07.01.06
$10.1 Billion
Key Executives:
Art Collins, Chairman and CEO
William A. Hawkins, President and COO
Stephen Mahle, Exec. VP and President, CRM
Susan Alpert, MD, PhD, Sr. VP—Chief Quality and Regulatory Officer
Jean-Luc Butel, Sr. VP and President, Asia Pacific
Terrance Carlson, Sr. VP, General Counsel and Corp. Secretary
H. James Dallas, Sr. VP, Chief Information Officer
No. of Employees: 33,000
World Headquarters: Minneapolis, MN
Founded in 1949, Minneapolis, MN-based Medtronic is no stranger to capitalizing on opportunity while meeting challenges head on. Therefore, it’s not surprising that the manufacturing giant managed to stay the course while increasing net sales to more than $10 billion (11%) in fiscal year 2005 (ended April 29, 2005). However, with the overall cardiology market seeing slower growth this year, Medtronic—along with its competitors—could face even more hurdles that may affect its revenues in coming months.
In the past year since 2005’s earnings were reported, however, Medtronic hasn’t shown any signs of losing momentum. Recently released FY 2006 numbers show another record for the company as net sales surpassed $11.3 billion (12% growth). Furthermore, net earnings were also up to $2.6 billion, representing a healthy 42% increase.
“Medtronic’s strong annual and fourth-quarter performance reflects the balance of our portfolio and underscores the importance of maintaining a diversified business,” said Chairman and CEO Art Collins. “We are encouraged by the strength of our new product pipeline and continue to make major investments to support growth in the coming fiscal year and beyond.”
In 2005, six of the company’s seven businesses were blessed with double-digit sales increases. The most newsworthy was the Spinal, ENT (ear/nose/throat) and Navigation division, which grew 20% to $2.1 billion. Neurological and Diabetes also saw double-digit gains with an 11% rise to $1.8 billion. Cardiac Rhythm Management came in third with 9%, reaching $4.6 billion. Already this year, all these divisions are posting healthy gains—most by double digits again.
With all this growth comes a continued strategy of investing more dollars in R&D—nearly $1 billion in 2005. Apparently this paid off that year, since as much as two thirds of corporate revenues stemmed from products introduced in the last two years. Some of the new products rolled out included the Intrinsic ICD and InSync Sentry cardiac resynchronization device with defibrillator backup (CRT-D); Paradigm 515 and 715 insulin pumps for diabetes; Verte-Stack Capstone PEEK (Capstone) Vertebral Body Spacer for spinal surgery; and Restore fully rechargeable neurostimulator for pain management. The company is continuing to introduce new products at a steady pace. Since February, Medtronic has received FDA approval for the AneuRx AAAdvantage, a minimally invasive abdominal aortic aneurysm stent graft with the Xcelerant delivery system; Micro-Driver coronary artery stent system; Minimed Paradigm REAL-time Insulin Pump and Continuous Glucose Monitoring System; Performer Cardiopulmonary Bypass System; Concerto CRT-D; and Virtuoso ICD.
After receiving FDA approval in December for the PROSTIVA RF Therapy system for treatment of benign prostatic hyperplasia, Medtronic kicked off its launch for commercial release of the product in May.
In the midst of all these introductions, the company is expecting to receive US clearance in 2007 to market its Endeavor stent, which is already being used in 85 countries. In June, Endeavor received reimbursement approval in France and regulatory approval in China.
With all this new business, Medtronic completed some major facility expansions in Tennessee (spinal business), Ireland (vascular) and Puerto Rico (diabetes and neurological). The cardiac rhythm management business is getting a major boost as well through new initiatives in Minnesota. To integrate all of Medtronic’s global operations, which serve more than 120 countries, a new enterprise-wide information system was implemented.
Along the way, the news hasn’t all been good for the company. In July 2005, Medtronic sent out a voluntary communication to its customers urging them to carefully inspect their hard-shell carry cases for the LIFEPAK CR Plus automated external defibrillator after it surfaced that some of them had problems with a blocked pressure vent.
Later that year, in November, Medtronic recalled some of its Sigma pacemakers due to a problem with a solvent used to clean the wires.
Litigation has also kept the company busy. In February, Medtronic Sofamor Danek announced that it filed suit against Biomet and its subsidiary, EBI Spine, L.P., for infringement on seven patents related to its spine products. Santa Rosa, CA-based Kyphon is another target of Medtronic, as the company filed suit alleging that Kyphon is infringing on at least four of Medtronic’s patents related to balloon dilatation catheters and spinal treatment. Finally, a suit was filed against Guidant Corporation in Dublin, Ireland, charging that Guidant’s MULTI-LINK Vision and Xience V coronary stents infringe patents under exclusive worldwide license to Medtronic Vascular from evYsio Medical Devices of Canada.
In spite of some of these problematic situations, nothing appears to stand in the way of Medtronic achieving its goals. In May, Medtronic announced that it projects 2007 revenue to keep climbing to as much as $13 billion, and 2008 projections are between $14 billion and $15 billion.
