What to Expect from Medtronic’s Diabetes Segment



Medtronic to acquire Mazor Robotics

In September 2018, Medtronic (MDT) announced that the company would acquire all outstanding shares of Mazor Robotics (MZOR) for $58.50 per American depositary share (or $29.25 per ordinary share), which amounts to a total of $1.64 billion (or $1.34 billion). Both companies’ boards of directors unanimously approved the transaction.

The acquisition of Mazor Robotics by Medtronic is expected to significantly strengthen Medtronic’s Spine Surgery segment. Mazor Robotics’ core technologies include the Mazor X Robotic Guidance System and the Renaissance Surgical Guidance System, both of which are state-of-the-art spinal surgery products for guided procedures. Mazor Robotics and Medtronic expect to close the transaction in the third quarter of the fiscal year ending on January 25, 2019.

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Medtronic’s diabetes business

Medtronic’s Diabetes Group significantly boosted the company’s growth in the first quarter of fiscal 2019. The Diabetes Group’s net revenues grew from $449.0 million in the first quarter of fiscal 2018 to $572.0 million in the first quarter of fiscal 2019, reflecting ~26% year-over-year (or YoY) increase. In the US market, the Diabetes Group’s revenue rose ~33% YoY to reach $324.0 million in the first quarter of 2019.

The strong demand for MiniMed 670G systems and Guardian Connect with SugarIQ, a continuous glucose monitoring system, primarily contributed to the revenue growth of Medtronic’s diabetes portfolio. Medtronic’s Diabetes segment is expected to boost the company’s revenue growth in 2018 and beyond.

Medtronic’s revenue growth could boost the iShares U.S. Medical Devices ETF (IHI). Medtronic (MDT), Abbott Laboratories (ABT), and Thermo Fisher Scientific (TMO) make up about ~9.80%, ~9.59%, and ~7.83% of Medtronic’s total portfolio holdings, respectively.


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