It's time to get started. Hello everyone. I'm Ryan Weispfenning, Vice President and Head of Investor Relations at Medtronic. Thank you for joining us for our Medtronic General Manager Call series. Today marks the second episode this calendar year, and the fifth since we initiated these in late 2019. We're excited to host the second episode here of our GM Call series. We've got a full pipeline of innovative products and ongoing launches that we intend to highlight with these calls and give you an opportunity to hear from and interact with the Presidents and General Managers who are running these large businesses at Medtronic. For today's event, we're pleased to feature our Neuromodulation business, which is in our Neuroscience portfolio.
I'm going to invite each of our Neuromod Leaders to turn on their videos one by one in a moment, but for now, I'll introduce them by name and title. You can see their pictures here on the slide. Joining me today is Dave Anderson, President of Neuromodulation, Charlie Covert, who leads Pain Therapies, which addresses spinal cord stimulation, drug infusion for chronic pain and cancer pain, and drug infusion for severe spasticity. Anu Codaty, who leads Interventional Pain, which includes RF nerve ablation, balloon kyphoplasty, vertebroplasty, and RF ablation. Krissy Wright, who is serving as the interim General Manager for Brain Modulation, which includes our deep brain stimulation portfolio. Similar to prior calls, I have some prepared questions for our Neuromodulation Management Team, and then we'll have plenty of time for questions from the Sell-Side Analysts that cover Medtronic. If we go to the next slide.
If you're a Sell-Side Analyst that covers Medtronic and you intend to ask a live question during today's event, please make sure you're connected to the Zoom platform via the link in the invitation you received. If you'd like to ask a question, please click the raise hand button in the Participants panel. If you're using the mobile app, press the More button and select Raise Hand. Your lines are currently on mute, and when we call on you'll receive a request to unmute your line, which you must respond to before asking your question. Let's go to the next slide. I want to note that on today's call, we could make some comments that may be considered forward-looking statements, and actual results might differ materially from those projected in any forward-looking statement, given risks and uncertainties.
Additional information concerning factors that could cause actual results to differ is contained in our periodic reports and other filings that we make with the SEC. We do not undertake to update any forward-looking statement. I encourage you to go back and read the slide. We'll be discussing certain products and indicators. Krissy Wright, Anu Codaty, and Charlie Covert, thanks for joining me today. Dave Anderson, if you could turn on your camera to join us. I'm definitely excited to highlight your business, given the increased focus we're seeing on this market and our enhanced competitive position. Before we dive into the business, though, Dave Anderson, perhaps you could share how long you've been at Medtronic and what roles you've held prior to this role.
Well, thanks, Ryan. I came to Medtronic four years ago to lead our enabling technologies business and transitioned to my current role as President of Neuromodulation about 18 months ago. I began my career as an Engineer, I've been in Med Tech really for my whole career, beginning at St. Jude Medical, Abbott, and then smaller startups as well.
Great. Thanks for that introduction, Dave. Next, I'm wondering if you could start at a high level with the Neuromodulation business as a whole. I'm sure there's a few in the audience today that are less familiar with this business. Maybe you could share the size of the business, the key markets that we serve, and the disease states that we're addressing. While you're at it, to tack one more on, could you also provide some color on the neuromod market and its growth today?
Sure. The neuromodulation portfolio consists of three businesses: implantable pain therapies, which is spinal cord stimulation and targeted drug delivery; interventional pain, which includes kyphoplasty, vertebroplasty, and ablation; brain modulation, which includes DBS and laser ablation. Last fiscal year, we were at about $1.6 billion in revenue in a COVID-depressed market. As we look forward and we look at post-COVID market growth over the next few years, we see our largest businesses, spinal cord stimulation and deep brain stimulation, being mid to high single-digit growth. We see interventional pain being mid-single digit growth, but having some fast-growing segments like tumor ablation that's going to grow into double digits. Targeted drug delivery is a low single-digit growth, but it's an important therapy for our patients. It has strategic value for our customers. It's important in the continuum of care.
Great. I think that the case as is the case with many therapies at Medtronic, and yours are no different, that they're very underpenetrated. What are some of the barriers to adoption across your key markets? When you think about market development, how do you make that decision on whether or not you invest and grow established markets versus allocating resources to enter into new therapies?
Well, as you shared, we treat multiple debilitating undertreated diseases such as chronic pain, movement disorders, spasticity, epilepsy, cancer pain. As you look across them, what's the most common is that our most sizable therapies, like spinal cord stimulation, deep brain stimulation, targeted drug delivery, they're later in the care continuum, and they have fragmented care pathways, and patient awareness is low. While that's a headwind to penetration and adoption. We see some of the therapy innovations that we're bringing and have brought, like BrainSense and DBS or closed loop therapies and spinal cord stimulation, that they're going to provide more compelling value to referrers and clinicians, and then ultimately be able to generate more patient awareness as well. We're going to lock that for greater penetration. As we consider established versus new markets, we look at the addressable population.
