MiniMed Group, Inc. (MMED) September 2026 Conference Transcript

Welcome back. I'm Larry Eagleson, the Medical Device Center. It's my pleasure to host this session with the management team for Minimed. With us from the company is CEO, Q Dilar, and Vice President of Investor Relations, Ryan Weisbenig. Ryan and Q, thanks so much for being here. Thanks for having us. So let's start with the U.S. business, the Q1 results we just reported. that business has been weaker than the international business. We saw a nice acceleration in the first quarter. High single-digit growth on an unknowingly basis, more than 20% growth in the U.S. and we've promised. So Q, what's driving the acceleration and what gives you your confidence to stay involved?

We really see traction. So one of the things we look at is we look at our daily orders and our daily shipments and our account activity. And we've seen a progressive tick up as we've been releasing new products. And so if I zoom out, say, what's happened in the last 18 months, you go back to fiscal year, the first half of fiscal year 26. U.S. was pretty flat. When we introduced CGM towards December last year, we saw a bit of an uptick. We got to low single-digit miss, double-digit growth. And in this past quarter, with Flex coming in, with Simplera, which represented only five weeks of the quarter, we saw another uptick. And then since Instinct has come out with Flex, we're seeing another uptick. So it's not one product that's doing it. It's the fact that we are having this cascading release of new products that's really getting people excited and generating a lot of activity that we see. And the sustainability? That's what's sustaining it. It's not just one thing, but it's the fact that CGM made people... It's been our Achilles heel for a long time. And then the new pump is getting a lot of excitement. It's the first hardware refresh in over a decade. And so we see it in our daily numbers.

So let's talk about your patch pump. You filed it for FDA approval fit. It was pulled forward, I think, the filing. And you plan to launch it, I think, summer of next year. So you're going to be, when you launch it, you could be the fourth patch pump to market, depending on the cadence of the competition. Do you think fit can be a strong number two? And if so, why?

Look, we think there's every prospect of fit being a very strong number two contender, and I think in the long run the number one AID system. There's a lot of companies that have got patch pump approval, but it's a different kettle of fish to actually launch the product. And what I love about our patch pump is that it's not a me-too. It's got up to seven days of wear, it has a 300 unit reservoir, and it has our world-class smart guard automation. And these are the three trade-offs that a lot of, when we do customer surveys, people complain about in terms of what's available in the patch market today. And so we're going to be delivering all of that in addition to customer ease of use with fit. So So it will really be the first to market with that feature set that addresses the trade-offs today.

And the 300 units is more than the competition.

It's 50% more than the competition.

Is there a trade-off on size?

It's a little bigger. When you wear it, the payload's the same. We've done those wear studies. But I think the number one thing that people look for from the existing patch users in the market is they want it to last longer. If you've got type 2 and you've got high insulin needs or you're an adult, type 1, or you're a peds, you want it to last up to seven days, we're going to be able to deliver that.

And talk about what you think these patch pumps, these new patch pumps coming to market can do to the market. Do you think it'll stimulate the growth of pumps in general? Do you think it'll change the kind of the ratio of patch pumps to two pumps, which is about 60-40 today? What do you think the impact is going to be of all these new patch pumps coming to market?

I think, generally speaking, patch pumps will grow as a category faster than the overall pump market. We believe that durable pumps will continue to grow, just not as fast. That's evident from what we've seen in the last few years. But the important thing is less about the precise mix between durable and patch pumps. What we're trying to do is actually have a solution for every segment of the market. If you want a smart pen because you don't want to wear something on body, you've got our smart MDI solution with Minimed Go. If you want a patch pump, we're going to be introducing Minimed Fit next year. And then if you want a durable pump where you can disconnect and have a smaller footprint on your body, you have Minimed Flex. So that's our goal, is to have a portfolio that addresses type 1 and type 2, depending on what preferences that people have, versus trying to force fit everyone into one solution.

That makes sense. And, you know, I asked about it on the call, just kind of deferrals or pausing ahead of the FIT launch. You did see a little bit with Flex. And it sounds like you don't expect to see much deferrals ahead of FIT coming out. Why is that?

