Medtronic 2011 Annual Report Download - page 27

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Medtronic, Inc.
impacted by a CRDM competitor’s stop shipment in the prior
fiscal year and due to the extra selling week in the prior fiscal
year, which impacted all businesses. See more detailed discussion
of each business’s performance below.
CRDM net sales for fiscal year 2011 were $5.010 billion, a
decrease of 5 percent over the same period in the prior fiscal
year. Worldwide net sales of our defibrillation system products
declined primarily due to continued pricing pressures and a
decline in the U.S. market in the second half of fiscal year 2011.
Net sales growth for fiscal year 2011 was negatively impacted by
a CRDM competitor’s stop shipment in the prior fiscal year and
due to the extra selling week in the prior fiscal year. Pricing
pressures included negative impacts from the delay in the launch
of the Protecta SmartShock (Protecta) family of devices in the U.S.
and a shift in product mix from initial to replacement implants.
The U.S. launch of Protecta was delayed as we awaited final
resolution of the Mounds View U.S. Food and Drug Administration
(FDA) warning letter and subsequent approval, which occurred
in the fourth quarter of fiscal year 2011. Net sales of defibrillation
system products were also negatively impacted by competitor
product launches in certain international markets. The decline in
worldwide net sales of our defibrillation system products was
partially offset by net sales growth from the launch of Protecta
outside the U.S., which received Conformité Européene (CE) Mark
approval late in fiscal year 2010. Additionally, worldwide net sales
of our pacing system products declined due to continued pricing
pressures and an extra selling week in the prior fiscal year. Pricing
pressures included a negative impact from R-Zone pricing
changes in Japan and the delayed FDA approval and U.S. launch
of the Revo Magnetic Resonance Imaging (MRI) pacing system.
The decline in worldwide net sales of our defibrillation and pacing
system products was partially offset by worldwide net sales
growth of our other products primarily due to the U.S. launch of
the Arctic Front Cardiac CryoAblation Catheter system (Arctic
Front system) in the third quarter of fiscal year 2011 and strong
AF Solutions growth in certain international markets.
CardioVascular net sales for fiscal year 2011 were $3.109 billion,
an increase of 9 percent over the same period in the prior fiscal
year. The increase in CardioVascular net sales was primarily due to
growth outside the U.S. in our Coronary and Peripheral, Structural
Heart, and Endovascular businesses. The primary contributors to
net sales growth were driven by new product introductions
including the Resolute drug-eluting stent and our Integrity bare
metal stent within Coronary and Peripheral, the Endurant
Abdominal and Valiant Captivia Thoracic Stent Graft Systems
within Endovascular, as well as the recent launch in the U.S. of the
Endurant Abdominal Stent Graft, and the continued acceptance
outside the U.S. of our transcatheter valves within Structural
Heart. Additionally, the acquisitions of ATS Medical, Inc. (ATS
Medical) and Invatec S.p.A. (Invatec) contributed to the overall
growth in net sales of the CardioVascular business.
Physio-Control net sales for fiscal year 2011 were $425 million,
which is flat versus the same period in the prior fiscal year.
Physio-Control’s performance was impacted by pent-up demand
upon resuming unrestricted global shipments in the fourth
quarter of the prior fiscal year. Physio-Control’s performance
also continues to be affected by the slowdown in capital spending
by certain governments as a result of the current global economic
environment.
The Cardiac and Vascular Group net sales for fiscal year 2010
were $8.557 billion, an increase of 10 percent over the same
period in the prior fiscal year. Foreign currency translation had a
favorable impact on net sales of approximately $75 million
compared to the prior fiscal year. The Cardiac and Vascular
Group’s performance was a result of strong sales across
CardioVascular, CRDM, and Physio-Control. The Cardiac and
Vascular Group’s performance was impacted by balanced growth
across each business and geography. Net sales growth for fiscal
year 2010 also benefited from a CRDM competitor’s stop shipment
and due to the extra selling week in the first quarter, which
impacted all businesses.
CRDM net sales for fiscal year 2010 were $5.268 billion, an
increase of 5 percent over the same period in the prior fiscal
year. Worldwide net sales of our defibrillation system products
increased primarily due to net sales growth of our Vision 3D
portfolio, primarily due to strong sales of Secura implantable
cardioverter defibrillators (ICDs) and Consulta cardiac
resynchronization therapy-defibrillators (CRT-Ds), the first quarter
2010 U.S. launch of the Attain Ability left-heart lead, and a
continued shift in product mix towards CRT-Ds. Net sales growth
for fiscal year 2010 was also impacted by a CRDM competitor’s
stop shipment in the fourth quarter and due to an extra selling
week in the first quarter. The Secura ICDs and Consulta CRT-Ds
feature OptiVol Fluid Status Monitoring (OptiVol) and Conexus
wireless technology which allows for remote transfer of patient
data and enables easier communication between the implanted
device and programmer at the time of implant, during follow-up
in a clinician’s office, or remotely using a patient home monitor.
The Attain Ability left-heart lead, which became commercially
available in the U.S. in the first quarter of fiscal year 2010, offers