Medtronic reported flat spine sales for the second quarter of the 2019 fiascal year, with revenue hitting $656 million.
The U.S. core spine business revenue was up in the mid-single digits, while posterior cervical spine revenue grew in the low single digits. The financial report was released within hours of Mazor shareholders voting to approve Medtronic's acquisition of the company, and during the call as transcribed by Seeking Alpha Chairman and CEO Omar Ishrak spoke about the potential for future innovation in the spinal robotic space, and why the company still has a focus on the spine field.
Here are four key quotes:
On the importance of robotics: "With respect to the robotics program, that was simply a confirmation that we're on track. It is the most important program in terms of financial commitment for Medtronic at this stage, it is one that we're very excited about, not just in the short-term, but in the long- term in the way that will address both the general surgery market and the minimally invasive market."
On the drop in Infuse sales: "This last quarter was not our best quarter in corresponding biologics, and a big driver in that was Infuse; it was down relatively to the prior year due to some customer buying patterns. However, the natural demand for Infuse is strong, mid-single digit, so I'm not concerned."
On the stagnating spine market: "The market is, from our perspective, it seems to have stabilized; it's still slower than it was a year or two ago as price declines are now offsetting procedure growth. You're getting either flat to low single-digit to growth, but it has stabilized and it's starting to inch back up a bit. But for us, we do feel we are very well-positioned to take share in this market over the next couple of quarters and years."
On robotics sales and what to expect heading into 2019: "In robotics sales, we look at every major account as kind of like a socket if you will, and the key is the robotic sale. And we're beating our expectations and we're two-times sales I think in the last quarter, two-times the sales of our competition, and that is before we've launched the Stealth edition, which is an integration of our navigation into the Mazor X, which just got approved by the FDA, and we'll be launching in January. And of those robotic sales, 70 percent were placements, meaning that the account chose to pay for them with incremental spine share over the next three to four years. So these are great leading indicators and then utilization of the robot system is up 10 percent over the last quarter."