The U.S. Food and Drug Administration (FDA) has now approved Medtronic’s (MDT) MiniMed 770G System, a hybrid closed loop diabetes management device that is intended to automatically monitor glucose, for children aged 2 to 6 with Type 1 diabetes.
It is a first-of-a-kind device for children of such a young age- and is the first legally marketed device that can automatically adjust insulin delivery based on continuous glucose monitor values for this patient population.
“Advancements in science, technology and manufacturing have helped make great strides in the treatment and successful management of type 1 diabetes, a life-threatening chronic condition,” commented FDA Commissioner Stephen Hahn.
Patients with Type 1 diabetes, or their caregivers, must normally consistently monitor their glucose levels throughout the day and inject insulin to maintain adequate glucose levels.
The MiniMed 770G System, a bluetooth-enabled version of the previously approved MiniMed 670G System, measures glucose levels every five minutes and automatically adjusts insulin delivery.
While the device automatically adjusts insulin levels, users need to manually request insulin doses to counter carbohydrate consumption at mealtime.
For the approval, the FDA evaluated data from a clinical trial that included 46 children aged 2 to 6 years old with Type 1 diabetes, which found no serious adverse events and that the device is safe for use.
However, Medtronic will need to conduct a post-market study to evaluate device performance in real-world settings in children aged 2 to 6.
Risks associated with use of the system may include hypoglycemia, hyperglycemia, as well as skin irritation or redness around the device’s infusion patch, says the FDA.
Shares in Medtronic are down 5% year-to-date, but the stock scores a bullish Strong Buy consensus from the Street. That’s with an average analyst price target of $115, indicating upside potential of 7%.
Raymond James analyst Jayson Bedford reiterated his MDT buy rating after the company posted F1Q results well above consensus. However he noted that “admittedly it was a low bar, and revenue was still -17% y/y organically (or -12%’ish if we exclude the y/y impact of bulk orders).”
Importantly, trends improved throughout F1Q, including in July and in August, said Bedford, adding: “the new consensus growth bogey in F2Q (-9% y/y organic vs. roughly –11.5% pre-call) should prove conservative, if current trends hold.”
The analyst has a $115 price target on the stock, arguing that “New products are generating share gains in key markets and the pipeline will attempt to fill the gaps in segments where Medtronic is losing share.” (See MDT stock analysis on TipRanks).
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