Medtronic to Spin Off Diabetes Business, Reshaping Medtech Landscape

Medtronic, a leading medical device company, has announced plans to spin off its diabetes business within the next 18 months, creating a new standalone diabetes technology company. This strategic move aims to streamline Medtronic's portfolio and create a focused competitor in the rapidly growing diabetes tech market.

Spinoff Strategy and Market Implications

Medtronic CEO Geoff Martha described the decision as a "win for both companies," simplifying Medtronic's portfolio while allowing for dedicated funding and strategy for the new diabetes firm. The spinoff will create the only diabetes company to offer both insulin pumps and continuous glucose monitors (CGMs) in a single ecosystem.

The new company, to be led by current Medtronic diabetes group president Que Dallara, will enter a competitive landscape dominated by specialized players like Abbott, Dexcom, Insulet, and Tandem Diabetes Care. With approximately 8,000 employees and two global manufacturing facilities, the spinoff is poised to become a significant player in the diabetes technology sector.

Medtronic's diabetes group represented 8% of the company's revenue and 4% of segment operating profit in fiscal year 2025, generating $2.76 billion in revenue with 10.7% year-over-year growth. The decision to spin off this growing segment has sparked mixed reactions from analysts, with some questioning the move and others seeing potential for increased focus and value creation.

Medtronic's Strategic Realignment

The spinoff decision aligns with Medtronic's broader strategy to streamline its businesses and focus on higher-growth markets. This move follows the company's February 2024 announcement to exit the ventilator market and restructure its patient monitoring and respiratory businesses.

Post-spinoff, Medtronic aims to concentrate on high-margin growth markets such as pulsed field ablation and renal denervation. New CFO Thierry Piéton expressed confidence that the company can still achieve mid-single-digit sales growth without the diabetes business.

Diabetes Technology Market Dynamics

The diabetes tech space has seen rapid growth as patients increasingly adopt wearable glucose sensors and smaller insulin patch-pumps. The new spinoff company will compete in a market that includes established leaders and emerging players like Senseonics, Roche, and Sequel.

Recent developments in Medtronic's diabetes business include a partnership with Abbott to create a specialized CGM compatible with Medtronic's insulin delivery devices, FDA approval for the MiniMed 780G insulin pump, and authorization to pair its CGM with insulin pumps. The company is also working on its next-generation pump, the MiniMed Flex, with plans to submit an FDA application by the end of the fiscal year.

As the diabetes technology landscape continues to evolve, the spinoff is expected to create a more nimble competitor capable of adapting to market trends and customer needs. The move positions both Medtronic and the new diabetes company to capitalize on their respective strengths in an increasingly competitive and innovative medical technology sector.