07.20.22
Rank: #1 (Last year: #1)
$31.69 Billion
Prior Fiscal: $30.12 Billion
Percentage Change: +5%
R&D Expenditure: $2.7B
Best FY22 Quarter: Q4 $8.09B
Latest Quarter: Q4 $8.09B
No. of Employees: 95,000
Global Headquarters: Dublin, Ireland
KEY EXECUTIVES:
Geoffrey S. Martha, Chairman & CEO
Karen Parkhill, EVP & CFO, IT & Enterprise Excellence
Que Dallara, EVP & President Diabetes Operating Unit
Sean Salmon, EVP & President Cardiovascular Portfolio
Brett Wall, EVP & President Neuroscience Portfolio
Bob White, EVP & President Medical Surgical Portfolio
Medtronic has been atop the MPO Top Companies list for some time now. In 2017’s list, it became the largest medical device manufacturer in the world (by revenue) and has not surrendered the spot since. In October 2021, the company announced a “bold new look” to better reflect that position and its desire to remain as the leading medtech organization going forward.
As part of this announcement, CEO Geoff Martha sat down for a video interview to outline a number of important factors critical to Medtronic’s strategy moving forward. He covered topics including robotics in healthcare, innovative diagnostic technologies, and working with tech industry leaders.
“We are at a pivotal moment in human health. Healthcare budgets are severely stressed, access to quality care is limited, and pervasive systemic healthcare inequities remain for too many,” said Martha.
“Technology will be part of the solution to drive better outcomes for our world and dismantle global disparities in healthcare.”
Another part of this brand refresh involved adding the tagline “Engineering the extraordinary.” The message is said to be a “call to action” to all employees of the organization. Regardless of title, they should try to help drive better outcomes around the globe. In addition to the tagline, the company updated its Medtronic Symbol, which has only changed a few times since Medtronic’s founding approximately 60 years ago.
ANALYST INSIGHTS: Expect management and portfolio disruption in the next 12 months at MDT. Hit by underperformance in their diabetes unit, significant delays in their robot solution market launch timelines, and large supply chain issues in 2022, CEO Geoff Martha needs to shake things up in the next 12 months to improve (Wall) “Street Cred” as industry analysts are expressing disappointment in MDT recent performances. Perhaps some leadership changes, maybe a spin-off of their diabetes business (or another division), or a major M&A…be watching for something to happen (and sooner than later).
“Medtronic’s brand must be intentionally and thoughtfully tied to our business objectives and strategy. Our new brand reflects our goal to become the leading healthcare technology company and a cornerstone for societal change,” said Torod Neptune, senior vice president and chief communications officer. “We’ll think about healthcare differently and push that change forward by going beyond our medical devices that already serve millions. We will engineer extraordinary, next-generation healthcare technology—and enable access to that technology for populations all around the world.”
Big Blue will work to hold its leadership position within the medtech space via a number of means, including organic internal development, tactical partnerships, and strategic M&A. With regard to acquisitions, the company wasn’t too active in its latest fiscal year in terms of volume, but with an average price tag of $1 billion for each, its pair of purchases were certainly significant.
In August 2021, it was announced Medtronic was buying Intersect ENT, a global provider of medtech solutions for ear, nose, and throat. The purchase involved the acquisition of all outstanding shares of the company for $28.25 per share, which translated to an enterprise value of approximately $1.1 billion.
The buy brought Intersect ENT’s portfolio of products into the fold, which included PROPEL and SINUVA sinus implants. These innovations are clinically proven solutions that open sinus passageways and deliver an anti-inflammatory steroid to aid in healing. It was stated by Medtronic that by combining these products with the organization’s navigation, powered instruments, and existing tissue health products, a broader suite of solutions could be offered to assist surgeons treating chronic rhinosinusitis patients.
The transaction was completed just a couple weeks following the close of the ’22 fiscal.
