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Medtronic ‘hopeful’ on FDA clearance for next-gen diabetes tech in FY 2023

May 26, 2022 By Sean Whooley

Medtronic MiniMed 780G
The Medtronic MiniMed 780G system. [Image from Medtronic]
The Medtronic (NYSE:MDT) diabetes business sputtered in the fourth quarter but could be bolstered by a major regulatory nod this year.

The Fridley, Minnesota-based company saw revenues for its diabetes arm fall by 7.7% year-over-year in the fourth quarter amid overall misses on both sales and adjusted earnings per share compared to Wall Street’s expectations.

On Medtronic’s fourth quarter earnings call, as transcribed by SeekingAlpha, CFO Karen Parkhill said the company projects fiscal 2023 diabetes revenues to decline 6% to 7% compared to 2022. However, the company didn’t include potential sales for its next-generation MiniMed 780G insulin pump and Guardian 4 sensor in its guidance despite its “hopeful” outlook on FDA clearance during the fiscal year.

MiniMed 780G with Guardian 4 is available in more than 40 countries and is under review by the FDA for U.S. approval. Earlier this year, CEO Geoff Martha said there was some uncertainty over approval timing for Medtronic’s next-generation platforms, including the MiniMed 780G insulin pump and Guardian 4 CGM sensor, as a result of a December 2021 FDA warning letter highlighting inadequacies in specific medical device quality system requirements at its diabetes business’ Northridge, California, facility.

The technology recently demonstrated sustained improvements in clinical trials, and Martha said on today’s earnings call that the MiniMed 780G with Guardian 4 “continues to be extremely well received in markets where it’s available.” More data will be presented on the platform at the American Diabetes Association’s Scientific Sessions next month.

Medtronic will also be submitting its next-generation sensor, Simplera, for CE mark and FDA approval this summer, Martha said, while it also plans to advance multiple next-generation sensor and pump programs, including patch pumps.

“We’re making considerable investments in our diabetes pipeline with line of sight to restoring strong growth in this business over the coming years,” Martha said.

Analysts have previously suggested that Medtronic’s diabetes business could be among the most likely options for a spin-off. On the back of this morning’s news that the company is combining its renal care solutions business with DaVita to form an independent kidney care company, the question remains around what the medtech giant’s next moves could be.

When asked by Wells Fargo Securities’ Larry Biegelsen if the company plans for more moves like the kidney business combination, Martha did not offer specifics surrounding which businesses could come next but said similar changes could be made.

“[The kidney business move] is what I’d characterize as a smaller initial step in terms of our portfolio management work,” Martha said. “That work continues, and we do anticipate that there could be more portfolio moves over the course of FY ’22. I’m not going to comment on the size of those. But I’d characterize this is a smaller initial step. It’s been under consideration for a while.”

Martha’s answer today falls in line with previous statements on the matter, including on the company’s second-quarter earnings call in November 2021 when he was asked if there was intent to spinoff Medtronic’s diabetes arm. Then, he said there were no current plans, but the company’s executive committee was spending “a lot more time” looking at portfolios and capital allocation to “make sure we’re the right owner.”

Filed Under: Auto-injectors, Business/Financial News, Diabetes, Drug-Device Combinations, Featured, Food & Drug Administration (FDA), MassDevice Earnings Roundup, Patient Monitoring, Regulatory/Compliance, Technology Tagged With: Medtronic

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About Sean Whooley

Sean Whooley is an associate editor who mainly produces work for MassDevice, Medical Design & Outsourcing and Drug Delivery Business News. He received a bachelor's degree in multiplatform journalism from the University of Maryland, College Park. You can connect with him on LinkedIn or email him at swhooley@wtwhmedia.com.

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