Medtronic tech takeaways on PFA, RDN, M&A and R&D from top executives

All eyes were on Medtronic today when the world’s largest medical device company shared its latest financial and operating results.

The pulsed-field ablation (PFA) business in Medtronic Cardiac Ablation Solutions (CAS) delivered strong results for the second quarter, which ended Oct. 24. We’ve got more on the financials at MassDevice and the latest on the Medtronic Diabetes separation at Drug Delivery Business News.

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Here are seven more takeaways from Medtronic Chair and CEO Geoff Martha, Medtronic EVP and CFO Thierry Piéton, Medtronic SVP and Chief Scientific and Medical Officer Laura Mauri as they fielded questions from analysts after their prepared remarks.

The following has been lightly edited for length and clarity.

Where is Medtronic’s increasing its investments in SGA (selling, general and administrative) and R&D?

Piéton: “There are really two different categories. One is to capitalize to the maximum extent possible on the growth-drivers that are ahead of us. So there’s a significant amount of investment that’s going to CAS, to renal denervation (RDN), to Altaviva and obviously to Hugo, with a profile that’s a little bit more long term. There are other growth drivers that we’re funding at the same time, such as structural heart and neuromodulation, for example. The second category of where we’re putting investment is to make sure that we keep the leading edge from a technology perspective in the key franchises that are our bread and butter. There’s overinvestment compared to the average of the business in Cardiac Rhythm Management (CRM), for example, in the next generation of Micra, and there’s significant investment going in Cranial and Spinal Technologies (CST) to continue to develop the ecosystem that business has created around AiBLE that has enabled us to make the CST business more sticky with the customers from a device perspective and gradually improve the margins. So it’s really those two areas: Capitalize on the growth-drivers on one hand, and keep the edge on innovation in the key franchises on the other.”

Related: R&D spending stalls in the 2025 Medtech Big 100 ranking

What’s the environment for tuck-in M&A and are there areas of opportunity that are more interesting than others?

Martha: “We’re very focused on tuck-in M&A. I don’t want to tip our hat in terms of exact segments, but we definitely are prioritizing [our] higher-growth segments. A lot of that is in cardiology, some in neuroscience as well. We like that Affera profile, where you’re close to market or on the market. Early-stage or close to market would be ideal. [We’re] not afraid to make the investment that it takes to get those type of companies. But as Thierry said on where’s the R&D going, with tuck-in M&A I wouldn’t rule out some of our other key franchises that may need to augment their R&D with a little M&A, but we are more focused on these higher-growth segments. The board committees we’ve set up help with the speed and enable us to move faster. So we’ll see where it goes. But it’s definitely a big focus.”

Previously: Medtronic CEO Geoff Martha explains activist investor changes and offers updates on MiniMed and Hugo

Piéton: “We don’t communicate a lot about it, but we’ve got a pretty active ventures arm. It’s got over over 50 companies in which we have a stake right now. We like to use that arm to make investments in early-stage companies and it helps with some of the dilution, etc. [We] make these venture investments with a view of going higher into the capital over time, so it’s never venture for venture. And again, the pipeline there is pretty strong, and we’ll keep working that angle too, because it’s helpful to feed the pipeline for future M&A.”

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Will Medtronic keep pruning its portfolio beyond the diabetes separation?

Martha: “Portfolio management is an ongoing focus for the company, and it’s really making sure that beyond diabetes — first of all, that deal is tracking and it’s on track and going well — but beyond diabetes, we just want to make sure the whole portfolio fits together, we’re getting the right amount of synergies and we can provide the right amount of focus on these generational enterprise growth-drivers like PFA, like RDN, like Altaviva and Hugo when it comes to the U.S. and others. It remains a focus and it remains a focus of one of the board committees that we set up, and we’re meeting frequently on this and looking at it.”

Related: Medtronic’s diabetes split could be a shot in the arm for both

How is Medtronic positioned as PFA moves to ambulatory surgical centers (ASCs)?

