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By the numbers
FY 2025 revenue: $33.5 billion
3.6% growth year over year
Diabetes revenue: $2.76 billion
10.7% growth year over year
Medtronic said Wednesday that it plans to spin off its diabetes business in the next 18 months, creating a new diabetes technology company that can offer customers both insulin pumps and continuous glucose monitors.
In the announcement, Medtronic argued that the move would focus the remaining company and create a new, scaled diabetes tech competitor. The company’s “preferred path” is to initiate an initial public offering followed by a full split, creating a stand-alone, publicly traded company.
CEO Geoff Martha told investors the decision is a “win for both companies,” simplifying Medtronic’s portfolio and allowing for focused funding and strategy for the diabetes firm.
“For Medtronic, our portfolio becomes more focused on high-margin growth markets like [pulsed field ablation] and renal denervation,” Martha said during an earnings call. “At the same time, the independent new diabetes company will be a scaled leader, and the only diabetes company to commercialize a complete ecosystem to address intensive insulin management.”
“I don’t want to speculate,” Martha added later on the call, “but I think the diabetes business is probably worth more outside the company than in.”
Que Dallara, president of Medtronic’s diabetes group, will become CEO of the new company. The diabetes business currently has about 8,000 employees and two global manufacturing facilities.
Medtronic’s spinoff decision continues a strategy to streamline its businesses and focus on higher-growth markets. In February 2024, Medtronic announced that it would exit the ventilator market and restructure its remaining patient monitoring and respiratory businesses into a separate unit. However, the company’s initial plan, announced in October 2022, was to spin off the patient monitoring and respiratory groups in 12 to 18 months.
The spinoff would come amid rapid growth in the diabetes tech space, as patients have further embraced newer devices like wearable glucose sensors and smaller insulin patch-pumps.
As the new company will offer both CGMs and insulin pumps, it will compete with the entire diabetes tech sector — market leaders like Abbott and Dexcom make glucose sensors, while Insulet and Tandem Diabetes Care make insulin pumps. It will also operate in a space that’s seeing new competing devices from companies like Senseonics, Roche and Sequel.