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What Investors Can Expect from Medtronic

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Part 10
What Investors Can Expect from Medtronic PART 10 OF 15

Medtronic Is Focused on Developing Glucose Monitoring Solutions

Glucose monitoring solutions

According to Medtronic (MDT), there are about 450 million diabetes patients in the world. 90% of these patients suffer from type two diabetes. Instead of initially targeting only the patient population that’s taking insulin or other injectable drugs by focusing on pumps and pens, Medtronic is focusing on the development of glucose monitoring solutions applicable for all type two diabetes patients. Medtronic aims to create awareness among physicians about the importance of glucose monitoring in the management of type two diabetes patients and convince them to make monitoring solutions an integral part of the care cycle of these patients.

Medtronic’s glucose monitoring solutions can help optimize treatment as well as improve the compliance of type two diabetes patients. Medtronic estimates that 80% of the blood glucose (or BG) industry’s revenues are earned from type two diabetes patients. About half of these patients are using BG devices only occasionally and not for insulin dosing or glucose management. With its focus on occasional glucose measurement as a vital sign for type two diabetes patients, Medtronic aims to launch the next-generation professional continuous glucose management (or CGM) device in 2017. This launch could have a favorable impact on Medtronic’s stock prices as well as those of the iShares Core S&P 500 ETF (IVV). Medtronic makes up about 0.51% of IVV’s total portfolio holdings.

Medtronic Is Focused on Developing Glucose Monitoring Solutions

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Market opportunity

According to National Health and Nutrition Examination Survey (or NHANES) data, only 5% of type two diabetes patients who aren’t using insulin adhere to glucose monitoring guidelines. However, 40% of total type two diabetes patients suffer from at least one hypoglycemic episode, while half of the total type two patients aren’t controlling their glycemic levels. These numbers, which have persisted despite the availability of 640 different combination therapies for type two diabetes patients, highlight the burden of this condition on primary care physicians. Plus, around 40% of type two diabetes patients with high glycemic values do not see a change in therapy for one year. On the other hand, 58% of the type two diabetes patients with good glycemic control have witnessed a change in therapy within six months. Thus, to improve outcomes for these patients, it’s necessary to standardize care in the primary care setting. Standardization will require the use of professional CGM devices, as type two diabetes patients are generally averse to using personal CGM devices, and the continuous stream of data from these devices may even add to the physician’s burden.

The unique focus area of Medtronic in the type two diabetes space is expected to enable the company to compete with other diabetes device players such as Roche Holdings (RHHBY), Johnson & Johnson (JNJ), and Insulet (PODD).

In the next article, we’ll discuss growth trends for Medtronic’s cardiac and vascular group in greater detail.

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