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Medtronic Reports FY4Q16 Revenue


Medtronic (MDT) posted FY4Q16 spinal revenue of US $737.0MM, -0.8% vs. FY4Q15. (U.S. $520.0MM, +0.8%; ex-U.S. $217.0MM, -4.4%) Quarter ended 4/29/16; geographic growth is as-reported.

ORTHOWORLD estimates spine and orthobiologic segment sales and growth on an as-reported basis, as follows, for FY4Q16. 

  • Spine $617.0MM, -0.8%
  • Orthobiologics $120.0MM, -1.6%

Per earnings call notes, MDT's Core Spine (hardware) and Interventional Spine (largely kyphoplasty) delivered improved growth, while BMP declined in low-single-digits in constant currency. Mid-single-digit U.S. BMP growth partially offset loss of EU sales due to a product hold, which equates to an ~$8MM loss per quarter. MDT projects that its third-party supplier will be able to resolve this issue by its FY3Q17. 

In the near-term, new products are expected to drive growth in spine, such as SOLERA VOYAGER, Elevate Cage and PTC Interbody launches. Within the present quarter, the company expects to launch its second-generation OLIF procedures

Looking to the future, MDT expects FDA approval for the 2-level Prestige LP cervical disc within its FY17.

After the quarter's close, in May, MDT announced new agreements with Mazor Robotics (MZOR). The first is a 2-stage commercial agreement for co-promotion, co-development and potential global distribution of certain MZOR robotic surgical guidance products. The second agreement relates to an equity investment in MZOR by MDT.

The company has restructured the elements within its Restorative Therapies Group, in which spine resides. Moving forward, MDT will report revenue results for four divisions comprising RTG:

  • Spine, which includes Core Spine, BMP and Kanghui
  • Brain Therapies, which includes Brain Modulation (formerly Deep Brain Stim), Neurovascular and Neurosurgery 
  • Pain Therapies, which includes Drug Delivery, Spinal Cord Stimulation and Interventional Spine
  • Specialty Therapies, including Pelvic Health (formerly Gastro/Uro), Advanced Energy and ENT

MDT's Analyst Day is scheduled for Monday, June 6. We expect to learn more details about MDT's turnaround activities in spine at that time.

Sources: Medtronic plc, ORTHOWORLD Inc.