Medtronic 2012 Annual Report Download - page 56

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Looking ahead, we expect our Restorative Therapies Group could be impacted by the following:
• Growth of the various markets and our ability to grow consistently within those markets. Our
performance in the Restorative Therapies Group has been and will continue to be affected by
continued market growth and our ability to increase or maintain our market position. The current
Restorative Therapies Group market is impacted by growth in procedural volumes partially offset
by increasing pricing pressures in certain businesses and competition.
• Market acceptance of innovative new products, including the Vertex Select product line, which
was launched in the first quarter of fiscal year 2011, and our new Solera product line. During the
fourth quarter of fiscal year 2011, we ramped up our launch of the Solera 4.75 system with a full
market release. Additionally, in the second quarter of fiscal year 2012 we had a limited launch of
Solera Sextant, our minimally invasive product, and are currently in the process of rolling out
Solera 5.5/6.0 to address the complex/deformity segment, as well as POWEREASE, a powered
instrument solution for Solera.
• Continued market penetration and differentiation with our BKP technology. Further, we anticipate
additional competitors to continue to enter the U.S. market in the future, while numerous
competitors offer alternatives in Europe.
• Market acceptance of new high pressure BKP balloons and syringes, curettes, and fixation materials
in the Spinal business. We expect a positive impact over time from the penetration of certain
international markets, such as Japan. Market growth potential in Japan will be dependent upon
additional investment and development by market participants. We launched the Xpander II
balloon in the U.S. late in the first quarter of fiscal year 2012. Additionally, we remain focused on
generating evidence to support the clinical and economic benefits for BKP.
• Expected future growth opportunities in our Biologics business, excluding INFUSE, including the
MAGNIFUSE and GRAFTON products.
• We continue to seek the U.S. FDA’s approval to market our new bone graft product, AMPLIFY
rhBMP-2 Matrix (AMPLIFY) for single-level, posterolateral spinal fusion procedures in patients
with degenerative disc disease. In the third quarter of fiscal year 2011, the U.S. FDA sent us a letter
advising that the agency was not able to approve AMPLIFY at that time without additional
information from us. In a letter dated December 2, 2011, the agency upheld its initial decision but
invited us to submit further information in support of the application. On June 22, 2012, the U.S.
FDA disapproved our revised investigational device exemption application. We remain in active
dialogue with the U.S. FDA to address these remaining issues regarding AMPLIFY.
• Spinal sales growth was negatively impacted from the June 2011 articles in The Spine Journal and
by inquiries from governmental authorities, relating to our INFUSE bone graft product. The Spine
Journal articles suggested that some physicians’ peer-reviewed studies may have underreported
complications and adverse events associated with INFUSE. These articles did not question the
integrity of the data provided by Medtronic to the U.S. FDA for product approval or the disclosure
of safety issues on the product’s Instructions for Use for approved indications. Medtronic believes
that the safety data reported to the U.S. FDA supports the safe use of INFUSE bone graft for the
approved indications. However, because questions have been raised about the peer-reviewed
literature, we announced in August 2011 that we have given a grant to Yale University to oversee
two independent, systematic reviews of all INFUSE-related clinical data. We expect results of the
reviews to be concluded in the second quarter of fiscal year 2013 and we will make all of the
INFUSE clinical data and results available to medical researchers. INFUSE bone graft global net
sales have declined 18 percent as reported for fiscal year 2012.
• Future and continued acceptance of the Restore family of pain stimulators to treat chronic pain,
including RestoreSensor, which is currently available in the U.S. and certain international markets.
RestoreSensor is a neurostimulator for chronic pain that automatically adjusts to the patients’
position changes. We fully launched this product in the U.S. the last week of the third quarter of
fiscal year 2012. Results to date indicate strong market acceptance.
• Continued and future acceptance of our current indications for Medtronic DBS Therapy for the
treatment of movement disorders, epilepsy (approved in Europe) and OCD. The DBS Therapy
portfolio includes Activa PC, our small and advanced primary cell battery, and Activa RC, a
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