The second deal, publicized in January 2022, involved Affera—a privately held developer and manufacturer of cardiac mapping and navigation systems as well as catheter-based cardiac ablation technologies. Although the firm had no products on the market at the time of the announcement, its Affera Prism-1 cardiac mapping and navigation platform and Sphere-9 cardiac ablation catheter provided Medtronic with investigational technologies designed to enable rapid creation of detailed maps used by electrophysiologists (EP) to diagnose arrhythmias and deliver cardiac ablation therapy, respectively.
“The EP ablation market is an exciting and fast-moving segment of cardiology,” said Rebecca Seidel, president of the Cardiac Ablation Solutions business, part of the Cardiovascular Portfolio at Medtronic. “Bringing Affera into our organization, with our established footprint in the cardiac ablation space, will strengthen our ability to provide innovative therapies and enable Medtronic entry into additional EP technology segments, such as mapping and navigation, for the first time.”
The deal was reported to be valued at $925 million, which included $250 million to be paid upon the completion of unnamed contingent factors.
Embarking on the aforementioned partnerships led to cooperation with several other firms. One such agreement involved Medtronic entering into a contract with Vizient to add the former’s Touch Surgery Enterprise to the latter’s offerings. A fully integrated hardware and software system connected to the cloud, Touch Surgery Enterprise works easily with many laparoscopic and robotic scopes, enabling hospitals to take the first step to digitizing their OR while leveraging existing equipment. Vizient is dedicated to helping healthcare organizations improve their performance and serves more than half the United States’ acute care providers, including academic medical centers, community hospitals, pediatric facilities, and non-acute care providers.
Another arrangement saw collaboration between Big Blue and Mpirik, a provider of a suite of software including cloud-based, automated patient screening, and care pathway management for cardiovascular disease, patient communication, and data collection/analysis platform. In this situation, a pilot program was announced to address disparities in care associated with the prevention of sudden cardiac arrest (SCA). The collaboration, which also involved Vizient, sought to identify patients at higher risk for SCA, and identify them earlier in their care journey.
Still another agreement made bedfellows of Medtronic and another MPO Top Company—GE Healthcare. The two announced a collaboration focused on the unique needs and demand for care at ambulatory surgery centers (ASCs) and office-based labs. The goal was to enable customers to be able to access extensive product portfolios, financial solutions, and personal service. Given the high costs and complexities associated with expanding an existing ASC or building a new one, the deal provides the most relevant offerings from each organization to the care facilities.
These initiatives help bolster the company’s continued growth, which has been relatively positive in recent years (pandemic setbacks aside). In its latest fiscal, the company held its top spot with a revenue take of $31.69 billion. This figure represented a 5% gain over the previous 12-month period. This was attributed primarily to the return of procedures compared to the volume experienced in the first and second quarters of the 2021 fiscal year. It was also noted, however, that supply chain issues (especially in the fourth quarter) prevented a greater increase from being achieved.
Within the organization’s largest segment—Cardiovascular—positive single-digit gains were seen across all businesses. As such, the whole unit rose 6% over the previous fiscal. Similarly, the Cardiac Rhythm & Heart Failure portion also grew by 6% to tally $5.91 billion in revenue. This was a result of growing sales of several products, but offset somewhat with the loss of HVAD system sales due the decision to eliminate the availability of the product as of June 2021.
Sister business, Structural Heart & Aortic, was up 8% to contribute $3.06 billion to the firm’s coffers. Continued adoption of the CoreValve Evolut (a transcatheter aortic valve replacement technology) and strong sales of Extra-Corporeal Life Support (ECLS) devices were credited as the reason for the growth.
Rounding out the segment, Coronary & Peripheral Vascular blossomed 5% to offer $2.46 billion to the organization’s revenue total. This was driven by strong performance of the Abre venous self-expanding stent system for Deep Venous disease, as well as the company’s superficial venous product portfolio, including the VenaSeal and ClosureFast systems.
The Cardiovascular segment’s product offerings also generated a fair number of headlines:
Conversely, Respiratory, Gastrointestinal, & Renal shrank (one of only two divisions to do so) by 7%. The loss was largely due to declines in ventilator demand as compared to fiscal year 2021.
