single largest contributor to the medical cost of diabetes.

Of the $486 billion in national expenditures for hospital inpatient care in 2017, approximately $123 billion is incurred by people who have diabetes, of which $70 billion is directly attributed to their diabetes.

Importance of Glucose Monitoring

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As a result, many people with diabetes are routinely outside the normal blood glucose range.

In an attempt to maintain blood glucose levels within the normal range, people with diabetes must first measure their blood glucose levels.

Often, after measuring their blood glucose levels, people with diabetes make therapeutic adjustments.

As adjustments are made, additional blood glucose measurements may be necessary to gauge the individual’s response to the adjustments.

More frequent testing of blood glucose levels provides people with diabetes with information that can be used to better understand and manage their diabetes.

The ADA recommends that most people with Type 1 diabetes test their blood glucose levels at least three or more times per day, and that significantly more frequent testing may be required to reach A1c targets safely without hypoglycemia.

Clinical outcomes data support the notion that an important component of effective diabetes management is frequent monitoring of blood glucose levels.

The landmark 1993 DCCT consisting of patients with Type 1 diabetes, and the 1998 UK Prospective Diabetes Study, consisting of patients with Type 2 diabetes, demonstrated that people with diabetes who intensively managed their blood glucose levels delayed the onset and slowed the progression of diabetes-related complications.

The DCCT demonstrated that intensive management reduced the risk of complications by 76% for eye disease, 60% for nerve disease and 50% for kidney disease, but also found that it led to a three-fold increase in the frequency of hypoglycemic events.

In the December 2005 edition of the New England Journal of Medicine , the authors of a peer-reviewed study concluded that intensive diabetes therapy has long-term beneficial effects on the risk of cardiovascular disease in patients with Type 1 diabetes.

study showed that intensive diabetes therapy reduced the risk of cardiovascular disease by 42% and the risk of non-fatal heart attack, stroke or death from cardiovascular disease by 57%.

Failure to maintain blood glucose levels within the normal range leads to numerous and significant health risks.

These risks include eye disease, nerve disease, kidney disease, cardiovascular disease and potentially hypoglycemic events.

Limitations of Existing Glucose Monitoring Products

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Further, people with diabetes cannot test themselves during sleep, when the risk of hypoglycemia is significantly increased.

The following graph shows the limited information provided by four single-point measurements during a single day using a traditional single-point finger stick device, compared to the data provided by our continuous sensor.

The data presented in the graph is from a clinical trial we completed in 2003 with a CGM system, where the patient was blinded to the continuous glucose data.

The illustrative graph below shows the limited information provided by four single-point measurements during a single day using a traditional single-point finger stick device, compared to the data provided by our continuous sensor.

The continuous data indicates that, even with four finger sticks in one day, the patient’s blood glucose levels were above the target range of 80-140 milligrams per deciliter (“mg/dl”) for a period of 13.5 hours.

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The Dexcom Solution

Our G4 PLATINUM, G5 Mobile and G6 systems offer the following advantages to people with diabetes:

We believe continuous glucose monitoring has the potential to enable more people with diabetes to achieve and sustain tight glycemic control with minimal disruption to their daily lives.

The landmark 1993 Diabetes Control and Complications Trial, or DCCT, demonstrated that improving blood glucose control lowers the risk of developing diabetes-related complications by up to 50%.

The study also demonstrated that people with Type 1 diabetes achieved sustained benefits with intensive management.

Various clinical studies and real-world evidence also demonstrate the benefits of continuous glucose monitoring in the management of Type 1 diabetes and insulin-requiring Type-2 diabetes, when compared to regimens relying on self-monitoring of blood glucose.

Results of several early clinical trials established that CGM usage was associated with improved glycemic outcomes.

Real-time alerts and multi-device integration further differentiate CGM-based and self-monitoring of blood glucose, or SMBG, based diabetes regimens.

One such automated insulin delivery system that uses the G6 was studied in a large clinical trial that associated its use with numerous quality-of-life and glycemic benefits.

Our current target market consists primarily of people with Type 1 and Type 2 diabetes who utilize insulin pump therapy or who utilize multiple daily insulin injections.

We also believe that our CGM systems are beginning to have a positive impact

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 are extending our commercial efforts for this population through several channels, including through strategic partnerships.

In the future, we expect to expand our product offering to address people with pre-diabetes, people who are obese, people who are pregnant, and people in the hospital setting.

Our current CGM systems offer the following advantages to people with diabetes:

• Improved Outcomes.

Results of a major multicenter clinical trial funded by the JDRF demonstrated that patients with Type 1 diabetes who used continuous glucose monitoring devices to help manage their disease experienced significant improvements in glucose control.

Data published in a peer-reviewed article based on the pivotal trial for our first-generation system demonstrated that patients using the system showed statistically significant improvements in glucose levels within the target range when compared to patients relying solely on single-point finger stick measurements.

Additional peer-reviewed published data has demonstrated that patients with access to seven days of continuous glucose data statistically improved glucose control by further increasing their time spent with glucose levels in the target range, thereby reducing time spent in both hyperglycemic and hypoglycemic ranges.

Finally, peer reviewed data published from the DIaMonD study demonstrated that DexCom CGM system users on multiple daily injection insulin regimen achieved a one percent average reduction in hemoglobin A1c levels, a measure of the average amount of glucose in the blood over the prior three months, after 24 weeks of regular use, compared to their baseline.

Study participants also increased time spent in their target A1c range and spent less time in hypoglycemia and hyperglycemia when they used a DexCom CGM system compared to those who used only a standard blood glucose meter to monitor their glucose.

Randomized clinical trials and peer reviewed published data have demonstrated that patients with diabetes who used continuous glucose monitoring devices to help manage their disease experienced significant improvements in glucose control, including when compared to patients relying solely on single-point finger stick measurements (i.e., less time in hypoglycemia and hyperglycemia) and reductions in A1c levels when compared to baseline.

• Access to Real-Time Values, Trend Information and Alerts.

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Access to continuous real-time glucose measurements provides people with diabetes information that may aid in attaining better glucose control.

Additionally, our G4 PLATINUM, G5 Mobile and G6 systems alert people with diabetes when their glucose levels approach inappropriately high or low levels so that they may intervene.

Additionally, our current CGM systems alert people with diabetes when their glucose levels approach inappropriately high or low levels so that they may intervene.

• Intuitive User Interface.

We have developed a user interface that we believe is intuitive and easy to use.

The G5 Mobile and G6 receiver are compact with an easy-to-read color display, simple navigation tools, audible alerts and graphical display of trend information.

Our current CGM system receivers are compact with an easy-to-read color display, simple navigation tools, audible alerts and graphical display of trend information.

Similar benefits are available via the interfaces we have made available on compatible mobile devices.

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• Convenience and Comfort.

Our G4 PLATINUM, G5 Mobile and G6 systems provide people with diabetes with the benefits of continuous monitoring, without having to perform finger stick tests for every measurement.