In the market research that we've done in terms of preference share and the value proposition of fit, we think that the two cohorts that will be probably the most excited are the MDIs that want a patch pump. So we think that's an expanding market, and as we introduce our patch pump with the automation control and including full closed loop next year, we think that will expand the market and attract a lot of people from MDI. And then the second cohort, which is a very sizable number, are the people on patch pumps today that aren't getting control, that want longer wear, that want a larger reservoir. So we think these are the big two cohorts. That's not to say that some of our install base aren't interested in upgrading. I'm sure there are. But we think this is less pronounced than what we saw with Flex. But that's what our research says so far.

And then manufacturing has been, I guess, a concern, a challenge. You know, in the past with patch pumps, I think you've said you're going to have capacity for 20,000 units upon launch. Just remind me of what you said on manufacturing and when you think you'll have unconstrained capacity.

We're having, we'll have capacity for 20,000 patients, not units. So it's millions of units, but it's 20,000 patients. Upon approval or launch in the summer? Upon launch. So we're working with, our lines are set up now. we are running water through the pipes, we're making products, we are working on making sure our yields are at the level we want it to be, we want to demonstrate the capacity we can produce, and we're planning for additional capacity even now. And then, of course, we're preparing all of the launch activities, marketing, market access, commercialization, training the sales team, and so forth.

So how long until you have unconstrained capacity?

We don't think of it as unconstrained the way that the best maybe analogy I can give you, Larry, is just look at the ramp-up that we had with Simplera. When you're making millions of these units, it takes time to ramp up volume. If I look at the volume that we did last year versus, say, what we're doing this year right now, it's tripled. So you should expect some type of ramp-up like that with the patch production.

And then just switching gears, the other update you gave was on Vivera, your fully closed-loop algorithm, which I think you said, no, it's fully enrolled at trial. And you said it's going to launch shortly after FIT in the second half of calendar 27. So I guess the question is, it's a 12-week follow-up study. So should we expect to see the data at ATTD in early 27, or is that more of like ADA in June of 27?

We haven't disclosed exactly when the data will be ready in when it's going to be published. But it's a pretty good guess whether they would pick a medical conference to show the data. But we're all eagerly waiting what's in there.

OK. And you've talked about Vivera being designed to meet patients where they are. Why is that flexibility important? And how should investors think about the advantage of one platform which serves both highly engaged and lower engagement patients?

I think one of the misconceptions in diabetes technology is that you have one product and everyone behaves the same and uses the technology in the same way. And that's just not the case. I think it really is different strokes with different folks. And so meal bolusing is one of the most complained about things that people with diabetes have to contend with every day. It's difficult to do people guess wrong and so the ability to remove meal bolusing or meal announcements or carb counting is really important to really unlock AID to completely simplify AID so and you have a spectrum you've got people who like teenagers who will never want to do anything and you have to be able to deal with that and then you've got people who are you know very good at managing their diabetes they're super fastidious about getting very tight control and they want to engage with technology and so we don't feel that it's right to tell someone like that oh you can't do anything with the system and similarly we don't want to tell the person that doesn't want to bowl this you've got to do these things and change your behavior and so we've built an algorithm that we're really excited about it can accommodate both you don't want to bowl this no problem You get above ADA guidelines if you want to engage with a system once a day Never maybe a couple times a day it can accommodate that as well on an optional basis And so it can really adapt to that full spectrum of behaviors and actually most people will end up being somewhere in the middle And I think what's great about what we've built is it accommodates type 1 and type 2 It makes it easier for the physician because they don't have to think oh is this therapy good for this patient? Our algorithm can actually handle both behaviors. And I think on the payer side, it should give them more confidence that if they're paying for a therapy, that you don't really need to depend on the patient's behavior for adherence. The patient can still achieve above the ADA guidelines.

That's helpful. And what do you think the commercial implications are of launching these fully closed-loop systems where you eliminate or reduce the burden of meal announcements?

I think it will expand the market. I mean, our view is that the easier the AID system, and we believe fit with Vivera will be extremely easy to use. You just need your teledated dose to get into therapy. So simple, simple to include into a clinic, that it will expand the market. So the ease of the AID, we believe that drives the easier market. It's very similar to when CGM, you remove finger sticks. You took out the behavior, the need to adhere to and be compliant. That's what we're doing with AID. We think that will open up the market massively. Type 1 and Type 2? Type 1 and Type 2, especially Type 2, because you don't have to do anything.

