Medical device giant Medtronic PLC (MDT.US) is preparing to spin off its diabetes management device subsidiary, MiniMed Group, Inc. (MMED.US), for a public listing. However, a sharp debate has emerged among analysts regarding whether the company's growth prospects can justify its proposed IPO valuation. The Northridge, California-based company is scheduled to finalize its IPO price on Thursday, aiming to raise up to $784 million. According to filings, the company plans to expand its insulin pump and continuous glucose monitoring products to increase its footprint in the global diabetes market.
Reports from Wednesday indicated that although MiniMed has been marketed to investors at a valuation lower than its peers, order books for the IPO are concentrated at the lower end of the $25 to $28 price range, suggesting investor price sensitivity. Following the successful IPO of medical supplies giant Medline (MDLN.US)—the largest in the U.S. in 2025—market enthusiasm for new medical device listings remains strong. MiniMed's offering is already oversubscribed, and a strong market debut could encourage more companies in the sector to pursue IPOs. However, ongoing geopolitical tensions in Iran introduce potential market volatility, casting uncertainty over the offering.
J.P. Morgan analyst Robbie Marcus pointed out that if MiniMed follows competitors such as Insulet (PODD.US), Tandem Diabetes Care (TNDM.US), and Beta Bionics (BBNX.US) in promoting automated insulin delivery systems through retail pharmacy channels, it could face challenges to revenue and profit growth. Currently, patients primarily purchase MiniMed products through specialized medical device distributors. Sources familiar with the matter indicated that, based on expected adjusted EBITDA, MiniMed's valuation is set to be lower than those of publicly traded peers like Dexcom (DXCM.US), Insulet, and Tandem.
The core product, the MiniMed 780G system, uses a continuous glucose monitor to automatically read glucose levels and adjust insulin delivery accordingly. Marcus expressed skepticism about the valuation implied by the midpoint of the IPO price range. In a client note dated February 25, he wrote, "We firmly believe a fair valuation falls within the $2–3 billion range, not exceeding $4 billion, whereas the IPO implies a market capitalization of approximately $7.4 billion." He added, "The company remains unprofitable with little near-term improvement expected." Filings show that in the six months ended October 24, 2024, MiniMed reported revenue of $1.5 billion and a net loss of $21 million, compared to revenue of $1.3 billion and a net loss of $23 million in the same period a year earlier.
In contrast, Robert W. Baird & Co. analyst Jeff Johnson stated, "From a valuation perspective, we find the $25–28 price range reasonable." He noted that this pricing implies an enterprise value-to-trailing twelve months revenue multiple of approximately 2.2–2.5 times, compared to 1.8 times for Tandem and 3 times for Beta Bionics. Compiled data show that U.S. healthcare-related IPOs raised a total of $10.9 billion last year, an increase of nearly two-thirds from 2024. MiniMed's listing is expected to further stimulate the recovery of healthcare IPOs.
Another analyst at the firm, David Rescott, suggested that more medtech IPOs could enhance the sector's appeal to investors. In an interview, he remarked, "There has been limited supply of new healthcare listings recently. New names like MiniMed are likely to attract more interest as they offer differentiated investment opportunities." RBC Capital Markets analyst Shagun Singh noted that while the timing of MiniMed's spinoff came as a surprise to the market, the move will allow Medtronic to focus more intently on its hospital-focused device business. She commented, "This transaction is significant as the diabetes business is increasingly shifting toward the consumer side."