gradually has shrunk while overseas earnings have virtually exploded. Domestic revenue fell 3. 4 percent between FY10 and FY12 to $8.8 billion, while inter- national sales jumped 17. 5 percent to $7.3 billion during that same period, according to Medtronic’s latest annual report. Asia/Pacific revenue pow- ered much of the growth, surging 28 percent since FY10 to $2.4 bil- lion in FY12. Sales in Europe and Canada swelled 10 percent. There’s still hope for the U.S. market, though. In FY12, Medtronic earned more than half of its $16.1 billion in total net sales within the nation’s bor- ders, mostly on the success of its Resolute Integrity drug-eluting coronary stent, MR-Conditional pacemaker, Endurant AAA stent graft system and RestoreSensor neurostimulator. Resolute’s fiscal fourth- quarter launch doubled the company’s U.S. drug-eluting stent revenue and market share in less than three
months, helping boost total
Cardiac and Vascular Group
sales 4 percent to $8.48 billion. The
Resolute Integrity DES is the first device of its kind approved for diabetics with coronary artery disease
(CAD), a class of patients that comprises roughly 30 percent of the
nearly 1 million percutaneous coronary intervention procedures
performed annually in the United States. Such procedures are inherently more difficult in diabetics because their arteries are more
narrow than those not afflicted by the condition.
The Endurant stent graft system also contributed to market
share ( 5 points) and was the likely engine powering an 18 percent increase in endovascular and peripheral device sales in FY12.
Other endovascular revenue-generators included the Endurant
Abdominal and Valiant Captiva Thoracic Stent Graft System,
which sold well overseas, and the integration of technology from
the past purchases of both Ardian Inc. and ATS Medical Inc.
The hot seller within Medtronic’s Structural Heart division
was the CoreValve transcatheter aortic heart valve, a minimally
invasive treatment option for heart disease patients too sickly for
or unable to survive open heart surgery. The procedure involves
snaking a replacement valve to the heart through the femoral or
left subclavian artery (historically, the only way to replace an aortic valve was through open heart surgery).
During the second quarter of FY12, Medtronic released results
of a four-year study proving the long-
term safety and efficacy of the CoreValve
replacement system, noting the data
establishes the device as a“sound
and stable valve that holds up to
“Almost more important,
however, is that these patients—
Robust overseas sales of the CoreValve system (it
is not yet approved for use in the United States) con-
tributed to a 9 percent rise in Coronary device
proceeds. Structural Heart sales rose 12 per-
cent to $1 billion and total cardiovascular
device revenue jumped 12 percent to $3.4
billion despite the challenges posed by
a lethargic economic recovery, pric-
ing pressures, softening markets
and increased hospital ownership
of physician practices.
Those same headwinds stymied
Medtronic’s cardiac rhythm disease
management (CRDM) sales as the U.S.
market struggled to free itself from the
lingering stigma of a federal investigation and trade media scrutiny over the use of implantable cardioverter defibrillators (ICDs).
A January 2011 study published in the Journal of the American
Medical Association found that 22. 5 percent of patients typically
fall short of the medical guidelines necessary to receive ICDs.
These patients, the study’s authors argued, have a higher mortality rate than those who meet the criteria for the implants.
The revelation sparked a U.S. Department of Justice investigation into the legality of countless ICD procedures. The government currently is evaluating ICD insurance claims under the
False Claims Act (an anti-fraud statute) to determine whether
hospitals knowingly submitted false claims.
With the brouhaha still simmering, the U.S. ICD market faltered for most of FY12, leading to a 5 percent decline in defibrillation systems sales. Proceeds fell from $2.96 billion in FY11 to
$2.82 billion in FY12, Medtronic’s annual report shows.
The shortfall was offset by a 4 percent rise in pacing systems
sales ($1.9 billion) and 41 percent increase in atrial fibrillation/
other revenue ($207 million), due mostly to robust demand of the
company’s Arctic Front Cardiac CryoAblation Catheter System,
a minimally invasive balloon-based technology that blocks the