By the numbers
Q1 (FY2025) revenue: $7.92 billion
2.8% growth year over year
Cardiovascular: $3.01 billion
5.5% growth year over year
Net income attributable to Medtronic: $1.04 billion
Compared with $791 million in the year-ago period
Medtronic’s diabetes leader told investors Tuesday that while the company is excited about its recent partnership with Abbott, its strategy in the market has not changed.
Que Dallara, president of Medtronic’s diabetes business, pushed back on one analyst’s suggestion that partnering with Abbott was a big strategy shift, saying the company still believes in its diabetes technology and the partnership is a way to reach patients who may prefer to use Abbott’s continuous glucose monitors (CGMs).
“The strategy hasn’t changed,” Dallara insisted. The executive later added that the partnership “allows us to tap into the largest CGM install base in the world, in addition to growing our own install base.”
On Aug. 7, Medtronic announced a partnership with Abbott to develop a glucose sensor that will work with Medtronic’s insulin pumps, pens and automated insulin delivery (AID) algorithms. Abbott will provide a CGM that will only work with Medtronic diabetes tech products, and Medtronic will be the exclusive seller of the device.
At the time, BTIG analysts wrote in a note to clients that while they were “initially surprised by the headline, we think this will help open the market for both companies given their respective competitive positions and installed base in the Type 1 CGM and AID market.”
Dallara, who did not provide a timeline on a product launch, said on the call that one key motivation for the partnership was a recent “widespread recognition” of the benefit of AID systems, in which CGMs and insulin pumps connect and deliver insulin when needed.
“The most obvious opportunity [is] for a very large install base of users that prefer the Abbott sensor to now have access to our technology,” Dallara said, adding that Medtronic wants to be the “one phone number” for patients who may prefer an Abbott sensor.
In the first quarter of Medtronic’s fiscal 2025, its diabetes unit grew sales by nearly 12% year over year to $647 million. CEO Geoff Martha said the company had high-single-digit growth in insulin pump revenue and more than 30% growth in CGM revenue.
‘Rapid’ PFA adoption
Medtronic executives also provided an update on another big medical device market: pulsed field ablation (PFA). The market has been one of the industry’s hottest spaces this year after Medtronic and Boston Scientific netted the first Food and Drug Administration approvals for PFA devices.
Martha said there has been “rapid market adoption” of the company’s PulseSelect system. Medtronic is “dramatically increasing our PulseSelect catheter manufacturing capacity and expanding into new accounts” because of demand, the CEO said.
PFA is a new treatment for atrial fibrillation, an irregular heartbeat that creates blood clots and can lead to stroke and heart failure. The technology targets heart tissue with non-thermal electrical pulses, as opposed to the heat of radiofrequency ablation and extreme cold of cryoablation.
Both Boston Scientific and Medtronic have reported strong early demand for PFA. Boston Scientific said its Farapulse PFA system fueled a nearly 122% year-over-year increase in electrophysiology sales in the second quarter.
Medtronic is awaiting an FDA decision for a second PFA system, called Affera, which is currently available in Europe. The device comprises a catheter that can perform mapping and deliver PFA or RFA to heart tissue.
Amid the anticipation of Affera, Martha told analysts on the call that they are overlooking the company’s current offering.
“PulseSelect is doing really well,” Martha said. “I think the analyst community has … moved past PulseSelect a little bit. I’m not sure that’s the right call.