Medtronic’s strategic decision to spin out its diabetes division into a distinct and independent entity signifies a transformative shift for the medical device powerhouse. This move allows Medtronic to divest a lower-margin, consumer-facing business while simultaneously providing the diabetes sector an opportunity to sharpen its focus amidst a rapidly evolving and competitive market landscape.
Recently, Medtronic disclosed its intent to separate the diabetes business into a new standalone company, which is slated to emerge within the next 18 months. While the new company remains unnamed, this initiative underscores Medtronic’s commitment to fostering innovation and operational efficiency in the diabetes space.
Presently, the diabetes division employs over 8,000 professionals globally. In the fiscal year 2025, this division accounted for approximately 8% of Medtronic’s total revenue and contributed around 4% to the operating profit of the company. Such figures highlight the importance of this sector within Medtronic’s overall business framework.
The rationale behind this separation is compelling; the diabetes technology market generally operates on lower margins compared to Medtronic’s other sectors, including cardiac devices and surgical robotics. Mike Kratky, an analyst at Leerink Partners, noted in a research report that the ability of the new company to differentiate its product offerings from established competitors within the diabetes technology arena remains uncertain.
Medtronic’s vision for this new diabetes-focused enterprise includes plans for an initial public offering (IPO). The company will be headed by Que Dallara, who currently serves as Medtronic’s diabetes president, bringing extensive expertise in managing diabetes-related innovations.
What makes Medtronic’s diabetes division particularly distinctive is its direct-to-consumer business model, contrasting sharply with Medtronic’s broader B2B operations, which primarily target hospitals and clinics. Dallara emphasized that this unique approach necessitates different sales strategies that significantly diverge from the company’s other divisions.
This divergence implies that the diabetes business may not fully capitalize on shared manufacturing and technological resources with Medtronic’s other branches. “We manufacture at high volumes, while Medtronic’s offerings tend to have a diverse mix,” Dallara explained. The planned separation allows the new company to concentrate and make informed investment choices that will directly benefit individuals living with diabetes.
According to Dallara, this new entity will expedite strategic investments in essential areas such as breakthrough innovations, enhancing customer experiences, and scaling automated manufacturing processes. This focus is intended to meet the increasing demand for cutting-edge technologies and strategically position the new company for success in automated insulin delivery and smart insulin dosing.
Dallara believes that this separation will facilitate more agile and responsive decision-making, allowing the business to concentrate more effectively on execution and operational efficiency.
Moreover, this strategic move will empower the diabetes business to prioritize its strengths and identify growth opportunities in specific areas such as pulsed field ablation, renal denervation, implantable tibial neuromodulation, and soft tissue robotics. Dallara stated that this approach will result in a streamlined and focused product portfolio that is simpler to manage and scale.
With the recent FDA approval of Medtronic’s new insulin sensor last month and the submission of its Abbott-based sensor for clearance, the diabetes division is set to launch two innovative continuous glucose monitor (CGM) options in the upcoming year, as per Dallara’s announcements.
Additionally, Dallara indicated that the company plans to submit the MiniMed Flex, a next-generation insulin pump, for FDA clearance by the end of Medtronic’s fiscal year. This will be followed by the introduction of MiniMed Fit, an advanced patch insulin delivery system.
“Our product pipeline will emphasize advancing automation to alleviate burdens, enhance health outcomes, and simplify the customer experience,” Dallara elaborated. “We are the only diabetes company providing a comprehensive ecosystem aimed at intensive insulin management, allowing individuals to transition seamlessly between therapies based on their specific diabetes journey without losing the support team and company they trust.”
The mission of the new company is to simplify life for individuals living with diabetes, while also striving for improved health outcomes. Dallara noted that the top priority for the new entity will be to build on existing consumer trust and guarantee a seamless transition with no disruption to the therapy and support currently provided by Medtronic.
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