SEC Filings

10-Q
MEDTRONIC PLC filed this Form 10-Q on 09/01/2017
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Cardiac and Vascular Group
The Cardiac and Vascular Group’s products include pacemakers, insertable and external cardiac monitors, cardiac resynchronization therapy devices (CRT-D), implantable cardioverter defibrillators (ICD), leads and delivery systems, ventricular assist systems, ablation products, electrophysiology catheters, products for the treatment of atrial fibrillation, information systems for the management of patients with Cardiac Rhythm & Heart Failure devices, products designed to reduce surgical site infections, coronary and peripheral stents and related delivery systems, balloons and related delivery systems, endovascular stent graft systems, heart valve replacement technologies, cardiac tissue ablation systems, and open heart and coronary bypass grafting surgical products. The Cardiac and Vascular Group also includes Care Management Services and Cath Lab Managed Services (CLMS) within the Cardiac Rhythm & Heart Failure division. The Cardiac and Vascular Group’s net sales for the three months ended July 28, 2017 were $2.6 billion, an increase of 5 percent as compared to the corresponding period in the prior fiscal year. Currency had an unfavorable impact on net sales for the three months ended July 28, 2017 of $12 million as a result of the change in exchange rates from the three months ended July 29, 2016. The Cardiac and Vascular Group's net sales for the three months ended July 28, 2017, as compared to the corresponding period in the prior fiscal year, benefited from strong net sales growth in all three divisions, as well as the acquisition of HeartWare in the second quarter of fiscal year 2017. See the more detailed discussion of each division's performance below.
Cardiac Rhythm & Heart Failure net sales for the three months ended July 28, 2017 were $1.4 billion, an increase of 4 percent as compared to the corresponding period in the prior fiscal year. Cardiac Rhythm & Heart Failure net sales growth for the three months ended July 28, 2017 was driven by strong growth in Arrhythmia Management and Heart Failure. The strong growth in Arrhythmia Management was driven by growth in AF Solutions, increased penetration of the Micra transcatheter pacing system as a result of receiving final approval for reimbursement in the U.S. from the Centers for Medicare & Medicaid Services during the fourth quarter of fiscal year 2017, the strong adoption of the TYRX absorbable antibacterial envelope, and growth in Diagnostics driven by the continued global demand of the Reveal LINQ insertable cardiac monitor. The strong net sales growth in Heart Failure for the three months ended July 28, 2017 was driven by strong demand for the CRT-P quadripolar pacing system, which launched in in the U.S. in the first quarter of fiscal year 2018, as well as the benefit from the acquisition of HeartWare, which was acquired during the second quarter of fiscal year 2017.
Coronary & Structural Heart net sales for the three months ended July 28, 2017 were $817 million, an increase of 7 percent as compared to the corresponding period in the prior fiscal year. Coronary & Structural Heart net sales growth for the three months ended July 28, 2017 was largely driven by the strong customer adoption of the Evolut PRO Transcatheter Aortic Valve system (Evolut PRO) in the U.S., as well as the continued demand for the Evolut R 34mm transcatheter aortic heart valve in the U.S. and Europe.
Aortic & Peripheral Vascular net sales for the three months ended July 28, 2017 were $439 million, an increase of 4 percent as compared to the corresponding period in the prior fiscal year. Aortic & Peripheral Vascular net sales growth for the three months ended July 28, 2017 was driven by success of the Heli-FX EndoAnchor System and the Endurant IIs aortic stent graft, as well strong performance in drug-coated balloons. Continued strong adoption of the HawkOne 6 French directional atherectomy system also contributed to net sales growth for the three months ended July 28, 2017.
Looking ahead, we expect our Cardiac and Vascular Group could be affected by the following:
Changes in procedural volumes, competitive and pricing pressure, geographic macro-economic risks, reimbursement challenges, impacts from changes in the mix of our product offerings, the timing of product registration approvals, replacement cycle challenges, and fluctuations in currency exchange rates.

Acceptance and future growth of the CRT-P quadripolar pacing system, which received CE Mark approval in February 2017 and launched in Europe during the fourth quarter of fiscal year 2017. In the U.S., we received FDA approval in May 2017, and launched in the first quarter of fiscal year 2018.

Acceptance and future growth of the Claria MRI CRT-D system with EffectivCRT Diagnostic and Effective CRT during AF algorithm, which launched in the U.S. late in the third quarter of fiscal year 2017 and is expected to launch in Japan in fiscal year 2018.

Continued future growth from the Reveal LINQ insertable cardiac monitor, which launched in Japan in the second quarter of fiscal year 2017.

Continued future growth of our Micra transcatheter pacing system, which we started shipping and physician training in the U.S. in the first quarter of fiscal year 2017. Micra is a miniaturized single chamber pacemaker system that is delivered through the femoral vein and is implanted in the right ventricle of the heart. The system does not use a lead and does not have a subcutaneous device pocket underneath the skin as with conventional

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