Medtronic plc and DaVita Inc. are joining forces to form a new, independent medical device company to provide enhanced kidney health care. The new company will focus on making different dialysis treatments more accessible to patients, especially at-home patients.
According to the joint press release on May 26, 2022, the new co-owned company “will focus on developing a broad suite of novel kidney care products and solutions, including future home-based products, to make different dialysis treatments more accessible to patients.”
During a May 26, 2022 earnings call, Medtronic CEO, Geoff Martha, stated that this joint venture had “been under consideration for a while” and that both Medtronic and DaVita will get to “participate in the expected upside.”
Medtronic will spin out its existing renal care product portfolio into the new company, as well as its product pipeline, global manufacturing, and R&D teams and facilities in the renal care solutions sector. As one of the largest providers of kidney care services in the U.S., DaVita will contribute its depth of knowledge and expertise in providing kidney care to patients in hospitals, outpatient dialysis centers, and at home. Medtronic and DaVita will each contribute approximately $200 million in cash to launch the new company, according to a regulatory filing submitted to the Securities and Exchange Commission.
The CEO of the new company will be Ven Manda, who is currently the president of Medtronic’s Renal Care Solutions business and who has worked for Medtronic for more than 20 years. In the press release announcing the proposed joint venture, Ven Manda emphasized:
Our singular focus on end-to-end kidney health solutions will position this new company to make a measurable difference in the lives of more than three million patients with kidney failure globally-a figure expected to double over the next decade.
The new company is expected to be formed in 2023.
The announcement of this new joint venture comes concurrently with Medtronic’s announcement during a recent earnings call that it experienced a 2021 Q4 shortfall relative to its expected revenue . Medtronic stated that the shortfall was primarily due to COVID lockdowns in China and global supply chain challenges.