And you think fit will resonate more with Type 2 because of the 300 units?

With the 300 units and the longer wear. And you're at 40% now, you said new starts, or Type 2?

Type 2 in the U.S., yes. Do you think that goes much higher? Because that's pretty high already.

Potentially. It will depend on probably unlocking the primary care channel, which I think Fit plus Vivera has the potential to do.

Do you need to expand the sales force to reach the primary care channel?

We expect some sales force expansion as volumes grow up, but not at the same rate as revenue. all right all right so type 2 transitioning to although we just started so how do type 2 patients different from type 1 in in terms of the onboarding and utilization and retention and and how are those impacting your commercial model I'm generalizing but typically type 2s tend to be one simpler systems you know when you have diabetes you've been diagnosed as a child you tend to have to learn all this stuff and you have pretty good adherence but type twos later in life habits have formed and so you want systems to be simpler and then the other thing we see is high insulin usage and so that's why we've designed our pumps to accommodate 300 units because we want it to be a good solution for type 1 but also type 2 with the bigger reservoir so simplicity matters now we've had the type 2 label indication, not just for 780, but prior to that for a very long time, and so it's always been part of our US install base, and as a result, you know, for many, many years, long before I joined the business, we've always had programs to help patients onboard to therapy, get success quickly, and stay successful, and so we call that Start Right, and then six months and beyond, We call it stay right, and so we have touch points with the patient throughout their journey. And the fact that we go direct where we can allows us to hold their hand through the process.

And is that why, I know you were asked about it on the Q2 call, that your retention or attrition is similar with type 2 and type 1 patients?

It's a little higher than type 1, but it's similar. It's not dramatically different. And what the trend we see as we've released new products is that that attrition has come down. and our retention go up, and so it's a combination of having the right product market fit for type 2, but in addition to that, making sure we support them with our clinical field.

And there's been a lot of concerns on GLP-1s or about GLP-1s impacting the type 2 population. Your view is?

My view is that we haven't really seen it in our new pump sold or our new patient starts with type 2. In the U.S. it's been pretty stable at around 40%, quarter upon quarter. Again, we mostly focus on the endo channel at the moment. And so that's pretty stable. And it makes sense because when you look at type 2 penetration in the U.S., it's not significant. It's still in the early innings. And so we think there's a lot of headroom ahead. So even if you assume widespread G or P1 usage and maybe it slows down the number of type 2s that become insulin dependent, the reality there's just so much adoption headroom that we don't really see an impact on the growth potential.

Okay one of your competitors has talked about the removal of the c-peptide requirement for the from the NCD for type 2 Medicare patients and this could be being a catalyst for the market if it happens. Do you expect this to happen and what impact would it have or could it have?

I think it's been a question of 20 years, Larry. I think the industry, the physicians, I think everyone agrees this is a very outdated test and just adds barriers to type 2s clearing the test in order to get coverage. And so we welcome anything that can help CMS open up the NCD and revisit it. BUT MY UNDERSTANDING IS THAT THE DEADLINE TO CHANGE THE GUIDANCE HAS PASSED. AND I DON'T THINK THERE'S A PROSPECT OF THAT CHANGING BEFORE THE END OF THE YEAR.

IS THERE A CHANCE? WHEN WOULD BE THE NEXT OPPORTUNITY?

WELL, IT WILL BE NEXT YEAR. BUT WE'RE ALWAYS HOPEFUL THAT CMS WILL SEE THE LIGHT. BUT THAT'S A BYZANTINE PROCESS AS FAR AS I'M CONCERNED. IT WILL BE TREMENDOUSLY GREAT FOR THE WHOLE INDUSTRY. because then type 2s can get greater access in the DME channel. But no prospects that I can see at the moment.

All right, so let's switch gears to the CGM business, which is actually the largest revenue line in your reported revenue. So what are you learning about patient preference between Simplera and Instinct? And as you broaden your sensor portfolio, how do you think about the opportunity to drive that attachment rate beyond, I think, the 69% you reported in Q1?