Our current CGM systems provide people with diabetes with the benefits of continuous monitoring, without having to perform finger stick tests for every measurement.

Additionally, the disposable sensor that is inserted under the skin is a very thin wire, minimizing potential discomfort associated with inserting or wearing the disposable sensor.

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Patients can monitor their glucose levels and trends on compatible wearable devices, such as Apple Watch and Wear OS by Google devices, when used with a compatible mobile device.

Also, our Share remote monitoring systems enable users of our G4 PLATINUM with Share, G5 Mobile and G6 systems to have their sensor glucose information remotely monitored by their family, friends or designated recipient, or follower, by wirelessly transmitting data from the user’s smart phone to the cloud and then to the follower’s mobile device.

Also, our Share remote monitoring systems enable users of our current CGM systems to have their sensor glucose information remotely monitored by their family, friends or designated recipient, or follower, by wirelessly transmitting data from the user’s smart phone to the cloud and then to the follower’s mobile device.

Several followers can remotely monitor a patient’s glucose information and receive secondary alert notifications from almost anywhere with an Internet connection via each follower’s mobile device.

While we believe the G4 PLATINUM, G5 Mobile and G6 systems offer these advantages, people with diabetes may not perceive the benefits of continuous glucose monitoring and may be unwilling to change their current treatment regimens.

Furthermore, our G4 PLATINUM, G5 Mobile and G6 systems are only available by prescription in the United States and may not appeal to all types of people with diabetes.

Many international jurisdictions do not require a prescription for the dispensing of a specific device to a patient, however, the device must have received necessary regulatory approvals (e.g., Australia, Singapore and Germany).

In the United Kingdom and Germany, CGMs and most related supplies do not require a prescription to purchase;

however, a prescription is required for coverage.

The G4 PLATINUM and G5 Mobile systems prompt the user to replace the sensor no later than the seventh day, and the G6 prompts the user to replace the sensor no later than the tenth day.

The G4 PLATINUM is not indicated as a replacement device for single-point finger stick devices in the United States, must be calibrated initially using measurements from two single-point finger stick tests and thereafter at least every 12 hours

using single-point finger stick tests, and may be more costly to use than other glucose measurement devices.

In the United States, Canada and the countries and regions outside of the United States that recognize the CE Mark, our G5 Mobile system no longer requires confirmatory finger sticks when making treatment decisions although it does require two single-point finger stick tests each day for calibration.

In the United States, Canada and the countries and regions outside of the United States that recognize the CE Mark, our G6 does not require confirmatory finger sticks when making treatment decisions or finger stick tests each day for calibration, although it does require finger stick tests when symptoms do not match readings and when readings are unavailable.

Our objective is to remain a leading provider of CGM systems and related products to enable people with diabetes to more effectively and conveniently manage their disease.

Our objective is to remain a leading provider of CGM systems and related products to enable people with diabetes to more effectively and conveniently manage their condition.

We are also developing and commercializing products that integrate our CGM technologies into the insulin delivery systems or data platforms of our respective partners.

In addition, we continue to pursue development partnerships with other insulin delivery companies, including automated insulin delivery systems.

In addition, we continue to pursue development partnerships with other insulin delivery companies, including automated insulin delivery systems, as well as other players in the disease management sector.

To achieve these objectives, we are focusing on the following business strategies:

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• Driving the adoption of our ambulatory products through a direct sales and marketing effort, as well as key distribution arrangements.

Driving additional adoption through technology integration partnerships such as our current partnerships with Eli Lilly, Insulet, Novo Nordisk, Tandem Diabetes and others.

• Driving additional adoption through technology integration partnerships such as our current partnerships with Eli Lilly, Insulet, Novo Nordisk, Tandem Diabetes, The Ypsomed Group and others.

• Seeking broad coverage policies and reimbursement for our products from private third-party payors and national health systems.

• Driving increased utilization and adoption of our products through a cloud-based data repository platform that enables people with diabetes to aggregate and analyze data from numerous diabetes devices and share the data with their healthcare providers and other individuals involved in their diabetes management and care.

Expanding the use of our products to other patient care settings and patient demographics, including use in the hospital setting, people with Type 2 diabetes and people who are pregnant.

• Expanding the use of our products to other patient care settings and patient demographics, including use for people with Type 2 diabetes who are not on intensive insulin therapy, population health, patient monitoring including in the hospital setting, and people who are pregnant.

• Providing a high level of customer support, service and education.

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Receiver and Transmitter Technology

G4 PLATINUM uses proprietary radiofrequency, and G5 Mobile and G6 use Bluetooth, to wirelessly transmit information from the transmitter, which sits in a pod atop the sensor, to our receiver or to a compatible mobile device.

Our current CGM systems wirelessly transmit information from the transmitter, which sits in a pod atop the sensor, to our receiver or to a compatible mobile device.

We have developed technology for reliable transmission and reception and have consistently demonstrated a high rate of successful transmissions from transmitter to receiver or compatible mobile device in our clinical trials.

Our receiver or the mobile device, via our G5 Mobile and G6 apps, then displays both real-time and trended glucose values, and provides alerts and alarms.

Our receiver or the mobile device, via our apps, then displays both real-time and trended glucose values, and provides alerts and alarms.

We have used our extensive database of continuous glucose data to create and refine software, algorithms and other technology for the display of data to customers.

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Over the longer term, we plan to continue to develop and improve networked platforms with open architecture, connectivity and transmitters capable of communicating with other devices.

We also continue to pursue and support development partnerships with insulin pump companies and companies or institutions developing insulin delivery systems, including automated insulin delivery systems.

In the future, we intend to seek additional indications for our CGM technology, including applications in pregnancy and hospital monitoring.

We intend to expand our efforts to accumulate CGM patient data and metrics and apply predictive modeling and machine learning to generate interactive CGM insights that can inform patient behavior.

We continue to pursue and support development partnerships with insulin pump companies and companies or institutions developing insulin delivery systems, including automated insulin delivery systems.

We are also exploring how to extend our offerings to other populations, including for people with Type 2 diabetes that are non-insulin using, people with pre-diabetes, people who are obese, people who are pregnant, and people in the hospital setting.

Eventually, we may apply our technological expertise to products beyond glucose monitoring.

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After a stabilization period with the G6, the user will begin receiving CGM data on his or her mobile device or dedicated receiver through the ten-day usage period.

After a stabilization period with the G5 Mobile, the user is required to calibrate the sensor with two measurements from a single-point finger stick device and the disposable sensor begins wirelessly transmitting the continuous glucose data at specific intervals to the handheld receiver or compatible mobile device.

After a stabilization period with the G5 Mobile, the user is required to calibrate the

sensor with two measurements from a single-point finger stick device and the disposable sensor begins wirelessly transmitting the continuous glucose data at specific intervals to the handheld receiver or compatible mobile device.

