Medtronic 2012 Annual Report Download - page 55

INFUSE bone graft, which declined 18 percent over the prior fiscal year. The decline in INFUSE bone graft
sales was primarily driven by the June 2011 articles in The Spine Journal as further described below. Partially
offsetting the negative performance in Biologics is positive performance from other biologics products,
including MAGNIFUSE and GRAFTON. Furthermore, Spinal net sales were positively affected by growth
outside the U.S., including the benefit from the joint venture with Shandong Weigao Group Medical Polymer
Company Limited (Weigao). The joint venture distributes Medtronic’s spinal products in the premium
segment and Weigao’s spinal and orthopedic products in the value and economy segments in China.
Neuromodulation net sales for fiscal year 2012 were $1.700 billion, an increase of 7 percent over the
prior fiscal year. The increase in net sales was primarily due to the growth of InterStim Therapy for
overactive bladder, urinary retention and bowel control, Synchromed II drug pumps for pain and spasticity
relief, and Activa PC and RC DBS systems for movement disorders. Additionally, the full U.S. launch of
RestoreSensor during the last week of the third quarter of fiscal year 2012 positively affected net
sales growth.
Diabetes net sales for fiscal year 2012 were $1.481 billion, an increase of 10 percent over the prior fiscal
year. The increase in net sales was led by international sales growth of 19 percent over the prior fiscal year.
The net sales growth was the result of continued demand in certain markets outside the U.S. for our Veo and
Enlite sensor. Additionally, worldwide sales of CGM systems positively affected our fiscal year 2012 net
sales growth.
Surgical Technologies net sales for fiscal year 2012 were $1.254 billion, an increase of 21 percent over
the prior fiscal year. The increase in net sales was driven by strong performance worldwide across the
portfolio of ENT, Power Systems, and Navigation product lines, as well as growth across capital equipment,
disposables, and service. Additionally, net sales for fiscal year 2012 were positively impacted by the August
2011 acquisitions of Salient and PEAK.
The Restorative Therapies Group net sales for fiscal year 2011 were $7.389 billion, an increase of
2 percent over the prior fiscal year. Foreign currency translation had a favorable impact on net sales of
approximately $8 million when compared to the prior fiscal year. The Restorative Therapies Group’s
performance was primarily a result of strong net sales in Diabetes and Surgical Technologies partially offset
by softer net sales in Spinal. The Restorative Therapies Group’s performance was negatively affected by the
continued macroeconomic downturn, increased payer scrutiny, competition, and the recent launch of notable
products. Net sales growth for fiscal year 2011 was also negatively affected by the extra selling week in the
prior fiscal year, which impacted all of the Restorative Therapies Group’s businesses.
Spinal net sales for fiscal year 2011 were $3.414 billion, a decrease of 2 percent over the prior fiscal
year. The decrease in Spinal net sales was primarily due to the decline in INFUSE bone graft sales and the
continued decrease in demand for BKP driven in part by articles on vertebroplasty in the New England
Journal of Medicine, partially offset by growth in our Solera products and Biologics, which benefited from
our acquisition of Osteotech during the third quarter of fiscal year 2011. We have also seen a decrease in the
number of Spinal procedures as certain patients are postponing elective procedures due to current
macroeconomic pressures and other factors. In addition, Spinal net sales were negatively impacted by
continued pricing pressures and a challenging reimbursement environment in many of our major markets.
These decreases were slightly offset by growth outside the U.S. including the positive impact from the joint
venture with Weigao.
Neuromodulation net sales for fiscal year 2011 were $1.592 billion, an increase of 2 percent over the
prior fiscal year. The increase in net sales was primarily due to the growth of Activa PC and RC DBS systems
for movement disorders and InterStim Therapy for overactive bladder, urinary retention, and bowel control
(certain countries outside the U.S.), partially offset by declines in pain management products.
Diabetes net sales for fiscal year 2011 were $1.347 billion, an increase of 9 percent over the prior fiscal
year. Net sales increased worldwide led by international sales growth of 13 percent over the prior fiscal
year. This was the result of continued growth for Veo in certain markets outside the U.S. In addition, the
Revel contributed to the growth in the U.S. market. We also saw an increase in CGM sales worldwide.
Surgical Technologies net sales for fiscal year 2011 were $1.036 billion, an increase of 8 percent over the
prior fiscal year. The increase in net sales was driven by strong performance worldwide across the portfolio
of ENT, Power Systems, and Navigation product lines, as well as growth across capital equipment,
disposables, and service.
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