SEC Filings

10-Q
MEDTRONIC PLC filed this Form 10-Q on 09/01/2017
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Restorative Therapies Group
The Restorative Therapies Group's products focus on various areas of the spine, bone graft substitutes, biologic products, trauma, implantable neurostimulation therapies and drug delivery systems for the treatment of chronic pain, movement disorders, obsessive-compulsive disorder (OCD), overactive bladder, urinary retention, fecal incontinence and gastroparesis, as well as products to treat conditions of the ear, nose, and throat, and systems that incorporate advanced energy surgical instruments. The Restorative Therapies Group also manufactures and sells image-guided surgery and intra-operative imaging systems and therapies to treat diseases of the vasculature in and around the brain, including coils, neurovascular stents and flow diversion products. The Restorative Therapies Group’s net sales for the three months ended July 28, 2017 were $1.8 billion, an increase of 2 percent as compared to the first quarter in the prior fiscal year. Currency had an unfavorable impact on net sales for the three months ended July 28, 2017 of $7 million as a result of the change in exchange rates from the three months ended July 29, 2016. Net sales growth for the three months ended July 28, 2017 was driven by Brain Therapies, Specialty Therapies, and Spine growth, partially offset by declines in Pain Therapies. See the more detailed discussion of each division’s performance below.
Spine net sales for the three months ended July 28, 2017 were $649 million, an increase of 1 percent as compared to the corresponding period in the prior fiscal year. Spine net sales growth was driven by growth in Core Spine in the U.S., Greater China, and Latin America and the return of InductOs to the European market, partially offset by slight declines in BMP. Growth in Core Spine was driven by the success of our Surgical Synergy strategy, which integrates our spinal implants with imaging and navigation equipment sold by our Neurosurgery business, and launch of new technologies such as the CD Horizon Solera Voyager system and ELEVATE expandable cage. Spine net sales growth was also driven by our "Speed-to-Scale" initiative, which involves faster innovation cycles and the launching of a steady cadence of new products at scale with sets immediately available for the entire market.
Brain Therapies net sales for the three months ended July 28, 2017 were $522 million, an increase of 7 percent as compared to the corresponding period in the prior fiscal year. Brain Therapies net sales growth was driven by strong growth in both Neurovascular and Neursurgery. Neurovascular net sales growth was driven by strong sales of our Solitaire family of revascularization devices for acute ischemic stroke, Axium detachable coils, and Navien intracranial support catheter. Neurosurgery net sales growth was driven by StealthStation S8 surgical navigation system launches in the U.S. and Europe. Net sales growth in Neurovascular and Neurosurgery was partially offset by declines in Brain Modulation due to competitive pressures in the U.S. and Europe.
Specialty Therapies net sales for the three months ended July 28, 2017 were $369 million, an increase of 4 percent as compared to the corresponding period in the prior fiscal year. Specialty Therapies net sales growth was driven by growth in ENT, Pelvic Health, and Transformative Solutions (formerly known as Advanced Energy). ENT net sales growth was driven by continued strong growth in NuVent sinus balloons and image-guided surgery products, Pelvic Health net sales growth was driven by strong InterStim growth in the U.S, and Transformative Solutions net sales growth was driven by the Aquamantys Transcollation and PEAK PlasmaBlade technologies.
Pain Therapies net sales for the three months ended July 28, 2017 were $269 million, a decrease of 5 percent as compared to the corresponding period in the prior fiscal year. The decrease in net sales was driven by decreases in our Spinal Cord Stimulation products due to competitive pressures in the U.S. and Europe, partially offset by growth in Interventional from the OsteoCool RF Spinal Tumor ablation system and strong sales in Japan and China.
Looking ahead, we expect our Restorative Therapies 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, and fluctuations in currency exchange rates.
Continued market acceptance of our new integrated solutions through the Surgical Synergy strategy, which integrates our spinal implants and imaging and navigation equipment.
Continued success of our "Speed-to-Scale" program launches, which involves faster innovation cycles and launching a steady cadence of new products at scale with sets immediately available for the entire market.
Market acceptance and continued global adoption of innovative new Spine products, such as our CD Horizon Solera Voyager system, our ELEVATE expandable interbody cages, and our OLIF25 and OLIF51 procedural solutions.
Growth in the broader vertebral compression fracture (VCF) and adjacent markets, as we continue to pursue the development of other therapies to treat more patients with VCF, including continued success of both the Kyphon V vertebroplasty system and the Osteocool RF Spinal Tumor ablation system.
Acceptance of Kanghui's broad portfolio of trauma, spine, and large-joint reconstruction products focused on the growing global value segment.

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