We look at how penetrated they are, how fertile the ground is to penetrate further. As we look at that from a geographic perspective, spinal cord stimulation for failed back surgery, it's reasonably penetrated in developed geographies, but still very under-penetrated in many geographies. You look at new indications like non-surgical refractory back pain or painful diabetic neuropathy or upper limb and neck, and those are large populations that are just beginning to be served. Significant opportunity for growth in those new indications. As you look at DBS, movement disorders is under-penetrated even in developed geographies. There's significant opportunity that remains. As you look at new diseases that we could treat with neuromodulation and the broader potential of bioelectronic medicine, there's many more disease states that we can effectively treat. We're assessing that right now, which new disease areas we'll enter with the technologies that we have.
Great. Then I was thinking we could turn a little bit to your technology as well because there's an exciting story here. Can you tell us about Neuromodulation's innovation pipeline and perhaps spend some time talking about some of our recently launched products? As you do that, how has product innovation played into your strategy to capture market share, and how do you feel about Medtronic's competitive position right now to maintain and expand our share position?
We're certainly in a strong position right now with our recent launches across our portfolio, our future's even brighter as we have the promise of personalized medicine through the closed loop therapies that you'll hear more about today from Charlie and Krissy. In spinal cord stimulation, DTM is showing outstanding durable pain relief. That's been evidenced by our recent 12-month RCT publication. We've also brought that market leading platform capability to the recharge-free segment with Vanta. Spinal cord stimulation, stronger than ever before. Future's bright with closed loop. In DBS, we now have the only sensing enabled directional stimulation system in the market, and we're in clinical trials right now on making that closed loop and adaptive. As we look ahead, we see smart adaptive therapies in both DBS and SCS being a game changer for outcomes and driving even more share take.
We're gaining share across all our businesses. That's driven by our recent product launches, and we see that trend will only strengthen as we have a really robust pipeline behind us.
Thanks for that overview, Dave, and I'll have you join us again at the end for Q&A. Next I want to take a quick tour through the neuromod portfolio. Let's turn first to Brain Modulation and Krissy Wright. I see your camera's on, Krissy. Thanks for joining us today. First, Krissy, I'm wondering if you could share how long you've been at Medtronic and what roles you've held prior to your current role. Then it would be great for you to have you walk us through the Brain Mod business and the market, touching on the conditions that we treat, the market size, growth rates, and our leading product portfolio including Percept and SenSight. Then if you could share with us a little bit about the future of DBS with our ADAPT clinical study and closed loop DBS.
Realize that's a lot of questions, but hoping you can cover some of those things for us today.
Yeah. Great. Thanks, Ryan. Really happy to be with the organization today. As Ryan said, I'm Kristen Wright, and I'm actually currently the CFO for the Neuromodulation and Pelvic Health operating units, and was recently named the interim general manager for the brain mod IOU, as Mike Daly is out on a medical leave. I've been with Medtronic for about 11 years, primarily with roles in finance, both in corporate finance as well as with a number of businesses in the RTG and now Neuroscience portfolio. I had a stint through corporate development as well. Prior to Medtronic, I worked for PricewaterhouseCoopers, first in their audit practice and then in the transaction services organization focused on financial due diligence. Try to tackle your questions, Ryan, one by one. First, the deep brain stimulation is used primarily to treat movement disorder conditions.
Medtronic has the most approved indications, including Parkinson's disease, essential tremor, dystonia under an HDE, epilepsy, as well as OCD under an HDE. We're approved in all major geographies, but as Dave mentioned earlier, it's a very under-penetrated therapy. Our research tells us that less than 15% of eligible patients in the U.S., less than 10% in Western Europe, and only about 1% in China receive DBS therapies today. We estimate our global market to be approximately $700 million across all indications, and we think it's going to be growing high single digits for new implants in the next five years. We've invested heavily in the last 5 years to overhaul our overall product portfolio. Last year we launched Percept with our new INS, including BrainSense, and it's 3T MRI compatible.
This year we launched SenSight, our directional lead system, which is the only lead system on the market specifically designed for sensing. Both Percept and SenSight were launched with more than 10 years of research into sensing. Medtronic has been working for decades to understand the brain, and our BrainSense technology has been critical advancement in this pursuit. Percept and its sensing capabilities now offers clinicians a way to monitor a patient's brain activity and observe the changes with stimulation and medical therapies. They can use what they see to inform their treatment decisions. We believe strongly that BrainSense is more than just a technological widget.
It's a major paradigm shift for us in how we can treat diseases of the brain, starting with how movement disorders such as Parkinson's can be monitored and treated to create a patient-tailored approach. Lastly, with the ADAPT study, we're currently evaluating how brain sensing can be used for adaptive aDBS, in Parkinson's patients. We look at it to automatically adjust the stimulation in response to fluctuations in each patient's brain activity. Globally, all sites are currently actively screening for enrollment, and we continue to actively recruit more centers.
Great. Thanks for that overview, Krissy. I'll ask you to join us again in a little bit for Q&A. Next, let's move on to Anu Codaty. Anu leads our Interventional Pain business. Thanks for joining us today, Anu. Wondering if you could share with us how long you've been at Medtronic, and the roles you've held prior to your current role. Then tell us about the Interventional Pain business and where you're taking this business. How are you looking at both market expansion as well as strengthening our current offerings? Anu, I think you might be on mute.
I apologize.
No problem.
