Welcome, everyone. I think we are going to get started. We're at the top of the hour. Good afternoon, good evening, good morning, depending on where you're joining us from today. I'm Ryan Weistang, Vice President and Head of Investor Relations at Medtronic.
I want to thank you all for attending our Medtronic General Manager call series. We are recording today's event and the replay will be available on our website, investorrelations. Medtronic.com, shortly after the conclusion of the call today. We are excited to host the first episode in 2021 today of our GM call series. This is the 4th since we initiated these in late 2019.
We took a pause given the breadth and depth of our Investor Day last October, and we are now ready to get these reinstated. Given our robust pipeline of innovative products and ongoing launches, we thought it would be helpful to highlight some of these and give you an opportunity to hear from and interact with the presidents and general managers who are leading these new operating units. For today's event, we're pleased to feature the Cardiac Rhythm Management Operating Unit or CRMOU to use the acronym that we call this business. Joining me today is Mike Marinaro, the CRMOU President Claywood Thompson, the General Manager of our Defibrillation Solutions business, which incorporates our high powered therapies and Chris Zilmer, the General Manager of our cardiac patient therapies, which covers our low power therapies. The CRMOU sits within the cardiovascular portfolio here at Medtronic.
It addresses and treats diseases such as bradycardia, tachycardia and heart failure with some of our most recognized products such as Micra VR and Micra AV, which are our lebrous implantable pacemakers and Cohult and CHROME, our cardiac resynchronization therapy defibrillators. This O U also houses our TYRX product, which is our absorbable antibacterial envelope. One important note, while historically this business has also included cardiac ablation solutions, mechanical circulatory support and cardiac diagnostics. All three of those businesses are now separate OUs. So we won't be covering AF or LVADs or LINC on today's call.
Similar to prior calls, I have some prepared questions for Mike, Quayle and Chris, and we will also leave some time to take your questions. On that note, in anticipation of the Q and A session, I want to reiterate for the sell side analysts that cover Medtronic what was on their invitation. If you intend to ask a live question on today's call, please make sure you're connected to the Zoom platform via the link in the invitation you received. If the sell side would like to ask a question during the Q and A session, just click the raise hand button in the participants panel next to your name. And if you're using a mobile app today, press the more button and select raise hand.
Your lines are currently all on mute. And when you're called upon during the Q and A session, you'll receive a request to unmute your line and you need to respond to that before you ask the question. Next, 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 statements 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, but we do not undertake the update in the forward looking statement. I encourage you to go back and read this slide that you can see on the screen now.
Further, we will be discussing certain products and indications that are in development where safety and effectiveness has not yet been established and which has not been approved for sale by certain regulatory agencies. This includes our EVICD program and our 3rd version of Micra called Micra AR. So with that, let's introduce the team. Mike, Queli and Chris, we're thrilled to have you join us today to talk about Medtronic CRM operating unit. And to start, maybe we can do some quick introductions.
Can each of you share with us how long you've been with Medtronic and what roles you've had prior to your current role? And maybe you start with you, Mike.
Yes. Thanks, Ryan, and thanks everyone for joining us here this afternoon. We're really excited to have the opportunity to speak with you here today. And I'm pleased to be joined by Chris and Quayle because we have just such a great team with deep and varied experience. As for me, I've been at Medtronic for 21 years, first 15 of which were in the sales organization, leading the sales organization, including the U.
S. Coronary business and then the cardiac and vascular sales group before then moving into general management of our heart failure management and now the cardiac rhythm management business. So again, thanks and looking forward to the discussion today. Quayle?
Welcome everyone. My name is Quayle Thompson. I have a joint MD and Master's in Public Health. I've been with Medtronic for about 18 years. I began my career with Medtronic in Business Development in our neurologic and diabetes business.
In the cardiac and In the cardiac and vascular space, I led the clinical research function for the entire cardiac and vascular group. I've also led our marketing function for our aortic and peripheral vascular business. Prior to my current role, I led our Cardiac Resynchronization Therapy Business as General Manager and now I'm the General Manager for our Defibrillation Solutions business for high powered therapies. Thanks.
Hi, I'm Chris Zilmer. I'm an engineer by training and I've been with Medtronic about 23 years. I started in our research and development area where I helped design many of the systems that we use today that we'll be talking about today. Since then I've held leadership roles. I led the R and D organization for the cardiac rhythm and heart failure division.
I've been General Manager for our diagnostics business and our Brady and Tacky businesses. And as was pointed out, I currently lead the cardiac pacing therapies business. Happy to be here, excited to talk about the
business moving forward. Great. Thanks, Chris and Quelie and Mike. Appreciate those introductions. Before we go deeper on the deprivulation solutions business and the cardiac patient therapies business, Maybe we'll stay with you, Mike, and talk high level about CRM overall.
Can you give us a brief overview of the business? And maybe you can touch on the size of the business, the key markets that we play in, the business states we're addressing and some general facts and figures that you want to share, especially since this business CRM, it's experiencing a sort of renaissance this year?
