Medtronic’s decision to split its diabetes division into a separate entity marks a major shift that allows the medical device giant to get out of the lower range, consumer-oriented business, while also providing the diabetes business with the opportunity to focus it on a competitive market.
Last week, Medtronic announced plans to split its diabetes business into a new independent company. The new company, which has not been named, is expected to be established within 18 months.
Currently, the diabetes business has more than 8,000 workers worldwide. In the fiscal year 2025, the division accounted for 8% of Medtronic revenue and 4% of Medtronic’s operating profit.
Mike Kratky, an analyst at Leerink Partners, noted that the separation makes sense because the profit margins in the diabetes technology sector are lower than other sectors of Medtronic, such as cardiac devices or surgical robotics. Whether the new company can distinguish its portfolio from competitors in the diabetes technology field remains to be seen.
Medtronic aims to bring the new diabetes company public through an IPO. The new company will be led by Medtronic’s current diabetes president Que Dallara.
Dalala notes that Medtronic’s diabetes division is unique because it is a direct-to-consumer business, while the rest of Medtronic is B2B and sold to hospitals and clinics.
This means that the sales motion for the diabetes team is very different from the wider company. This also means that sharing manufacturing and technical structures with other Medtronic’s departments will not benefit from the diabetes business.
“We manufacture at a large price, and Medtronic tends to have a high combination in its portfolio. With this expected separation, new companies can strengthen our focus and investment decisions. For new companies, we will be able to accelerate people with diabetes among most people with diabetes, thus enabling people with diabetes to engage in breakthrough innovation and manufacturing tools to extend the automatic development of models to accelerate the majority of people with diabetes to achieve diabetes and to facilitate five-star automation to achieve their own development. The success of automatic insulin delivery and smart insulin administration,” Dalala explained.
In her opinion, separation will enable more agile decisions to make more agile decisions and strengthen business focus on execution.
The move will also help the diabetes business prioritize areas where it has a competitive advantage and can best grow, such as pulse field ablation, renal denervation, implantable tibial nerve regulation and soft tissue robots, Dalala added. This will give the company a cleaner, more centralized set of products that are easier to manage and expand, she said.
Dalala said that with Medtronic’s new insulin sensors received FDA approval last month and its Abbott-based sensors have now submitted customs clearance, the diabetes business plans to bring two new continuous glucose monitor (CGM) options this year.
She also said her business will submit the smallest FLEX before the end of Medtronic’s fiscal year, the next generation of insulin pumps for clearance at the FDA – and then minimize the Fit (subsequently) (a patched insulin delivery system).
“The pipeline will focus on improving automation to further reduce the burden, improve results, while simplifying and enhancing the customer experience. We are the only diabetes company, commercializing a complete ecosystem to address intensive insulin management, which will allow people to seamlessly transition between treatments based on where they are on their diabetes journey. This means they don’t have to be familiar with the support team and have to be familiar with and familiar with the company that escorts and are familiar with familiar companies.
She noted that the new company’s mission is to make life easier for people with diabetes while achieving better health outcomes. For her, the first priority of the new company is to build on existing consumer trusts and ensure a seamless transition without the treatment and support provided by Medtronic.
Photo: Gustavofrazao, Getty Images