Good morning, everyone. I'm Anu Codaty. It's a pleasure to be with all of you. I've been in healthcare for my entire career, 22+ years. The last 10 of those have been with Medtronic. During my time here, I've held various roles in Corporate Strategy, Business Development, and Product Development. Prior to Medtronic, I was with Genentech and Bain & Company. Last year, I took on this role leading the Interventional Pain Integrated IOU. When I think about strategy, we really think of it in three buckets. First and foremost is innovation-led growth in our core vertebral compression fracture segment, taking share in balloon kyphoplasty, a therapy that we created. Advancing clinical and data-enabled innovation in our fast-growing tumor ablation segment. Finally, owning the entire pain care continuum by expanding into the high-growth early intervention segment.
One critical way in which we are getting after this strategy is by implementing a portfolio mindset into our commercial teams. Earlier this year, we combined my sales force in Interventional Pain and Charlie Covert's Spinal Cord Stimulation business under one sales leader to offer the full portfolio to treat back pain. With integrated sales management, we have brought discipline in offering the full portfolio of products and commercial solutions to pain managers and surgeons through the entire care continuum and across all care settings. This structure was also designed to position ourselves for growth in this early intervention space, which we find very exciting. Right now, we are seeing this in play as we're leveraging Vanta and our interventional portfolio, specifically RF nerve ablation within new accounts.
We are seeing our ability to offer pricing and contracting opportunities in all sites of service, particularly the lower acuity sites of care. We are seeing very strong growth in Spine Essentials. This is our ASC and office BKP product line. We created this streamlined kit by partnering with physicians to simplify the procedure without compromising on either the quality or the familiarity that they're used to while managing costs. This streamlined kit provides a product for the most commonly treated spine levels with VCF. It includes all the tools you need for a single-level BKP and contains a bone biopsy device in every kit. Further, as part of this overall portfolio strategy, our dedicated ASC sales force is trained on Accurian RF system for nerve tissue ablation, so that when they're going to ASCs, they offer the full portfolio again.
Touching upon our early interventions portfolio, we are targeting several chronic pain disease states, which have large underlying patient populations and a very high degree of unmet need. First is lumbar spinal stenosis. This has about 2.5 million patient population, degenerative disc disease with a three million addressable patient population, and sacroiliac joint dysfunction with 1.5 million patient population. Again, very large patient populations, all following a similar care continuum. Finally, aggregating with pain managers who are our current customers. Ryan, talking about how we are looking at expansion and set the OsteoCool, we really focus in the short term here on protecting our market share with enhancements like faster ablation times. We've also made investments in clinical data. One example is the OPuS One study.
This is the largest prospective study on the performance and safety of radiofrequency ablation for the treatment of palliative bone metastases to date. This data demonstrates that OsteoCool provides significant pain relief and improved quality of life in as little as three days, and a benefit that is sustained through 12 months as a palliative treatment for patients with bone metastases. We've made major investments in R&D to support the growth of this important platform, as well as in expanding our BKP portfolio. We have the best RFA system, the strongest clinical data, and leading market share. We continue to invest in developing the market to increase awareness amongst referring oncologists as well as treaters, and we feel great about our investments in this area again.
Great. Thanks, Anu, appreciate the overview of the interventional business, which I know doesn't always come up on earnings calls, so it's good to give that overview for our investors and analysts. I'll ask you to join us again for the Q&A session when that comes up here shortly. Next, let's turn to pain therapies and spinal cord stimulation. Charlie, can you please join me? Thanks for turning on your camera. I'm going to start with the same question that I asked Dave, Krissy, and Anu. Maybe if you can start with just how long you've been at Medtronic and the roles that you've held. Then give us a bit of perspective on the SCS market, including the size of the market, the growth expectations, which I know a lot of investors and analysts have been asking about.
Share with us how some of our recent product launches, like DTM, Intellis, and Vanta, are making a difference in the market. Charlie, I can't hear you either.
Ryan, can you guys hear me now? Apologize for that.
Yeah.
Well, thanks for the question. I appreciate the opportunity to connect with the group today. For those of you I haven't met, my name is Charlie Covert. I'm GM for our Implantable Pain Therapies business. I stepped in as GM in this business back in about 2016. My experience in med device dates back about 20 years, with over 15 of those with Medtronic. Prior to my current role leading pain, I held multiple roles in our cardiac surgery and cardiac rhythm businesses: cross strategy, product planning, marketing, business development, and sales. Prior to moving over to our pain business in 2016, led marketing and strategy for our pacemaker business, launching Micra, the transcatheter pacemaker, which I'm sure many of you are familiar with, and led product planning for our first Bluetooth-enabled platforms within that cardiac rhythm business as well. I hope that background helps.
Let me turn to your questions, Ryan. We got a lot of ground to cover here. I'll start with the market. In terms of the SCS market, ultimately, as Dave mentioned at the outset, we see it recovering and growing in the mid to high single digits as we anticipate several new indications for the therapy being approved and adopted, and I'm going to discuss a little bit more about those in just a moment here. The current environment is a bit more challenging, as you all know, as we've continued to navigate kind of the effect of COVID-19 on a highly elective procedure space. It has not fully recovered to the pre-pandemic levels.