So first on the two sensors, we think there's room for both. And each of the sensors, they're both accurate, and they just fulfill, they have different features that different people prefer. So, for example, some people prefer, obviously, the longer wear. They like the size, and they'll pick instinct. Sometimes the tape doesn't work for them. For Simplera, we see a lot of users who want to optionally calibrate. They like the weekly routine, and the tape works for them. So there's just different features that when people use the sensor, they have different experiences, and so we think there's room to offer both. And given that we're indifferent as to which sensor we sell, we get really the same revenue. It doesn't really matter, and we think the choice is important. We don't want to force people who want a weekly routine to have to have one every 15 days.

But it would seem, let me just push back a little bit, longer wear, smaller size. You didn't mention it, but one's ICGM, one's not ICGM. And you calibrate, I think you may have mentioned it earlier, most people don't want to calibrate. That was actually removing that was a catalyst for CGM.

So it would seem like Simplera would kind of become the minority well Simplera you don't have to calibrate Simplera you can optionally calibrate and for a lot of people they like that because especially if you're type 1 and sometimes the sensor can drift you want to be able to calibrate and be in tighter control and that's the reason why people do it so if you look at the social media post you're gonna see I can't calibrate the instinct why can't I do that a lot of our install brace like to calibrate the sensor because of that reason they don't have to but that's why they what that's why some people do it I agree the majority don't want to calibrate but again the tip of the pyramid you're gonna have very engaged patients that

just want to eke out very very tight control that may want to do that and I don't think you've said anything publicly about the split share but like of new starts but would tell me if I'm wrong but is do you think the majority is going to be instinct going forward?

It's possible. I mean, right now, both sensors have very sizable scale install bases. And so we're seeing both grow and people have different preferences. I think in the US, you're going to see more instinct users because we launched that first, and we gave preference to our US for the simpler supply. And so we'll see where it lands. But we're indifferent. We want to give the choice. And then obviously as we get into our extended wear sensor that we talked about last week, we'll be able to offer Simplera in store base and even longer wear sensor as well.

Remind me how long the new extended wear sensor is going to last?

You haven't said, Larry. It'll be longer than seven days.

Longer than seven. But you haven't said if it's longer than 15. We haven't disclosed it. I don't want to get ahead of our... Is it at least 15 competitive with the...

We haven't disclosed any of that. We will in due course.

And the pivotal trial starts this fall. So it's in October, actually next year. Probably this fall, I guess. So is this like a calendar 28 launch?

I mean, typically a new sensor trial is about 18 months.

Okay, so it could be a little longer than that to approval. Okay. And do you think you're going to be able to achieve ICGM specifications? And have you said anything about size? because you said earlier Simplera is bigger than Instinct.

It's going to be the same form factor as Simplera, and so what that does is it allows us to leverage all of the manufacturing lines that we have today with Simplera. The only difference is it's a new sensor filament, and so that way we can be capital efficient. People like Simplera. They like the feel of it, the low profile, so we're keeping that. And as to the rest of the features, I don't want to get ahead of ourselves, but obviously ICGEM is important, but so are things like reliability, the durability of sensors lasting the full label indication. So all of those things are in the mix for our new sensor platform.

And remind us now that while we're on CGM, Libre Duo is approved in the U.S. and internationally. Remind me of the timelines they've disclosed, I think, for the different pump partners.

For MiniMed, what's the timeline, and how are you thinking about adoption? we're working with them right now on integrating ketone data into our app so we'll have a single app as opposed to two apps that a patient has to juggle and we said it will come out in 2027 calendar year what do you think the where do you think the sweet spot is for what what's the kind of the the sweet spot for that you know sensor which patient types i think there's a lot of interest in the pediatric category, some MDI. I think when you're using our AID, you've got an algorithm that's going to get you back in range if you do go high. So it tends to be pediatrics, people on MDI, and then maybe on AID, if you're using a SGLT2 off-label, you could experience DKA in the euglycemic range, and so it acts as an airbag there. I think it's early, we'll see. But we're actively working now on really delivering a great user experience. And there's going to be more work being done to study what do you do with key turns if it goes up or if it alarms. I mean, those things still need to be worked out.

Got it. Okay, let's switch gears to pharmacy.

Hot topic in the pump world.

And I guess the way I frame the question is maybe it's just me, but some confusion among investors around your pharmacy strategy. Can you please help us better understand what the strategy is and how we should think about, you know, the economic implications and potential price uplift, please?