Seeking to attempt to limit the chance of future decreases, the Medical Surgical segment was quite active in announcements around innovation being developed and launched.
The next segment, Neuroscience, enjoyed a 7% rise to finish the fiscal at $8.78 billion, which was funded by its three divisions. The largest, Cranial & Spinal Technologies, ballooned by 4% to increase the firm’s total by $4.46 billion. This gain was primarily bolstered by strong sales of the Midas Rex-powered surgical instruments and StealthStation Navigation and O-arm Imaging System.
Specialty Therapies, Medtronic’s other double-digit growth division, saw a 12% gain to offer $2.59 billion in contributed revenue. The additional sales were driven by the strength of Pelvic Health (InterStim Micro neurostimulator and SureScan MRI leads), ENT (StealthStation ENT Navigation System), and Neurovascular (flow diversion, hemorrhagic stroke, and liquid embolic products) offerings.
The last of the trio, Neuromodulation, ended the fiscal up 8% due to growth of both Pain Therapies and Brain Modulation and also reflected a recovery in procedural volumes. The business provided $1.74 billion to the firm’s financials.
Similar to its peers, the Neuroscience segment provided insights on a number of products.
The firm was proactive, however, in its approach to stimulating future gains through new offerings to the market. It offered information on several of these projects.
$31.69 Billion
Prior Fiscal: $30.12 Billion
Percentage Change: +5%
R&D Expenditure: $2.7B
Best FY22 Quarter: Q4 $8.09B
Latest Quarter: Q4 $8.09B
No. of Employees: 95,000
Global Headquarters: Dublin, Ireland
KEY EXECUTIVES:
Geoffrey S. Martha, Chairman & CEO
Karen Parkhill, EVP & CFO, IT & Enterprise Excellence
Que Dallara, EVP & President Diabetes Operating Unit
Sean Salmon, EVP & President Cardiovascular Portfolio
Brett Wall, EVP & President Neuroscience Portfolio
Bob White, EVP & President Medical Surgical Portfolio
Medtronic has been atop the MPO Top Companies list for some time now. In 2017’s list, it became the largest medical device manufacturer in the world (by revenue) and has not surrendered the spot since. In October 2021, the company announced a “bold new look” to better reflect that position and its desire to remain as the leading medtech organization going forward.
As part of this announcement, CEO Geoff Martha sat down for a video interview to outline a number of important factors critical to Medtronic’s strategy moving forward. He covered topics including robotics in healthcare, innovative diagnostic technologies, and working with tech industry leaders.
“We are at a pivotal moment in human health. Healthcare budgets are severely stressed, access to quality care is limited, and pervasive systemic healthcare inequities remain for too many,” said Martha.
“Technology will be part of the solution to drive better outcomes for our world and dismantle global disparities in healthcare.”
Another part of this brand refresh involved adding the tagline “Engineering the extraordinary.” The message is said to be a “call to action” to all employees of the organization. Regardless of title, they should try to help drive better outcomes around the globe. In addition to the tagline, the company updated its Medtronic Symbol, which has only changed a few times since Medtronic’s founding approximately 60 years ago.
ANALYST INSIGHTS: Expect management and portfolio disruption in the next 12 months at MDT. Hit by underperformance in their diabetes unit, significant delays in their robot solution market launch timelines, and large supply chain issues in 2022, CEO Geoff Martha needs to shake things up in the next 12 months to improve (Wall) “Street Cred” as industry analysts are expressing disappointment in MDT recent performances. Perhaps some leadership changes, maybe a spin-off of their diabetes business (or another division), or a major M&A…be watching for something to happen (and sooner than later).
—Dave Sheppard, Co-Founder and Managing Director, MedWorld Advisors
“Medtronic’s brand must be intentionally and thoughtfully tied to our business objectives and strategy. Our new brand reflects our goal to become the leading healthcare technology company and a cornerstone for societal change,” said Torod Neptune, senior vice president and chief communications officer. “We’ll think about healthcare differently and push that change forward by going beyond our medical devices that already serve millions. We will engineer extraordinary, next-generation healthcare technology—and enable access to that technology for populations all around the world.”
