Medtronic has announced plans to spin off its diabetes business within the next 18 months, creating a new standalone company that will offer both insulin pumps and continuous glucose monitors (CGMs). The move aims to focus Medtronic’s portfolio on high-margin growth markets like pulsed field ablation and renal denervation.
CEO Geoff Martha stated that the decision is beneficial for both companies, allowing Medtronic to simplify its portfolio and allocate resources more effectively. The new diabetes company will be led by Que Dallara, president of Medtronic’s diabetes group, who will become CEO. This unit currently employs around 8,000 people and operates two global manufacturing facilities.
The spinoff decision follows Medtronic’s strategy to streamline its businesses and focus on higher-growth markets. The move comes as the diabetes tech space experiences rapid growth, with patients adopting newer devices like wearable glucose sensors and smaller insulin patch-pumps. The new company will compete with established players in the market, including Abbott, Dexcom, Insulet, and Tandem Diabetes Care.
The diabetes business represents 8% of Medtronic’s revenue and 4% of segment operating profit. Despite concerns from analysts about potential sales growth, some experts view the spinoff as a positive move, allowing Medtronic to maintain mid-single-digit organic revenue growth while expanding its margins post-spin.
Source: https://www.medtechdive.com/news/medtronic-spin-off-diabetes-business/748688