The medtech giant said the strategic decision can 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. The new company — given the placeholder title “New Diabetes Company” — aims to accelerate innovation. It comes with the differentiation of a complete ecosystem that addresses insulin management.
Medtronic shared this news alongside its fourth-quarter earnings. It comes after several years of speculation surrounding the Diabetes unit, as analysts suggested that it was a candidate for sale or spin as far back as 2021.
“This marks a significant milestone in driving both Medtronic and the Diabetes business to achieve lasting value for Medtronic, our shareholders, customers, and patients,” said Geoff Martha, chair and CEO of Medtronic. “Active portfolio management is an important lever to delivering on our ongoing growth and success, and this decision shifts the Medtronic portfolio to have intense focus on our highest margin growth drivers where we have our strongest core competencies. I’m also excited about what the future holds for the Diabetes business. Que’s impressive track record in driving growth and innovation has set Diabetes on a path to continued success, ensuring the needs of individuals with diabetes are met around the globe.”
More about the planned Diabetes unit separation at Medtronic
Medtronic expects to complete the separation within 18 months through a series of capital markets transactions. It noted that it prefers the path of an IPO with a subsequent split-off. Medtronic expects this separation to be tax-free to shareholders for U.S. federal income tax purposes.
Following the separation, the company expects to have an enhanced benefit from its scale and strategic commercial, manufacturing and technology synergies. New Diabetes Company, meanwhile, expects to become a leading, scaled, direct-to-consumer business.
The separation should enable more focused investment into the diabetes pipeline, plus manufacturing scale and automation. The company expects to position the company for success in automated insulin delivery and smart multiple daily injections (MDI).
Medtronic Diabetes currently features a team of more than 8,000 global employees. It represents 8% of Medtronic revenue and 4% of the company’s segment operating profit in fiscal 2025.
Que Dallara, the current EVP and unit president, will become CEO of New Diabetes Company.
“I’m incredibly grateful to Geoff for his vision and commitment to investing in the Diabetes business — we wouldn’t be where we are without his unwavering support,” said Dallara. “As we embark on this exciting new chapter, we celebrate the tireless efforts and dedication of our teams. Their passion and perseverance have brought us to this pivotal moment. Together, we’re poised to transform lives, giving people the freedom to forget diabetes and live their best lives.”
What’s the latest with the Diabetes unit’s pipeline?
The Diabetes unit develops tools for diabetes management, including automated insulin pumps, smart insulin pens and continuous glucose monitors (CGMs).
Most notably — and most recently — the business advanced its landmark partnership with Abbott, connecting insulin systems and CGMs, by submitting an interoperable pump to the FDA in April. Last summer, the companies announced a global partnership pairing Abbott CGMs with Medtronic insulin delivery systems. The partnership aims to collaborate on a system based on Abbott’s FreeStyle Libre 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. Separate from the collaboration, Medtronic just last month earned FDA approval for its own Simplera Sync CGM with MiniMed 780G.
The company initially won FDA approval in August for its next-generation Simplera CGM. The Simplera platform includes the Simplera CGM for use with the InPen smart insulin pen and Simplera Sync specifically for integration with the MiniMed 780G. The medtech giant picked up CE mark for Simplera Sync with MiniMed 780G in January 2024.
Additionally, the pipeline could include next-generation systems like a patch pump offering.
Medtronic Diabetes also has some new figures leading the way with recent appointments. Last month, the company named former Dexcom leader Laura Endres as the new head of Americas for its Diabetes business unit. Earlier this month, former Moderna executive Kate Cronin joined as the new chief marketing officer for the unit.
“We strive to give people with diabetes the freedom to forget about diabetes and live their best life,” Dallara added. “This is our North Star and will continue to guide all of our decisions. This next chapter will allow us to accelerate technologies that provide more of that freedom and peace of mind. We’ve proudly served this community for over 40 years, and we’ll continue to lead the next frontier of innovations until a cure is found.”
The analysts’ take
BTIG analysts Ryan Zimmerman and Iseult McMahon maintained a “Neutral” rating for Medtronic following the fourth-quarter results and Diabetes unit news.
The analysts said the unit previously proved “a drag on profitability.” They also said that, if it remained part of Medtronic’s business, it would continue to drag as growth accelerates.
“We believe this is the right move for MDT as Diabetes requires a completely separate call point (B2C vs. B2B), and is not as strong competitively as MDT’s other businesses. Given MDT’s size, nothing is immediate (in terms of the separation) but we think that the line of sight to improved performance is clearer now (MDT is a more simplified, de-risked business when complete).
The analysts say tariffs likely weigh down the company’s 2026 performance. However, 2027 looks better if the separation goes through.
