Medtronic aims to be number one in automated insulin delivery

Medtronic (NYSE:MDT) reported revenue growth at its diabetes unit as recent moves by the company signal its intention to enter the competitive insulin pump market.

The company’s first-quarter (fiscal year 2025) results included $647 million in revenue from the Diabetes unit. This represented an 11% year-over-year increase compared to the same three-month period a year ago.

U.S. revenue rose in the mid-teens as the company reported continued rollout of its MiniMed 780G automated insulin delivery system (AID). The medtech giant also reported CGM growth in the low 30s, driven by high CGM enrollment and high single-digit pump growth.

Medtronic also saw international growth in the low double digits, thanks to rising CGM enrollment rates and the introduction of Simplera Sync. Simplera Sync, the company’s next-generation CGM, also received FDA approval earlier this month.

The company’s diabetes business saw a major development this month when it announced a collaboration with Abbott. The partnership will combine Abbott’s FreeStyle Libre CGM-based system with Medtronic’s automated insulin delivery technology (the latest generation is the MiniMed 780G) and smart insulin injection systems, such as the InPen system.

“We’re getting great feedback on the ease of insertion and use of (Simplera Sync),” CEO Geoff Martha said during the company’s first-quarter earnings conference call. “This adds to the already high satisfaction with our 780G system, where we were the No. 1 AID system by DQ&A for the last two quarters. That’s why we’re confident in Simplera and our CGM system.”

“In addition, two weeks ago we announced our global partnership with Abbott, under which we will bring to market an integrated CGM system based on Abbott’s state-of-the-art CGM platform.”

More about the Medtronic-Abbott partnership

Integrating Abbott’s CGM with Medtronic’s automated insulin delivery algorithms allows for automatic insulin adjustments to keep glucose levels within the norm. The partnership allowed Abbott to develop the sensor and Medtronic to sell it. The new CGM will work exclusively with Medtronic devices.

The companies did not wish to disclose the financial terms of the partnership or the product launch date.

“This will allow us to offer patients more choice, grow our install base and grow diabetes revenue,” Martha said on the earnings conference call. “And we expect to do that while maintaining the same revenue per patient and remaining diabetes gross margin neutral. We are committed to being number one in the rapidly growing AID and smart MDI space, and this partnership will help deliver that.”

Analysts see the collaboration as a way for Medtronic to retain existing pump users (estimated at about 700,000 worldwide) and attract new users who may have previously expressed dissatisfaction or concerns about Medtronic’s in-house CGM systems.

Que Dallara, executive vice president and president of Medtronic Diabetes, highlighted the opportunity for the “very large user base that prefers the Abbott sensor” who now have access to Medtronic’s technology.

Dallara declined to provide a timeline, but said the companies intend to work as quickly as possible to launch the new sensor. They hope to provide an experience where users can choose between two sensor options but still experience Medtronic’s automation.

“That’s the user experience we want to bring to market,” Dallara said on a conference call about financial results. “We think it’s quite differentiated and allows us to leverage the largest CGM installed base in the world, as well as grow our own installed base.”

What is the company’s future strategy for diabetes?

Dallara said the company’s diabetes strategy remains unchanged despite all the major changes in the business. Medtronic believes the change is in the market.

According to Dallara, the company saw widespread acceptance that AID provided better results than CGM or MDI alone.

“We always knew there was a large installed base of users who wanted access to our technology, our AID system,” she said. “We still believe the benefits of the system are greater than the sum of the parts, connecting everything together with our algorithm, CGM, pump devices. And the typical integrations you see in the market put a technology burden on patients.”

Dallara said the company wants to provide “one Medtronic experience” even for patients who might prefer a different sensor. The partnership with Abbott has opened a path that works for both patients and companies.

“The strategy hasn’t changed,” Dallara said. “We’ve just found a way to expand access to a broader installed base. And I think what hasn’t changed is our commitment to the system, our confidence in our CGM. The launches of Simplera and Simplera Sync in Europe have gone very well. We’re very pleased with the early experience. And we’re pleased that we now have FDA approval for Simplera in the U.S. and we’re working with the agency to get Simplera Sync approved for integration with the 780G system as well.”