Yes. We are experiencing Renaissance. We've turned this business to growth. And I think importantly, we're now helping to lead the growth of Medtronic and no longer a flat or a drag on the business. And it's really a result, as I mentioned, of the great team that we have and our innovation.
The market itself is about an $8,000,000,000 market or so for the core implantable space. And we roughly hold about half the market. We've been on a march to gaining market share pretty consistently here through the last 4 or 5 quarters and expect that to continue. Our business is made up of 4 businesses and so you'll hear from Chris and Quayle today, but we also as mentioned earlier have 2 other businesses, one that we call procedure innovations, which houses our highly successful TYRX franchise as well as our EPG business, our external pacemaker business. And then patient management, which has really moved to the front now during the pandemic and with the emergence of digital and telehealth.
These are critical elements of our business, but we won't be talking about those today. We'll be talking to Chris and Quayle. We're really excited about the fact that as you said, we have seen a renaissance in our business and it's really driven by specific growth strategies. A 2 pronged innovation approach to bring a constant cadence of new products in our core therapy area as well as disruptive innovation, successfully introducing disruptive innovation. We strive to have very specific strategies for each one of our global markets and we found that to be really critical.
And then now this strength in our patient management platform and digital health is becoming more and more important and it's moved from an enabler to a real differentiator for our business. And so it's positioned us well today and into the future.
Great. That's really helpful, Mike. It has been great to witness how you've translated innovation into market share gains. And that comes from this well developed strategy that you're just touching on there. Maybe I'm wondering if you could maybe go a little deeper on that and share with us your vision and strategy for CRM and touch on some of those areas in a little more detail and perhaps address not only how Medtronic is going to maintain our share position, but actually disrupt the market with innovation and gainshare.
And it'd be great if you could also address some of the hot topics that investors asked me, such as our view on the replacement headwinds and how these have turned into tailwinds for this business and how the business has fared throughout COVID and how remote monitoring, you touched on this already, but how remote monitoring has really taken hold, especially here during the pandemic?
Yes. 1st from a vision perspective, look, the vision is that this is a growth business. And while we're Medtronic's original business, we've now turned this business to growth and we'll continue to grow moving forward. I think it's important to note that the performance that we've seen now over the last several quarters is not just from our disruptive innovation, but rather from the growth strategies that I touched on briefly and I'll go a little deeper on each of those today. So first, the approach that we take towards innovation really has 2 vectors.
The first of which is to continue to bring a constant flow of new products into our core therapy areas. So that's where we operate today in our core transvenous market or core transvenous Brady and tacky markets. And in fact, over the last 2 years, we've introduced over 20 new products, I should say 3 years, over 20 new products into that space and we see that now continuing. I think notably, we've launched about 3 years ago, our new pacemaker platform called Azure. We've talked a lot in these forums about Cobalt and Chrome.
But you may have heard a little less about the new sort of adjacent technologies like our new left heart lead, attain stability quad, which has really given a share preference or our leadership and things like conduction system pacing or his bundle pacing from a core transvenous perspective. And then of course, we focus a lot on disruptive innovation and disruptive innovation is critical really for two reasons and we've experienced this with Micra. First, it's obviously a share driver for the business, but more importantly as we think about growth, it allows us to actually grow the size of the market. We're now accessing patients we may not have access before with the great data that we have and the value of the products we can drive a higher price point for these products. And so overall, we can turn the size of the markets larger than they've been and into a growth phase.
And of course, we're striving to do the same thing with EVITD, which we'll touch on more today. Next, we're very focused on what we call purposeful global growth. And what does that mean? I think it's a traditional med tech model is to take a U. S.
Strategies and products and export them around the world. And we've learned that by taking very specific approaches to each one of our markets, we're seeing disproportionate movement. So for example, in China, we're focused on market growth and product localization where we have the leading share of the local pacemaker market. In our Western Europe market, it's critical for us to have a very broad portfolio given the high variability of that market. In Australia, New Zealand, what's been a critical share driver there has been our remote and digital capabilities that's really differentiated us from the competition.
So, getting very specific about what we do there has really been a success for us. And then last, I'd say, the strategic investments in digital health and remote management capabilities. And as I mentioned at the outset here, those have traditionally been seen as enablers of our therapy. But while we're enabling the therapies, we've been developing now what we see as really large differentiator. So, we are the only company that has remote and distance programming capability.
We can do really unique things like during the in the setting of the pandemic, we've programmed pacemakers during the case in Hawaii from California. And we've had many of those instances or closer to home, we can take our people out of the care setting and they can do programming outside of the lab or outside of the sterile environment, which has been so critical. We're the only company that have apps across the entire portfolio. We have really unique tablet based interrogation capability that allows us to state that to drive efficiencies and keep people out of the care setting. And so we're able to drive more efficiencies and differentiation from this digital health leadership.
