Medtronic (NYSE: MDT) is boosting its research and development spending in fiscal year 2022 by more than 10%, which CEO Geoff Martha described as the largest dollar increase ever for the Fridley, Minn.-based medtech giant.
“The investments we’re making in our pipeline will play a key role in accelerating our top-line growth, and we’re at the front end of some large opportunities to win share, create new markets and disrupt existing markets,” he said in a quarterly earnings call with investors and analysts this week.
Topping Medtronic’s list of golden opportunities is its renal denervation treatment for hypertension and its Hugo soft tissue robotic-assisted surgery system, two areas where Medtronic executives see multibillion-dollar businesses.
Medtronic’s investments in Hugo and renal denervation are expected to cost $400 million to the company’s annual operating margin, said Chief Financial Officer Karen Parkhill. Those two initiatives “represent what we believe to be the largest opportunity in medtech,” she said.
Martha reported “good progress” on the company Spyral renal denervation efforts.
“We expect that the results of our ON MED pivotal trial will be ready for presentation at the [Cardiovascular Research Foundation’s] TCT conference in November, assuming the interim look at this Bayesian-designed study reaches statistical significance,” Martha said. “The ON MED clinical trial represents the final piece of a large body of evidence that we intend to submit to the FDA for approval.”
Martha also reported “impressive” progress on surgical robotics in recent months, leading with the first Hugo procedures performed in June at Chile’s Clinica Santa Maria by urological surgeon Dr. Ruben Olivares, followed in July by the first gynecological procedures at Panama’s Pacifica Salud Hospital.
Medtronic submitted Hugo for CE Mark approval in March and remains “on track” for that goal, Martha said, as the company moves toward the first domestic procedures through the U.S. EXPAND Uro pivotal trial.
Medtronic executives did not say when they hope to win regulatory approval for Hugo, but EVP Bob White — president of Medtronic’s Medical Surgical Portfolio — offered a status update on the trial.
“We’re gaining ethics committee approval, working through the [Institutional Review Board], conducting site training, getting clinical study site activation — and for competitive reasons, I’m not going to go through all the sites, but we’re really excited to treat our first patient in the U.S.,” he said.
A video replay of the first-quarter earnings call and supporting materials are available here.