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Nov 27

Medtronic shrugs off concerns over newer weight-loss drugs, raises … – Reuters

Long Term Weight Loss Comments Off on Medtronic shrugs off concerns over newer weight-loss drugs, raises … – Reuters

Medtronic Plc logo is seen displayed in this illustration taken, April 10, 2023. REUTERS/Dado Ruvic/Illustration/File Photo Acquire Licensing Rights

Nov 21 (Reuters) - Medtronic (MDT.N) raised its annual earnings forecast on Tuesday as strong sales in its surgical and diabetes units allayed concerns about the impact of new diabetes and weight-loss drugs on long-term growth, sending its shares up nearly 4% in morning trade.

Makers of medical products used in bariatric surgery and glucose-monitoring devices have been trying to ease investor concerns over a potential hit to demand from the rising popularity of new GLP-1 drugs like Novo Nordisk's (NOVOb.CO) Ozempic and Eli Lilly's (LLY.N) Mounjaro.

Medtronic's CEO Geoffrey Martha said GLP-1 drugs would have a modest but temporary impact on the bariatric surgery market.

Dublin-based Medtronic joins peers Johnson and Johnson (JNJ.N) and Abbott Laboratories (ABT.N) in playing down the impact of GLP-1 drugs, which suppress hunger in patients.

"Bariatric surgery will continue to remain the gold standard for addressing obesity," Martha said, adding that many patients who try these drugs will not stay on them for more than a year due to concerns related to costs and side effects.

Over the long term, health care costs may be delayed with the use of GLP-1s but not eliminated, limiting the impact on medical-device companies, said John Boylan, analyst at Edward Jones.

When asked about a possible spin-off or sale of its respiratory and patient-monitoring units, Martha confirmed to Reuters that Medtronic is continuing to work on the separation, which is expected by the first half of the next fiscal year.

Sales in Medtronic's diabetes unit stood at $610 million, beating estimates of $588.4 million. Martha expects diabetes devices to drive the company's sales growth in the second half of the fiscal year.

It now estimates profit per share between $5.13 and $5.19 for the fiscal year ending in April 2024, above the previous $5.08 to $5.16 per share range.

Medtronic beat adjusted profit by 7 cents for the quarter ended Oct. 27, according to LSEG data.

Reporting by Khushi Mandowara and Christy Santhosh in Bengaluru; Editing by Pooja Desai

Our Standards: The Thomson Reuters Trust Principles.

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Medtronic shrugs off concerns over newer weight-loss drugs, raises ... - Reuters

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