You asked me, Ryan, to touch on replacement headwinds or the replacement sort of dynamic. And replacements have been a headwind for us, so the replacement volumes have been a headwind for about the last 5 years. And they've been somewhere between 1.5% 2% drag on growth, so negative growth of 1.5% to 2%. Those have now moderated and turned neutral and we'll see those getting modestly positive here over the next 3 to 4 years. And so that's critical because it sets a solid footing.
We don't have to start the year behind, but rather we start with a solid footing from which we can grow. And then lastly, this team has fared extraordinarily well through and I think it's a real testament to the team that we have. We have a large and highly effective team and the new technologies that really bring advantages during this time.
Great. Yes, that's perfect, Mike. And it certainly will be nice over the next few years to start each year with the wind at our back as opposed to what we what you've been dealing with over the last few years with the replacement headwinds. So that's perfect. I'll come back to you, Mike, in a few minutes, but maybe we'll turn over and ask a few questions of the people that work for you, Claylee and Chris.
And maybe we'll first we'll turn over to you, Claylee. I'm wondering, Claylee, can you give us a brief maybe just start with a brief overview of the business at Yulee, Defibrillation Solutions?
Yes, sure, Ryan. So I'll start by saying that approximately every 2 minutes our defibrillation solutions business impacts the life of someone with heart failure or at risk of sudden cardiac arrest. We operate in a market that's roughly $4,000,000,000 in size and we're the clear market leader with respect to cardiac resynchronization therapy and implantable cardioverter defibrillators. We are excited about the market because we see an opportunity to outperform the competition. I think equally important, we see the opportunity to transform aspects of this market and really breathe new growth into the marketplace.
One example Mike has mentioned, segment of this market, it's a slow growth niche segment, which we estimate to be about $300,000,000 currently. Today, the segment only has one product, that's the subcutaneous ICD system. And the limitations of that system have really constrained the extravascular market. We feel with the addition of our extravascular ICD platform, we can accelerate that market to double digit growth, propelling it to about a $1,000,000,000 market in the next decade or so.
Perfect. That's great, Quailen. Maybe before we get into a little more detail on EVICD, can you tell us a little bit about cobalt and chrome devices that you've launched here over the past year? And it'd be helpful if you can describe for the audience how cobalt and chrome is differentiated from some of the other ICD platforms on the market? Sure.
I'll first take a step back and just again reemphasize something Mike mentioned earlier, which is we're committed to innovating across the entire high power space. So that includes core device technology leads, smart algorithms, digital platforms, delivery systems, accessories. And really our ability to innovate across all of these areas is part of what differentiates us from our competition. We've successfully launched new platform of ICDs and CRTs, the Cobalt and Chrome platform. And as you've heard that comes on the tail end of a successful launch of our active fixation lead, attainsibility quad for our cardiac resynchronization therapy devices.
The Cobalt and Chrome platform has really been an exciting platform to launch because we've upgraded the entire high power platform, both CRTD devices as well as ICD devices. We've seen impressive performance with respect to the Cobalt and Chrome platform, which brings the benefits of Bluetooth technology to both healthcare providers and patients. You've heard physicians can use tablet technology for distance programming of our devices and pretty uniquely patients are able to use their smartphones to interact with their devices essentially carrying remote monitors in their purses in their pockets which is pretty cool. Aspect of using consumer electronics, it really creates a platform for rapid iteration for us. The Cobalt and Chrome family of high powered devices, it's increased battery longevity by about 25% over our previous generation platform.
We deliver 40 joules of energy on all shocks. And then we've continued with our history, our legacy of smart algorithms on 2 fronts, intrinsic antitachycardia pacing as well as Triage HF. Just a highlight of note, our intrinsic ATP algorithm, it's the only ATP algorithm that customizes therapy based on real time physiologic feedback from patients. And that really enables the Cobalt XT devices in that family to terminate arrhythmias before shock is even necessary.
Thanks, Quilee. Yes, and from time to time, I get asked about our exclusive Triage HF features. And often it comes to me in the question of how does that compare to the competition's offering. I think Boston Scientific has features called HeartLogic. And so investors are wondering what's the difference between Medtronic, Triage HF and the other heart failure algorithms that are out there.
Wondering how you would answer that question?
That's a good question. So Triage HF is a smart algorithm that resides on our Carelike platform to help healthcare providers care for patients with heart failure. As an example, last week, one of our experienced centers shared that Triage HF will help them to increase the number of patients they can follow by a factor of 5 while maintaining their existing inpatient heart failure clinic operations. While the capabilities of the clinic may play a key role, Triage HF is a pretty powerful enabling technology. Triage HF because it resides on CareLink, we can analyze data from both our legacy devices as well as our new Cobalt and Chrome platform.
