Medtronic PLC announced on May 21, 2025, its plan to separate its diabetes division into a standalone publicly traded company within the next 18 months. This strategic move aims to allow Medtronic to concentrate on its core sectors—cardiovascular, neuroscience, and medical surgical—while enabling the diabetes unit to adopt a consumer-focused model.
Strategic Realignment for Growth
The decision to spin off the diabetes division aligns with Medtronic’s broader strategy to streamline its portfolio and focus on higher-margin businesses. The diabetes unit, which includes insulin pumps and continuous glucose monitors, reported $2.8 billion in sales in the most recent fiscal year, marking a 10.7% increase from the previous year.
“To realize the full potential of what we’re sitting on here, it’s going to need more focus than we can provide, and more investment,” said Medtronic CEO Geoff Martha.
Leadership and Operational Details
The new diabetes company will be headquartered in Northridge, California, and led by Que Dallara, who has been at the helm of Medtronic’s diabetes business since 2022. The division employs approximately 8,000 staff worldwide.
Medtronic’s diabetes products, such as the MiniMed 780G insulin pump and smartphone-connected insulin pens, have seen significant advancements. The company also partnered with Abbott in 2024 to develop compatible glucose monitoring technology.
Financial Implications
Medtronic’s overall performance remains robust, with net income rising 61.6% to $1.06 billion and adjusted earnings per share surpassing analyst expectations at $1.62. The company also increased its quarterly dividend to $0.71 per share, reflecting confidence in its financial trajectory.
Despite the positive financials, Medtronic’s stock experienced a slight decline in early trading on Wednesday, likely affected by the announcement of the spin-off. Shares dipped slightly to $86.17 in premarket trading.
Market Context and Future Outlook
The spin-off comes at a time when demand for diabetes and weight-loss medications from companies like Novo Nordisk and Eli Lilly is surging. By creating a dedicated entity, Medtronic aims to better compete in this dynamic market and foster innovation tailored to diabetic patients’ needs.
The new company’s consumer-focused model will contrast with Medtronic’s traditional business-to-business approach, aiming to provide a comprehensive insulin management ecosystem. The separation is expected to unlock value for Medtronic and its shareholders, enhancing gross and operating margins, as well as earnings per share.