After a couple of quarters of spine revenue growth, Medtronic plc’s most recent quarter saw sales decline by 2% on a constant currency basis.
Medtronic Spine’s Aching Quarter
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Revenue of $743 million, means Medtronic lost 1.6% of overall spine share during the quarter, said Needham & Company analyst, Mike Matson. U.S. sales of $516 million declined by 4%.
Releasing preliminary quarterly results on May 18, 2015, the company said core spine and interventional revenue both declined in the low single digits, offsetting low single digit growth from the company’s bone morphogenetic protein (BMP) product, Infuse.
For the last four quarters, sales of $2, 971 million declined 1% on a constant currency basis. U.S. sales of $2, 061 fell 2% for the full year.
Spine Share Winners and Losers
Share losses accelerated for DePuy Synthes and Medtronic this quarter as smaller, pure play spine manufacturers continue to gain share, said RBC Capital Markets, LLC analyst, Glenn Novarro. He echoed Matson’s estimate of market loss for Medtronic and believes DePuy Synthes lost around 1.4% of market share. In the U.S., Novarro guesses Medtronic lost about 2% of share, while DePuy Synthes gave up 1.2% of share.
Analysts identified NuVasive, Inc., LDR Holding Corporation, K2M, Inc. and Globus Medical, Inc. as market share winners for the quarter.
Spine Market
Matson said the global spine market, on a constant currency basis, grew by 2% in the first quarter of 2015, down from 3% growth in the last quarter of 2014.
However, Novarro estimates that the worldwide spine market, on a constant currency basis, grew ~4% in the first quarter, similar to the 4% growth reported in the last quarter of 2014. He estimates that the U.S. spine market grew around 2.5% during the quarter with international spine market growth of 8% in the quarter and approximately 8% for all of 2014.
Overall, Novarro believes underlying spine market trends are relatively stable with pricing continuing to be down in the low to mid-single-digit range for most manufacturers with volume/mix more than offsetting the implant pricing declines.
New VP of Strategy and Marketing
Medtronic’s spine business recently named a new head of strategy and marketing, Rob Carson. Carson spoke with us about Medtronic’s strategy to regain market share in a post fee-for-service world. We’ll bring you that feature story in an upcoming edition of Orthopedics This Week.
The company will report its fiscal fourth quarter and full-year results on June 2, 2015.
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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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