And this is a feature that's unique to Medtronic and it's actually part of what enables heart failure clinics to scale to the extent that you just heard previously. Triage HF enables heart failure clinics to focus earlier on patients who are highest at highest risk for hospitalization. So again, I just would just like to reiterate to go back to the fact that innovation across the core device technology, the leads, the smart algorithms, the digital platforms, delivery systems and accessories, all of that really comes together to help differentiate us from our competition and it's really translating into positive share gains in the marketplace.
Great, very helpful. And maybe we can circle back now to EVICD. It's one of the most exciting programs that I know that is in Medtronic's pipeline. And we included it at Investor Day, but I'm thinking that this audience might want to hear more about the product and the opportunity it represents. And so if it's okay with you, Quetta, I'm just going to throw out a bunch of questions that I get on EVICD and maybe you can help to answer them.
So I take questions of what is EVICD and how is it different than traditional ICDs? And how would you describe the technology and why is it important? How does it you touched on earlier that Boston Scientific has their SICD and how does our UVICD offering? How is that going to be differentiated from what's currently in the market? And why do we think it's better?
So lots of questions there I know, but wondering if you can touch on some of those.
All right. I'll take a stab at it. So if I take a step back and think about the past 30 plus years, transvenous ICDs have really been a cornerstone for treating patients at risk of sudden cardiac death. They saved countless lives and have added significant societal benefit. We see the opportunity today to really transform the procedure for both transvenous ICDs as well as the existing subcutaneous device space.
So we've attempted to approach this from a vantage point that includes both the healthcare provider perspective as well as the patient perspective. As a first key step, we want to preserve the vast future. So we're developing a technology and a procedure that physicians can perform without having to place a lead in the vascular space. Next, while you're in the extravascular space, we want to get as close to the heart as anatomically possible. And this is important to us because if we're in the correct anatomical location, we can minimize the energy that we require to shock a patient out of life threatening arrhythmias and we can deliver pacing which allows us to terminate arrhythmias without requiring a shock.
In addition, we can provide pacing to prevent long pauses in a person's heart rate. And these features are features that healthcare providers and patients they have access to in our current Transvenous technology. Unfortunately, the current subcutaneous ICDs don't offer these benefits because of the distance of the lead from the heart. So when we take a step back and we bring together our Medtronic EVICD, what we'll bring to the market is a device that's half the size of the current subcutaneous device, because we'll require only 40 joules or less of high energy. Because of the small size it will be much more comfortable for patients.
The device will have 2 times the longevity of the current subcutaneous device because we can leverage our existing ICD platform technology. And importantly, this will translate into fewer generator changes and procedures for patients. It will be a device that can provide pacing support and antitachycardia pacing for patients and a single device with no modification. There's not a subcutaneous device on the market that can do this. And this is extraordinarily important because we know that patient outcomes are better when we can actually avoid device shocks.
Our ADVANCE III clinical experience really shows us that patients experience about 52% fewer shocks with our ATP algorithm. So we think, our EDICD will add significant value for everyone. Patients will get the benefit of a single device, smaller device with significantly longer battery longevity that could deliver patient support and tachycardia pacing while requiring fewer procedures. Physicians will have access to an EDICD technology with fewer exclusions than the current subcu technology and equally important, the single device that we'll bring to market will be a very, elegant solution that will have no unnecessary cost from a procedural standpoint when you look at modular devices or modular systems.
Great. Thanks, Pheile. Maybe could you touch on a little bit the clinical pathway for EVICD and our clinical program that we're running for that and maybe touch on the regulatory pathway and when we might see this product on the market?
Right. Sure. I've always appreciated discipline and rigor that Medtronic applies to the clinical research programs. It's been no different for our Medtronic EVICD program. That program has been pretty remarkable because it's informed both the physician education and training as well as the development of the technology.
And to date, it includes about 5 studies evaluating around 500 patients in 20 countries, including our EDICD pivotal study, which is a prospective non randomized pre market clinical study enrolling up to 400 subjects at about 60 sites worldwide. We anticipate sharing findings from the trial at one of our major conferences in 2022 with simultaneous publication and a peer reviewed journal. As I said, we'll leverage evidence from more than 500 patients and from more than around 65 years of device follow-up experience to evolve the technology and the procedure for EVICD. Just a few things that I'd note in terms of what we've been able to learn from the program to date. 1, the development of the tools that we've done to optimize the procedure, it's translated into a safe procedure with minimal acute major complications.
2, we've demonstrated defibrillation success that's comparable to transvenous devices. And 3, we can achieve pacing support from the subcirnal space. So those are 3 great points to kind of keep in mind. The EDIC pivotal study, it's on track, it will support regulatory approval for our 1st generation device and we anticipate market entry first half calendar year 'twenty two in Europe, first half calendar year 'twenty three in the United States. So we're excited about the technology and the physicians that we speak to in the electrophysiology community are very excited about what it can mean for people at risk of sudden cardiac arrest.
