The good news coming out of the Medtronic earnings announcement is that results confirmed what we already knew. Namely the Control IQ from Tandem is eating the 670G for lunch and as we predicted would adversely impact Medtronic sales. Now this isn’t likely what Medtronic wanted but it is the truth.
Looking at the Medtronic results it’s difficult to find a bright spot. Sales declined in the US by low double digits which was partially offset by growth in international markets. This sounds good on the surface until one considers that when it comes to insulin pump therapy the US market is where it’s at.
The future doesn’t appear much brighter as when asked about the much ballyhooed 780G timeline the company seemed overly tentative and would not comment on when this system would hit US shores. The same can be said for their struggling CGM unit as the company noted they think they have figured this out but based on their tone we wouldn’t say they are overly confident.
Should the 780G take longer than originally anticipated which seems likely given the company’s comments as hard as this may be to believe things will go from bad to worse. The company is banking on the 780G to offset the strong uptake of the Control IQ. However given the continued issues with their CGM sensor and the strong demand for Control IQ it may not matter when the 780G. Simply put the longer the 780G takes the less likely it is this product will have any substantial impact.
To fully appreciate how well the Control IQ is doing and how badly it’s hurting Medtronic we’d suggest checking out the comments being made by patients on the various social media sites. Unlike the 670G the Control IQ is getting rave reviews from the people that matter most, patients. Listen you know that Tandem has a hit on their hands when the biggest compliant by Control IQ patients is long hold times when calling customer support. As Momma Kliff would say this is the right problem to have.
As we have been noting Medtronic is already losing the battle for patients new to insulin pump therapy. A much bigger problem that seems to be developing is existing Medtronic patients converting to the Control IQ. This problem extends to existing Medtronic patients NOT on the 670G but still on older systems who are NOT upgrading to the 670G. A problem compounded by the recent recall which impacts over 300,000 systems.
Now just when you think it can’t get any worse it does as it won’t be long before Insulet launches their hybrid closed loop system, the Horizon later this year likely late in the second quarter or early in the third. Like the Control IQ the Horizon works with the Dexcom G6 which as we all know is an accurate and reliable sensor something the Medtronic sensor is not.Once on the market Medtronic will fall to third place behind both Tandem and Insulet in terms of having the coolest toy in the toy chest.
The real question now becomes what the company can do to stop the bleeding. With the 780G apparently delayed and the continued issues with the CGM sensor frankly we’re aren’t sure there is much they can do but take their lumps. Some will rejoice watching the evil empire who has ruled the insulin pump space for so long getting a dose of their own medicine and we can understand that. However as well deserved as this beating is, we think of the patients stuck on Medtronic system who for whatever reason are forced to remain on what is clearly an inferior system.
To be honest we take no particular joy that we have been spot on about Medtronic. No question their wounds are self-inflicted, something that should surprise no one as this happens frequently when you combined arrogance with hubris. However we can’t help but feel for patients who cannot convert to a competing system. The facts are these when it comes to diabetes Medtronic has been seriously wounded. The only real question is, is this a mortal wound?
One thing seems certain the Evil Empire is no longer, and Death Star will not be rebuilt.