Users are prompted by the receiver or mobile app, if using the G5 Mobile, to calibrate the system twice per day with finger stick measurements throughout the use period to ensure reliable operation.

Calibration may be accomplished by using any FDA cleared blood glucose meter.

Currently, the G4 PLATINUM system is indicated for use as an adjunctive device to complement, not replace, information obtained from standard home blood glucose monitoring devices.

Our G6 and G5 Mobile systems both have labeling from the FDA and CE Mark permitting their use as a replacement for finger sticks for making therapeutic adjustments, although the G5 Mobile still requires two daily finger stick calibrations.

The disposable sensor contained in the G6 system is intended to function for up to ten days and the G5 Mobile and G4 PLATINUM systems are intended to function for up to seven days, after which the sensor should be replaced.

Our G6 system has labeling from the FDA and CE Mark permitting their use as a replacement for finger sticks for making therapeutic adjustments, although the G5 Mobile still requires two daily finger stick calibrations.

The disposable sensor contained in the G6 system is intended to function for up to ten days, after which the sensor should be replaced.

To replace a sensor, the user simply removes the pod and attached sensor from the skin and discards them while retaining the reusable transmitter.

A new sensor and pod can then be inserted and used with the same receiver and transmitter for a subsequent use period.

We are aware of reports from the field, however, that patients have been able to use the G6 and the G5 Mobile and G4 PLATINUM sensors for periods longer than ten or seven days, respectively.

Handheld Receiver

Our small handheld receiver is carried by the user and wirelessly receives continuous glucose values from the transmitter.

Proprietary algorithms and software, developed from our extensive database of continuous glucose data from clinical trials, are programmed into the G4 PLATINUM receiver to process the glucose data from the sensor and display it on a user-friendly graphical user interface.

For the G5 Mobile and G6, the algorithm resides on the transmitter, which then sends the processed glucose data to the receiver.

Proprietary algorithms and software, developed from our extensive database of continuous glucose data from clinical trials, are programmed into the G6 transmitter to process the glucose data from the sensor, which then sends the processed glucose data to the receiver and displays it on a user-friendly graphical user interface.

With a push of a button, the user can access their current glucose value and one-, three-, six-, twelve- and twenty-four-hour trended data.

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Compatible Mobile Devices

With our G5 Mobile and G6 systems, the functionalities of our proprietary receiver can be obtained through the use of a compatible mobile device, such as an iOS or Android device, and our mobile applications, depending on the patient’s geographic location.

With our G6 system, the functionalities of our proprietary receiver can be obtained through the use of a compatible mobile device, such as an iOS or Android device, and our mobile applications, depending on the patient’s geographic location.

A receiver may be required as the primary display device or a backup to the mobile device in some jurisdictions, including the United States.

Sales and Marketing

We have built a direct sales organization to call on health care professionals, such as endocrinologists, physicians and diabetes educators, who can educate and influence patient adoption of continuous glucose monitoring.

Commercial Operations

We have built a direct sales organization in the United States, Canada and certain countries in Europe to call on health care professionals, such as endocrinologists, physicians and diabetes educators, who can educate and influence patient adoption of continuous glucose monitoring.

We believe that focusing efforts on these participants is important given the instrumental role they each play in the decision-making process for diabetes therapy, and to ensure that health care professionals and patients are knowledgeable about our products and their functionality.

We focus on delivering this important information to participants to drive adoption of our G4 PLATINUM, G5 Mobile and G6 systems.

We focus on delivering this important information to participants to drive adoption of our current CGM systems.

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.

Although the number of diabetes patients is significant, the number of physicians and educators influencing these patients is relatively small.

As of 2018, we estimate there were approximately 6,500 clinical endocrinologists who treat diabetes in the United States.

As a result, we believe our direct, highly specialized and focused sales organization is sufficient for us to support our sales efforts for the foreseeable future.

We also are increasing our direct to consumer marketing efforts to increase awareness of our CGM systems and drive new patient leads to our website.

To complement our direct sales efforts, we have entered into distribution arrangements in the United States, Australia and New Zealand, and certain countries in Africa, Asia, Europe, Latin America, and the Middle East that allow distributors to sell our products.

We expect to continue investing in our field sales force and believe our direct, highly specialized and focused sales organization and our domestic and international distribution agreements are sufficient for us to support our sales efforts for at least the next twelve months.

Direct to consumer marketing is one of our key initiatives to increase awareness of our CGM systems and drive new patient leads to our website.

We target people with Type 1 and insulin intensive Type 2 diabetes.

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• maintaining a readily accessible telephone and web-based technical and customer support infrastructure, which includes clinicians, diabetes educators and reimbursement specialists, to help referring physicians, diabetes educators and people with diabetes as necessary.

Our sales organization competes with the experienced and well-funded marketing and sales operations of our competitors.

As compared to some of our competitors, we have relatively limited experience maintaining and managing a direct sales organization, and it is a difficult, expensive and time-consuming process.

To continue to be successful we must:

recruit and retain adequate numbers of effective sales personnel;

effectively train our sales personnel in the benefits of our products;

establish and maintain successful sales, marketing, training and education programs to educate endocrinologists, physicians, diabetes educators and patients about our products;

manage geographically disbursed operations;

effectively train our sales personnel on the applicable fraud and abuse laws that govern interactions with healthcare practitioners as well as current and prospective patients and maintain active oversight and auditing measures to ensure continued compliance.

We typically experience seasonality, with lower sales in the first quarter of each year compared to the immediately preceding fourth quarter.

This seasonal sales pattern relates to U.S.

annual insurance deductible resets and unfunded flexible spending accounts.

The market for blood glucose monitoring devices is intensely competitive, subject to rapid change and significantly affected by new product introductions and other market activities of industry participants.

In selling the G4 PLATINUM, G5 Mobile and G6 systems, we compete directly with the Diabetes Care division of Abbott Laboratories;

In selling our current CGM systems, we compete directly with the Diabetes Care division of Abbott Laboratories;

Medtronic plc’s Diabetes Group;

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Several companies are developing or commercializing products for continuous or periodic monitoring of glucose levels in the interstitial fluid under the skin that compete directly with our products.

In 2015, Abbott Diabetes Care, Inc.

launched a consumer flash or intermittent scan glucose monitoring system, FreeStyle Libre outside the United States.

Abbott first received FDA approval for a professional-use version of this system in September 2016 for use in the United States for which readings are only made available to the patient through consultation with their healthcare provider.

Abbott first received FDA approval for the consumer version of this system in September 2017 for use in the United States.

Medtronic plc’s Diabetes Group markets and sells a standalone glucose monitoring product called Guardian Connect, which has launched both internationally and in the United States after receiving FDA approval in 2018.

We have competed with Abbott and their Libre family of CGM products for many years.

Medtronic markets and sells a standalone glucose monitoring product called Guardian Connect, both internationally and in the United States.