Yes. So I think the best way to answer your question is to go by product because it really does vary by the nature of the product. So today we have MiniMayGo, which is in pen and our CGM is available through pharmacy today. And if you compare the pricing of our CGM, which is Simplera and Instinct in the pharmacy versus DME, they're very similar. So that's number one. So that's available today. We have pretty good coverage for CGM and in-pen, and we also have coverage for our consumables through pharmacy today. What happened in the last, call it 18 months, so 12 months, was the introduction of 780G through pharmacy. So 780G is on the formulary through Ascent, MSR, and Zinc. So that's about 70% of covered lives. And we're seeing price accretion when health plans take advantage of that formulary. One of the challenges, though, in the durable pump market is traditionally it hasn't been through pharmacy. And so a lot of the health plans have medical guidelines in their design where they don't accept the formulary. So we're working now with the various health plans to encourage them to accept 780G through pharmacy. And so that's what we're working on at the moment. We certainly see ASP uplift. And the way that our economics works for 780G is we get paid up front for the pump price. We pay a rebate to the PBM. It's an attractive rebate, but it's not giving away the farm. And then we get paid for the consumable. And then typically the patient has a co-pay somewhere between $50 and $100 for that pump. So that's how 780G works. And then I think I mentioned in the prior earnings call that we're working right now to get Flex available through pharmacy as well. Can't disclose very much at the moment, but the conversations are going very well. and so we hope to get flex through pharmacy very soon and certainly for the calendar year 27. And then, of course, FIT. I know there's a lot of products. FIT will be a patch pump product. It's got a disposable element, and so it will be very similar to how the patch pump is going through the market today. You've got a starter kit, and then you have a supply kit that comes through, so it will be a very similar model.

Through the pharmacy? Entirely through pharmacy. The CGM and the pump. Yes. Okay. And Medicare, too?

Medicare Advantage will take a bit longer to do, but yes, that's the plan.

And you've talked about kind of a revenue uplift, you mentioned, I think. People can run the numbers, they can see your revenue per patient is higher than the competition. So two-part question, A, how much higher can you actually go, given you're relatively high? And B, I think the question we typically get, probably you and me, is what's the risk actually that your actually revenue per patient comes down closer to where the other guys are?

Look, I think our fundamental strategy has always been to differentiate through innovation, through our clinical outcomes, through the user experience and the physician experience, and to price for value. We don't try to compete on features. We don't compete on price. we don't think the winner in the end wins that way it's about a value proposition that is very compelling the clinical evidence is there and so that's how that's our general approach and so that's the same it will be the same with the patch pump and the way that we've done it to date is we have direct contracts with payers and these are the pricing that they're willing to pay because we serve the intensive insulin population it's the most vulnerable patient cohort we're not going after non-intensive, and so when you amortize this small cohort, their need for this technology over a million members and the cost per month, it ends up being very little. But it's worth it because when you look at the claims through our CareLink data, payers can look at claims from that cohort and see that if they're doing better than the national average, they're going to have less hospitalizations, less ER visits, less complications, less costs downstream. So that's really the argument that we make with the payers, and they're willing to pay us, and we have contracts to prove that. We think that going to pharmacy with a patch pump is a big opportunity because today, if you look at the price for a patch pump in the pharmacy versus what we get through DME, there's a lot of headroom. And so we intend to be competitive, but there's a lot of space for us to improve the value we can achieve through the innovations we're bringing to market.

Okay. So you mentioned MiniMed Go.

Yes.

Since we have time, you probably know, well, investors are skeptical.

Yep, that's fine.

The pens have not been, smart pens haven't been super successful, you know that. Is it fair to be skeptical?

Or are we going to be, you know, how are you going to prove people wrong? well I have to admit I was skeptical too about this thing but to be honest what we're seeing in the market I'm is a big opportunity first of all the patient pool is huge you've got 15 million patients on MDI that don't have the benefit of technology they might have some CGM but combined with our smart pen solution in our software and our poor man's version of our algorithm in the system, we're getting 70% time in range if you follow the recommendation. So we think it's a very exciting solution. One of the reasons why the SmartMDI solution hasn't done well in the past is because we had Guardian, and that just doesn't work well with the pen. Now that we have Instinct and we have Simplera and we have one single app, not two, we used to have an app for Simplera and app for InPen, now we have one app. So we've made it super simple that we're seeing huge, huge interest. So, you know, at some point, you know, we will disclose a little bit more around that, but we're seeing great traction both OUS and also in the US.

