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Medtronic (MDT) Partners with Aetna for Type 1 & 2 Diabetes

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One of the world’s largest medical technology, services and solutions companies, Medtronic plc (MDT - Free Report) has been consistently expanding in the field of diabetes management. Keeping in line with this, the company recently inked a new ‘outcomes-based’ collaboration with Aetna (AET) for type 1 and type 2 diabetes patients who are on doses of multiple daily insulin injections. This agreement aims at measuring health outcomes for patients who have switched to pump therapy with Medtronic insulin pump. This insulin pump features Medtronic’s SmartGuard Technology, including the new MiniMed 670G system.

This tie-up gives Aetna members access to Medtronic’s advanced diabetes technologies and support system, along with the new MiniMed 670G system. This partnership will help the company to demonstrate the improved patient outcome at lower costs.

According to Medtronic, “The agreement ties a component of Medtronic’s reimbursement to successfully meeting agreed-upon clinical improvement thresholds for Aetna members with type 1 and type 2 diabetes who chooses to transition from multiple daily injections to a Medtronic insulin pump.” This is aimed at enhancing patient experience, improving clinical outcomes and cutting down on the total cost of care.

In this regard we note that Medtronic launched MiniMed 670G system this June, a Hybrid Closed Loop insulin delivery system for type 1 diabetic patients. This followed the U.S. FDA approval received late last year. MiniMed 670G helps Medtronic simplify and improve diabetes management through advancement of smart algorithms that help control glucose levels in diabetic patients.

We expect the latest development by Medtronic to be completely strategic taking into consideration the hugely expanding market of diabetes management. According to BCC Research, the global diabetes market should reach a worth of $155 billion by 2021, at a CAGR of 4.4% in the 2016 to 2021 period. Clearly, the company has bountiful opportunities in this niche market.

Also, over the last six months, Medtronic has outperformed the Zacks categorized Medical Product industry. As per the last share price movement, the company has gained 24.2%, compared to the 21.6% gain of the broader industry.

Recent Developments

Of late, Medtronichas ventured into the untapped diabetes market of Canada. The company announced that its subsidiary has opened its first Canadian Medtronic Resource Centre to serve diabetic patients in Surrey BC and nearby.

Zacks Rank & Key Picks

Medtronic currently carries a Zacks Rank #3 (Hold). A few better-ranked medical stocks are Align Technology, Inc. (ALGN - Free Report) , Inogen, Inc. (INGN - Free Report) and Accelerate Diagnostics, Inc. (AXDX - Free Report) . Notably, Align Technology and Inogen sport a Zacks Rank #1 (Strong Buy), while Accelerate Diagnostics carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Align Technology has an expected long-term adjusted earnings growth of almost 24.1%. The stock added roughly 33.1% over the last three months.

Inogen has a long-term expected earnings growth rate of 17.5%. The stock gained around 24.1% over the last three months.

Accelerate Diagnostics has an expected long-term adjusted earnings growth of 30%. The stock added roughly 21.2% over the last three months.

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