Medtronic’s (MDT) wholly-owned subsidiary, Physio-Control recently launched ReadyLink 12-Lead ECG device to provide enhanced care for heart attack patients and expand regional STEMI systems. According to the company, this product is the first device of its kind to expand the reach of regional chest pain management networks.
During the first quarter of fiscal 2012, Physio-Control recorded $103 million of revenues, up 23% year over year or 17% at constant exchange rate. The growth was driven by strong pre-hospital market sales, as the Lifepak 15 monitor/defibrillator and the Lucas chest compression system continued to increase share. However, Medtronic is trying to divest the Physio-Control business.
While the growth in Physio-Control is encouraging, Medtronic is witnessing several challenges in its two core segments – CRDM and Spinal. Maintaining the lackluster trend seen in the past few quarters, CRDM continues to disappoint. Although pacing systems increased 7% (up 1% at CER) to $508 million, ICD sales declined 3% (down 8% at CER) to $697 million. CRDM sales were affected by declining procedure volume in the US ICD market, partially offset by growth of AF solutions and continued rollout of Protecta ICD and Revo MRI pacemakers in the US.
Besides, a 4% growth in Biologics ($215 million) was more than offset by a 2% decline in Core Spinal ($610 million). The Biologics business benefited from the Osteotech acquisition, offset by decline in the sales of Infuse especially following the recent publication of articles in The Spine Journal.
To make up for some of the lost sales of the core segments, Medtronic has been focusing on other businesses such as Diabetes, CardioVascular, among others, both of which recorded robust growth during the quarter.
Fiscal 2011 has been one of the most challenging years for Medtronic stemming from the macroeconomic downturn and decreased utilization. Besides, the company faces tough competition from several players including Boston Scientific (BSX) and St Jude Medical (STJ). The company to its credit is undertaking several steps to better adapt to the changing environment.
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