Medtronic nosedives on diabetes delays
The 6% fall in Medtronic’s share price yesterday – the company’s biggest one-day loss for more than a year – was all thanks to the FDA. The company disclosed that it had received a warning letter from the agency regarding quality control at the headquarters of its diabetes tech business, likely resulting in falling diabetes sales and a delay to the US launch of its flagship MiniMed 780G artificial pancreas. The letter was prompted by lacklustre responses to earlier recalls of diabetes tech, including the MiniMed 670G, a previous version of the 780G device. Stifel analysts have lowered their 2022 forecasts for Medtronic’s diabetes tech sales by 5%, to $2.3bn, owing to the costs of resolving the issues and lost sales. It is not clear how long the US approval and launch of the 780G device might be delayed, but the group can ill afford even a short wait. Medtronic’s diabetes business has been underperforming for some time, and the 780G was a big hope for arresting its forecast decline in market share. As it is, Medtronic’s insulin pump competitors are celebrating: shares in Tandem Diabetes Care and Insulet were up 10% and 5%, respectively, at yesterday’s close.