Medtronic and other third parties have developed or are developing, insulin pumps integrated with continuous glucose monitoring systems that provide, among other things, the ability to suspend insulin administration while the user’s glucose levels are low and to automate basal or bolus insulin dosing.

Medtronic launched its 670G insulin delivery system in 2017.

We also have begun to become 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.

Some of the companies developing or marketing competing devices are large and well-known publicly traded companies.

We believe that the principal competitive factors in our market include:

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• technological leadership and superiority.

For additional information, see our Risk Factors, including We operate in a highly competitive market and face competition from large, well-established medical device manufacturers with significant resources, and, as a result, we may not be able to compete effectively .

For additional information on competition, please see our Risk Factor entitled “ We operate in a highly competitive market and face competition from large, well-established companies with significant resources, and, as a result, we may not be able to compete effectively.”

Manufacturing

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Our Mesa, Arizona facility has approximately 14,000 square feet of laboratory space and approximately 33,000 square feet of controlled environment rooms.

In 2020, we commenced construction of a new facility in Malaysia that we anticipate will add substantial manufacturing capacity.

There are technical challenges to increasing manufacturing capacity, including FDA qualification of new manufacturing facilities, equipment design and automation, material procurement, problems with production yields, and quality control and assurance.

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Additionally, the production of our continuous glucose monitoring systems must occur in a highly controlled and clean environment to minimize particles and other yield- and quality-limiting contaminants.

Developing and maintaining commercial-scale manufacturing facilities has and will continue to require the investment of substantial additional funds and the hiring and retaining of additional management, quality assurance, quality control and technical personnel who have the necessary manufacturing experience.

We manufacture our G4 PLATINUM, G5 Mobile and G6 systems with certain components supplied by outside vendors and other components that we manufacture internally.

Developing and maintaining commercial-scale manufacturing facilities has and will continue to require the investment of substantial additional funds and the hiring and

retaining of additional management, quality assurance, quality control and technical personnel who have the necessary manufacturing experience.

We manufacture our current CGM systems with certain components supplied by outside vendors and other components that we manufacture internally.

Key components that we manufacture internally include our wire-based sensors.

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As of December 31, 2020, those single sources include suppliers of application-specific integrated circuits used in our transmitters, seals used for the applicator and certain polymers used to synthesize polymeric membranes for our sensors.

The advantages of the manufacturing facility in Mesa, Arizona include increasing our capacity to:

mitigate the constraints we anticipated in our headquarters facilities continuing in 2020;

geographically diversify our manufacturing base to mitigate the risks of having all of our manufacturing located in earthquake and fire-prone California;

help manage certain of our operating expenses by taking advantage of Arizona’s lower costs and taxes relative to California.

Third-Party Reimbursement

As a medical device company, reimbursement from Medicare, Medicaid or other governmental healthcare programs or systems, and private third-party healthcare payors is an important element of our success.

In January 2017, the Centers for Medicare and Medicaid, or CMS , established a classification of “Therapeutic Continuous Glucose Monitors” as durable medical equipment under Medicare Part B, subject to payment by Medicare under certain coverage conditions to be determined

by CMS, by local Medicare Administrative Contractors or on a patient claim by claim basis.

This is a decision we had pursued for many years and which was made possible by the FDA’s decision in December 2016 to approve a non-adjunctive indication, or use, for our G5 Mobile system, as described further in the Government Regulation section below.

Similarly, 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.

Our G4 PLATINUM system is not classified as a Therapeutic CGM by CMS and thus remains ineligible for reimbursement within the Medicare-eligible population.

Reimbursement of our G4 PLATINUM system, or any future system that does not meet the requirements for Therapeutic CGMs under Medicare Part B or the requirements of another governmental healthcare system, will be limited to those customers covered by third-party payors that have adopted coverage policies for continuous glucose monitoring devices that include our products.

In January 2017, the Centers for Medicare and Medicaid, or CMS, established a classification of “Therapeutic Continuous Glucose Monitors” as durable medical equipment under Medicare Part B, subject to payment by Medicare under certain coverage conditions to be determined by CMS, by local Medicare Administrative Contractors or on a patient claim by claim basis.

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.

We also have coverage under certain international markets and Medicaid coverage in 40 states.

As of December 31, 2020, the seven largest private third-party payors, in terms of the number of covered lives, have issued coverage policies for the category of continuous glucose monitoring devices.

In addition, we have negotiated contracted rates with all seven of those third-party payors for the purchase of our G4 PLATINUM, G5 Mobile and G6 systems by their members.

Many of these coverage policies reimburse for our products under durable medical equipment benefits, are restrictive in nature and require the patient to comply with extensive documentation and other requirements to demonstrate medical necessity under the policy.

Customers who are insured by payors that do not offer coverage for our devices will have to bear the financial cost of the products.

In addition, we have negotiated contracted rates with all seven of those third-party payors for the purchase of our current CGM systems by their members.

We have personnel with reimbursement expertise to assist customers in obtaining reimbursement from private third-party payors.

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We have continued our efforts to create and liberalize coverage policies with third-party payors, including obtaining reimbursement for our products under pharmacy benefits and for more people with diabetes.

Medicare, Medicaid, other governmental health programs, health maintenance organizations and other third-party payors are increasingly attempting to contain healthcare costs by limiting both coverage and the level of reimbursement of medical devices, and, as a result, their coverage policies may be restrictive, or they may not cover or provide adequate payment for our products.

In order to obtain reimbursement arrangements, we may have to agree to a net sales price lower than the net sales price we might charge in other sales channels or that we have charged in the past.

Our revenue may be limited by the continuing efforts of government and third-party payors to contain or reduce the costs of healthcare through various increasingly sophisticated means, such as requiring prospective reimbursement and second opinions, purchasing in a bundle, or redesigning benefits.

Furthermore, we are unable to predict what effect the current or any future healthcare reform will have on our business, or the effect these matters will have on our customers.

Our dependence on the commercial success of the G4 PLATINUM, G5 Mobile and G6 systems makes us particularly susceptible to any cost containment or reduction efforts.

Accordingly, unless government and other third-party payors provide adequate coverage and reimbursement for the G4 PLATINUM, G5 Mobile and G6 systems, people without coverage who have diabetes may not use our products.

Additionally, Medicare does not cover any items or services that are not “reasonable and necessary.” Medicare covers the CGM system, which includes supplies necessary for the use of the device, under the Durable Medical Equipment, or DME, benefit category.

In order to be covered under this benefit, one component of the CGM system must meet the criteria for a durable medical device.

To date, the receiver satisfied this criteria.

In some foreign markets, pricing and profitability of medical devices are subject to government control.

In the United States, we expect that there will continue to be federal and state proposals for similar controls.

Also, the managed care trends and the consolidation in the health care industry in the United States and proposed legislation intended to reduce the cost of government insurance programs could significantly impact the purchase of health care services and products and has resulted in lower prices for our products or the exclusion of our products from certain reimbursement programs.

