Medtronic, Inc. reported a $4 billion dollar quarter on August 21, 2012. That’s up 2% on a reported basis over last year. Analysts credited strong coronary stent sales as a major contributor to the overall sales gain.
Medtronic’s 1Q 2013: Has Spine Turned the Corner?
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Secondary
Restorative therapies group sales, which include spine, neuromodulation, diabetes and surgical technologies, rose 3% to $1.893 billion.
Reported spine revenue was down 5% to $786 million. Biologics, a low margin line for the company, dropped 19%, while core spine was only down 1% on a reported basis.
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Medtronic Spine 1Q13 |
Sales
($ in millions)
% Change
Total Reported Sales
$786.0
down 5%
Core Spinal
$645.0
down 1%
Biologics
$141.0
down 19%
Source: Medtronic, Inc.
Core Spine Improving
The company said the core spine business was improving (it was down 3% last quarter) as new products reached greater scale and new procedural innovation drove increased surgeon interest.
On a call with analysts on August 21, company President and CEO Omar Ishrak said spine sales were showing signs of stability in a flat U.S. market. “The business seems to be turning a corner, ” said Ishrak. Even the big drop in biologics was stable sequentially.
During the call analysts noted it was the best spine performance in some time. Ishrak attributed the stabilization to synergies with capital equipment purchases by hospitals and strong surgeon interest in new products, particularly the company’s CD Horizon Solera Spinal System released in 2011. The system is integrated with Medtronic’s surgical navigation and imaging systems and neuromonitoring system. Ishrak said he expected to see the company begin to take market share as new products are introduced at the North American Spine Society (NASS) meeting in Dallas in October and, hopefully, FDA approval is received for the Bryan cervical disc.
Mike Matson, analysts with Mizuho Securities observed that while Medtronic lost share in spine overall, it held share if you excluded BMP [InFuse] sales.
Wells Fargo analyst Larry Biegelsen said he thinks there is some near-term risk from two spine studies expected soon, including the Yale InFuse study and a study comparing kyphoplasty to vertebroplasty recently completed by David Kallmes, M.D. of the Mayo Clinic and could be presented as early as the NASS meeting.
Has Medtronic’s spine business turned the corner? We’ll find out after the next corner.
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This is a fascinating development. In my practice we've seen similar outcomes with the revised protocol. The key differentiator seems to be patient selection criteria. Has anyone else noticed the correlation with BMI thresholds?
Great point. I'd push back slightly on the conclusion, the sample size in the cited study is too small to draw population-level inferences. That said, the directional signal is compelling and worth a larger RCT.
We implemented a similar approach last year. Early results are promising but we're still gathering 12-month follow-up data. Happy to share our protocol if anyone is interested.
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