Great. Thanks, Quayle. That's very helpful and we are just as excited to see EBICD come to market. So maybe next we'll turn to you, Chris, and the cardiac patient therapies business that you lead. It goes without saying that Micra, the world's smallest pacemaker, is one of Medtronic's most well known products.
It's also one of the best examples we have of innovation and disruption at Medtronic. And I'm wondering, Chris, can you start by giving the audience, especially those that might not be as familiar with Micra, an overview of the products, the market, its size, the growth and penetration that we have with Micra. And I think you may also have a Micra with you today that we can show on camera.
Yes. Thanks, Ryan. Maybe before going deep on Micra, it'd be helpful just to have a high level overview of the pacing market. Currently, the worldwide pacing market is about a $3,300,000,000 market that's been growing in the low single digits. And there are 2 primary technologies within this market.
Our core transvenous technology, which has been around for decades, this involves placing leads or thin wires inside the heart and then connecting them up to a separate generator that is implanted in the chest. We have market leading technology here with unique and differentiated leads. Mike mentioned earlier about His bundle pacing or conduction system pacing. Our leads and delivery systems are unique in this space and have really been driving preference and share for our transvenous space for the last several quarters. And we also have the only Bluetooth enabled pacemakers that work with patients' cell phones.
So our conduction system pacing and our Bluetooth enabled devices really have been driving share for the Transvenous segment for us. The other technology segment, which I know everyone's interested in was introduced in 2015 with our Micra leadless pacemaker. With Micra, we have compressed the pacemaker to the size of a vitamin and remove the leads and made itself contained completely within the heart. We've studied this technology extensively and have shown us 63% reduction in complications for patients compared with traditional transvenous technology. It's been pretty explosive in the marketplace.
The leadless pacemaker segment last year will have done around $350,000,000 and it grew almost 60% in the past year. And our current projections are that this will become a $2,000,000,000 segment by 2,030.
Wow, Chris, that's incredible growth, especially when you consider that, that growth that you've had here over the last year was during a pandemic. And it really speaks to the adoption of Micron. And I'm wondering maybe next if you could help our audience understand a little bit about the technology behind Micra. I'm thinking specifically about the fixation system, the electronics, the battery and why these are so important to the Micra platform?
Sure. Well, I mean the technology behind Micra is incredibly impressive. The electronics and battery reduced in size by almost 10x when compared to our traditional transvenous pacemakers and it's pretty remarkable that this tiny little device can provide continuous therapy for patients for over a decade. And you specifically mentioned fixation, Ryan, and that's one of the most important aspects of a leadless pacemaker. The heart is constantly in motion and one of the biggest concerns with leadless pacemakers would be if the device were to dislodge from the heart tissue.
The micro device has been designed with these proprietary times, I don't know if you can see them very well here in the video, that do really an exceptional job of keeping the device fixated to the heart. In the Micra IDE study, we didn't see any dislodgements. And in the Micra post approval study, we saw one dislodgement out of more than 1800 patients. Our proprietary fixation method is one of the most differentiated parts of the technology and we're really proud of how well it has performed in the market.
Yes, that's very helpful. And Chris, earlier you mentioned that the 60% or almost 60% growth that we've had the past year. And maybe you can talk a little bit about what's driven that performance. And the question I get all the time, is that growth sustainable?
Sure. So the exceptional growth we had last year was really driven by the Micro AV product in the U. S. And Europe. And this product adds new capabilities that meaningfully expands the number of patients that Micra can serve.
We now have 2 products in the leadless pacing segment with MicraVR and MicraAV. MicraVR serves the single chamber segment which treats patients who have AV block along with atrial fibrillation and those patients make up roughly about 15% of the overall pacing market. Micra AV is used to treat patients with AV block that don't have atrial fibrillation and this market is about 2x the size of the microVR market. The key differences between Micra VR and Micra AV is the novel sensor technology and sophisticated algorithms that were added into the Micro AV device that allows the device to send signals in the atrium and then to synchronize this with the pacing that is delivered in the ventricle. Without this innovation, you would have had to have 2 devices in the heart to achieve AV synchrony, one located in the atrium and one located in the ventricle.
Our solution allows for a single leadless device to serve this market segment. This fits with our strategy of minimizing the amount of hardware in the heart, which supports our goals of being less invasive, which we believe is ultimately better for patients. Now as far as the sustainability question goes, obviously with the strong growth last year, the comparables are going to get tougher moving forward. But we're still expecting to see really strong double digit growth going into next year. And that growth is going to be driven by continued penetration in the U.
S. And Europe, but also we'll be launching Micra AV in Australia and Japan next fiscal year and potentially in China towards the latter part of the fiscal year where MicroVR has actually done really well since we launched it back in January. And we're also currently working on a third version of Micra called Micra AR and this device is going to reside in the atrium, which is the upper chamber of the heart and will offer pacing for patients who have sinus node dysfunction. This system requires a completely new delivery approach and unique way of fixing the device And we're still a few years away from being in the market with the solution. So we're not providing timelines just yet.
