Medtronic to separate its diabetes division into an independent entity within approximately 18 months timeframe.
In a significant move, medical technology giant Medtronic has announced plans to spin off its diabetes business, creating a new standalone company focused on diabetes technology. The decision comes after a series of strategic partnerships and growth in the diabetes division, which has seen double-digit revenue growth in the last six quarters.
The new company, valued at approximately $2.755 billion in revenue for 2025, will offer customers a comprehensive product portfolio, including insulin pumps and continuous glucose monitors. Medtronic's well-established MiniMed 780G insulin pump and Simplera Sync CGM system are expected to play a significant role in the new entity's market position.
Que Dallara, president of Medtronic's diabetes group, will assume the role of CEO in the new company. Dallara assured investors in August that the company's diabetes strategy hadn't changed, despite the recent partnership with rival Abbott to create a specialized continuous glucose monitor (CGM) for Medtronic's insulin delivery devices.
The spin-off aims to operate independently, providing flexibility for research and development, partnerships, and acquisitions. This independence will allow the new company to prioritize development in areas like smart manual diabetes injection (MDI) systems and next-generation automated insulin delivery.
Medtronic's decision to spin off its diabetes business follows the company's refocus on higher-margin and faster-growth areas like cardiac devices, renal denervation, and surgical robotics. The diabetes business, with about 8,000 employees and two global manufacturing facilities, will now stand as a focused player in the diabetes tech space.
Analysts view the planned spinoff as unsurprising, with RBC Capital Market analysts believing it will create a more focused Medtronic with mid-single-digit or higher organic revenue growth. However, J.P. Morgan analysts question the decision to spin off Medtronic's "growth business in one of the best end markets" in the medtech space, suggesting either the business won't sustain its current growth rate or the move is not a value-creating option for the company.
Medtronic's CEO, Geoff Martha, believes the diabetes business is probably worth more outside the company than in. He stated that the move would focus the remaining company and create a new, scaled diabetes tech competitor. The diabetes management market, estimated to grow at a compounded annual growth rate (CAGR) of 6.94% through 2030, reaching around $91.95 billion, presents a sizeable opportunity for the new standalone company.
With its strong market positions, strategic partnerships, and innovative pipeline, the new diabetes technology company is well-positioned to compete strongly in the rapidly expanding global diabetes market.
- Medtronic's decision to create a new, standalone company focused on diabetes technology involves spinning off its diabetes business, valued at approximately $2.755 billion in revenue for 2025.
- The new company will offer customers a comprehensive product portfolio, including insulin pumps and continuous glucose monitors, with Medtronic's MiniMed 780G insulin pump and Simplera Sync CGM system playing a significant role.
- Que Dallara, president of Medtronic's diabetes group, will assume the role of CEO in the new company, aiming to operate independently for flexibility in research, development, partnerships, and acquisitions.
- The new company's focus will be on developing smart manual diabetes injection (MDI) systems, next-generation automated insulin delivery, and competing in the rapidly expanding global diabetes market.
- Analysts view the spinoff as potentially creating a more focused Medtronic with mid-single-digit or higher organic revenue growth, yet some question the decision to spin off the "growth business" in the medtech space.
- The diabetes management market is estimated to grow at a compounded annual growth rate (CAGR) of 6.94% through 2030, reaching around $91.95 billion, presenting a sizeable opportunity for the new standalone company.
- With a strong market position, strategic partnerships, and an innovative pipeline, the new diabetes technology company is well-positioned to make significant impacts in health-and-wellness, lifestyle, technology, science, and AI sectors within the healthcare industry.
