For the past few decades, we’ve been hearing about the rising levels of obesity in America that are leading to more cases of diabetes. A look at the recent numbers is pretty startling. 

According to American Diabetes Association (ADA), 1 out of every 10 Americans is diabetic, and 1 in 4 Americans is classified as pre-diabetic (myself included). For seniors, the figures are more daunting: 25% of America’s elderly residents have diabetes, which is quite concerning when you note that millions of baby boomers are entering that demographic.

What kind of toll has this taken? More than 200,000 Americans die annually either directly or indirectly from diabetes. Worldwide, the figure is far larger. 

Society also has a huge financial stake in diabetes. According to the ADA, treating people with diabetes consumes one-fifth of all of our nation’s health care expenditures. Getting our arms around that would have a profound impact on our economy in the form of reduced health care premiums. 

Thankfully, there is considerable progress being made and view is emerging of a future where most pre-diabetics can stop the disease in its tracks. Keeping diabetes in check, before it advances to the point where it produces many other medical ailments, is becoming a new reality. 

#-ad_banner-#Some biotech firms such as Isis Pharmaceuticals (Nasdaq: ISIS) are focusing on the body’s mechanisms that create the conditions for diabetes. Isis is working on a drug that focuses on a genetic mutation that leads to very low levels of triglycerides. Lower your triglycerides, and you lower your risk of diabetes and heart disease. 

Big Pharma also appears to be stepping up its efforts in the fight against diabetes. Medtronic (NYSE: MDT) and Sanofi (NYSE: SNY) recently announced plans to collaborate in the development of drugs and medical devices that target diabetes management.

Diabetes may eventually be conquered through the use of a bionic pancreas, which has shown great promise in early-stage testing. Such a device would not only monitor insulin levels, but periodically automatically inject insulin in the bloodstream when needed.

Even as researchers focus on major breakthroughs, San Diego-based Dexcom (Nasdaq: DXCM) is already helping people who already have diabetes better monitor and manage the problem. More effective monitoring of diabetes and related organ function can sharply improve the quality of life, and forestall the more serious side effects of diabetes.

Dexcom is an emerging leader in the field of continuous glucose monitoring (CGM). Dexcom’s G4 handheld device provides accurate real-time analysis of the rate of change in glucose levels. Doctors love it because provides an early warning of a dangerous diabetic condition known as a hypoglycemic episode.

Doctors also like that it also helps show patients exactly how their glucose levels are responding to various forms of exercise and diets. Behavior modification alone can act as a powerful deterrent to the further onset of diabetes. (Current CGM devices can’t provide that level of granular real-time feedback.)

That bionic pancreas noted above actually used Dexcom’s G4 device as its CGM platform. Indeed, many insulin pump manufacturers such as Insulet (Nasdaq: PODD) and the U.K.’s Animas are now collaborating with Dexcom to link the G4 directly to the pumps. For a company that has boosted sales at least 30% annually in each of the past seven years, the winning streak looks set to continue: Analysts are projecting at least that much growth for 2014 and 2015 as well.

Risks to Consider: The pursuit of multiple approaches to the diabetes problem means that one technology may eliminate the need for others. For example, if Isis succeeds in developing drugs that alter organ function, then glucose monitoring may eventually become a much smaller market.

Action to Take –> The diabetes problem is so massive and so costly that any companies developing treatments or monitoring advances will face billion-dollar market opportunities. The fight is just heating up, and Dexcom looks like an early winner, with others to follow.

If the potential of a bionic pancreas and other novel diabetes treatments has you excited, wait until you see what StreetAuthority’s Andy Obermueller has been working on. Andy has identified five “game-changing” trends with the potential to revolutionize the way we live our lives — and make early investors a killing. To learn more about these developing technologies — and the companies behind them — follow this link.