Medtronic's Diabetes Business Prepares for Spinoff as MiniMed, Launches New CGM Products

Medtronic's diabetes business is gearing up for a significant transformation as it prepares to spin off into a standalone company called MiniMed. The move comes as the unit launches new continuous glucose monitoring (CGM) products and continues to innovate in the diabetes care space.

Que Dallara Leads Diabetes Business Turnaround

Que Dallara, who joined Medtronic in 2022 and will become CEO of MiniMed, has been instrumental in turning around the diabetes business. Under her leadership, the company has resolved an FDA warning letter, improved U.S. diabetes sales, and launched new insulin pumps and glucose sensors.

Dallara outlined three key priorities since joining Medtronic:

1. Clearing the FDA warning letter, which was accomplished in about 14 months.
2. Meeting financial commitments to the company.
3. Investing in long-term innovation, including the development of smart multiple daily injections (MDI) and the MiniMed 780G automated insulin delivery system.

New Product Launches and Partnerships

Medtronic's diabetes unit has recently launched two new CGM products:

1. Instinct: A CGM developed in partnership with Abbott, designed to work with Medtronic's insulin pumps.
2. Simplera Sync: Medtronic's own CGM sensor, which has begun its U.S. rollout.

The collaboration with Abbott allows Medtronic to offer a longer-wear sensor with a different form factor, particularly beneficial for Type 2 diabetes patients. This partnership also gives both companies access to each other's install base, potentially benefiting millions of Type 1 and Type 2 diabetes patients.

Pipeline and Future Innovations

Dallara highlighted several upcoming devices in Medtronic's diabetes care pipeline:

1. MiniMed Flex: A next-generation durable pump that will be phone-controlled, featuring a sleek design and incorporating the features of the 780G system.
2. MiniMed Fit: A patch pump currently in development.
3. MiniMed Go: A smart MDI solution with InPen, launched in Europe and preparing for a U.S. launch later in the fiscal year.

These innovations aim to cater to different patient preferences, from those who prefer durable pumps to those who opt for patch pumps or multiple daily injections.

Spinoff Strategy and Progress

The decision to spin off the diabetes business as MiniMed is described as a "win-win" for both Medtronic and the diabetes unit. This move will allow each entity to focus on its core strengths and allocation of capital.

Dallara explained that while it's unusual to separate growth businesses, Medtronic's numerous growth options in cardiovascular, neuroscience, and surgery sectors led to this decision. The diabetes business, with its consumer-oriented approach and different innovation cycle, will benefit from increased focus as a standalone company.

The spinoff process is progressing well, with the team continuing to execute on product launches while simultaneously preparing for independent operations. This includes setting up essential business functions, establishing a board, and forming a leadership team.

As MiniMed prepares for its future as an independent entity, the diabetes care industry can expect continued innovation and a sharpened focus on addressing the needs of diabetes patients across different treatment modalities.