Medtronic 2010 Annual Report Download - page 29

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Medtronic, Inc.
of INFUSE Bone Graft during the remainder of fiscal year 2009
were flat because of the negative impact of several external
factors including a public health notice from the FDA regarding
off-label use of recombinant human bone morphogenic protein
in the cervical spine that was issued in July 2008, a previously
disclosed government investigation, negative newspaper stories
and a whistleblower lawsuit filed against a number of spine
surgeons and distributors of INFUSE Bone Graft.
Looking ahead, we expect our Spinal operating segment should
be impacted by the following:
• Continued acceptance of our products for stabilization of the
thoracolumbar region of the spine, including the CD HORIZON
LEGACY, MAST and PEEK Rod Systems.
• Continued acceptance of the TSRH 3Dx Spinal System, which
was launched in November 2009. The TSRH 3Dx Spinal System
offers two screws designed to address multiple pathologies.
The Multi Planar Adjusting Screw option provides surgeons a
variable angle posted screw for targeted, controlled correction
maneuvers. The OSTEOGRIP Screw enhances bone fixation by
incorporating a dual-lead thread pattern that reduces toggle
at the bone-screw interface. This next generation pedicle
screw system includes competitive differentiating technology
for addressing multiple spinal pathologies, from degenerative
disc disease to spinal deformity.
• Improved procedural integration of our thoracolumbar and
cervical fixation and interbody implant products with
proprietary NIM neuro monitoring technologies and MAST
Quadrant and METRx access technologies.
• Full launch of the Solera Legacy products. At the end of the
second quarter of fiscal year 2010, we began a limited launch
and anticipate the broader roll-out of these products in the
second half of fiscal year 2011.
• Continued and future acceptance of our BKP technology.
While we have been most recently encouraged by our return
to growth in Europe, we believe worldwide growth continues
to be negatively impacted by the vertebroplasty articles in
the New England Journal of Medicine. In addition, a new
competitor entered into the U.S. marketplace during the
fourth quarter of fiscal year 2010.
Future growth opportunities will be supported by the
anticipated launch of high pressure balloons and syringes,
curettes and fixation materials in fiscal year 2011. In addition,
the KYPHON Cement Delivery System (CDS) was launched in
the U.S. in September 2009. CDS allows physicians to keep a
farther distance from the radiation source during the cement
delivery phase than with Medtronic’s current delivery system
used in the balloon kyphoplasty procedure. It allows for the
delivery of KYPHON HV-R Bone Cement with one-handed
operation, preserving some tactile feel during delivery with
the ability to halt bone cement flow on demand with the
quick-release button. Additionally, we expect a positive
impact from regulatory clearance and reimbursement
approval for BKP in Japan during fiscal year 2011.
• Increased presence in China as a result of our joint venture
with Weigao to distribute Medtronic’s spinal products and
Weigao’s orthopedic products in China.
• Continued and expected future growth in our Biologics
franchise, driven by new products such as AMPLIFY, which
has been submitted for FDA approval for indications within
and outside the spine.
• The continued acceptance of the Atlantis Translational
Cervical Plate System, the VERTEX SELECT Reconstruction
System and the future acceptance of the recently launched
PEEK PREVAIL Cervical Interbody Device. The Atlantis
Translational Plate provides expanded options for our market
leading anterior cervical portfolio. The VERTEX SELECT
Reconstruction System offers adjustability through multiple
plate designs, rods, screws and hooks that gives surgeons
more options during surgery, enabling them to tailor the
procedure to each patient’s needs. The PEEK PREVAIL Cervical
Interbody Device offers surgeons another option for cervical
interbody fusion procedures.
CardioVascular CardioVascular products consist of coronary and
peripheral stents and related delivery systems, endovascular stent
graft systems, heart valve replacement technologies, tissue
ablation systems and open heart and coronary bypass grafting
surgical products. CardioVascular net sales for fiscal year 2010
were $2.864 billion, an increase of 18 percent over the prior fiscal
year. Foreign currency translation had a favorable impact on net
sales of approximately $27 million when compared to the prior
fiscal year.
Coronary net sales for fiscal year 2010 were $1.489 billion, an
increase of 15 percent when compared to the prior fiscal year. The
increase in net sales was primarily the result of the fiscal year 2010
launch of Endeavor in Japan and strong sales of Endeavor and the
Resolute drug-eluting stent outside the U.S. Endeavor and
Resolute generated worldwide revenue of $767 million for the
fiscal year compared to $603 million for the prior year. In addition,
during fiscal year 2010 we entered into a buyout agreement with
our coronary distributor in Japan. In order to settle a preexisting
relationship with this distributor, a revenue reversal of $18 million