For additional information, see Risk Factors Managed care trends and consolidation in the health care industry could have an adverse effect on our revenues and results of operations .

and Health care policy changes, including U.S.

For additional information on third-party reimbursement, please see our see Risk Factors entitled “ Managed care trends and consolidation in the health care industry could have an adverse effect on our revenues and results of operations.” and “ Health care policy changes, including U.S.

health care reform legislation, may have a material adverse effect on our business .”

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We rely on a combination of patents, copyrights, trademarks, tradenames, trade secrets, nondisclosure agreements and other measures to establish and protect our proprietary rights.

As of December 31, 2019 , we had 516 issued U.S.

patents in force, and numerous U.S.

published patent applications pending.

We believe it will take up to five years, and possibly longer, for our pending U.S.

patent applications to result in issued patents.

As of December 31, 2019 , we had 50 granted European patents, and numerous European patent applications and published international applications pending under the Patent Cooperation Treaty.

Our patents began expiring in 2017.

We also have 31 registered U.S.

trademarks, 21 registered European Community trademarks, and many other trademark registrations

and pending trademark applications around other parts of the world.

Our patent portfolio includes numerous issued and pending patent applications in the U.S.

and other parts of the world, which in the aggregate, we believe to be of material importance in the operation of our business.

patents, as well as most foreign patents, are generally effective for 20 years from the date the earliest application was filed.

In some cases, the patent term may be extended.

Our issued patents as of December 31, 2020 are set to expire over a range of years, from 2021 with respect to some of our earlier patents, to 2039, subject to any extensions.

We also have various registered U.S.

trademarks, registered European Community trademarks, and many other trademark registrations and pending trademark applications around other parts of the world.

In addition, we have entered into exclusive and non-exclusive licenses in the ordinary course of business relating to a wide array of technologies or other intellectual property rights or assets.

Our Restated Collaboration Agreement with Verily provides us with an exclusive license to use intellectual property of Verily resulting from the collaboration, and certain Verily patents in the development, manufacture and commercialization of blood-based or interstitial glucose monitoring products more generally (subject to certain exclusions, which are outside the CGM field as it is commonly understood).

It also provides us with non-exclusive license rights under Verily’s other intellectual property rights to develop, manufacture and commercialize those kinds of glucose monitoring products and certain CGM-product companion software functionalities.

Our patents and patent applications seek to protect aspects of our core membrane and sensor technologies and our product concepts for continuous glucose monitoring.

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We also face risks associated with intellectual property infringement.

For additional information, see our Risk Factors, including We are subject to claims of infringement or misappropriation of the intellectual property rights of others, which could prohibit us from shipping affected products, require us to obtain licenses from third parties or to develop non-infringing alternatives, and subject us to substantial monetary damages and injunctive relief.

We may also be subject to other claims or suits.

and Our inability to adequately protect our intellectual property could allow our competitors and others to produce products based on our technology, which could substantially impair our ability to compete .

We also rely on trade secrets, technical know-how and continuing innovation to develop and maintain our competitive position.

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Despite measures taken to protect our intellectual property, unauthorized parties might copy aspects of our products or obtain and use information that we regard as proprietary.

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.

We do this by holding true to our core values:

Listen, Think Big, Be Dependable, and Serve with Integrity.

These values are at the heart of our sustainability activities.

• Listen – We believe in listening to our customers and our employees.

We have launched a number of programs to advocate for individuals living with diabetes and we support our employees and their families through a number of benefit programs that are available.

In addition, we promote diversity, practice fairness, and treat everyone with respect and dignity.

• Think Big - We seek to expand global healthcare access for people with diabetes and actively work to increase access to our products.

We also have committed to operate our business in a manner that is protective of the environment and conserves natural resources and reduces waste.

• Be Dependable – We are committed to quality and believe that is best achieved through a safe and healthy workplace as well as a Quality Management System that is compliant with all applicable regulatory requirements and which is continuously being improved.

• Serve with Integrity – While oversight of our ethics and governance structure begins with our Board of Directors and Executive Leadership Team, we expect all employees to foster a culture of accountability in line with our Code of Conduct and Business Ethics.

We also maintain a compliance program to help enforce ethical conduct and adherence to applicable laws and regulations.

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.

Our Sustainability Report is available at https://investors.dexcom.com/corporate-governance, which is provided for reference only and is not incorporated by reference into this Annual Report on Form 10-K.

Government Regulation

The medical devices that we manufacture are subject to regulation by numerous regulatory bodies, including the U.S.

FDA and comparable international regulatory agencies.

The medical devices that we manufacture are subject to regulation by numerous regulatory bodies, including the FDA and comparable international regulatory agencies.

These agencies require manufacturers of medical devices to comply with applicable laws and regulations governing the development, testing, manufacturing, labeling, marketing and distribution of medical devices.

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states also impose licensing and compliance regimes on companies that manufacture or distribute prescription devices in the state.

In addition, the delivery of our devices in the U.S market is subject to regulation by the U.S.

Department of Health and Human Services and comparable state agencies responsible for reimbursement and regulation of payment for health care items and services.

laws and regulations are imposed primarily in connection with the Medicare and Medicaid programs, as well as the government’s interest in regulating the quality and cost of health care.

In addition, the delivery of our devices in the U.S market is subject to regulation by various U.S.

Department of Health and Human Services divisions including CMS, the DHHS Office of the Inspector General, or OIG, the Department of Veterans Affairs, and comparable state agencies responsible for reimbursement and regulation of payment for health care items and services.

laws and regulations are imposed primarily in connection with the Medicare, Medicaid, and TRICARE programs, as well as the government’s interest in regulating the quality and cost of health care.

FDA Regulation

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and final reclassification order published in the Federal Register).

Our G4 PLATINUM and G5 Mobile systems (excluding associated Share System functionalities and mobile applications) have been classified as devices requiring PMA approval.

Our G4 PLATINUM and G5 Mobile systems (excluding associated Share System functionalities and mobile applications) were classified as devices requiring PMA approval.

A PMA application must be supported by valid scientific evidence, which typically requires extensive data, including technical, pre-clinical, clinical, manufacturing and labeling data, to demonstrate to the FDA’s satisfaction the safety and efficacy of the device.

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During this review period, the FDA may request additional information or clarification of information already provided.

Also during the review period, an advisory panel of experts from outside the FDA may be convened to review and evaluate the application and provide recommendations to the FDA .

Also during the review period, an advisory panel of experts from outside the FDA may be

convened to review and evaluate the application and provide recommendations to the FDA.

In addition, the FDA generally will conduct a pre-approval inspection of the manufacturing facility to evaluate compliance with QSR, which requires manufacturers to implement and follow design, testing, control, documentation and other quality assurance procedures.

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• the FDA concludes that the results from our trial and/or trial design are inadequate to demonstrate safety and effectiveness of the product.

