Medtronic (NYSE:MDT) officials today said that the company’s planned separation of its Diabetes business is on the right track.
The medtech giant announced in May that it planned to separate the Diabetes unit into a standalone, publicly traded company. The move sought to create “a more focused Medtronic” with a more simplified portfolio in high-margin growth markets. At the same time, it creates an independent, scaled leader in diabetes, called MiniMed.
On Medtronic’s first-quarter earnings call today, Chair and CEO Geoff Martha said the separation is “proceeding according to plan.” (Read the full breakdown of the company’s first-quarter earnings report on MassDevice here.)
“Diabetes continues to grow above the company average…,” Martha said. “MiniMed is entering a strong innovation cycle in its own right. The separation will sharpen Medtronic’s focus on our core businesses, including high-growth opportunities.”
The Medtronic Diabetes Business is one of the largest diabetes tech companies in the world — learn more about the company and the rest of the diabetes space by downloading our free Diabetes Technology Special Report.
Medtronic CFO Thierry Piéton said that the separation involves two elements: the operational separation of the business and the transaction itself. Medtronic still aims to go the IPO route to complete the split and maintains its timeline. In May, the company said it would separate the unit within 18 months, and Piéton now says 15 months is the expected timeframe.
“I would say the process is perfectly on track,” Piéton said. “On both fronts, the teams are making progress exactly in the way we anticipated. The first investor engagements have been very, very encouraging. … Everything is on track. That’s all I would say on this one.”
The Medtronic Diabetes business (MiniMed) quarterly performance
Medtronic reported $721 million in revenue for the Diabetes business, growing 11.5% on a reported basis.
According to Martha, the company’s MiniMed 780G automated insulin delivery system and Simplera Sync sensor drove growth in international markets.
He also said the company expects accelerated performance with the launch of Simplera Sync, plus the Instinct sensor developed in collaboration with Abbott. Martha said this partnership brings Abbott’s most advanced continuous glucose monitor (CGM) platform to Medtronic customers.
“When you combine these improved sensors with our MiniMed 780G and its exclusive meal detection technology, we expect to see a positive inflection in our installed base and revenue growth,” Martha explained.
Martha called this the “super cycle of innovation” within the Diabetes business. And, as the separation is still many months away, he believes the business can still prove valuable while it’s a part of Medtronic.
“In the meantime, Medtronic is the owner of this company for a year plus, and we’re very focused on it,” Martha said. “This is an important part of the company. We’re committed to capitalizing on this cycle of innovation that we’ve been building toward and making this transaction a meaningful value creator for investors.”
What the future holds
Piéton says the company has “heavily invested” in diabetes over the past few years, bringing it into a new innovation cycle. He singled out recent CE mark for expanded MiniMed 780G indications for the type 2 diabetes population and expects even more on the way.
“Looking ahead, in addition to launching the two new sensors… we’re expecting type 2 approval in the U.S. in the coming months and we also continue to make progress with our new insulin pump systems.”
The company in June outlined its expectations to submit a new automated insulin delivery system, the MiniMed Flex (8 series) pump, to the FDA by the end of the fiscal year. (Medtronic’s fiscal year ends in April, meaning the submission could come by spring 2026.) Analysts also say they received a look at the company’s in-development MiniMed Fit patch pump as it looks to enter that market, too.
Piéton said that MiniMed Flex is “much smaller than 780G,” allowing for more discrete placement while still using the same reservoirs and infusion sets. It will also work with both the Simplera Sync and Instinct sensors.
Que Dallara, soon-to-be CEO of the to-be separated Diabetes unit, said on the earnings call that the demand for Simplera Sync in the U.S. remains and she expects that and Instinct to provide a boost for the business, like Martha.
Dallara said the company also ramped up production significantly to bring the new CGMs to patients. She also expects Instinct to launch in the coming months, not far behind Simplera.
“It’s actually a very big moment for us,” Dallara said. “We’re now going to have two competitive sensors on the market giving patients choice, significant improvements in form factor and days of wear. … “I’m actually extremely confident that we’ll see growth acceleration second half.”
