Medtronic 2008 Annual Report Download - page 8

Internationally, Medtronic continued to expand its footprint with further infrastructure investments that helped
support revenue growth of more than 18 percent outside the United States for the fiscal year.
In November, we completed the acquisition of Kyphon, a pioneer in the minimally invasive treatment of spine fractures.
Our merger with Kyphon allows the company to better service customers and patients by expanding our portfolio of
products to support the aging spine market.
Finally, no discussion of our performance this year would be complete without mentioning the company’s handling
of our voluntary Fidelis lead recall. While this was a difficult decision, it was the right one. Our first priority has always
been, and continues to be, patient safety. Our Mission calls on us to strive without reserve for the greatest possible
reliability and quality in our products, and to be recognized as a company dedicated to honesty, integrity and service.
With this decision, we believe we upheld this commitment. We are grateful to our physician customers for their support
and leadership in helping us ensure that patients were cared for in the best manner possible. With the Quattro lead now
in full production, patients now have access to the gold standard, as Quattro has been shown to be one of the most
reliable and high-performing leads on the market.
Medtronic’s Unique Role in Medicine
As we look to the future, Medtronic’s businesses are strong and growing. Certainly, we face challenges, but we are
confident that we are in the right markets and have the right capabilities and the right people. We also know that global
demand for healthcare has never been stronger as people are living longer, with more active lives. In fact, a baby girl
born in Japan has a 50 percent chance of living past the age of 100. As people live longer, they are dealing with multiple
chronic diseases. In the United States, one out of every five Medicare beneficiaries has five or more chronic conditions.
With our broad experience in treating chronic conditions, Medtronic will continue to play an even more critical role
in shaping the way medicine is practiced. Just as the healthcare system is placing more emphasis on chronic disease
management, we are increasingly helping patients throughout the continuum of their care, from prevention and
diagnosis to post-treatment follow up. We have evolved to become more than a medical device company and are
uniquely positioned to play a much broader role in the overall life sciences industry.
As our therapies, diagnostics, monitoring, data collection and communications technologies continue to become
more sophisticated, we have the ability to serve patients, physicians, hospitals and payers in a more integrated way—
a way that no other healthcare company can. Our capability and strength is in integrating diagnostic, therapeutic and
information technology to enable physicians to better manage patients’ diseases. We also are enabling patients to
become more involved in the management of their healthcare. For example, people with diabetes can monitor their
blood sugar levels continuously with our real-time glucose monitoring systems. This helps empower them to more
precisely modify their insulin therapy to prevent dangerous excursions that put them at significant health risk and can
increase overall healthcare costs. We are proud of our increasing role in helping patients take control.
Unfortunately, many patients who need our diagnostics and therapies still don’t have access to them. It is this unmet
need for patient access to the best technology that drove our management team at Medtronic to crystallize the
company’s Vision going forward:
Creating a world where every person suffering from chronic disease who could benefit from our diagnostic, therapeutic and
disease management solutions will get them.
These are truly exciting times, and we have much to celebrate as we continue to grow and chart new frontiers.
Our Commitment to Innovation
Innovation truly is at the core of our business. While delivering strong financial results last year, we continued to invest
in a broad range of initiatives designed to support sustained profitable growth. This last fiscal year, we invested more
than $1.2 billion, or approximately 10 percent of revenue, in research and development (R&D).
Recognizing that many of our markets are changing, we put increased emphasis this last year on directing resources
to the greatest areas of opportunity for innovation. For example, our fast-growing Diabetes and Neuromodulation
businesses both benefitted from these investments. In addition, we are investing in new therapies, such as continuous
drug infusion for hepatitis C and post-operative pain. This strategy is consistent with our historical practice of applying
our unique technology to address unmet clinical needs. The chart on pages six and seven demonstrates how Medtronic
has evolved core technologies over time and leveraged them into totally new disease areas.
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