While we've seen many patients who were already in the later stages of the SCS care pathway may have been treated, and likely caught up since mid-2020, we know that there's still patients out there in the early stages of the care pathway that have been delayed. We'll be continuing to work through that backlog. Looking ahead, we believe that the core indications for Failed Back Surgery Syndrome, or FBSS, and CRPS, or Complex Regional Pain Syndrome, will recover in kind of that low single-digits growth range. We see the expansion of clinical evidence to drive coverage and adoption of SCS for new indications, multiple new indications, including nonsurgical refractory back pain, upper limb and neck chronic pain, and painful diabetic neuropathy as really key drivers of growth.
As we've stated also in the past, with an opportunity, we believe a total addressable market that's over existing double the market revenue today in our current indications. As these additional indications begin to kind of pull in new patients, we believe this market's going to grow again in that mid to high single-digit range for several years. I'm going to switch a little bit to kind of our product launch space after having commented on the market. That's a bit of a longer-term view, but really what excites me now about our business is our current competitive position and a number of our recently launched technologies into the marketplace. I'll start with DTM spinal cord stimulation. This is a proprietary algorithm on our platform, the Intellis rechargeable platform, that has demonstrated superior sustained back relief compared to conventional spinal cord stimulation.
For those of you not familiar with DTM SCS, it's an algorithm that targets multiple signals at multiple anatomical targets. Just recently, in a large multi-center RCT at 12 months, DTM demonstrated superiority with 84% of patients with chronic back pain treated with DTM SCS reporting greater than 50% pain relief, and that's compared to 51% of patients who were treated with conventional spinal cord stimulation. Those trial results were first announced back last October, but have just recently also been published in the peer-reviewed journal, Pain Practice. Beyond the evidence, we continue to receive really positive feedback from our clinicians and customers and their patients on DTM SCS, and we are taking share from our competitors in the market, which again, we're proud of and the progress we've been able to see in the adoption of the therapy here.
Moving beyond our rechargeable market into our recharge-free segment, the spinal cord stimulation market. This summer, we just recently launched Vanta, which is our high-performance, recharge-free implantable neurostimulator with a device life that can be optimized up to 11 years. Now, historically, Medtronic, as you may know, has been a low single-digit player in the recharge-free market, which accounts for about a quarter of the total spinal cord stimulation market. We obviously expect Vanta to change that. It offers a battery that lasts nearly twice as long as competitive devices in comparable settings. Vanta, as with Intellis, provides unmatched MRI access, and this is a key feature for clinicians, as we know that about four out of five or greater than 80% of patients are going to need an MRI within five years of their implant.
For DTM on Vanta, this is a question that comes up often. We're carrying out the DTM principles, multiplexed algorithm, coordinating multiple signals at multiple anatomical targets forward into a program we call DTM Endurance. It's specifically proposed for our recharge-free platform, Vanta. We're still early in our evidence development for DTM Endurance, but the evidence we have so far is encouraging. It suggests that patients can maintain pain relief and satisfaction while benefiting from a reduction in energy usage, which is really important on a recharge-free platform. We look forward to sharing more about this in the coming quarters, Ryan.
Yeah. Thanks, Charlie. That's exciting. I was also thinking about your pipeline. I know investors are interested in our next generation SCS system using closed loop, which uses ECAPS. I was wondering if you can give us an update on that program as well as the three indication expansion trials that you touched on earlier. Maybe you can update us on where those trials stand.
Yeah, sure. Thanks. Well, there's no doubt that this space has advanced considerably in the last several years. We've not done this in a way, Ryan, that really looks at the body's response, and that's what our next generation closed loop technologies will help us do. We look at personalized and real-time response to stimulation. We adjust the therapy as needed. It's built around ECAPS, which you referenced, which stands for Evoked Compound Action Potentials, and this is a measure of neural response to stimulation. One of the ways I've tried to describe it to others in the past, a simplistic way to think about it would be like an adaptive cruise control feature in your car.
You set your speed, or in the case of SCS therapy, a preferred dose, and we automatically maintain and adjust the dose, like your car would maintain a safe distance and optimal speed. We really believe this is going to be a disruptive leap forward in this space, especially considering our unique approach where we expect to deliver contemporary therapy, like DTM, in a closed loop fashion. Also, we plan to carry forward the cutting-edge proven technology of the Intellis platform. As many of you already know, this includes the smallest INS on the market, our OverDrive battery technology, SureScan MRI, and Snapshot objective reporting. When we put these aspects together, we see our next generation SCS system as really unmatched in the market.
We're tracking, as we've talked about in the past, to an FDA submission here before the end of the calendar year, and we'll be providing more updates on that into the future. On the indication expansion topic, this again, as I outlined at the outset, Dave mentioned, this really represents the future growth for this space. We're at various stages of clinical evidence for each of the three emerging indications that we're studying, and I'll make a couple comments on each of those. For nonsurgical refractory back pain, there are two studies underway right now, one in the U.S. and one in Europe. The studies have distinct endpoints. Each is required differently in the respective markets. We anticipate pivotal data available next calendar year in 2022. Today, nonsurgical refractory back pain is roughly a $110 million market, and we estimate the TAM to be about $1 billion.