Big Blue will work to hold its leadership position within the medtech space via a number of means, including organic internal development, tactical partnerships, and strategic M&A. With regard to acquisitions, the company wasn’t too active in its latest fiscal year in terms of volume, but with an average price tag of $1 billion for each, its pair of purchases were certainly significant.
In August 2021, it was announced Medtronic was buying Intersect ENT, a global provider of medtech solutions for ear, nose, and throat. The purchase involved the acquisition of all outstanding shares of the company for $28.25 per share, which translated to an enterprise value of approximately $1.1 billion.
The buy brought Intersect ENT’s portfolio of products into the fold, which included PROPEL and SINUVA sinus implants. These innovations are clinically proven solutions that open sinus passageways and deliver an anti-inflammatory steroid to aid in healing. It was stated by Medtronic that by combining these products with the organization’s navigation, powered instruments, and existing tissue health products, a broader suite of solutions could be offered to assist surgeons treating chronic rhinosinusitis patients.
The transaction was completed just a couple weeks following the close of the ’22 fiscal.
The second deal, publicized in January 2022, involved Affera—a privately held developer and manufacturer of cardiac mapping and navigation systems as well as catheter-based cardiac ablation technologies. Although the firm had no products on the market at the time of the announcement, its Affera Prism-1 cardiac mapping and navigation platform and Sphere-9 cardiac ablation catheter provided Medtronic with investigational technologies designed to enable rapid creation of detailed maps used by electrophysiologists (EP) to diagnose arrhythmias and deliver cardiac ablation therapy, respectively.
“The EP ablation market is an exciting and fast-moving segment of cardiology,” said Rebecca Seidel, president of the Cardiac Ablation Solutions business, part of the Cardiovascular Portfolio at Medtronic. “Bringing Affera into our organization, with our established footprint in the cardiac ablation space, will strengthen our ability to provide innovative therapies and enable Medtronic entry into additional EP technology segments, such as mapping and navigation, for the first time.”
The deal was reported to be valued at $925 million, which included $250 million to be paid upon the completion of unnamed contingent factors.
Embarking on the aforementioned partnerships led to cooperation with several other firms. One such agreement involved Medtronic entering into a contract with Vizient to add the former’s Touch Surgery Enterprise to the latter’s offerings. A fully integrated hardware and software system connected to the cloud, Touch Surgery Enterprise works easily with many laparoscopic and robotic scopes, enabling hospitals to take the first step to digitizing their OR while leveraging existing equipment. Vizient is dedicated to helping healthcare organizations improve their performance and serves more than half the United States’ acute care providers, including academic medical centers, community hospitals, pediatric facilities, and non-acute care providers.
Another arrangement saw collaboration between Big Blue and Mpirik, a provider of a suite of software including cloud-based, automated patient screening, and care pathway management for cardiovascular disease, patient communication, and data collection/analysis platform. In this situation, a pilot program was announced to address disparities in care associated with the prevention of sudden cardiac arrest (SCA). The collaboration, which also involved Vizient, sought to identify patients at higher risk for SCA, and identify them earlier in their care journey.
Still another agreement made bedfellows of Medtronic and another MPO Top Company—GE Healthcare. The two announced a collaboration focused on the unique needs and demand for care at ambulatory surgery centers (ASCs) and office-based labs. The goal was to enable customers to be able to access extensive product portfolios, financial solutions, and personal service. Given the high costs and complexities associated with expanding an existing ASC or building a new one, the deal provides the most relevant offerings from each organization to the care facilities.
These initiatives help bolster the company’s continued growth, which has been relatively positive in recent years (pandemic setbacks aside). In its latest fiscal, the company held its top spot with a revenue take of $31.69 billion. This figure represented a 5% gain over the previous 12-month period. This was attributed primarily to the return of procedures compared to the volume experienced in the first and second quarters of the 2021 fiscal year. It was also noted, however, that supply chain issues (especially in the fourth quarter) prevented a greater increase from being achieved.