But I did want to share this because it's a really high priority program for us that we believe is going to really accelerate growth once we bring it to the market.
Thanks, Chris. That's really helpful. And maybe we'll wrap up this micro section by just having to address our competitive position when it comes to legal spacing. I know we believe we have a long runway, but maybe you can help the audience understand why this is the case.
Sure. Well, I mean the biggest advantage we're going to have is by the time our competitors get approval and enter the market, we will have had somewhere around 175,000 implants of the micro technology. We will have clinically studied and reported on more than 17,000 patients by the time they're in the market. And we will upset an extremely high bar with the performance of our products that we've proven with clinical evidence. It's also important for people to note that when our competitors enter the market in a couple of years, they're going to be entering into the single chamber market or the VR segment that I described earlier, which makes up about 15% of the market and is about half the size of the market that we're serving with Micra AV.
Great. Thanks, Chris. That's very helpful. It's great to see Puneet that we've built in this important market. So now I'd like to come back to you, Mike, if we could, and maybe take it up just a level here.
As many people know, Medtronic has implemented a new operating model, and you're one of our 20 OD Presidents. So I'm wondering if you could comment on our new operating model. We get asked a lot how it's going and investors are wondering what kind of difference it's making and if it's making a difference and so how. Given your years of experience at Medtronic and working under our old group model and now working under the CRM operating unit model, just wondering what's changed and how are things going?
Yes. First, I'd say it's important to note that we move through this pretty efficiently and the org is settled and now has been for more than a quarter. I think the obvious benefit here is focus. You highlighted earlier that cardiac rhythm and heart failure management, our business also included our diagnostics business as well as our circulatory support business and at one point our AF solutions business. And now that those are separate OUs, which will allow them to focus more, really allows us to put a finer point on our work around the rhythm management space.
And as you heard, we have a lot going on. And these are just a few of the things that we're working on that we can really press further on. So that's the first one. Secondly, I'd say, from a region perspective, we now have a very direct connection to the region. We don't have to share attention to the region with the region leaders, the Medtronic region leaders or the group level region leaders that kind of work through and give many different perspectives.
But we're directly connected. They report to us and we work together to build strategies for the market. And so it's really taken out just a lot of that extra work. The last thing I'd say is, we've by way of removing this group layer, we are far more nimble than we were just 6 months ago. Because when we have a team with the experience like the one that we have, we really have the ability to go and make decisions on our own own and move more quickly to keep the business forward and stay focused on what's important, which is the customer and then work backwards into the company versus perhaps where we were before, which was splitting our time between considering what we had to work through at the group level and then the customer.
So, it's been a material difference I think for me and for our team and we're just starting to pick up steam in terms of the benefit. I'd also say that at the same time, we are doing the work to make sure we capture the leverage where it exists at our scale. And so that's in areas like R and D. So our R and D organization still works with the diagnostics business because there's common sort of technologies there. And then of course in operations where we have common platforms and we gain a lot of efficiency by working through the common sites.
But overall, I'm very pleased and I'd say we're just picking up steam with this new model.
Great. Thanks, Mike. That's very helpful. Maybe before we get to Q and A, because actually we have about 20 minutes left, but before we do that, any key thoughts, Mike, that you'd like to leave the audience with today?
Yes, I would just like to restate that CRM has turned into a growth business for Medtronic as evidenced by our performance here over the last several quarters. We're growing above the rate of the market. We're growing well compared to our peer group in this environment. And we anticipate that that will continue now for the next several years. And it's really growth because of our focus strategy around innovation as we talked about innovating across our portfolio and disrupting.
It's around our purposeful strategies in global markets to get very specific about what's required. And then it's focused that we've had on our digital health capabilities and remote patient management, which has turned into a differentiator for Medtronic and is going to be ever more critical moving forward as telehealth becomes more present. And then of course, again, we touched a little bit again on the replacement dynamic. And so that is no longer a headwind for us and that gives us a steady foundation from which to grow. So we're really excited about what we're doing here.
I think most importantly, because we've been able to execute and are delivering results in the marketplace.
Perfect. That's really helpful, Mike. And as this audience knows, we're focused on accelerating growth at Medtronic. And it's clear from today that their business is no exception when it comes to that. So I'm sure there are people online that would like to ask you all some questions as well.
As a reminder, for the sell side analysts that would like to ask a question, please select the participants button and click the raise hand button. If you're using the mobile app, press the More button and select Raise Hand. Your lines are currently on mute. When we call upon you, 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 of you as possible today.
And so in order to do that, I do ask that you limit yourself to one question and only if necessary related follow-up. And time permitting, we'll have a second round of questions after everyone has been allowed to ask their first question. And as I mentioned earlier, please limit the focus of your questions today to the CRM business. We have them on the line today. And keep in mind, as Mike mentioned and I mentioned earlier, that CRM does not include AF cardiac diagnostics or our LDAD product lines.
