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On December 15, Medtronic announced that it had received a warning letter from the FDA after inspecting its diabetes business. The warning letter was issued on December 9, which concluded in July and concluded that the inspection involved a recall of remote control equipment for the MiniMed 600 series insulin infusion pumps and miniMed 508 and Paradigm pumps.
After the FDA's warning news, Medtronic's share price fell more than 6% in early trading that day to $104.29 per share and finally closed at $104.94 per share, down 6.04%.
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FDA issues a warning message
Medtronic shares fell 6.04%
It is understood that in the FDA's warning letter, it focuses on the quality system requirements for specific medical devices that regulators believe are insufficient in terms of risk assessment, complaint handling, corrective and preventive measures, adverse event reporting, and equipment recalls. The FDA inspected the facility in July, resulting in medtronic's MiniMed 600 series insulin infusion pumps and a Recall of the MiniMed 508 and Paradigm Pump Remote Controls in October.
The latest warning letter asks Medtronic to update its systems and procedures in order to provide consumers with safe and high-quality equipment.
Medtronic said it will leverage company-wide resources and leverage external experts to implement a range of corrective actions and process improvements related to the FDA letter, but patients and healthcare providers using its diabetes devices will not need to take any protective measures.
Sean Salmon, executive vice president and president of Medtronic's Diabetes Division, said: "Millions of people with diabetes around the world rely on the innovative technologies and products we provide every day, and Medtronic remains strongly committed to ensuring their safety and well-being, addressing all observations as effectively and quickly as possible. ”
After the FDA's warning news, Medtronic's stock price fell more than 6% in early trading on the day to $104.29 per share and finally closed at $104.94 per share, down 6.04%.
Meanwhile, competitors in the diabetes space closed high, with insulin pump maker nsulet up 5.4 percent to $269 per share, diabetes management detection system company Dexcom up 1.1 percent to $541.29 per share, and diabetes medical technology developer Tandem Diabetes Care up 10.5 percent to $144.34 per share.
In this regard, some analysts believe that Medtronic's diabetes business has been dragged down because the company's share of the market segment has declined, and there is a gap in its portfolio, including the launch of the MiniMed 780G insulin pump in the United States and the Guardian Sensor 4 without finger stings (currently under FDA review). While the releases of these products are designed to help the sector turn around losses, the potential delays can put pressure on the diabetes business.
Geoff Martha, Chairman and CEO of Medtronic, said: "This quarter, the company lost share of the diabetes market again, but we are still satisfied with the momentum established outside the United States, and with the launch of products such as the 780G insulin pump, extended infusion set and Guardian Sensor 4, we believe the company's performance in the United States will also improve." ”
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MiniMed 600 series products
The number of recalls in the United States alone has reached more than 460,000 units
In fact, the problem with Medtronic's insulin infusion pump dates back to 2019.
In November 2019, Medtronic issued a warning to patients using the MiniMed 600 series insulin infusion pumps for safety issues.
At that time, the problem with the MiniMed 600 Series insulin infusion pumps was that if the fixing ring broke, the pump's insulin reservoir could loosen, preventing the reservoir from locking properly, which could lead to too much or insufficient insulin delivery, resulting in hypoglycemia or hyperglycemia.
MiniMed 630G
In February 2020, FDA identified hundreds of thousands of Medtronic Minimed insulin pumps as the most severe first-class recalls, covering MiniMed 630G (model MMT-1715) and MiniMed 670G (model MMT-1780). Among them, the number of recalls in the United States is 322005 units, and the number of recalls worldwide is 481875 units.
Medtronic's MiniMed 670G system, approved by the FDA in September 2016, is the world's first insulin management device that can be used to control adult patients with type 1 diabetes by measuring blood glucose every few minutes and automatically dispensing insulin to automatically track and adjust patients' blood glucose levels, according to the data. The MiniMed 630G was approved by the FDA in 2017.
Among the recalled products, the affected insulin pumps include the MiniMed 630G (Model MMT-1715) pump manufactured before October 2019 and distributed between September 2016 and October 2019, and the MiniMed 670G (Model MMT-1780) pump manufactured before August 2019 and distributed from June 2017 to August 2019.
MiniMed 670G
By October, Medtronic had expanded its recall coverage for its MiniMed 600 series insulin infusion pumps. FDA confirmed that the recall covers the MiniMed Model 630G pump distributed between September 2016 and February 2020 and the MiniMed Model 670G pump distributed between May 2015 and December 2020. The number of devices recalled in the United States alone amounted to 463464 units.
