Medtronic plays catch-up in diabetes

The long-awaited US approval of its newest artificial pancreas comes through, but Medtronic remains behind.

Medtronic hit a major milestone on Friday, when the FDA approved the newest generation of its closed-loop insulin delivery system. But the group lags here, its peers having obtained more widespread approval for comparable devices months or in some cases years ago

Still, Medtronic can hope that the approval of the MiniMed 780G, which combines a glucose sensor, insulin pump and dosing algorithm, will stem the bleeding at its US diabetes division. The device giant recently announced a company-wide cost cutting exercise so any boost to its top line will be welcome, and its shares rose 4% in early trade today.

The MiniMed 780G is approved for type 1 diabetes patients aged seven and older. It does not require fingerstick calibration while it is in its closed-loop setting, Medtronic says, though fingersticks are necessary to enter the closed loop mode. In its US pivotal trial, patients using the 780G spent 93% of time in this mode. 

Hanging on

The 780G was approved in Europe nearly three years ago, but its debut in the US was delayed by an FDA warning letter about Medtronic’s diabetes headquarters which knocked the group’s share price in late 2021. The delay has hurt since, too. Between its fiscal second and third quarters of 2023, Medtronic’s worldwide diabetes business grew by 2.5% – but in the US its diabetes revenues shrank by 5.7%.

This is because diabetes patients are hanging on to their old tech, waiting for the 780G to become available. Medtronic says it will begin shipping in late summer, after which many patients will be able to upgrade from the current version of the closed-loop system, the 770G, to the 780G for no cost.

Consequently any increase in revenue will probably come from new converts to Medtronic’s technology, including patients who currently administer insulin via multiple daily injections, as well as those newly diagnosed with diabetes. 

The green light could also allow Medtronic to take at least modest share from other companies with advanced diabetes tech, with Tandem Diabetes Care looking particularly vulnerable. 

Tandem, a pump maker, is the only large diabetes tech players that cannot boast a major new device approval in the US in the past five years. It hopes to rectify this shortly, with FDA approval of the Mobi pump expected in the back half of this year. 

The 780G, along with the Hugo surgical robot and the PulseSelect atrial fibrillation catheter, is a key product in Medtronic’s attempts to right the ship, particularly as other big hopes like the Symplicity renal denervation system have disappointed. But its effect will be limited, at least at first, and tough times could continue for a while yet. 

Current and forthcoming advanced diabetes devices
Company Technology Type Status
Abbott  Freestyle Libre 3 CGM CE marked Sep 2020; FDA approved May 2022
Dexcom G7 CGM CE marked Mar 2022; FDA approved Dec 2022
Insulet Omnipod 5* Insulin pump FDA approved Jan 2022; CE marked Sep 2022
Tandem t:slim X2  Insulin pump FDA approved Aug 2017; CE marked Apr 2018
Tandem Mobi Insulin pump FDA approval poss H2 2023
Tandem t:slim X3 Insulin pump FDA approval not due until after Mobi is approved
Ypsomed Mylife YpsoPump Insulin pump CE marked Jun 2016; FDA filing planned for H2 2023
Medtronic Minimed 780G Closed-loop CE marked Jun 2020; FDA approved Apr 2023
CGM = continuous glucose monitor. *Formerly called Omnipod Horizon. Source: company communications, analyst notes.

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