Within the organization’s largest segment—Cardiovascular—positive single-digit gains were seen across all businesses. As such, the whole unit rose 6% over the previous fiscal. Similarly, the Cardiac Rhythm & Heart Failure portion also grew by 6% to tally $5.91 billion in revenue. This was a result of growing sales of several products, but offset somewhat with the loss of HVAD system sales due the decision to eliminate the availability of the product as of June 2021.
Sister business, Structural Heart & Aortic, was up 8% to contribute $3.06 billion to the firm’s coffers. Continued adoption of the CoreValve Evolut (a transcatheter aortic valve replacement technology) and strong sales of Extra-Corporeal Life Support (ECLS) devices were credited as the reason for the growth.
Rounding out the segment, Coronary & Peripheral Vascular blossomed 5% to offer $2.46 billion to the organization’s revenue total. This was driven by strong performance of the Abre venous self-expanding stent system for Deep Venous disease, as well as the company’s superficial venous product portfolio, including the VenaSeal and ClosureFast systems.
The Cardiovascular segment’s product offerings also generated a fair number of headlines:
- CE mark for the Evolut PRO+ TAVI System, which includes four valve sizes with an external pericardial tissue wrap that provides advanced sealing for the largest annular range (for self-expanding TAVI technology) on the market (at the time of the announcement).
- U.S. FDA expanded approval for the Arctic Front Family of Cardiac Cryoablation Catheters for treatment of recurrent symptomatic paroxysmal atrial fibrillation as an alternative to antiarrhythmic drug therapy as an initial rhythm control strategy.
- Launch of the Prevail drug coated balloon (DCB) catheter in Europe following CE mark. The Prevail DCB is used during percutaneous coronary intervention procedures to treat narrowed or blocked coronary arteries in patients with coronary artery disease.
- U.S. FDA clearance for two AccuRhythm AI algorithms for use with the LINQ II insertable cardiac monitor. AccuRhythm AI applies artificial intelligence to heart rhythm event data collected by LINQ II, improving the accuracy of information physicians receive so they can better diagnose and treat abnormal heart rhythms.
- U.S. FDA approval of a self-expanding transcatheter aortic valve replacement (TAVR) system—the Evolut FX TAVR system. Designed to enhance ease-of-use and provide greater precision and control, the technology maintains the hemodynamic and durability benefits of the Evolut platform for patients with symptomatic severe aortic stenosis.
- National Medical Products Administration approval of the CoreValve Evolut PRO TAVR system for the treatment of severe aortic stenosis for symptomatic patients in China who are at high or extreme risk for open heart surgery.
- Approval from Japan’s Ministry of Health, Labor and Welfare for the sale and reimbursement of the Micra AV Transcatheter Pacing System, as well as the product’s launch.
- FDA approval of the Freezor and Freezor Xtra Cardiac Cryoablation Focal Catheters to treat the growing prevalence of pediatric Atrioventricular Nodal Reentrant Tachycardia—a life-threatening abnormal heart rhythm.
Conversely, Respiratory, Gastrointestinal, & Renal shrank (one of only two divisions to do so) by 7%. The loss was largely due to declines in ventilator demand as compared to fiscal year 2021.
Seeking to attempt to limit the chance of future decreases, the Medical Surgical segment was quite active in announcements around innovation being developed and launched.
- U.S. commercial launch of the SonarMed airway monitoring system. This innovation utilizes acoustic technology to check for endotracheal tube obstruction and verify position in real-time, giving clinicians vital information required to make more informed, life-saving decisions for their smallest patients.
- U.S. FDA clearance of the INVOS 7100 cerebral/somatic oximetry system for children from birth through age 18. The system picks up key signals to inform time-critical decisions by pediatric clinicians related to hemodynamic management, ventilation, and resuscitation for premature infants, neonates, children, and other patients treated by pediatric clinicians.
- U.S. FDA clearance of the PillCam Small Bowel 3 system for remote endoscopy procedures. The PillCam SB3 @HOME program combines Medtronic’s PillCam technology with Amazon logistics—a combination intended to ensure both timely and accurate results for patients from the comfort of their homes.