Key Executives:
Art Collins, Chairman and CEO
William A. Hawkins, President and COO
Stephen Mahle, Exec. VP and President, CRM
Susan Alpert, MD, PhD, Sr. VP—Chief Quality and Regulatory Officer
Jean-Luc Butel, Sr. VP and President, Asia Pacific
Terrance Carlson, Sr. VP, General Counsel and Corp. Secretary
H. James Dallas, Sr. VP, Chief Information Officer
No. of Employees: 33,000
World Headquarters: Minneapolis, MN
Founded in 1949, Minneapolis, MN-based Medtronic is no stranger to capitalizing on opportunity while meeting challenges head on. Therefore, it’s not surprising that the manufacturing giant managed to stay the course while increasing net sales to more than $10 billion (11%) in fiscal year 2005 (ended April 29, 2005). However, with the overall cardiology market seeing slower growth this year, Medtronic—along with its competitors—could face even more hurdles that may affect its revenues in coming months.
In the past year since 2005’s earnings were reported, however, Medtronic hasn’t shown any signs of losing momentum. Recently released FY 2006 numbers show another record for the company as net sales surpassed $11.3 billion (12% growth). Furthermore, net earnings were also up to $2.6 billion, representing a healthy 42% increase.
“Medtronic’s strong annual and fourth-quarter performance reflects the balance of our portfolio and underscores the importance of maintaining a diversified business,” said Chairman and CEO Art Collins. “We are encouraged by the strength of our new product pipeline and continue to make major investments to support growth in the coming fiscal year and beyond.”
In 2005, six of the company’s seven businesses were blessed with double-digit sales increases. The most newsworthy was the Spinal, ENT (ear/nose/throat) and Navigation division, which grew 20% to $2.1 billion. Neurological and Diabetes also saw double-digit gains with an 11% rise to $1.8 billion. Cardiac Rhythm Management came in third with 9%, reaching $4.6 billion. Already this year, all these divisions are posting healthy gains—most by double digits again.
With all this growth comes a continued strategy of investing more dollars in R&D—nearly $1 billion in 2005. Apparently this paid off that year, since as much as two thirds of corporate revenues stemmed from products introduced in the last two years. Some of the new products rolled out included the Intrinsic ICD and InSync Sentry cardiac resynchronization device with defibrillator backup (CRT-D); Paradigm 515 and 715 insulin pumps for diabetes; Verte-Stack Capstone PEEK (Capstone) Vertebral Body Spacer for spinal surgery; and Restore fully rechargeable neurostimulator for pain management. The company is continuing to introduce new products at a steady pace. Since February, Medtronic has received FDA approval for the AneuRx AAAdvantage, a minimally invasive abdominal aortic aneurysm stent graft with the Xcelerant delivery system; Micro-Driver coronary artery stent system; Minimed Paradigm REAL-time Insulin Pump and Continuous Glucose Monitoring System; Performer Cardiopulmonary Bypass System; Concerto CRT-D; and Virtuoso ICD.
After receiving FDA approval in December for the PROSTIVA RF Therapy system for treatment of benign prostatic hyperplasia, Medtronic kicked off its launch for commercial release of the product in May.
In the midst of all these introductions, the company is expecting to receive US clearance in 2007 to market its Endeavor stent, which is already being used in 85 countries. In June, Endeavor received reimbursement approval in France and regulatory approval in China.
With all this new business, Medtronic completed some major facility expansions in Tennessee (spinal business), Ireland (vascular) and Puerto Rico (diabetes and neurological). The cardiac rhythm management business is getting a major boost as well through new initiatives in Minnesota. To integrate all of Medtronic’s global operations, which serve more than 120 countries, a new enterprise-wide information system was implemented.
Along the way, the news hasn’t all been good for the company. In July 2005, Medtronic sent out a voluntary communication to its customers urging them to carefully inspect their hard-shell carry cases for the LIFEPAK CR Plus automated external defibrillator after it surfaced that some of them had problems with a blocked pressure vent.
Later that year, in November, Medtronic recalled some of its Sigma pacemakers due to a problem with a solvent used to clean the wires.
Litigation has also kept the company busy. In February, Medtronic Sofamor Danek announced that it filed suit against Biomet and its subsidiary, EBI Spine, L.P., for infringement on seven patents related to its spine products. Santa Rosa, CA-based Kyphon is another target of Medtronic, as the company filed suit alleging that Kyphon is infringing on at least four of Medtronic’s patents related to balloon dilatation catheters and spinal treatment. Finally, a suit was filed against Guidant Corporation in Dublin, Ireland, charging that Guidant’s MULTI-LINK Vision and Xience V coronary stents infringe patents under exclusive worldwide license to Medtronic Vascular from evYsio Medical Devices of Canada.
In spite of some of these problematic situations, nothing appears to stand in the way of Medtronic achieving its goals. In May, Medtronic announced that it projects 2007 revenue to keep climbing to as much as $13 billion, and 2008 projections are between $14 billion and $15 billion.