It's a significant opportunity for us. Regarding upper limb and neck pain, feasibility study work is currently underway, where we're evaluating the effectiveness of DTM spinal cord stimulation in this population. We believe that this patient population could really benefit from our next generation closed loop therapy as well. You think about it, given the narrower space kind of in the cervical spinal canal, these patients are known to have a higher degree of positional sensitivity, potentially accentuating the benefit that they could receive from a really responsive closed loop system, like the one we're implementing through ECAPS. One or more studies will follow, but right now we're currently in feasibility study phase on this work. Finally, on painful diabetic neuropathy, we're currently planning a study in this patient population with the benefit of our latest therapy advancements.
We anticipate beginning enrollment in that study in calendar year 2022. It's about a $70 million market we estimate today, and we would put this TAM just shy of about $2 billion.
Okay, great. Thanks, Charlie. All really big opportunities for Medtronic. I'll ask you to join me soon for Q&A. Before we do that, I want to circle back to Dave. Dave, if you could turn on your camera. I know these are really exciting times for Medtronic neuromodulation with a number of successful products in multiple growing markets. You're taking share, and you have a very robust pipeline. Just wondering, though, as we close out here, what do you think is most underappreciated or least understood as you think about the future of neuromodulation?
Thanks, Ryan. Appreciate the opportunity to kind of wrap it with a perspective there. First, while more and more investors are starting to notice, I think many may not fully appreciate the turnaround that this business is undergoing. After years of losing share, we made significant investments in these businesses, and you've heard today about all the technology that we've recently brought to market. This innovation has transformed us from being a perennial share donor to a business that's growing above market and poised to do so for many years to come with our robust pipeline. That's to me, first and foremost, that's today. Our trajectory has shifted, and we see that accelerating. As we look ahead into the future, I want to highlight what I see as really two critical areas to transformation and growth.
The first you've heard about through Charlie and Krissy, and I've mentioned it, but personalized medicine that will be achieved through closed loop therapies. What I want to step back is the foundation to all of that is sensing. It's really difficult to sense brain and spine signals. We're sensing something that's a million times smaller than the stimulation of therapy that we're delivering. We've been working on it for more than a decade, and now it's available. As we develop smart, adaptable, AI-driven algorithms that leverage that sensing, that understanding, we're truly able to deliver personalized medicine for the first time. Now, as you think about that capability and the platforms that we just talked about, and you think about different diseases that could be treated, that's the promise of bioelectronic medicine. We're assessing those diseases right now.
We look forward to sharing those new treatment opportunities in the future.
Yeah, really exciting stuff there, Dave, and very helpful. Wondering any last comments here before we go to Q&A.
Let's go to Q&A.
Okay, good. We'll turn here to Q&A. As we have the Neuromodulation team here today, I ask that you please keep your questions focused on that business. We don't intend to answer broader non-Neuromod questions today, and we're not going to provide any updates today on things like COVID impact on broader Medtronic. Please keep your questions focused on Neuromod. For the sell-side analysts that would like to ask a question, please select the Participants button and click Raise Hand. If you're using the mobile app, press the More button and select Raise Hand. Your lines are currently on mute. When you're called upon, you'll receive a request to unmute your line, which you must respond to before asking your question. We're going to try to get to as many questions as possible today.
In order to do that, we ask that you limit yourself to one question and only if necessary, a related follow-up. If you have additional questions, once you've asked your question, you can go back in queue and raise your hand again. Lastly, please be advised that this QA session is being recorded. With that, I'll pause a moment here to see the hands go up in the queue. I'll ask Krissy Wright, Anu Codaty, and Charlie Covert to join Dave Anderson and me by turning their cameras back on. I'm seeing some hands pop up. Again, if you have a question, please click the Raise Hand button in Zoom. The first question here will go to Matt Miksic at Credit Suisse. Matt?
Thanks so much. I'll stick to just one. The comments you made on the SCS market, I appreciate the color on where it can go long term and where it is today. I'm just wondering if you could maybe provide a little more cadence as to how we get there with these new indications. Is it exiting 2022 and 2023 as these indications build that you anticipate? Or maybe map out just the trajectory of growth would be super helpful. Thanks.
Thanks, Matt. Charlie, why don't you take that?
Yeah, I'll start with that, Matt. Thanks for the question. I think first, as I talked about, let's kind of capture all three of them, maybe in the context of your question. I think first, of the three, I think the timing of data around nonsurgical refractory back pain will be earliest in our cadence, Matt. That opportunity I talked about in the range of about $1 billion, I think, begins to unfold right as we release some of that data in calendar year 2022. We're going to be initiating a study then around painful diabetic neuropathy in that timeframe as well, probably closer to mid-year next year, to get initiated in that space. Over the course of the enrollment, then the follow-up, we would expect in the next couple of years, that opportunity to begin to unfold.
Then finally, as we bring our ECAPS-enabled system to market, and we begin to think about the application of that technology for a population like upper limb and neck, we will start to build evidence both around the indication, but also that technology. I think you're going to see a real steady cadence, I would say, over the next four-six years, the technology beginning next year, against each of these indication spaces. The only other comment I'll make here is that this is going to require more than clinical evidence, right? We've got a robust effort underway that we'll be initiating around ensuring that we can bring payers along on the ride for some of these indications that aren't currently covered as well. I hope that helps answer the question.
Very helpful. Thanks.
Yeah. Thanks, Matt. Let's go to the line of Danielle Antalffy at SVB Leerink. Danielle?