- The Hugo robotic-assisted surgery system made its worldwide clinical debut in Santiago, Chile, in June 2021. The first procedure—a prostatectomy—was performed by Dr. Ruben Olivares at Clinica Santa Maria. A month after the debut, the Hugo was used in the first gynecological procedures (including hysterectomies and myomectomies), which took place in Panama. Then, in September, the first procedure was performed in Asia-Pacific (India), also a prostatectomy. CE mark approval was gained a month later followed by the first clinical procedure on the European continent when a prostatectomy was performed in Belgium in February 2022.
The next segment, Neuroscience, enjoyed a 7% rise to finish the fiscal at $8.78 billion, which was funded by its three divisions. The largest, Cranial & Spinal Technologies, ballooned by 4% to increase the firm’s total by $4.46 billion. This gain was primarily bolstered by strong sales of the Midas Rex-powered surgical instruments and StealthStation Navigation and O-arm Imaging System.
Specialty Therapies, Medtronic’s other double-digit growth division, saw a 12% gain to offer $2.59 billion in contributed revenue. The additional sales were driven by the strength of Pelvic Health (InterStim Micro neurostimulator and SureScan MRI leads), ENT (StealthStation ENT Navigation System), and Neurovascular (flow diversion, hemorrhagic stroke, and liquid embolic products) offerings.
The last of the trio, Neuromodulation, ended the fiscal up 8% due to growth of both Pain Therapies and Brain Modulation and also reflected a recovery in procedural volumes. The business provided $1.74 billion to the firm’s financials.
Similar to its peers, the Neuroscience segment provided insights on a number of products.
- U.S. FDA approval and first U.S. implants of the SenSight Directional Lead System used for deep brain stimulation (DBS) therapy. SenSight is a DBS directional lead that combines the benefits of directionality with the power of sensing, allowing physicians to deliver precise, patient-specific DBS therapy for the treatment of some symptoms associated with movement disorders.
- Deployment of the CareGuidePro, a mobile application and web portal that serves as a virtual guide for patients throughout their Medtronic spinal cord stimulation therapy journey. The patient’s care team, including physicians and Medtronic, may also use the platform to help manage and support the patient’s experience with spinal cord stimulation.
- U.S. FDA approval of Vanta, a high performance recharge-free implantable neurostimulator with a device life that can be optimized up to 11 years. At comparable settings, the Vanta neurostimulator offers nearly twice the device life than competitive primary cell devices.
- CE mark approval of the company’s radial artery access portfolio, which includes the Rist 079 Radial Access Guide Catheter and Rist Radial Access Selective Catheter. The Rist 079 is specifically designed for the unique demands of accessing the neurovasculature through the radial artery versus access through the transfemoral artery.
- U.S. FDA approval of the Intellis rechargeable neurostimulator for the treatment of chronic pain associated with diabetic peripheral neuropathy (DPN). DPN is a debilitating and progressive neurological disorder that affects approximately 30% of people with diabetes.
- U.S. FDA approval of the InterStim X recharge-free device, provided for advanced therapy options and the most personalized system to deliver sacral neuromodulation therapy.
- U.S. launch of the NuVent Eustachian tube dilation balloon for the treatment of chronic, obstructive Eustachian Tube Dysfunction. The balloon enables surgeons to deliver treatment in an outpatient or office setting.
The firm was proactive, however, in its approach to stimulating future gains through new offerings to the market. It offered information on several of these projects.
- CE mark for expanded functionality of the company’s InPen smart insulin pen for multiple daily injections. The InPen is integrated with real-time continuous glucose monitoring (CGM) via one convenient smartphone app. The system automatically records insulin doses, tracks active insulin, and recommends mealtime and correction doses based on an auto-populated bolus calculator.
- CE mark for the Guardian 4 sensor, which requires no fingersticks for calibration or diabetes treatment decisions. The approval allows the sensor to be integrated with either the MiniMed 780G insulin pump system or InPen, or for stand-alone CGM use.