Medtronic 2012 Annual Report Download - page 54

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arteries. It has received CE Mark approval, Australia’s Therapeutic Goods Administration listing,
and approval in Canada in the fourth quarter of fiscal year 2012. We continue to enroll patients in
our U.S. pivotal study, and remain on track for U.S. approval in fiscal year 2015.
• Future growth in Japan from the Endurant Abdominal Aortic Aneurysm (AAA) Stent Graft
System and the Valiant Captivia Thoracic Stent Graft System. The Endurant AAA Stent Graft
System received PMDA approval and was launched in Japan during the third quarter of fiscal
year 2012.
• Future growth from the Endurant II AAA Stent Graft. Our Endurant II AAA Stent Graft is
available in Europe, and in the fourth quarter of fiscal year 2012, we received U.S. FDA approval.
• Continued acceptance in major markets around the world, including the U.S., Europe, and Japan
from the Talent Thoracic Stent Graft System, our next generation Endurant Abdominal Stent Graft
System, and our Valiant Captivia Thoracic Stent Graft System. In the U.S., the Talent Thoracic
Stent Graft System, on an improved delivery system, Captivia, was launched in the third quarter
of fiscal year 2011.
• Continued acceptance of our CoreValve transcatheter heart valve technologies for the
replacement of the aortic valve. The CoreValve System has received CE Mark approval and is
currently available outside the U.S. The CoreValve 31 millimeter received CE Mark approval in
the first quarter of fiscal year 2012 and we continue to expect CE Mark approval for our CoreValve
Evolut this summer. Additionally, we continue to make progress on the CoreValve System in the
U.S. pivotal study; we finished enrollment in the extreme risk arm and expect to finish enrollment
in the high risk arm by this summer. Also, we started our CoreValve pivotal trial in Japan during
November 2011.
Restorative Therapies Group The Restorative Therapies Group is composed of the Spinal,
Neuromodulation, Diabetes, and Surgical Technologies businesses. Products in the Restorative Therapies
Group include products for various areas of the spine, bone graft substitutes, biologic products, implantable
neurostimulation therapies and drug delivery devices for the treatment of chronic pain, movement disorders,
obsessive-compulsive disorder (OCD), overactive bladder, urinary retention, fecal incontinence and
gastroparesis, external insulin pumps, subcutaneous CGM systems, products to treat conditions of the ear,
nose, and throat, and devices that incorporate advanced energy technology. Additionally, this group
manufactures and sells primarily image-guided surgery and intra-operative imaging systems. The Restorative
Therapies Group’s net sales for fiscal year 2012 were $7.702 billion, an increase of 4 percent over the prior
fiscal year. Foreign currency translation had a favorable impact on net sales of approximately $99 million
when compared to the prior fiscal year. The Restorative Therapies Group’s performance resulted from
strong net sales in Diabetes and Surgical Technologies, as well as solid growth in Neuromodulation, partially
offset by weaker net sales in Spinal. The Restorative Therapies Group’s performance was affected by strong
international results across all businesses. The Restorative Therapies Group’s performance was positively
affected by the recent launch of notable products, sales force expansion, and the acquisitions of Salient and
PEAK (comprising the Advanced Energy business) in the second quarter of fiscal year 2012, and negatively
impacted by the continued macroeconomic downturn, continued heightened payer scrutiny, competition,
and the continued trend of increased hospital ownership of physician practices. See the more detailed
discussion of each business’s performance below.
Spinal net sales for fiscal year 2012 were $3.267 billion, a decrease of 4 percent over the prior fiscal
year. The decrease in Spinal net sales was led by a 10 percent decline in U.S. sales partially offset by a
12 percent increase in sales outside the U.S. Additionally, Spinal’s performance was negatively affected by
a decrease in the number of spinal procedures as certain patients are postponing elective procedures
due to current macroeconomic factors, continued pricing and competitive procedures, and a challenging
reimbursement environment in certain of our major markets. More specifically, the decline in Spinal’s sales
was due to a decline in sales of Core Spinal, which was primarily due to negative performance in core metal
constructs and Kyphon Balloon Kyphoplasty (BKP) products. BKP’s sales declined 6 percent, when
compared to the prior fiscal year. The decline in BKP sales was due to the continued decrease in demand and
competitive pricing pressures. The negative performance in Core Spinal was partially offset by growth from
the ongoing launch of new product lines, including Solera, Vertex Select, and Atlantis Vision Elite cervical
plates. Biologics also negatively affected Spinal’s performance, primarily due to the decline in sales of
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