Okay, all right, so you're gonna prove us wrong. We're gonna earn your trust. Okay, it's interesting, we didn't talk about international but that's been kind of the steadiest best you know part of mini med over the you know past few years maybe even longer uh low double digit growth pretty sustainable pretty sustained in recent past um how are you thinking about the sustainability of that and the drivers we feel really good um two big drivers for that number one our commercial team in 80 countries is really formidable.

We've been there for a very long time. We've got a commercial infrastructure, thousands of people that can handle tech support 24 by 7 in 26 languages. We have a lot of scale and that matters because again, it's not just about the product. It's about can you support the physician? Can you support the patient? And so we have that infrastructure already there. That team is so strong at execution. Remember, we've had 780 there since 2020, 2020, 2021. So we haven't had a new pump, and we've had Simplera for only about two years. So now that market is going to get more Simplera. Now it's got Instinct, and we're commercially launching Flex in November. So it will be the first hardware refresh and software refresh in about six to seven years. And so given how well we perform with the older technology, we're going to do even better with the new innovations that we're bringing out. So we're seeing that already, and that's one of the reasons why we think it's, you know, sustainable. We don't have to build a new sales force. We understand how the different health systems work in these markets. So it's really primed for continuation, if not acceleration.

You know, when I looked at the slides, my question is around, are there markets that you've had to kind of prune or pull back? Because when I look at the slides, you gave color on the U.S., you gave color on Europe. both doing well, but it almost implied that maybe emerging markets or some other markets were not that great to get to kind of the averages, if you will. Now that you're not part of Medtronic anymore, Medtronic obviously has a bigger infrastructure than you do. They were competing in a lot of markets. Are you having to kind of pull back in some geographies or focus on larger ones?

I think to answer your other part of the question, I think if you look at our overall growth, we had broad-based growth in every geography. The difference in Q1 was that our new pump sold was not as high in the emerging markets, and that's really a bit of a timing impact from tenders. But overall, emerging markets grew as much as the developed markets did, which is why we had low double-digit growth if you exclude the 14th week. We used to be in 123 countries, and so even as part of Medtronic, I was already getting us out of about 40 markets. It didn't make sense, didn't have scale. So that's already happened. We're happy with the 80 markets that we're in.

I want to go back to the guidance in the U.S. I asked a question earlier, but a different way. You posted low double-digit underlying organic growth in Q1, excluding the extra week. you expect the U.S. to continue to accelerate. You said that on the call. But the guidance is 9% to 9.5% underlying, excluding the extra week. So it doesn't reflect any acceleration in the U.S. Is that just conservatism earlier in the year, or is there something that kind of offsets the acceleration in the U.S.?

Philosophically, we try to give you guidance that we have confidence we can hit, and that's been our approach. We have a lot of levers we're pulling. We're not pulling back from the progression we expected to see in the US, as well as the welcome news that we have CE mark early and we're going to launch in November. So there's a lot of things to be excited with, but generally when we give you guidance, we want to give you a number we can hit.

Okay, and then that makes sense. And then on profitability, 16% adjusted EBITDA margin in fiscal 2027, you reaffirmed that, but you accelerated some of these launches. How do you balance the investment behind Flex, FIT and Vivera with this commitment to expand profitability?

We don't really see growth as being the trader for profitability. If anything, growth helps us drive more leverage in the P&L. So we continue to invest. What we did in Q1 was we decided to pull forward the launch investments. We were able to pull forward the launches. So it made sense for us to pull forward the spend to support those launches. And so that doesn't repeat itself in the second half of the year. and then we had some favorability on gross margin. Simplera yields and output are better than what we assumed going in, so I feel better where we are today than we were even 90 days ago. And so that helped offset some of the FX headwinds that we saw in Q1. And now we have our hedging program in place, so that type of swing we don't think will repeat itself in the rest of the year.

All right. Well, we covered a lot. We're almost out of time, but I'll give you the last word.

Well, Larry, thanks for hosting us. So we're really excited with our first two quarters as a stand-alone public company. We shared a lot last week, and we hope to continue to earn your trust and interest in Minimet as the year progresses.

Sounds good. Thanks for being here.