In November 2011, we received 510(k) clearance from the FDA to market to clinics a data management service, which helps healthcare providers and patients see, understand and use blood glucose meter data to diagnose and manage diabetes.

In 2014, we submitted a request to the FDA via the de novo process and the FDA agreed that our data management services with CGM data is classified as Class I.

Our data transfer service allows researchers to control the transfer of data from certain diabetes devices to research tools and databases according to their own research workflows.

We have a Class I data management service which we market to clinics.

This service helps healthcare providers and patients see, understand and use blood glucose meter data to diagnose and manage diabetes.

The service also allows researchers to control the transfer of data from certain diabetes devices to research tools and databases according to their own research workflows.

The infrastructure of the data management service is considered “medical device data systems,” or MDDS, and does not require 510(k) clearance.

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MDDS are not intended to be used for active patient monitoring.

On February 15, 2011, the FDA issued a regulation down-classifying MDDS from Class III (high-risk) to Class I (low-risk).

Since down-classifying MDDS, the FDA gained additional experience with these types of technologies, and determined that these devices pose a low risk to the public.

Therefore, the FDA stated in 2014 guidance that it did not intend to enforce compliance with the regulatory controls that apply to MDDS devices, including registration and listing, premarket review, postmarket reporting, and QSR for manufacturers of these types of devices.

In 2016, the 21st Century Cures Act amended the Food, Drug, and Cosmetic Act’s definition of “device” to exclude certain software functions, thus products meeting the definition of MDDS are no longer considered devices and thus are not subject to FDA regulatory requirements.

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After a medical device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a significant change in its intended use, requires a new 510(k) clearance.

In March 2018, we obtained marketing authorization for our G6 as an integrated continuous glucose monitoring, iCGM, system for determining glucose (sugar) levels in children aged two and older and adults with diabetes, via the de novo process.

In March 2018, we obtained marketing authorization for our G6 as an iCGM system for determining glucose (sugar) levels in children aged two and older and adults with diabetes, via the de novo process.

After a device is authorized for marketing and placed in commercial distribution, numerous regulatory requirements apply.

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• operating restrictions;

• injunctions;

• criminal prosecution.

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The definition of “remuneration” has been broadly interpreted to include anything of value, including such items as gifts, discounts, the furnishing of supplies or equipment, credit arrangements, waiver of payments, and providing anything at less than its fair market value.

The Department of Health and Human Services - Office of the Inspector General, or OIG, has issued regulations, commonly known as safe harbors, that set forth certain provisions which, if satisfied in their entirety, will assure healthcare providers and other parties that they will not be prosecuted under the federal Anti-Kickback Statute.

The failure of a transaction or arrangement to fit precisely within one or more safe harbors does not necessarily mean that it is illegal or that prosecution will be pursued.

However, conduct and business arrangements that do not fully satisfy each applicable safe harbor element may result in increased scrutiny by government enforcement authorities or invite litigation by private citizens under federal whistleblower laws.

The penalties for violating the federal Anti-Kickback Statute include imprisonment for up to ten years, fines of up to $100,000 per violation and possible exclusion from federal healthcare programs such as Medicare and Medicaid.

Many states have adopted prohibitions similar to the federal Anti-Kickback Statute, some of which apply to the referral of patients for healthcare services reimbursed by any source, not only by the government programs such as Medicare and Medicaid.

Federal False Claims Act.

The federal False Claims Act prohibits knowingly presenting, or causing to be presented a false claim or the knowing use of false statements or records to obtain payment from the federal government.

When an entity is determined to have violated the False Claims Act, it must pay three times the actual damages sustained by the government, plus mandatory civil penalties of between $11,181 and $22,363 for each separate false claim.

Suits filed under the False Claims Act, known as “qui tam” actions, can be brought by any individual on behalf of the government and such individuals (known as “relators” or, more commonly, as “whistleblowers”) may share in any amounts paid by the entity to the government in fines or settlement.

Given the breadth of this prohibition, Congress has issued a number of exceptions and has granted authority to the OIG to issue safe harbor regulations, each of which set forth certain provisions which, if satisfied in their entirety, will assure parties to the arrangement that they will not be prosecuted under the federal Anti-Kickback Statute.

The failure of a transaction or arrangement to fit precisely within one or more exceptions or safe harbors is not per se illegal;

rather, each arrangement is subject to a facts and circumstances analysis to determine whether the requisite improper intent exists.

Therefore, conduct and business arrangements that do not fully satisfy each applicable exception or safe harbor element may result in increased scrutiny by government enforcement authorities or invite litigation by private citizens under federal whistleblower laws.

Federal Civil False Claims Act.

The federal Civil False Claims Act prohibits knowingly presenting, or causing to be presented a false claim or the knowing use of false statements or records to obtain payment from the federal government.

Suits filed under the False Claims Act can be brought by any individual on behalf of the government and such individuals (known as “relators” or, more commonly, as “whistleblowers”) may share in any amounts paid by the entity to the government in fines or settlement.

These whistleblower-initiated False Claims Act cases are commonly referred to as “qui tam” actions.

False Claims Act cases may also be initiated by the U.S.

Department of Justice or any of its local U.S.

Attorneys’ Offices.

In addition, certain states have enacted laws modeled after the federal False Claims Act.

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Healthcare companies may decide to agree to large settlements with the government and/or whistleblowers to avoid the cost and negative publicity associated with litigation.

Federal enforcement agencies also have showed increased interest in

pharmaceutical companies’ product and patient assistance programs, including reimbursement and co-pay support services, and a number of investigations into these programs have resulted in significant civil and criminal settlements.

In addition, the Affordable Care Act amended federal law to provide that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act.

Criminal prosecution is possible for knowingly making or presenting a false or fictitious or fraudulent claim to the federal government.

Federal enforcement agencies also have showed increased interest in pharmaceutical companies’ product promotion, health care professional engagements, and patient assistance programs, including reimbursement and co-pay support services, and a number of investigations into these programs have resulted in significant civil and criminal settlements.

In addition, the Affordable Care Act amended federal law to provide that the

government may assert that a claim for items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act.

Criminal prosecution is also possible for knowingly making or presenting a false or fictitious or fraudulent claim to the federal government.

Federal Physician Self-Referral Law.

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The Stark Law also prohibits such an entity from presenting or causing to be presented a claim to the Medicare program for such designated health services provided pursuant to a prohibited referral, and provides that certain collections related to any such claims must be refunded in a timely manner.

Because we bill Medicare for DME and related supplies, the company’s financial relationships with referring physicians are governed by the Stark Law.

Exceptions to the Stark Law include, among other things, exceptions for certain financial relationships, including both ownership and compensation arrangements.

The Stark Law is a strict liability statute, therefore, to the extent that the statute is implicated and an exception does not apply, the statute is violated.

In addition to the Stark Law, many states have implemented similar physician self-referral prohibitions that may extend to Medicaid, third party payors, and self-pay patients.

