Medtronic (NYSE:MDT) and DaVita (NYSE:DVA) today announced the intent to form a new medical device company for kidney care.
The new, independent company — dubbed “NewCo” for now — aims to enhance the patient treatment experience and improve overall outcomes for kidney care patients.
According to a news release, the new company will bring together Medtronic’s capabilities as a healthcare technology leader and DaVita’s expertise as a comprehensive kidney care provider. The new company will focus on developing a wide range of novel kidney care products and solutions, including future home-based products to make different dialysis treatments more accessible.
“This is an exciting moment that will shape the future of kidney care,” Ven Manda, president of Medtronic’s renal care solutions business and NewCo’s CEO upon close, said in the release. “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 will be co-owned by Medtronic and DaVita, each with equal equity stakes, and led by an independent management team under the terms of the agreement. Medtronic’s renal care solutions business — which includes a current portfolio of renal access, acute therapies and chronic therapies — will get rolled into the new company alongside its product pipeline and global manufacturing R&D teams and facilities.
Medtronic will not include any further products or portfolios, including those in the AV access portfolio within the peripheral vascular health business, the company said. Both companies plan to provide an initial investment to fund the new kidney care company and provide future certain operating capital.
The new company’s six-person board of directors will include two directors each from Medtronic and DaVita, plus two independent directors. The companies expect the transaction to close in the next calendar year.
“We’re excited to collaborate with Medtronic and share our deep insight into patient and physician needs with the goal of accelerating the development and commercialization of scalable kidney care technologies,” DaVita CEO Javier Rodriguez said. “DaVita is committed to best-in-class solutions that improve outcomes, access and the quality of life of our patients, and this is another way to provide more options to the market.”