Medtronic Teams Up With Fitbit, Accelerates Diabetic Care
Zacks Investment Research | Dec 07, 2016 08:54PM ET
As people are becoming increasingly conscious about the various health hazards linked to diabetes, Medtronic (NYSE:MDT) is efficiently strategizing to capture the diabetes treatment market, which is expected to grow at a CAGR of 6.3% during the 2015–2020 period (according to a Markets and Markets report).
As a major breakthrough, the company recently joined forces with Fitbit (NYSE:FIT) , a popular name in the field of connected health and fitness category to create an integrated diabetes care management program. Per the agreement, Fitbit’s iPro2 myLog mobile app will enable type 2 diabetes patients to check their glucose levels and physical activity data in one streamlined application. The application will also simplify the sharing of information with the patient`s healthcare team, enabling them to come up with a more efficient diabetes management option.
Price Movement
Medtronic has been going through a rough phase since its earnings release in November. While its share price has consistently remained above the broader Zacks categorized Medical product industry over the last six months, the mixed second-quarter performance disrupted the trend. Per the latest movement, the stock is down 8.7%, wider than the loss of 3% for the broader industry over this period. The lowered fiscal-2017 guidance is more disappointing, indicating slim chances of recovery down the line.
Additionally, Medtronic has seen 18 downward revisions with no upward movement for the full year over the last one month. Similarly, for the same period, current-year estimates have slid 8 cents from $4.65 to $4.58. However, we believe that the company’s latest initiatives to expand its portfolio in sectors with huge untapped potential are expected to boost stock price.
Coming back to the company’s teaming up with Fitbit, the iPro2 myLog App will collect data generated by the Fitbit activity tracker and Medtronic’s iPro2 professional Continuous Glucose Monitors (CGM) system. This, thereby, will enable the patients to monitor how exercise is impacting their glucose levels.
Why Medtronic is Focusing on Diabetes Market?
Of late, Medtronic has been concentrating on the diabetic device market which is expanding in leaps and bounds. The disease is on the rise and is no longer the tag of the rich nations only. Per a latest World Health Organization data, the global prevalence (age-standardized) of diabetes has nearly doubled since 1980, rising from 4.7% to 8.5% in the adult population.
According to a Markets and Markets report, the global diabetes care device market has been forecasted to reach $2.3 billion by 2020 and is estimated to grow at a CAGR of 6.3% during the period.
Medtronic has made many developments in recent times within its Diabetes group. This includes the U.S. FDA approval of the MiniMed 630G System and the earlier-than-expected FDA approval for the MiniMed 670G System, which is expected to become commercially available in 2017. Also, it got FDA approval for Enlite sensor, to be used with the iPro2 Professional CGM system. These product launches, along with the company’s recent partnerships with big mammoths like Fitbit in diabetes space is expected to accelerate growth further for the company in the coming period.
Zacks Rank and Key Picks
Medtronic currently holds a Zacks Rank #4 (Sell). A couple of better-ranked medical stocks include NxStage Medical Inc. (NASDAQ:NXTM) and Baxter International Inc. (NYSE:BAX) . Both the stocks sport a Zacks Rank #1 (Strong Buy). You can seeZacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.