Abbott and Medtronic have announced a strategic partnership to develop an integrated continuous glucose monitor (CGM) tailored specifically to work in concert with Medtronic’s advanced diabetes management technologies. This collaboration marks a progressive step for both companies; Abbott will design glucose sensors that are compatible exclusively with Medtronic’s lineup of insulin pumps, pens, and automated insulin delivery (AID) algorithms. Although details on the financial aspects and launch timelines remain undisclosed, the partnership is poised to propel both companies further into the competitive diabetes care market.
The joint venture initiates as Abbott aggressively seeks to expand its presence in the AID sector, while Medtronic aims to rejuvenate its diabetes unit following the resolution of a previously issued FDA warning letter. The agreement delineates that Abbott will provide a CGM that only functions with Medtronic devices, which Medtronic will sell exclusively. This arrangement is anticipated to leverage both companies’ strengths and market positions, particularly in catering to Type 1 diabetes patients using CGM and AID technologies.
From an industry perspective, analysts like Marie Thibault from BTIG view the collaboration as a strategic form of “coopetition,” where both companies continue to develop their proprietary technologies while simultaneously co-operating in certain areas. Thibault suggests that this partnership could broaden market opportunities for both Abbott and Medtronic, without them encroaching on each other’s core competitive areas.
Further enhancing its product lineup, Medtronic also announced the FDA approval of its Simplera CGM on the same day. This new sensor system boasts the advantage of not requiring fingersticks or overtape, which were necessary with earlier models. The upcoming Simplera Sync sensor, designed to integrate with Medtronic’s AID algorithm, is currently under separate FDA review.
Historically, Medtronic secured the first FDA approval for an AID system back in 2016 and has since primarily focused on integrating its own glucose sensors with its insulin pumps. However, the company experienced a setback when a warning letter in 2021 regarding issues with its Minimed 600 series pumps temporarily stalled new diabetes product introductions. The FDA has since lifted this warning letter.
For Abbott, partnering with insulin pump manufacturers has become a strategic focus, particularly to attract Type 1 diabetes patients. Preceding the partnership with Medtronic, Abbott secured integrations of its FreeStyle Libre 2 Plus sensor with Tandem’s t:slim X2 insulin pump in January and Insulet’s Omnipod 5 pump, which achieved CE mark approval for use with Abbott’s CGM in Europe as of February.
Abbott’s CEO, Robert Ford, expressed optimism about these regulatory approvals and partnerships with various pump manufacturers, highlighting enhanced opportunities for growth and benefits for patients. The collaboration between Abbott and Medtronic is anticipated to enrich the product offerings in diabetes care by providing patients with more flexibility to mix and match devices to tailor their diabetes management.
Analyzing the financial implications, the partnership is expected to be accretive to Medtronic’s diabetes-related revenue while maintaining neutrality in its gross margin. However, it’s worth noting that the AID systems and products under this partnership will still need to undergo regular regulatory approval processes. Approval for these new systems is not anticipated within the current fiscal year ending in April, as indicated by Thibault.
Overall, the alliance between Abbott and Medtronic is positioned as a strategic move to enhance their standing in the diabetes care market, bringing innovative solutions to patients while fostering an environment of healthy competition and collaboration in the medtech industry.
#Abbott #Medtronic #partner #diabetes #tech