Violations of the Stark Law must be reported and returned to Medicare in order to avoid potential liability under the federal False Claims Act for avoiding a known obligation to return identified overpayments.

Violations of the Stark Law, the Anti-Kickback Statute, the Civil Monetary Penalties Law and/or the federal False Claims Act can also form the basis for exclusion from participation in federal and state healthcare programs.

In the fall of 2020, we transitioned our Medicare business to distributors and no longer bill Medicare directly for DME and related supplies.

In doing so, we have limited our exposure under the Stark Law.

In addition to the Stark Law, many states have implemented similar physician self-referral prohibitions that may extend to Medicaid, third party payors, and self-pay patients, and may be applicable to our relationships with physicians and other health care providers.

Civil Monetary Penalties Law .

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Sanctions for violations of the CMPL include civil monetary penalties and administrative penalties up to and including exclusion from participation in federal health care programs.

State Analogs of Federal Fraud and Abuse Laws .

states have their own laws intended to protect against fraud and abuse in the health care industry and more broadly.

In some cases these laws prohibit or regulate additional conduct beyond what federal law affects.

In some cases these laws prohibit or regulate additional conduct beyond that covered under federal law.

Penalties for violating these laws can range from fines to criminal sanctions.

HIPAA and Other Privacy Laws and Regulations.

The Health Insurance Portability and Accountability Act of 1996, as amended by the American Recovery and Reinvestment Act of 2009, and implementing regulations, or HIPAA, created two new federal crimes:

Health Insurance Portability and Accountability Act of 1996 (HIPAA).

The Health Insurance Portability and Accountability Act of 1996, as amended by the American Recovery and Reinvestment Act of 2009, and implementing regulations, collectively HIPAA, created two new federal crimes:

healthcare fraud and false statements relating to healthcare matters.

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The false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.

HIPAA and Other U.S.

Privacy Laws and Regulations.

HIPAA, as well as a number of other federal and state privacy-related laws, also extensively regulate the use and disclosure of individually identifiable health information, known as “protected health information,” and require covered entities, including health plans and most health care providers, to implement administrative, physical and technical safeguards to protect the security of such information.

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In addition, a covered entity may be subject to criminal and civil penalties as a result of a business associate violating HIPAA, if the business associate is found to be an agent of the covered entity.

Covered entities must report breaches of unsecured protected health information to affected individuals without unreasonable delay and notification must also be made to the U.S.

Department of Health & Human Services, Office for Civil Rights, or OCR and, in certain situations involving large breaches, to the media.

state laws and regulations may also require us to notify affected individuals and state agencies in the event of a data breach involving individually identifiable information.

The OCR enforces the regulations and performs compliance audits.

In addition to enforcement by OCR, state attorneys general are authorized to bring civil actions seeking either injunction or damages in response to violations that threaten the privacy of state residents.

Dexcom is a covered entity under HIPAA and in

certain circumstances, may also be a business associate of another covered entity.

The HIPAA privacy regulations and security regulations impose and will continue to impose significant costs on us in order to comply with these standards.

In addition, certain states have proposed or enacted legislation that will create new data privacy and security obligations for certain entities, such as the California Consumer Privacy Act that went into effect January 1, 2020.

There are numerous other laws and legislative and regulatory initiatives at the federal and state levels addressing privacy and security concerns.

We also remain subject to federal or state privacy-related laws that are more restrictive than the privacy regulations issued under HIPAA.

These laws vary and could impose additional penalties.

For example, the Federal Trade Commission uses its consumer protection authority to initiate enforcement actions in response to alleged privacy and data security violations.

Further, certain states have proposed or enacted legislation that will create new data privacy and security obligations for certain entities, such a the California Consumer Privacy Act, or CCPA, which came into effect January 1, 2020 and was recently amended and expanded by the California Privacy Rights Act (CPRA) passed on November 3, 2020.

The CCPA and CPRA, among other things, create new data privacy obligations for covered companies and provides new privacy rights to California residents, including the right to opt out of certain disclosures of their information.

The CCPA also created a private right of action with statutory damages for certain data breaches, thereby potentially increasing risks associated with a data breach.

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

Therefore the effects of the CCPA and CPRA are significant and will likely require us to modify our data processing practices, and may cause us to incur substantial costs and expenses to comply, particularly given our base of operations in California.

In addition to the laws discussed above, we may see more stringent state and federal privacy legislation passed in 2021 and beyond, as the increased cyber-attacks during the COVID-19 pandemic have once again put a spotlight on data privacy and security in the U.S.

and other jurisdictions.

We cannot predict where new legislation might arise, the scope of such legislation, or the potential impact to our business and operations.

FCPA and Other Anti-Bribery and Anti-Corruption Laws.

Foreign Corrupt Practices Act, or FCPA, prohibits U.S.

corporations and their representatives from offering, promising, authorizing or making payments to any foreign

government official, government staff member, political party or political candidate in an attempt to obtain or retain business abroad.

The scope of the FCPA would include interactions with certain healthcare professionals in many countries.

corporations and their representatives from offering, promising, authorizing or making payments to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business abroad.

The scope of the FCPA would include interactions with certain healthcare professionals in many countries, either directly or through our contracted distributors.

Our present and future business has been and will continue to be subject to various other U.S.

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Reporting requirements will go into effect in 2022 for payments and transfers of value made to these additional practitioner-types in 2021.

CMS has the potential to impose penalties of up to $1.15 million per year for violations of the Physician Payment Sunshine Act, depending on the circumstances, and payments reported also have the potential to draw scrutiny on payments to and relationships with physicians, which may have implications under the Anti-Kickback Statute, Stark Law and other healthcare laws.

CMS has the potential to impose penalties of up to $1.15 million per year for violations of the Physician Payment Sunshine Act, depending on the circumstances, and reported payments also have the potential to draw scrutiny to our relationships with physicians, which may have implications under the Anti-Kickback Statute and and other healthcare laws.

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.

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There is a trend towards harmonization of quality system standards among the European Union, United States, Canada and various other industrialized countries.

The primary regulatory body in Europe is that of the European Union, which includes most of the major countries in Europe.

The regulatory framework governing medical devices is largely harmonized within the European Union, which includes most of the major countries in Europe (please note that the UK is effectively no longer part of the European Union as of January 1, 2021).

Other countries, such as Switzerland, have voluntarily adopted laws and regulations that mirror those of the European Union with respect to medical devices.

The European Union has adopted numerous directives and standards regulating the design, manufacture, clinical trials, labeling and adverse event reporting for medical devices.

Devices that comply with the requirements of a relevant directive will be entitled to bear the CE conformity marking, indicating that the device conforms to the essential requirements of the applicable directives and, accordingly, can be commercially distributed throughout Europe.

An assessment by a Notified Body of one country within the European Union is required in order for a manufacturer to commercially distribute the product throughout the European Union.

To be placed on the European Union market, devices must undergo a conformity assessment and bear the CE mark, indicating that the device

conforms to the essential requirements of the applicable rules.