In this recall, Medtronic said that a review of safety data related to the MiniMed 600 series insulin pump with a transparent snap ring did not confirm that the adverse event was directly related to the damaged clear snap ring, but that the company was "actively expediting our replacement program."
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Medtronic is constantly expanding diabetes
Layout and R&D investment
As the world's leading medical device giant, Medtronic currently has four major businesses: cardiovascular, surgical, neuroscience and diabetes.
Data from Medtronic's fiscal year 2021 (February 1 to April 30, 2021) shows that of the four major businesses, cardiovascular business accounts for 36%, surgery business accounts for 29%, neuroscience business accounts for 27%, and diabetes business accounts for only 8%. However, the diabetes business, while contributing very little to Medtronic's total revenue, at just $647 million, is the business with the greatest growth potential.
Diabetes accounted for $237 billion in direct medical spending in the United States last year as a growing public health concern. About 29 million Americans show one of the symptoms of diabetes, and 24.7 million of them have been diagnosed. According to the World Health Organization, 422 million people worldwide have to endure diabetes. It also means that device sellers may face a huge market: the global market for insulin management devices is accelerating, with annual sales expected to exceed $35 billion by 2024.
In addition to the MiniMed 600 series, Medtronic is also constantly deploying and expanding its R&D investment in other products for diabetes.
In November 2018, Medtronic announced the acquisition of Nutrino Health, a nutritional technology company that focuses on diabetes. At the time, Medtronic said Nutrino Health was able to provide nutrition-related data services, analytics and technology, and it planned to integrate Nutrino Health's food analysis infrastructure, nutritional science expertise and artificial intelligence platform into Medtronic's diabetes division, integrating Nutrino Health's predictive blood glucose response algorithm with Medtronic's CGM (Dynamic Blood Glucose Monitor) system.
In February 2019, Medtronic announced that its personalized, fully automated ring insulin pumps under development were selected for FDA's Breakthrough Medical Device Program. In June, Medtronic announced the start of a key clinical trial of its next-generation Guardian continuous glucose monitor. Compared with the previous generation, the new monitor will be more accurate, can reduce the number of calibrations, will greatly reduce the number of blood collections in the patient's fingers, and bring a better experience.
GUARDIAN connection system
On June 7, 2019, Medtronic and Tidepool collaborated to develop an automated insulin pump delivery system for diabetes, and Tidepool Loop focused on developing an open-source automatic insulin delivery application for iPhones and Apple watch.
In September, Medtronic announced that it would partner with pharmaceutical giant and largest insulin manufacturer Novo Nordisk to provide patients with a digital solution that integrates data from Novo Nordisk pen insulin syringes with data from Medtronic continuous glucose monitors.
In December 2019, Medtronic announced the acquisition of Klue, a gesture tracking company whose technology is to use analytics to determine in real time whether a patient is eating, speed, and amount of insulin to help predict the amount of insulin required and lay a solid foundation for fully automated insulin injections by sensing changes in human gestures.
At the end of June 2021, Medtronic announced the positive results of its InPen smart insulin pen and its long-acting infusion device, which not only provides a simplified approach to diabetes management, but also effectively helps regulate blood sugar levels and reduce the occurrence of hypoglycemia...
Sean Salmon
In response to the expanding product portfolio and layout, Sean Salmon, executive vice president and president of Medtronic's diabetes business, has said: "We know that diabetes is a very personal journey and we want to meet people with solutions that fit their lifestyles and needs, while enabling them to be seamlessly supported in all of their life transitions. That's why we're committed to expanding our product portfolio and prioritizing what matters most to our customers – a simple technology experience that doesn't affect the results they deliver. ”
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As a high-incidence chronic disease, diabetes has the characteristics of irreversible disease and many complications in the later stage, which brings great demand potential to the diabetes market. The global diabetes drug market reached $68.9 billion in 2017, with a compound growth rate of 7.4% from 2013 to 2017. In the future, with the increase in the number of diabetes patients and the continuous innovation of drugs, Frost & Sullivan predicts that the market size of diabetes drugs will reach $90.7 billion in 2022 and $137.7 billion in 2028.
In the face of this huge market volume, Medtronic remains optimistic. Following the FDA's warning letter, Geoff Martha, chairman and CEO of Medtronic, continued: "In terms of diabetes, the MiniMed 780G insulin pump will continue to be actively scrutinized by the FDA in combination with the Guardian 4 sensor." The MiniMed 780G system is expected to drive the growth of the diabetes business after approval and launch in the United States. ”
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