Hey, good afternoon everyone? Thank you so much for doing this, and thanks for taking the question. Krissy, I think this question is probably for you in the deep brain stimulation market here. You mentioned the very low penetration rates, and I guess I'm curious whether you think we're at an inflection or what it's going to take to get us to an inflection from a penetration perspective. Getting at, is it technology? It sounds like you guys have made a lot of advances there. Is that enough? Do we need more clinical data? What is the big barrier to adoption? What takes us from 15% penetration in the U.S. to whatever it should be, 30%, 50%? Pick a number.
Yeah. Thanks for the question, Danielle. Actually, it's a combination of all of them, right? I do think technology, especially Medtronic's launch of technology with sensing capabilities, helps to personalize the medicine for our patients. We have a number of clinical studies which show that when patients get DBS therapy, they improve, right? It is not a question of efficacy from the DBS therapy itself. Really, as we think about the under-penetration, it comes down to a couple just large barriers in the marketplace. One is patient acceptance. They need to get brain surgery.
We're working on ways to innovate on the procedure, make it more palatable for patients, looking at asleep DBS as an example, as well as the referral pathway can be a little bit of a headwind for us as well, and working on ways to connect the neurosurgeons with the neurologists in the communities to be able to provide education for the availability of DBS, as well as just community outreach. It's going to be a combination of all of those areas in order for us to really break down the barriers to increasing our penetration overall.
Okay. Thanks, Danielle. Next, let's go to the line of Matt Taylor at UBS. Matt?
Thanks. Can you hear me okay?
I can.
Great. Thanks, Ryan. Thanks a lot for doing this. I did have a question about the new indications. I was wondering, given you had your competitor Nevro come out with some data around PDN, for example, do you think Medtronic could actually see a pickup in its own PDN implants before you have data? Is broader acceptance in the market driving that? You think most of that will accrue to Nevro?
Go for it, Charlie.
Yeah, I think-
See you coming up.
Yeah, I'll go for it. Thanks, Matt. I think naturally, if you think about the application of our therapies against the existing indication spaces today, we do see that happen in some context. Look at nonsurgical refractory back pain today, Matt. It's not labeled, it's not indicated right now, but it does get used. There are times where that gets challenged by payers and other times where our clinicians are successful in demonstrating the case for these patients. I think we're going to see that too with painful diabetic neuropathy. Clearly, until we've got an indicated use or a label approved use for this, we won't be out there promoting that to the marketplace. There may be some natural tendency to use it for that cause.
Okay. Great. Thank you for that.
Yeah.
Thanks, Matt. Next, let's go to the line of Chris Pasquale at Guggenheim. Chris?
Thanks. Can you hear me okay?
We can.
Question for Charlie, and maybe Dave can chime in as well. I am curious why you think the SCS market has been more impacted by COVID than some other non-emergent procedure categories. What gives you confidence that the SCS market can be a mid to high single-digit grower going forward? It was a much faster growth market than that back in 2017 and 2018, and it actually declined in 2019. The trajectory pre-COVID was not really clear. Just some thoughts on that would be helpful.
I'll start, Charlie, just sharing about COVID impact, and then maybe Charlie can share a more forward-looking view on SCS. As we look at our businesses and COVID impact, we look, for example, specifically at Delta this last quarter. You can look at past waves. SCS and DBS were actually both very impacted. Our businesses like interventional balloon kyphoplasty, those are less elective. Those tended to do much better. Just to be clear, I do think SCS and DBS are examples of among the most elective, among the, let's say, most quickly deferred. We've seen that in the Delta variant as well. I just want to put it in that category. I don't think it's just DBS or just SCS. We've certainly seen it in DBS as well. Charlie, you want to speak to maybe the post-COVID forward-looking view? Yeah.
I'll just summarize it by saying, reiterating a point I made earlier about just the sheer size of the opportunity, Chris, being twice the existing revenue market that exists today, I think is going to be a motivator for pulling these patients forward for this therapy. The fact of the matter is, these patients with some of these conditions that we've highlighted that are not being treated today, continue to go untreated in this space without options. We believe that will be a significant driver for penetration of spinal cord stimulation in the future. As you know too, this market is very dynamic. The chronic pain space. Anu talked about a number of the emerging therapies too within her area as well. We believe that bringing that new innovation and that new technology to these growth opportunities will motivate even greater interest in this therapy.
I'm optimistic about the opportunity, the sheer size, and then also the technology we can bring to these markets.
Thanks.
Thanks, Chris. Next let's go to the line of Larry Biegelsen at Wells Fargo. Larry?
Hey, Ryan. You can hear me?
We can.
Good. I wanted to ask a question for Dave or Krissy on epilepsy. Curious to know how big that indication is for you guys today, what's next in the pipeline, and how are you thinking about applying the closed loop technology there? Thanks for taking the question.
Sure. I'll start and then Krissy, please add some specifics on what I share. For starters, we are looking at epilepsy from a disease perspective and see significant opportunity. Obviously, we have two later-stage therapies today with DBS and laser ablation. Again, a very undertreated, very debilitating disease state. I'd say overall, from a broad perspective, we're looking at how can we treat more effectively and how can we treat earlier in the care continuum, too. Krissy, do you want to share some of your strategic point of view on it?
