Medtronic 2010 Annual Report Download - page 26

22 Medtronic, Inc.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations
(continued)
In fiscal years 2010 and 2009, net sales were favorably/
(unfavorably) impacted by foreign currency translation of $113
million and $(100) 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 10 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 Annual Report on Form 10-K and
“Cautionary Factors That May Affect Future Results” in this
management’s discussion and analysis for more information on
these important risk factors.
Cardiac Rhythm Disease Management CRDM products consist
primarily of pacemakers, implantable defibrillators, leads and
delivery systems, ablation products, electrophysiology catheters,
products for the treatment of atrial fibrillation (AF) and information
systems for the management of patients with our CRDM devices.
CRDM fiscal year 2010 net sales were $5.268 billion, an increase of
5 percent over the prior fiscal year. Foreign currency translation
had a favorable impact on net sales of approximately $41 million
when compared to the prior fiscal year.
Worldwide net sales of Defibrillation Systems, our largest
product line, for fiscal year 2010 were $3.167 billion, an increase of
7 percent when compared to the prior fiscal year. Foreign currency
translation had a favorable impact on net sales of approximately
$16 million when compared to the prior fiscal year. Net sales
growth was primarily a result of worldwide net sales of our
Vision 3D portfolio, specifically from worldwide sales of Secura
implantable cardioverter defibrillators (ICDs) and Consulta cardiac
resynchronization therapy-defibrillators (CRT-Ds), but was partially
impacted by continued pricing pressures. We continue to see a
shift in product mix toward CRT-Ds. Both the Secura ICDs and
Consulta CRT-Ds feature OptiVol Fluid Status Monitoring (OptiVol)
and 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. Additionally, net sales in the U.S. were positively impacted
by the temporary suspension of sales of a competitor’s products
during a portion of the fourth quarter of fiscal year 2010 and also
the Attain Ability left-heart lead. The Attain Ability left-heart lead,
which became commercially available in the U.S. in the first
quarter of fiscal year 2010, offers a thin lead body, providing
physicians a tool to deliver therapy to hard-to-reach areas of the
heart in heart failure patients.
Pacing Systems net sales for fiscal year 2010 remained flat at
$1.987 billion when compared to the prior fiscal year. Foreign
currency translation had a favorable impact on net sales of
approximately $21 million when compared to the prior fiscal year.
Net sales remained flat for the fiscal year primarily as a result of
modest growth outside the U.S. in the Adapta family of pacemakers,
but were offset by continued pressure in the Japan market as a
result of the Kappa/Sigma field action that was announced early
in fiscal year 2010, as well as continued pricing pressures. The
Adapta family of pacemakers incorporates several 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, 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 2010 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, approximately
500,000 patients are being monitored through Medtronic’s
CareLink Service worldwide, up from approximately 400,000
patients being monitored a year ago.
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. Net sales
growth was primarily a result of worldwide net sales of Secura