Medtronic has announced it will separate its diabetes business into an independent company, aiming to create a leading player in the insulin management space. The new entity will include insulin pumps, continuous glucose monitors, and related products.
The move is expected to sharpen Medtronic’s focus on high-margin, fast-growing healthcare markets. Following the news on May 21, Medtronic shares dropped 2.27% on the New York Stock Exchange.
According to Dr. Andrew Thompson, Director of Therapy Research at GlobalData, “This gives Medtronic the capital to grow in more interventional areas, particularly cardiovascular. They’ve expanded through acquisitions before, so this could lead to a major deal by 2026 or 2027.”
Medtronic plans to execute the separation through an initial public offering (IPO) and a subsequent split-off. The company expects the process to be completed within 18 months.
The new diabetes business will operate as a scaled, direct-to-consumer company. Medtronic says it will be the only firm to offer a complete intensive insulin management system. The company also expects the spin-off to boost investment in its product pipeline, manufacturing, and automation, especially in Automated Insulin Delivery and Smart Multiple Daily Injection (MDI) technologies.
Thompson added that the new company may not remain independent for long. He noted that Medtronic’s newly approved CGM sensor is compatible with Abbott devices, and both companies are in partnership. “There’s a chance this spin-off could evolve into a joint venture,” he said.
In FY2025, Medtronic’s diabetes unit generated $2.75 billion—around 8% of total company revenue—marking a 10.7% annual increase. However, the unit has faced setbacks, including a 2024 FDA Class I recall of its MiniMed insulin pump, growing competition, and operating losses since 2022.
GlobalData estimates that in 2024, Medtronic held a 6% share of the U.S. insulin delivery market and 7.3% in glucose monitoring.
The diabetes division employs 8,000 people worldwide. Que Dallara, currently executive vice president and CEO of Medtronic Diabetes, will remain in charge after the spin-off.
Medtronic CEO Geoff Martha said, “Active portfolio management is key to our growth. This move helps us focus on high-margin areas where we have the strongest capabilities. I’m also confident in the future of the Diabetes business under Que’s leadership.”
The separation is expected to immediately boost Medtronic’s financials, improving adjusted gross margins by about 50 basis points, adjusted operating margins by 100 basis points, and increasing adjusted earnings per share.
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