Lastly, please be advised that this Q and A session is being recorded. With that, we'll pause now for a moment to assemble the queue. And for the sell side analysts, please click the raise hand button and I will ask let's see. Let's go to Matt Miksic from Credit Suisse. Matt, are you there?
Hey, hi. Can you hear me?
We can. Terrific.
Thanks so much for taking the question. So a question on sort of the Micra launch and growth. And if I could just to a related question on TYRX, even though that wasn't a focus of the call. So on Micra, given the growth trajectory, could you talk a little bit about the investment or the logistics that you need to do to complete additional training of centers or maybe talk about how much of that was done effectively with MicroVR and laying the groundwork for the current launch? And then the follow-up I'll ask now is just on TYRX, not to get off track, but love to hear how that is affecting your business maybe in terms of penetration or pull through or what you'd say the effect has been so far given the focus over the past couple of years?
So Chris, I'll throw it to you for the micro question and then I'll come back to me for the TYRX question.
All right. Sounds good. So regarding the launch, so we have roughly around in the United States, I'll talk about we have around 900 accounts what MicroVR had trained that we were working through. And as of about right now, Micro AV AV has penetrated those 900 accounts. And now we're in the process of starting to train new centers, which this will be an evolution that we will continue to invest in getting new accounts and new physicians trained on being able to do the micro procedure and we anticipate that we'll continue to train and get up say another 100 accounts or up to 200 accounts next year is the way we're thinking about that.
The good news is the procedure between MicroVR and Micro AV is roughly the same procedure. There's some differences in how the devices are programmed. So some additional training for MicraAV on how to program and follow those patients. But the procedure training is basically identical, which really gives us a lot of synergies as we move forward and roll the cell.
Terrific. Thanks.
And then just a comment on TYRX. TYRX continues to be on a tear. I mean, TYRX is growing significantly driven by the largest data set that we've ever collected with the rapid data 7,000 device patients. And we're seeing continued penetration deeper into our population and then also into competitive devices. It's a bit hard to pull apart how much pull through we're getting there.
But the way we think about it is together with our core portfolio, the innovation that we drive across the entire core portfolio now drive share preference and we've seen an increase in share across the portfolio. So we're pleased with TYRX and we see continued significant growth ahead.
Super helpful. Thanks.
Thanks, Matt. Next, let's go to the line of Josh Jennings from Cowen. Josh?
Hi. Thanks a lot, Ryan, and thanks for the team for doing this. Mike, maybe just to ask a question to start off, just you mentioned CRM is back in growth phase and referenced some pretty nice tailwinds behind you now. Should we think about CRM being accretive or dilutive to corporate wide long range plan target of 5% organic growth for Medtronic as a whole? D.
Moriarty:] So, I'd say that our target is to grow in the low to mid single digits. And so, I'd say, if you look at this from a historical perspective, that would make us accretive to historical performance. I think as the company lands in that range, that's how we're thinking about it. And so it's essentially it's a tailwind of sorts for the company.
That makes sense. Thank you. And then for Doctor. Thompson, just on the X ICD, sounds like you've cleared a lot of hurdles. You've proven you can shock, you've proven you can pace, including any tachycardia pacing, data is accruing.
I was wondering if you could just help us think through the procedure and the risks, the learning curve, training, etcetera, and just the specific risk of having a lead in the extracardiac space or within the underneath the pericardium or is it outside the pericardium and the infection risk there with ALLETE in that space? Thanks so much for taking the questions.
Yes. So we've refined the procedure over the first three acute studies that we've done and then we've got a chronic study as well. So we've gotten the acute complications down to they're minimal, not a concern at all. And then just to clarify that we're in the sub sternal space, which is essentially filled with no blood vessels, it's just connective tissue. And a part of the acute phase that we've done is really to kind of refine the procedure.
So we refine the procedure working with really surgeons so that we could kind of get familiar with the space, understand the space. And then the initial phases of our trial, what we've required is that the electrophysiologist do get them up the learning curve and to get familiar with the space. So the initial results from again the acute studies that we've done and the initial chronic study have been very positive from a safety perspective. We don't have any concerns with the device and the major adverse events out to 6 months as well. So, so far so good and we're pleased with the way things are tracking from a procedural standpoint.
We do anticipate the training to be it's important, it'll be equally rigorous. We've required heavy training before implanting in the trial and then we'll continue that as we launch the device in the future.
Okay. Thanks, Josh. Next, let's go to the line of Robbie Marcus at JPMorgan. Robbie?
Yes. Great. Thanks for doing this. It's really helpful. I was hoping you could talk about market growth in CRM.
It's clear that you're taking share in the short term, but really just trying to get a better sense of how you think about market growth over the next several years and how durable you think your competitive advantage is over that timeframe? Thanks.
