Medtronic 2009 Annual Report Download - page 26

22 Medtronic, Inc.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations
(continued)
In fiscal years 2009 and 2008, net sales were (unfavorably)/
favorably impacted by foreign currency translation of $(100)
million and $400 million, respectively. The primary exchange rate
movements that impact our consolidated net sales growth are
the U.S. dollar as compared to the Euro and the Japanese Yen.
The impact of foreign currency fluctuations on net sales is not
indicative of the impact on net earnings due to the offsetting
foreign currency impact on operating costs and expenses and
our hedging activities. See the “Market Risk” section of this
management’s discussion and analysis and Note 9 to the
consolidated financial statements for further details on foreign
currency instruments and our related risk management
strategies.
Forward-looking statements are subject to risk factors (see
“Risk Factors” set forth in our Form 10-K).
Cardiac Rhythm Disease Management CRDM products consist
primarily of pacemakers, implantable defibrillators, leads, ablation
products, electrophysiology catheters, products for the treatment
of atrial fibrillation and information systems for the management
of patients with our devices. CRDM fiscal year 2009 net sales were
$5.014 billion, an increase of 1 percent over the prior fiscal year.
Foreign currency translation had an unfavorable impact on net
sales of approximately $25 million when compared to the prior
fiscal year.
Worldwide net sales of Defibrillation Systems, our largest
product line, for fiscal year 2009 were $2.962 billion, an increase
of 2 percent when compared to the prior fiscal year. Foreign
currency had an unfavorable impact on net sales of $18 million
when compared to the prior fiscal year. Net sales growth
was primarily a result of worldwide net sales of Secura
implantable cardioverter defibrillators (ICDs) and Consulta cardiac
resynchronization therapy-defibrillators (CRT-Ds), both of which
are included within our Vision 3D portfolio. Both the Secura ICDs
and Consulta CRT-Ds feature Conexus wireless technology which
allows for remote transfer of patient data and enables easier
communication between the implanted device and programmer
at the time of implant, during follow-up in a clinician’s office, or
remotely using a patient home monitor. In addition, net sales for
the comparative period were negatively impacted by our voluntary
suspension of worldwide distribution of Sprint Fidelis (Fidelis)
leads in the second quarter of fiscal year 2008.
Pacing Systems net sales for fiscal year 2009 were $1.984 billion,
a decrease of 1 percent when compared to the prior fiscal year.
The decrease in net sales was primarily a result of a decrease in
net sales in the U.S. due to significant competition, partially offset
by sales growth outside the U.S. Net sales growth outside the
U.S. for fiscal year 2009 was led by the acceptance of the Adapta
family of pacemakers, including the Adapta and Sensia models.
The Adapta family of pacemakers incorporates an array of
automatic features to help physicians improve pacing therapy and
streamline the patient follow-up process, potentially minimizing
the amount of time spent in a physician’s office. Adapta offers
Managed Ventricular Pacing, or MVP, which is an atrial-based
pacing mode that significantly reduces unnecessary pacing in the
right ventricle while providing the safety of a dual chamber
backup if necessary. Clinical studies have suggested that reducing
this unnecessary pacing in the right ventricle may decrease the
risk of developing heart failure and atrial fibrillation, a potentially
life-threatening irregular heartbeat.
Fiscal year 2009 Defibrillation and Pacing Systems sales
benefited from the continued acceptance of the Medtronic
CareLink Service. The Medtronic CareLink Service enables
clinicians to review data about implanted cardiac devices in real
time and access stored patient and device diagnostics through
a secure Internet website. The data, which is comparable to
information provided during an in-clinic device follow-up, provides
the patient’s medical team with a comprehensive view of how the
device and patient’s heart are operating. Today, over 360,000
patients are being monitored through Medtronic’s CareLink
Service worldwide, up from approximately 250,000 patients being
monitored a year ago.
CRDM fiscal year 2008 net sales grew by 2 percent from the
prior fiscal year to $4.963 billion. Foreign currency translation had
a favorable impact on net sales of approximately $160 million
when compared to the prior fiscal year.
Defibrillation Systems net sales of $2.897 billion for fiscal year
2008 decreased 1 percent when compared to fiscal year 2007. The
decrease in net sales was the result of sales declines in the U.S.,
offset by sales growth outside the U.S. Global sales were driven
by the Virtuoso ICD and the Concerto CRT-D. Both of these devices
feature Conexus wireless technology. Net sales from Defibrillation
Systems in the U.S. were $1.955 billion, a decrease of 6 percent in
comparison to the prior year. The decrease in U.S. Defibrillation
Systems net sales in fiscal year 2008 was primarily the result of
the suspension of worldwide distribution of the Fidelis lead in the
second quarter of fiscal year 2008. The distribution of the Fidelis
lead was suspended because of the potential for lead fractures at
higher than anticipated rates. Leads are sophisticated “wires” that
connect an electronic pulse generator to the heart and are the
pathway for therapy delivery between the device and heart. The