The partnership aims to collaborate on a system based on Abbott’s FreeStyle Libre continuous glucose monitors (CGMs) with Medtronic’s automated insulin delivery technology (the latest generation being the MiniMed 780G) and smart insulin pen systems, such as the InPen system. Medtronic’s systems previously used its own CGMs, such as the Guardian 4 and the Simplera platform, and the company intends to continue using those systems as part of a comprehensive CGM portfolio.
Medtronic also received FDA approval for its Simplera CGM today, adding another boost to its portfolio.
Integrating Abbott’s CGM with Medtronic’s automated insulin delivery algorithms enables automatic insulin adjustments, keeping glucose in range. The partnership arranged for Abbott to develop the sensor and Medtronic to sell it. It works exclusively with Medtronic devices.
The companies declined to disclose the financial terms of the partnership, as well as the timeline for commercial availability.
Investor reaction was positive for Abbott and Medtronic, which both saw their share price rise slightly at the end of trading Wednesday. Competitors, however, faced a far more negative reaction. Tandem Diabetes Care closed the day down nearly 15% as Medtronic seeks to gain share in the pump market. Dexcom finished the day down about 8% as Abbott’s CGM business received a boost. Insulet, which also operates in the automated insulin delivery market but with a different form factor, closed the day down 3%.
Abbott and Medtronic leadership comment on the collaboration
“Our partnership with Abbott allows us to expand access to our advanced automated insulin delivery and smart [multiple daily injection] systems that deliver best-in-class outcomes with the most widely used CGM in the world,” said Que Dallara, EVP and president, Medtronic Diabetes. “We’re committed to simplifying diabetes management and making the transition to automated technology much more seamless for those who wish to achieve more with their diabetes care.”
Abbott says the collaboration marks another step forward in its effort to connect its CGMs with insulin delivery systems. The company recently paired its FreeStyle Libre 2 Plus with Insulet’s Omnipod 5 in Europe and announced compatibility with the Tandem Diabetes Care t:slim X2 system in January.
“This partnership pairs two global leaders in glucose sensing technology and insulin delivery,” said Jared Watkin, EVP of Abbott Diabetes Care. “Libre technology has set the standard for accurate, accessible, easy-to-use and reliable continuous glucose monitoring. Connecting this CGM built for Medtronic’s insulin delivery systems and algorithms makes it easier for people to spend less time thinking about their diabetes and more time living.”
The analysts’ view
BTIG analysts Marie Thibault and Sam Eiber say the news of the collaboration initially surprised them. However, they think the move helps open the diabetes market for both companies while remaining in a “coopetition arrangement.” The CGMs developed in the collaboration only work with Medtronic devices, meaning they can’t operate as standalone systems.
The analysts don’t anticipate FDA approval or CE mark for the integrated system in Medtronic’s fiscal year (which ends in May 2025). Truist analysts say a late-FY 2026 represents a “best-case scenario” for the deal they view as a win-win for both companies.
“Overall, we think this partnership is a win for both companies since it can help drive increases in their respective installed base without stepping on each other’s toes,” the analysts wrote. “It’s also a win for patients who will now have more choices to mix and match devices from competing manufacturers.”
The analysts also note that Medtronic anticipates a neutral impact to its EPS ahead of a launch as the deal includes no upfront or milestone payments. Medtronic agreed to pay Abbott a sensor transfer price upon delivery of the sensors.
With regard to the competition in the space, the analysts see the collaboration as a way for Medtronic to retain existing pump users (they estimate around 700,000 worldwide) and attract new users that may have previously expressed dissatisfaction or wariness with Medtronic’s in-house CGMs.
The analysts say they fail to see a major threat to Insulet, a leader in automated insulin delivery with its Omnipod patch pump.
“Given the very different form factors and business model, we tend to think the type of patient who is contemplating a tubed pump is not typically straying away from a patch pump like Insulet’s Omnipod 5,” the analysts said. “For this reason, we see minimal threat to Insulet’s business.”
They note that the exclusivity of the deal means Dexcom can’t convert existing Medtronic users to its own CGMs, though. The analysts see a benefit to Abbott as it makes the company’s CGM technology available to an existing pool of type 1 diabetes patients. However, they don’t see meaningful harm to Dexcom’s ability to compete in that population moving forward.
“On the CGM side, the partnership does not impact basal-only adoption, but is specific to the core type 1 patient population,” they wrote. “The exclusivity means Dexcom does not have a chance to convert existing MDT users to a Dexcom CGM. We do not see a high likelihood of material impact to Dexcom’s existing T1D installed base, since these patients would also need to be using a pump and decide to switch away from their existing device to Medtronic’s form factor.
Abbott a ‘clear winner’
Analysts had positive outlooks for both companies involved in the deal, but particularly on the Abbott side.
Research posted by Raymond James outlined Abbott as the “clear winner” in the deal.
“Simply put, Abbott wants to sell more sensors, and this is a low-risk/minimally disruptive way to potentially sell more sensors and gain traction in the insulin-using segment of the market,” Raymond James wrote. “We assume the economics to Abbott are attractive. For these reasons, Abbott is the winner.”
They say a Medtronic-specific sensor adds manufacturing complexity, but called it manageable for Abbott. It also cools down talk of Abbott buying a pump company, Raymond James said.
For Medtronic, the firm says it’s still a win, but less clear.
“Medtronic’s goal is to sell more pumps, and this deal gives it an opportunity. With another (better) sensor, Medtronic can play more offense and increase its installed base. This also levels the playing field with Insulet and Tandem which already have existing relationships with Abbott. That said, we still need more clarity on the accompanying economics.”
Travis Steed at Bank of America also said it’s a smart deal for both companies, and especially for Abbott. Steed writes that it opens an opportunity to sell to 700,000 new users, likely adding $100 million or more in growth per year for Libre.
Steed also sees the most negative impact heading Tandem’s way, as the pump maker “has historically been the biggest beneficiary of MDT’s patient attrition.”
We think that this deal will make Medtronic much more competitive going after new pump patients coming off sidelines from multiple daily injections that prefer a durable pump,” Steed said.
