Sometimes it’s not easy being big. The world’s largest medical device operation, created through the $50 billion merger of Medtronic and Covidien in early 2015, hit some operational snags in recent months: An “inadvertent human error” caused an IT systems shutdown in June, and demand is so high for Medtronic’s hybrid closed loop MiniMed 670G insulin pump system that it temporarily outstripped production capacity for the continuous glucose monitoring sensors that are part of the system.
The recent problems, though, amounted to a stubbed toe for the medical device giant, which sells everything from cardiac and vascular devices to minimally invasive therapies to restorative therapies to diabetes devices. Profits for the first quarter ended July 28, 2017 were up 9.4% year-over-year, to $1.02 billion, with sales growing 3.1% to $7.39 billion. For the fiscal year ended April 28, 2017, profits grew $13.8% to $4.03 billion, with revenue up 3.0% to $29.71 billion.
During his recent first-quarter earnings call with analysts, CEO Omar Ishrak outlined Medtronic’s three growth strategies: innovative new therapies, embrace of globalization and driving economic value for health systems.
Besides the MiniMed 670G, which launched in the U.S. in June 2017, other products driving growth include:
• The Solitaire stent retriever accesses arteries in the brain through a micro-sized catheter. It restores blood flow and removing blood clots that cause acute ischemic stroke;
• The Resolute Onyx drug-eluting stent, recently approved in both the U.S. and Japan, has a metallically dense, radiopaque inner core within its cobalt alloy wire to boost visibility during placement.
• The pill-sized Micra leadless pacemaker, already introduced in the U.S. and Europe, is coming to Japan.
When it comes to globalization, emerging markets grew 12% in the first quarter, with strong growth in countries ranging from China to Brazil to Saudi Arabia. Medtronic’s Hospital Solutions business also grew double-digits, with the company now managing cath labs and operating rooms for nearly 140 heath provider customers worldwide.
Medtronic also further streamlined through the $6 billion sale of its patient care, deep vein thrombosis and nutritional insufficiency business to Cardinal Health; the deal closed in July.