Martha: “For PFA in ASCs, over time we do see that as an incremental opportunity for market expansion. It’ll be a bit of a shift outside of the tertiary centers to the ASCs over time, but it’ll also be a market expansion opportunity for us. It is a focus for us. We have been hiring across the company, quite frankly — particularly in neuroscience and in cardiovascular — folks that are specifically focused on market development in the ASCs for us and what our strategy is, and how our product portfolio fits there, and the resources we need including mappers. This definitely is in the calculus for Medtronic, not just our cardiac ablation business.”

Related: HRS and ACC issue guidance for cardiac ablation in ASCs

Is Medtronic PFA being held back by supply chain or mapper hiring?

Martha: “Supply [is] not holding us back. Supply’s in a good spot. And then on the mappers, mapper hiring is going well. We’re staying ahead, but I wish the buffer [was] a little bit more, because the growth is tremendous, but we are staying ahead on the mappers and the supply is not an issue. Our PFA business is really humming. I was just with a big customer yesterday. They’ve got two systems. They laid out three more that they’re going to buy, and just talking about once they put — especially Affera — once they put that in one of their hospitals how it takes all the market share or the majority of the market share there for all types of cases. There’s just all these benefits there. Feeling really, really good about that. Again, this mapper hiring has been a Medtronic — not just our cardiac ablation business — but a Medtronic effort. And our HR team is doing a hell of a job there.”

Related: Medtronic reports double-digit pay hikes for CEO Geoff Martha and other top executives

How does the exclusion of isolated systolic hypertension (ISH) from the National Coverage Decision (NCD) impact the growth of Medtronic’s RDN business?

Mauri: “Isolated systolic hypertension [patients] don’t have an elevation of their diastolic or the lower number of their blood pressure, it’s only the top one. We’re continuing to study those patients, but I think the important thing to note is that this population is actually pretty small for us overall. If you look at recent studies, people with hypertension over age 60, it’s less than 15% of patients who have ISH or this condition, and for patients who are younger than 60, who are half of our patients in trials and then also in practice, it’s really very unusual. … Out the gate with the NCD, if you just look at that topic we would estimate less than 10% would be affected by isolated systolic hypertension or not meet those criteria. … Overall, the final NCD makes access more practical for patients with less time delays to treatment, less restrictions. And the couple of things that they’ve talked about screening for are really things that are done in standard practice by general practitioners or internists. The other part to mention is that in their response, CMS reiterated that quality of life is a really important consideration for patients because lifestyle changes and being on many medications can be really difficult, and so they specifically said the good faith attempts are reasonable before referral, rather than specifying some mandatory minimum doses or number of medications. … Whether it’s ISH or overall, the workflow for patients to get into referral for Symplicity is really not restricted.”

Related: Medtronic names its next-gen renal denervation catheter as it builds the RDN market

Could percutaneous tibial neuromodulation cannibalize Botox in treating overactive bladder, and could it become a billion-dollar product?

Martha: “Tibial is something I think everyone needs to invest a little bit of time in here. It’s a huge market: 46 million people in the U.S. with overactive bladder, and of that, 16 million with urinary urge incontinence where this really shines and it takes the therapy, versus sacral, which works really well and has been a great market for us. There’s been some some channel disruption in the market lately, but it’s still a great market and works really well for patients, but it does take weeks or months to get that therapy to a patient from when they start, versus tibial is less than day. So what you’re seeing here is with sacral nerve, you have to do a trial, then you have to go in for the implant, then the patient leaves without the therapy turned on and has to come back to get it activated, versus tibial where this all happens in a day and the procedure is easier. When patients are presented with all of their options — sacral nerve, tibial, Botox — they tend to choose the tibial. So we do think it will take share from Botox. And I would emphasize that we believe there’s a very strong place for sacral nerve, definitely. This is an incremental opportunity on top of our sacral business, and that sacral combined with tibial, given that it’s going to be incremental, this is going make that pelvic health business a growth-driver for the company. It’s going to meaningfully improve the growth rate of that business.”