GALWAY, Ireland - Medtronic plc (NYSE: NYSE:MDT), a global healthcare technology company, has voluntarily initiated a field action for its MiniMed™ 600 and 700 series insulin pumps. Starting July 31, 2024, the company has been advising customers worldwide to monitor their pump's built-in battery status alerts and alarms and to contact Medtronic for a pump replacement if they notice a significant decrease in battery life. This action follows customer reports and a comprehensive analysis indicating that physical impacts, such as drops or bumps, can damage internal electrical components, leading to reduced battery life.
The FDA has categorized this field action as a class I recall, the most serious type of recall where there is a potential for serious injury or death. Medtronic has received 170 reports of hyperglycemia and 11 reports of diabetic ketoacidosis in the US that may be related to this issue from January 2023 to September 2024.
Medtronic's updated customer notification includes guidance that even a single drop can affect the battery life and that the issue persists after changing the battery. The company advises users to be prepared to replace batteries promptly upon hearing the "Low Battery Pump" alarm and to always carry a spare set of batteries. Those experiencing unexpected battery depletion should contact Medtronic's local support team for possible pump replacement.
Robert Vigersky, MD, Chief Medical Officer of Medtronic Diabetes, emphasized the company's commitment to patient safety and continuous therapy, stating that Medtronic proactively notified impacted users due to the critical nature of pump functionality in diabetes management. The company provides 24/7 support to assist users experiencing battery depletion or other pump issues.
Medtronic is recognized for its efforts to transform diabetes care by enhancing access, integrating care, and improving outcomes. The company's mission is to address challenging health problems and deliver innovative technologies that significantly impact patient lives.
This news is based on a press release statement from Medtronic plc.
In other recent news, medical technology company Medtronic has been the subject of multiple analyst notes. TD Cowen has maintained a Buy rating for the company, citing the anticipated growth in the Cardiac and Spinal Technologies (CST) and Spine sectors, driven by the company's artificial intelligence-powered ecosystem, AiBLE. The firm also highlighted Medtronic's recent partnership with Siemens Healthineers, which is expected to enhance the company's market offerings.
Piper Sandler, on the other hand, has maintained a Neutral stance on Medtronic, anticipating the approval of the company's second Pulsed Field Ablation (PFA) catheter, Sphere-9, by the FDA. However, the firm advises investors to moderate their expectations due to potential manufacturing capacity challenges and the availability of mapping specialists.
Truist Securities has raised its price target for Medtronic following the company's first-quarter earnings, which surpassed revenue expectations. The company also revised its revenue and earnings per share (EPS) guidance upwards.
Conversely, Goldman Sachs reiterated its Sell rating on Medtronic, citing continuous growth in operating expenses and uncertainties in other operating income and expenses. Despite these recent developments, all analysts emphasize the importance of Medtronic's strategic moves and its potential for growth in the competitive medical technology market.
InvestingPro Insights
As Medtronic navigates the challenges posed by the recent field action for its insulin pumps, investors may find valuable context in the company's financial metrics and market position. According to InvestingPro data, Medtronic boasts a substantial market capitalization of $112.56 billion, underlining its significant presence in the healthcare technology sector.
Despite the current recall, Medtronic's financial health appears robust. The company's revenue for the last twelve months stands at $32.58 billion, with a gross profit of $21.35 billion and a healthy gross profit margin of 65.52%. This financial strength suggests that Medtronic is well-positioned to manage the costs associated with the field action and potential pump replacements.
InvestingPro Tips highlight Medtronic's commitment to shareholder value. The company has maintained dividend payments for 48 consecutive years and has raised its dividend for 10 consecutive years. This track record of consistent dividends, coupled with a current dividend yield of 3.19%, may provide some reassurance to investors during this challenging period.
It's worth noting that Medtronic's stock is trading near its 52-week high, with a one-year price total return of 18.98%. This performance indicates that the market remains confident in Medtronic's long-term prospects, despite the current recall situation.
For investors seeking a deeper understanding of Medtronic's position, InvestingPro offers 11 additional tips that could provide further insights into the company's financial health and market outlook.
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