Event Maps Out Strategy for Creating Long-Term Value
At the company’s biennial Investor Day on June 5, Medtronic executives laid out the vision and strategy of the company for institutional investors and analysts.
“Our Mission to alleviate pain, restore health, and extend life starts with technology. Technology is the lifeblood of this company,” said Medtronic chairman and CEO Omar Ishrak. “When we lead in technology — when we innovate, invent, and disrupt — our other initiatives, globalization and economic value, only enhance our growth profile,” he added.
The event was held at the New York Stock Exchange in New York City and included presentations and question and answer sessions with each of the company’s business unit and regional leaders. Approximately 150 institutional investors and analysts attended. Ishrak also appeared on CNBC’s “Mad Money” television program for a conversation with host Jim Cramer, where he highlighted the Medtronic innovation and globalization strategies.
Technology is the lifeblood of this company. When we lead in technology — when we innovate, invent, and disrupt — our other initiatives, globalization and economic value, only enhance our growth profile.Omar Ishrak, Chairman and CEO
Therapy Innovation Highlights
Throughout the morning, senior executives from each of the Medtronic core businesses presented an overview of their respective plans for growth through product innovation.
Mike Coyle, executive vice president and group president of the Cardiac and Vascular Group (CVG), spoke to the continued growth and expanded patient access through technology innovations, including Micra™, the world’s smallest pacemaker. “CVG is driven by continuous innovation with the goal of serving more patients in need. We are investing in therapy innovation to create new markets as well as disrupt existing ones.” Coyle highlighted therapies like the CoreValve™ Evolut™ PRO, Arctic Front Advanced PRO™, HVAD™ Destination Therapy, VenaSeal™ Closure System, and Japan Drug-Coated Balloon as well as Drug-Coated Balloon in expanded sizes in the United States — all of which are anticipated to grow significantly during the coming year.
CVG is driven by continuous innovation with the goal of serving more patients in need.Mike Coyle, EVP and Group President, Cardiac and Vascular Group
Executive Vice President and Group President for the Minimally Invasive Therapies Group (MITG), Bob White, outlined opportunities related to the Signia™ stapling system, Ligasure™ vessel sealing, capnography, and remote monitoring. “In MITG, our focus is to do the most good while touching the patient less because we know that less invasive therapies help patients get better faster, with fewer complications, and improved outcomes,” said White. “We are committed to advancing the adoption of minimally invasive surgery (MIS), which is the single largest growth driver for MITG. There is clinical evidence that open surgeries — as compared to MIS — can increase complications, increase hospital stays, extend recovery time, and increase overall costs.“1-6
...we know that less invasive therapies help patients get better faster, with fewer complications, and improved outcomes.Bob White, EVP and Group President, Minimally Invasive Therapies
In the Restorative Therapies Group (RTG), led by Executive Vice President and Group President Geoff Martha, product highlights included the latest in chronic pain management with the Intellis™ spinal cord stimulation system, stroke treatment including the Solitaire™ stent retriever and Riptide™ aspiration system, and Surgical Synergy for Spine featuring innovations like the Mazor X™ robotic guidance system.
...our innovation pipeline is as robust as ever, and all of our businesses are executing at a very high level.Geoff Martha, EVP and Group President, Restorative Therapies
“We have great confidence in RTG’s strategy, our innovation pipeline is as robust as ever, and all of our businesses are executing at a very high level,” said Martha. “Most importantly, we’re laser-focused on our Mission of improving lives for more patients.“
Executive Vice President and Group President for Diabetes, Hooman Hakami, highlighted the breadth of the portfolio that now includes products that address the needs of nearly all people with diabetes. This includes innovation like Guardian™ Connect with Sugar.IQ™, which not only provides real-time sensing of a patient’s glucose levels but — through a partnership with IBM Watson — also provides actionable insights and analytics that can identify historical trends and the effects of daily activities on glucose levels. “We’re not just focused on product innovation, but on innovating outcomes-based solutions that enable patients, HCPs, and health systems,” Hakami said. “Our comprehensive portfolio across the care continuum sets us apart from others in the industry. These solutions all drive toward improving patient outcomes and lowering healthcare costs, which we believe — in the end — will transform diabetes care.”
Our comprehensive portfolio across the care continuum sets us apart from others in the industry. These solutions all drive toward improving patient outcomes and lowering healthcare costs, which we believe — in the end — will transform diabetes care.Hooman Hakami, Executive Vice President and Group President for Diabetes
Expanded Access, Increased Value, and Enterprise Excellence
A panel discussion shifted the conversation from product innovation to how Medtronic intends to help expand access to care, drive value for health systems leaders, and achieve improvements in the company’s day-to-day operations through its Enterprise Excellence program.
With a growing emphasis on value over volume, presenters explained, Medtronic is going well beyond medical devices in its offerings to healthcare systems.
A number of value-based programs — where Medtronic and its shareholders only benefit when better patient outcomes are achieved — were highlighted. The company is casting a wide net to ensure hospital systems have what they need to meet the demands of a growing, highly complex patient population. Examples include risk-sharing models for products like the TYRX™ antibacterial envelope, telemedicine offerings through Medtronic Care Management Services, clinic-based care for bariatric surgery candidates, and outcomes-based partnerships with insurance providers like United Healthcare.
Ishrak noted one of the company’s biggest opportunities to make a difference is by reaching underserved populations.
In places like China and Latin America, Medtronic plans to invest heavily in localized, tailored R & D efforts. In regions like the Middle East, expanding clinic-based models — like Netherlands-based Diabeter™ and NOK — is a focus for the coming year.
Operational Excellence Fuels Future Investments
Adding to the technology and globalization efforts underway, Executive Vice President and Chief Financial Officer Karen Parkhill described an emphasis on execution and operational rigor that the company expects to deliver shareholder value — along with benefits to patients, providers, and payers — in the year ahead.
“The near-term benefits of new products and services are complimented by long-term opportunities to leverage the company’s size and scale,” Parkhill said. A key component of that will be functional and operational initiatives that are underway, such as enhanced functional support through shared services and capabilities. Cross-functional and cross-business partnerships are also expected to improve productivity and help identify opportunities for R & D investments.
Closing Bell: Informed Optimism
The day closed with a Q & A session and product demos. “Today we provided our investors with a full picture of the long-term trajectory of Medtronic, from our innovation pipeline, to new financial guidance, to the clarity of our vision,” said Parkhill.
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