Medtronic details diabetes, TAVR offensives as COVID-19 recovery progresses.
Medtronic beat analyst expectations on revenue and earnings during its fiscal second quarter. The company reported early Tuesday a 1.5% decline in organic revenue to approximately $7.6 billion, while net profit plunged to $489 million from $1.36 billion a year earlier.
CEO Geoff Martha told investors the financial results show the medtech giant's recovery "from the depths of the pandemic" has been faster than expected and Medtronic is now approaching year-over-year growth. Despite the global resurgence of the coronavirus, Martha said healthcare systems are better prepared to handle the spike in COVID-19 cases and patients are "more willing to seek the care they need."
At the same time, Martha acknowledged "near-term uncertainty" for Medtronic's businesses. As a result, the company continues to not provide formal annual or quarterly financial guidance. "Particularly with the rising cases of COVID around the world, the impact to our business remains difficult to predict," said CFO Karen Parkhill.
Medtronic's fiscal calendar, which differs from most other companies in the medtech industry, gives industry observers a slightly more up to date picture of industry trends amid the coronavirus. Still, the quarter ended Oct. 30, prior to the thick of the current resurgence. While Martha expressed confidence in continued recovery, there are signs that elective surgeries are again being disrupted and consumer willingness to follow through with procedures may be waning.
Martha noted Boston Scientific's recent announcement that it will discontinue its Lotus Edge TAVR system, a departure from the market that Medtronic plans to take advantage by "increasing field personnel" and opening new U.S. accounts with expectations of share gains going forward.
Diabetes technology is an area where Medtronic continues to lag. Diabetes second quarter revenue came in at $574 million, a 5% decrease on an organic basis, negatively impacted by a delay in new patient starts on insulin pumps and competitive pressure while CGM grew in the mid-single digits.
At Medtronic's investor day in October, Martha laid out a new operating model, acknowledging the medtech has too often grown "below its markets." Subsequent Wall Street commentary reflected a wait-and-see attitude on the restructuring.
Martha Tuesday told investors the company is "going on the offensive" and winning market share in several of its businesses including cardiac rhythm, where he contends the company is "outperforming" the competition by gaining nearly two points of share year over year.
While Medtronic's revenue declined 1.5% on an organic basis in the second quarter, Martha said it grew 18% sequentially reflecting new product launches, share gains in several markets and procedure recovery worldwide.
Medtronic's European launch of its MiniMed 780G closed loop insulin pump system is "off to a great start" and the company started last week a limited release in the U.S. of its MiniMed 770G system, according to Martha.
In September, Medtronic received FDA's nod for the 770G, an insulin pump system that builds on the MiniMed 670G, providing smartphone connectivity and an expanded indication to ages two and up. "We continue to work with the FDA on the most efficient filing strategy for the 780G," Martha said.
Medtronic is continuing to focus efforts on building its product pipeline across business areas. Martha noted that since last quarter, Medtronic has received 50 product approvals, with a total of more than 180 regulatory approvals in the U.S., Europe, Japan and China in 2020. Product innovation is the "foundation for material future revenue growth," Martha contends.
Author:Greg Slabodkin
Published: https://www.medtechdive.com/news/medtronic-q2-diabetes-tavr-coronavirus-recovery/589620/