Yeah. Thanks, Dave. As he mentioned, we are looking at doing a deep dive in our strategy overall, including adding some additional products to our portfolio. As we see it right now, you're probably familiar with our Visualase transaction we did a number of years ago, also focused on laser ablation for epilepsy. With the indication we got in DBS as well, we continue to see growth for that therapy as well. Because these patients are treated through a number of physicians and get passed along the way, it's a pretty complicated care continuum. We feel that it's really important for us to have a number of options for them as they work through their very complicated medical journey.
Thank you.
Thanks, Larry. Next, and I'll remind people, if you'd like to ask a question, please make sure you click the raise hand in Zoom for the sell-side analysts that cover the company. I see top of the queue here, Danielle and Antalffy. Danielle, you have another question?
I do. Thanks, Ryan. Sorry to be greedy here, guys.
No problem.
Just a question for Anu on the interventional pain space. This is a market I don't actually as well as the other two, so would love to hear a little bit more color on the competitive landscape here and how that's evolving. Then it's a multi-part question, I apologize. How much overlap is there in interventional pain versus something like spinal cord stim, for example?
Thank you, Danielle. Let me cover that in BKP therapy in the vertebral compression fracture space, our primary competition. This is a highly competitive space. Primary competitors are Stryker, J&J, Merit Medical. We still have the leading market share in this space. Stryker is our strongest competitor here. Again, we believe that with our innovation-driven portfolio, we have significantly increased our investment in R&D, that we will continue to be the leader in this space, taking share. Historically, we've donated share to Stryker. We have reversed that trend, and we see that trajectory changing. On the tumor ablation space, Merit Medical is really the key player there. That is our competitor. We still have the leading market share there. Again, it's attractive, fast-growing market. We expect other entrants, but right now, that's Merit Medical there.
In terms of your second question, in terms of overlap with Charlie Covert's business, we see overlap in two key areas. One, pain physicians, we see an increase in the number of pain physicians wanting to do kyphoplasty in the office setting. We see an overlap there. There's also overlap in the surgeons between both of these businesses, and that's what we're trying to leverage there.
Thank you.
Thanks, Danielle. Next, let's go to the line of Steve Lichtman at Oppenheimer. Steve?
Thanks. Thanks, Ryan. Can you hear me?
We can.
Okay, great. Both on the SCS and the DBS sides of the business, you talked about under-penetration worldwide. Obviously, neuromodulation is much heavier revenue mix in the U.S. than the rest of Medtronic. Can international be an outside driver versus U.S. over the next three to five years in the neuromod business? If so, how? If not, why not? Thanks.
Thanks, Steve. I'll start and then ask Charlie and Krissy to share more specifics. Simple answer is absolutely. It's an area that we're really strengthening our focus on, is what will it take in different geographies to unlock more penetration. As Krissy shared for DBS, outside the U.S., it's very under-penetrated, yet considered standard of care. For SCS, there's a few more barriers, just depending on how different geographies and cultures from a reimbursement and a perception of a therapy perspective. Maybe, Krissy, why don't you start, since it is standard of care worldwide, it's just a question of penetration, and then maybe Charlie follow with SCS.
Right. Great. Thanks. Steve , actually, for us in DBS globally, we're about 50% of our revenue comes from OUS as well, which is a little bit dissimilar than Charlie Covert or Anu Codaty's business. We absolutely see opportunity for us internationally in terms of our future growth. What we're trying to do is identify those geographies where we have the right opportunities for partnership with our clinicians, the right concentration of patient population, and the referral pathways available for us to over-invest to gain increased penetration in those markets first versus smattering our investment all over the place, and perhaps realizing lower returns for those investments. Some of the key geographies that we're focused on would be China. As you noted, we're under 1% penetrated in China.
We have large opportunity in Japan as well as Latin America, and our CEMA region actually is a strong growth driver for us in the future as well.
Yeah, a relatively consistent answer with what Krissy stated, other than the fact that we are a much larger and more dominant proportion business in our developed markets, the U.S. and Western Europe, for example, in spinal cord stimulation. Significant opportunities, Steven, outside the United States for our therapy as well. It's going to require, first and foremost, I think, an investment and a focus on therapy awareness. In a number of these markets, there's not a developed understanding of spinal cord stimulation and its applications, and similarly with targeted drug delivery as well. That's our primary focus in a number of these markets. Building evidence, if that evidence needs to be local, right? Investments in local versus global evidence, I think, are important considerations.
One of the studies that we're pursuing for example, around non-surgical refractory back pain could have some application in some of our markets outside of the U.S. and Western Europe, as we leverage there as well. Then ultimately bringing the right type of payer coverage strategies or healthcare system strategies to get these therapies covered, and then finally putting the technology into these markets as well. The pipeline that we talked about, the strength of that pipeline, making sure we can pull that through to these geographies. It's an incredible body of work there, but a significant opportunity as both Dave and Krissy highlighted.
Okay. Thanks, Steve. Let's next go back to the line of Chris Pasquale at Guggenheim. Chris?
Thanks, Ryan. I had a question about how you guys think about clinical evidence in the pain space. In our conversations with clinicians, one of the topics that's come up is some skepticism about the quality of clinical data in the SCS field, how it translates into the real-world setting. As you think about differentiating your own innovative products, embarking on all these indication expansion trials, is that something that you think about? Do we need more objective measures to quantify what is an inherently subjective variable in pain?
