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Medtronic (MDT) Diabetes Arm Secures Two Approvals in Europe

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Medtronic (MDT - Free Report) recently secured two back-to-back European regulatory approvals in the diabetes management space. Its InPen smart insulin pen as well as Guardian 4 sensor both received CE Mark.

The commercial launch of both will begin sometime this fall (the second quarter of fiscal 2022).

Details of the Approvals

InPen got expanded approval for multiple daily injections (MDI). Smart MDI system automatically records insulin doses, tracks active insulin and recommends mealtime and correction doses based on an auto-populated bolus calculator.

For investors’ note, InPen is the first smart insulin pen approved in Europe, which can work together with real-time CGM (continuous glucose monitoring) via one convenient smartphone app. Inpen got integrated to Medtronic’s product line following the company’s acquisition of connected insulin pen company, Companion Medical in September 2020.

The latest CE Mark approval for the Guardian 4 sensor 3 enables it to be integrated with the MiniMed 780G insulin pump system or InPen or stand-alone CGM use.

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Notably, the Guardian 4 sensor 3 does not require any fingersticks for calibration or diabetes treatment decisions.

Strategic Significance

InPen combined together with the Guardian 4 CGM system is claimed to provide real-time glucose readings and insulin dose information to the user in one place. Rather than using multiple applications with this integration, users will be able to see all their information real-time in one single app. This will help them with smarter dosing decisions to manage their sugar levels in one view rather than taking the help of different apps.

The MiniMed 780G system with Guardian 4 sensor will automatically adjust and correct insulin delivery every 5 minutes with no fingersticks.

These two latest innovations will enable Medtronic to offer the only pump that adjusts and corrects every 5 minutes with an infusion set that lasts twice as long. These will improve the user experience of insulin pump therapy.

Industry Prospects

Per a report by Fior Markets, the global insulin pen market is expected to reach $42.11 billion at a CAGR of 4.82% between 2019 and 2026. Factors like rising incidences of diabetes in various age groups and increasing usage of insulin pen in medical application are expected to drive the market.

Again, per a report by Allied Market Research, the global CGM systems’ market size was valued at $1,774.2 million in 2019 and is expected to reach $8,844.9 million by 2027, witnessing a CAGR of 22%. Factors like rise in the elderly population and a surging diabetes population are expected to drive the diabetes market.

Given the market potential, the latest advancements are well timed.

Recent Development in Diabetes Management

In Diabetes, the company reported 9% growth in the last-reported fourth quarter of fiscal 2021 based of strong execution of its turnaround strategy. The company’s new Minimed 770G and 780G insulin pumps gained momentum, resulting in strong double-digit global insulin pump growth.

In the fiscal fourth quarter, the company received CE Mark for ZEUS CGM sensor, which the company is marketing as the Guardian 4 sensor.

Share Price Performance

The stock has outperformed its industry over the past three months. It has risen 7.4% against the industry’s 0.9% drop.

Zacks Rank and Key Picks

Currently, Medtronic carries a Zacks Rank #3 (Hold).

A few better-ranked stocks from the breader medical space include Straumann Holding AG (SAUHF - Free Report) , CONMED Corporation (CNMD - Free Report) and West Pharmaceutical Services, Inc. (WST - Free Report) .

Straumann Holding, currently carrying a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 11%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CONMED, which carries a Zacks Rank #2, has a long-term earnings growth rate of 9.90%.

West Pharmaceutical, which carries a Zacks Rank #2, has a long-term earnings growth rate of 25.80%.

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