Medtronic has revealed its intent to separate its Diabetes business into a new, standalone company (New Diabetes Company).

The company said the move will create a more focused company with a more simplified portfolio in high-margin growth markets. It will also create an independent, scaled diabetes company that will focus on accelerating innovation—and is the only company that commercializes a complete ecosystem for intensive insulin management.

The separation’s completion is anticipated within 18 months via a series of capital markets transactions, with a preferred path of an IPO and subsequent spin-off.

New Diabetes Company will be a scaled direct-to-consumer business. The separation from Medtronic will allow more focused investment into its pipeline, manufacturing scale, and automation. This aims to position success in automated insulin delivery and Smart MDI.

The Diabetes business currently has a team of over 8,000 worldwide employees. Que Dallara, currently EVP and president of Medtronic Diabetes, will become CEO of New Diabetes Company.

“We strive to give people with diabetes the freedom to forget about diabetes and live their best life,” Dallara said in a statement sent to MPO. “This is our North Star and will continue to guide all of our decisions. This next chapter will allow us to accelerate technologies that provide more of that freedom and peace of mind. We’ve proudly served this community for over 40 years, and we’ll continue to lead the next frontier of innovations until a cure is found.”

The Diabetes business represented 8% of Medtronic’s revenue and 4% of segment operating profit in fiscal year 2025 (ended April 25). The separation is expected to boost the company’s gross margin by about 50 basis points, adjusted operating margins by approximately 100 basis points, and be immediately accretive to adjusted EPS (earnings per share).

Last month, the company submitted 510(k) applications to the U.S. Food and Drug Administration seeking clearance for an interoperable insulin pump. The FDA nod will facilitate system integration with a continuous glucose monitoring (CGM) sensor based on Abbott’s most advanced CGM platform.

“This marks a significant milestone in driving both Medtronic and the Diabetes business to achieve lasting value for Medtronic, our shareholders, customers, and patients,” said Geoff Martha, chairman and CEO of Medtronic. “Active portfolio management is an important lever to delivering on our ongoing growth and success, and this decision shifts the Medtronic portfolio to have intense focus on our highest margin growth drivers where we have our strongest core competencies. I’m also excited about what the future holds for the Diabetes business. Que’s impressive track record in driving growth and innovation has set Diabetes on a path to continued success, ensuring the needs of individuals with diabetes are met around the globe.”

Also last month, the company earned FDA approval for its Simplera Sync continuous glucose monitor (CGM) for use with the MiniMed 780G insulin delivery system.