Yeah, I'll take a stab at it, Dave. If you want to chime in, feel free to as well. We have a lot of discussions around this, Chris, but particularly around how we advance this space. I can tell you from my experience in the past, I give you an introduction. I spent a number of years in cardiac rhythm, right? You look at things like a patient with a sinus node dysfunction or an AV block. If you pass out, you get a pacemaker. They're very concrete measures. If a patient that might need a defibrillator, for example, with an ejection fraction less than 35. Pain is highly subjective, as you called out. If you think about the investments that we're making in our portfolio, ECAPS is a great example of that investment.
Another is the fact that we've got an accelerometer in both of our platforms, both Intellis and Vanta, that allows us to see patients' activity and posture, right? To begin to start to look at ways that we can correlate that patient's response or that patient's outcome to something more than a subjective measure, make it more objective. There is a promise of doing that, with a technology like ECAPS, where you're actually getting a quantitative view in our sense of that neural system, and then be able to correlate that with other measures, physiological measures, for example, to begin to objectify this. I think it's a very relevant discussion, important one. We're working toward that direction. In the near term, obviously very committed on the, I'll say, the execution, the quality of our current clinical programs as well to deliver really strong outcomes for our patients.
Dave, if you want to add anything, feel free there as well.
I think you covered it well. I think you can see our commitment to evidence is as strong as our commitment to innovation. We're absolutely working on objective measures as well, and I think that's something you'll see in real-world evidence that'll be building on top of the prospective trials, too.
Okay. Thanks, Chris. Let's go to the line of David Rescott at Truist. David?
Hey, Ryan. Can you guys hear me all right?
We can.
Great. Thanks for hosting us, and thanks for taking the questions. Within the interventional pain business, I know you talked a lot about kind of going after several chronic disease states, such as lumbar spinal stenosis, degenerative disc disease, SI joint, and just kind of wondering what the strategy here behind taking share in these segments are. Is this something where the existing portfolio that Medtronic has is positioned to take share here? Or would we need to see some more internal development or kind of M&A to really build up a portfolio position here? Thanks.
Thanks for the question, David. This is really where we expect to see a lot of innovation. We have invested in innovation in this space. The whole focus here is minimally invasive surgery, where pain physicians can do these procedures in a lower acuity setting, and surgeons can also do these procedures in lower acuity settings. This is where we have doubled down on innovation, and we will certainly be looking at tuck-in acquisitions as well.
Maybe I'll just add, David, that maybe for the basis of the question, when you first started the question was why. These are just large patient populations that are poorly treated, and we see high growth there. We see it fitting our portfolio well and fitting the patients that we think we can treat well.
All right. Thank you.
Thanks, David. Let's see. Taking a look at the queue. Are there any more questions? One last call for questions. If you have one, please click the raise hand there. We see a couple popping up. Let's go to the line of Jayson Bedford at Raymond James. Jayson?
Thanks, Ryan. Can you hear me okay?
We can.
Just a couple of clarification questions here at the end. You mentioned SCS and DBS are the two biggest revenue sources in Neuromod. Maybe just as a percentage of total, how big are these subsegments as a percentage of Neuromod revenue? My second question was just on nonsurgical refractory back pain. I think you said pivotal data in calendar 2022. Just curious, was that U.S. or European data? I think you mentioned you have two studies going.
I'll start with the first one with some simple math, so we can get precise following. It's something in the order of 35%-40% of our revenue is SCS. Probably roughly 25-ish% is DBS. Interventional will be third, and targeted drug delivery will be fourth.
That's cool. Thanks.
I'll just make a quick comment, Jayson, on the timing. The initial data we'll be sharing will be our earliest data from Europe, but we will be following with the U.S. thereafter, and we'll be able to provide a little bit more timing on that as we kind of work through completion of enrollment over the course of the next couple of months, we expect.
Charlie, will we see both U.S. and European data?
We'll be close on U.S., but I'll provide a little bit more guidance on that, maybe looking forward.
Okay. Thank you.
Okay.
Thanks, Jayson. Let's go to the line of Matt Miksic at Credit Suisse. Matt, go ahead.
Thanks. Yeah, similar kind of clarifying question. Just on ADAPT- PD, maybe if you could flesh out what the timeline looks like for that. You mentioned opening up some additional centers and enrolling. Remind us sort of what the follow-up looks like and when you think that will be in a position to be enabled on Percept.
Yeah. Thanks, Matt. As I mentioned, globally, all of our open centers are actively screening for enrollment. We expect the completion of enrollment by Q4 of FY 2022. For competitive reasons, we're not sharing any additional timelines in terms of when we would have our results at this point.
Fair enough. Thank you.
Thanks, Matt. I think we'll wrap it there. I want to thank Dave, Krissy, Anu, and Charlie for their participation in today's call. Thanks to the audience for joining us today. If you have any follow-up questions, please reach out to me or Francesco or Winn on my team. As a reminder, a replay of this call will be available on our website, investorrelations.medtronic.com, later today. We hope you'll join us for our next episode, which we're working on and hope to announce in the coming months. Thanks everyone for your continued support and interest in Medtronic, and have a great week. Bye.