The method of assessing conformity varies depending on the class of the product, but normally involves a combination of self-assessment by the manufacturer and a third-party assessment by a “Notified Body.” This third-party assessment, which may consist of an audit of the manufacturer’s quality system and specific testing of the manufacturer’s product, is always required in order for a manufacturer to commercially distribute the product throughout the European Union, except in case of Class I medical devices (those entailing the lowest level of risk).

Outside of the European Union, regulatory approval needs to be sought on a country-by-country basis in order for us to market our products.

The European Union regulatory bodies finalized a new Medical Device Regulation (MDR) in 2017, which replaced the existing Directives and provided three years for transition and compliance.

The MDR will change several aspects of the existing regulatory framework.

The new European Union Medical Device Regulation (MDR) went into force in 2017, replacing the existing Directive and providing three years for transition and compliance, which has been extended by one additional year.

The MDR will become fully applicable in the European Union on May 26, 2021, changing several aspects of the existing regulatory framework.

Other countries have adopted medical device regulatory regimes, such as the Classification Rules for Medical Devices published by the Hong Kong Department of Health, the Health Sciences Authority of Singapore regulation of medical devices under the Health Products Act, and Health Canada’s risk classification system for invasive devices, among others.

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In the European Union, increasingly stringent data protection and privacy rules that have and will continue to have substantial impact on the use of patient data across the healthcare industry became effective in May 2018.

The EU General Data Protection Regulation, or GDPR, applies across the European Union and includes, among other things, a requirement for

prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances and significant fines for non-compliance.

The EU General Data Protection Regulation, or GDPR, applies across the European Union and includes, among other things, a requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances and significant fines for non-compliance.

The GDPR fine framework can be up to 20 million euros, or up to 4 % of the company’s total global turnover of the preceding fiscal year, whichever is higher.

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Due to this scrutiny, we incur legal and consulting fees to ensure our relationships with physicians meet regulatory requirements, including that compensation paid to such physicians is within fair market value.

As of December 31, 2019 , we had approximately 3,900 full-time employees and approximately 1,300 contract and temporary employees globally.

Human Capital

As of December 31, 2020, we have approximately 5,500 full-time employees and approximately 900 contract and temporary employees around the globe.

Country Female Male Grand Total

United States 1,800 2,300 4,100

Non-United States (“OUS”) 700 700 1,400

Grand Total 2,500 3,000 5,500

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.

Available Information

Our Internet website address is www.dexcom.com.

We provide free access to various reports that we file with or furnish to the SEC through our website, as soon as reasonably practicable after they have been filed or furnished.

These reports include, but are not limited to, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports.

Our SEC reports can be accessed through the investor relations section of our website, or through www.sec.gov.

Information on our website does not constitute part of this Annual Report on Form 10-K or other report we file or furnish with the SEC.

Stockholders may request copies of these documents from:

6340 Sequence Drive

San Diego, CA 92121

(858) 200-0200

Although the COVID-19 pandemic has disrupted business and operations for companies around the globe, the resilience of our employees has enabled us to minimize disruption to our sales, research, clinical studies and operations.

Our onsite employees, particularly in manufacturing and operations, have rapidly adjusted to numerous stringent safety protocols.

Thousands of other employees have shifted to work-from-home status since March 2020.

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

Diversity, Equity and Inclusion

As a global company, we understand the importance of diversity in our workforce.

This year, we made progress in our commitment to Diversity, Equity & Inclusion (DEI) by formally establishing a DEI Council responsible for coordinating efforts around the organization, and securing resources to drive necessary change.

At the same time, we expanded our Employee Resource Group (ERG) network to better reflect the diversity of our workforce and drive grassroots change.

We now have multiple ERGs, including Dexcom PRIDE, Dexcom African American Network, LatinX, and ABLE, which help build our company community and enable opportunities for development.

Together, these groups helped allocate our initial donation of $250,000 to support organizations dedicated to diversity, equity and inclusion.

The work we have done to date represents the beginning of our DEI journey.

We will continue to focus on building a pipeline of opportunities for both the hiring and advancement of qualified individuals, including for women, persons with disabilities, and minority groups that are underrepresented in science and engineering industries.

We believe that diverse perspectives will help empower our employees, patients and industry.

Communications and Engagement

Our success depends on employees understanding our strategic vision as well as our day-to-day objectives.

To that end, we employ a mix of communication and engagement channels, including global, regional and functional town halls, regular leadership forums, and quarterly updates on our progress against our strategic goals.

We have also created a cross-functional team focused on improving the employee experience and driving engagement.

A central part of our communications and engagement efforts are connecting people to purpose.

To this end, we regularly invite Dexcom users, called Warriors, to share their stories with our employees.

Whether the Warrior is a professional athlete whose performance depends on Dexcom, or a parent who no longer has to stick their child’s fingers during the night, their experiences reinforce our commitment to expand our reach into new patient populations, geographies and markets.

Health, Safety and Wellness

We are deeply committed to the safety, health and wellness of our employees.

The Dexcom Environmental, Health & Safety team develops global safety practices and procedures, trains employees, and monitors compliance.

Through these efforts, along with leadership commitment and investment of resources in support of workplace safety initiatives, our total US injury rate has consistently tracked below industry averages.

We also provide comprehensive wellbeing programs that support our employees and their families.

For example, Inspire, our newly launched global wellness platform, helps employees and their family members develop and achieve their physical, emotional, and financial wellbeing goals.

We recognize that our employees are our most valuable asset.

Our total rewards package includes market competitive pay, comprehensive and competitive global benefits and retirement offerings, paid time off and family leave, tuition reimbursement and on-site services.

To foster a stronger sense of ownership and align the interests of employees with shareholders, we offer an Employee Stock Purchase Plan, and restricted stock units are provided to eligible employees under our broad-based stock incentive programs.

In 2019, we began proactive reviews of both gender and minority pay equity for our global employees in the same or similar roles.

The goal of these reviews is to identify and close any gaps in average pay, after accounting for legitimate business factors that may explain differences, such as performance, time in role, and tenure with the company.

We have incorporated the findings into our compensation assessment cycles, and we recognize the need to regularly review pay equity to maintain our pay equity goals.

Growth and Development

We believe that investing in our talent’s growth and development will directly enhance our overall company performance.

Our career development site, includes employee resources focusing on the advancement of six core competencies:

collaboration, effective communication, talent development, driving results, demonstrating self-awareness, and strategic mindset.

The internal site includes several training videos on a wide variety of topics, providing necessary resources for employees to grow in accord with their personal goals.

The site also serves as a hub for our virtual and in-person sessions that align with the development of our six core competencies.

Recently, we enhanced our internal careers platform to more effectively match an employee’s experience with potential career paths at Dexcom.

By providing an easy way for employees to explore new roles, we can increase internal mobility, develop great talent, and reduce turnover.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business