Medtronic 2015 Annual Report Download - page 59

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Spine net sales for fiscal year 2015 were $2.971 billion, a decrease of 2 percent over the prior fiscal year. The decrease in
Spine’s net sales for fiscal year 2015 was driven by declines in Core Spine and Interventional, partially offset by growth in BMP
(composed of INFUSE bone graft (InductOs in the EU)). Both the global and U.S. Core Spine markets grew in the low-single
digits, with modest procedural growth offset by continued pricing pressures. During fiscal year 2015, the Core Spine business
continued to focus on differentiating itself over the long-term through portfolio updates, procedural innovation, and continued
development and deployment of the its Surgical Synergy program that integrates imaging, navigation, and powered surgical
instruments. Fiscal year 2015 included several new product launches, including our Prestige LP cervical disc and Pure Titanium
Coated (PTC) interbodies spacers, which partially offset declines in Core Spine. Interventional Spine net sales decline was
driven by a decline in European sales, where the business faced pricing pressures in Germany and unfavorable foreign currency
translation. Underlying demand for BMP stabilized and returned to slight growth in the latter half of fiscal year 2015.
Neuromodulation net sales for fiscal year 2015 were $1.977 billion, an increase of 4 percent over the prior fiscal year. The
increase in net sales was primarily due to strong growth in Gastro/Uro and growth in DBS and Pain Stimulation. Our global
focus on our neurologist referral programs, and the strength of the EARLYSTIM data in international markets, continues to
drive solid growth of DBS systems. Implant growth of our InterStim Therapy for overactive bladder, urinary retention, and
bowel incontinence continued in the U.S. throughout fiscal year 2015. The increase in net sales for fiscal year 2015 was also due
to global growth of our RestoreSensor SureScan MRI system. While the U.S. pain stimulation market has weakened as a result
of reimbursement changes, net sales of our SureScan MRI system for the fiscal year demonstrate our continued strength in the
market.
Surgical Technologies net sales for fiscal year 2015 were $1.671 billion, an increase of 7 percent over the prior fiscal year. The
increase in net sales was driven by continued worldwide net sales growth across the portfolio of Advanced Energy, ENT, and
Neurosurgery, partially offset by unfavorable foreign currency translation. Performance was driven by strong growth of power
systems, Aquamantys Transcollation, and PEAK PlasmaBlade technologies, as well as solid growth of Midas Rex products,
monitoring, and O-arm imaging systems. Additionally, net sales growth was positively impacted by launch of our NuVent sinus
balloons in the second quarter of fiscal year 2015 and the acquisition of Visualase during the first quarter of fiscal year 2015,
adding a MRI-guided laser ablation technology to our broad suite of neuroscience solutions for neurosurgery. The increase in
revenue from Visualase and our NuVent sinus balloons was partially offset by our divestiture of the MicroFrance product line
during the third quarter of fiscal year 2015.
Neurovascular net sales for fiscal year 2015 were $132 million. The division, formerly part of Covidien, contributed revenue
from the strength of its coils, stents, flow diversion, and access product lines. The New England Journal of Medicine published
several positive clinical trials on our Solitaire FR revascularization device, resulting in continued customer adoption of the
product. Additionally, net sales were positively impacted by the U.S. launch of the Pipeline Flex embolization device, which
was launched during the third quarter of fiscal year 2015.
The Restorative Therapies Group’s net sales for fiscal year 2014 were $6.501 billion, an increase of 2 percent over the prior
fiscal year. Foreign currency translation had an unfavorable impact on net sales of approximately $58 million when compared to
the prior fiscal year. The Restorative Therapies Group’s performance for fiscal year 2014 was favorably impacted by strong net
sales in Surgical Technologies and growth in Neuromodulation, partially offset by declines in Spine, primarily driven by BMP
and balloon kyphoplasty (BKP). See the more detailed discussion of each business’s performance below.
Spine net sales for fiscal year 2014 were $3.041 billion, a decrease of 3 percent over the prior fiscal year. The decrease in
Spine’s net sales for fiscal year 2014 was primarily driven by declines in BMP and BKP, and unfavorable foreign currency
translation. Net sales in BKP for fiscal year 2014 declined compared to the prior fiscal year due to increased competition,
pricing pressures, and reimbursement challenges with select payers. Significant declines in U.S. sales of INFUSE bone graft
resulted from the June 2011 articles in The Spine Journal. In addition, some surgeons reduced their usage through both patient
selection and the use of smaller kits. Core Spine’s low-single digit decline for fiscal year 2014 compared to the same period in
the prior fiscal year was primarily due to unfavorable foreign currency translation and negative performance in BKP as
discussed above, which were substantially offset by recent launches of our new products and therapies, including product line
extensions to our Vertex platform and BRYAN artificial cervical disc, as well as the continued adoption of other biologics
products. The global Core Spine markets were relatively flat on a year-over-year basis. During fiscal year 2014, Core Spine
benefited from our focus on enabling technologies, including the O-Arm imaging system, StealthStation navigation, and
Powerease powered surgical instruments.
Neuromodulation net sales for fiscal year 2014 were $1.898 billion, an increase of 5 percent over the prior fiscal year. The
increase in net sales was primarily due to 8 percent growth in international markets, strong global growth of our Activa DBS
systems for movement disorders driven by new implant growth, and strong performance from our conditionally safe SureScan
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