So we see the market depending on the therapy area somewhere in that 0.5% to 2% growth, large. However, as I just described, our strategy to go move into faster moving segments of the market, like leadless pacemakers, for example, allows us to accelerate our what we see is our effective market growth rate higher than that. And we also see that with the extravas gel or IPD to get into this segment that has been established, but now has slowed, we believe with the capability of this device, we can also accelerate that. So both of those vectors and others that we're working on will take us from this market growth rate that we've seen now for some time and accelerate the growth rate beyond that, which is really a critical driver for us. It's not just share, but it's also market growth.
In terms of durability, the durability of that runway, I think is sound. We see a very long runway with our leadless pacing franchise that continue to expand into a much larger portion of the population. And then as Quali described, we will be launching into the extravascular segment here over the next 2 years or so and then growing from there. And so we see this sort of incremental growth above the market really starting to accelerate now and then continuing through these product launches into the next several years. And so it's pretty exciting from a market perspective, not just because of the share that we've been able to take.
Thanks, Robbie. Next, let's go to the line of Matt O'Brien from Piper Sandler Companies. Matt,
go ahead.
Question. I guess, I don't want to be lobbing in hand grenades here late on a Friday, but there was a heart rhythm article that was out about a month ago on Micra. The incidence rate wasn't anything really all that concerning kind of in line with the rest of your products. But the mortality rates were a little bit higher, especially versus the comparator arm, not the best clinical study I've ever seen in the world. I'm just wondering if you've seen any kind of response to that article, anything in terms of physicians being a little bit more leery about Micra in response to that article?
Thank you.
Go ahead, Chris, you take it.
Yes, I think I can take that one, Mike. A couple of things that would be important, you're talking about the Doctor. Hauser paper in heart rhythm. A couple of things, when you're doing comparables using the mod database, it's pretty well known not to compare across technologies with MOD and that gives you some confusing data. But Doctor.
Reynolds actually created a really nice editorial that I'd recommend people read that really goes through the data in really good detail, not just the mod data, but all the clinical trials that we've done and showcases that in a more realistic light. And then as regarding your question about what's the feedback that we've had from customers, it's actually been pretty quiet. And we think it's largely been pretty quiet because of the editorial that Doctor. Reynolds wrote about that. So hopefully that answers your question.
Absolutely. Thank you.
Thanks, Matt. Next, let's go to the line of Kevin Farshchi from Wells Fargo Securities. Kevin, please go ahead.
Hey, everyone. Thanks for taking the question. So my question is just on this theme of disruptive technology. There's 2 new companies in high power and low power that are going after kind of this theme. On the high side, one company is combining an ICD with cardiac contractility modulation to improve symptoms and potentially outcomes.
And on the low power side, another company is combining cardiac neuromodulation with a pacemaker to reduce hypertension. So the question is, what is Medtronic's view of each of these technologies? And would you pursue or have an internal program in each of these areas? Thanks so much.
Thanks for the question, Kevin. I can't speculate on what at this point is mostly theoretical from a efficacy and benefit perspective. What I would say is that, as we think about disruptive innovation, we are seeking the most elegant solutions
possible.
Meaning, we can get to a singular device that minimizes risk for patients that allows us to bring maximum value to the marketplace. That's our approach. And so we're doing that with Micra AV, it's essentially a dual chamber pacemaker, but we're doing it with a single device. And we're planning as Qualia to strive to do it with extravascular ICD as well to say, how do we put the full functionality of today's devices into these disruptive therapies without having to have a bunch of technologies that are all communicating together. Now at some point, some parts of the disease state will or may require that.
But from our vantage point, we are really driving hard to say, let's make it simple and let's minimize risk and deliver most value for the healthcare system in general and we're putting that into practice by way of our technology.
Okay. Thanks, Kevin. Thank you.
Next, we'll go to the line of Anthony Petrone from Jefferies. Anthony, please go ahead. Thanks. One quick one for Mike and then follow-up for Chris on lead list. Mike, maybe can you quantify just the shift in replenishment that's going from a headwind to a tailwind, how we should think about that from a growth contribution standpoint to the overall CRM business?
Is it 100 basis points, 200 basis points and sort of how long will that last and I'll have a quick one for Chris.
Yes. So as I mentioned, I mentioned 1% to 2% negative growth. So 100 to 200 basis points has been the headwind that we've been facing. That has now moderated. We expect that to moderate this year.
And what I mean by that is essentially it turns neutral. And then it turns to a modest positive over the next couple of years, less than 100 basis points. But importantly, if you look at it on a comparable basis, 200 basis points above where we've been historically, which for us is a huge deal.
And quick follow-up for Chris on lead list. When you think about the benefit of avoiding damaged leads and having to replace damaged leads, it just seems like it would be an obvious. And so do you think the study you mentioned, 1800 patients with a very high attach rate, no dislodgements, Is that enough to keep growth at a high level for lead list? And when you think about how that's baked into pricing, are you getting a fair amount of a premium on lead list versus lead? Thanks.
Yes. I didn't catch all of it, but I think I caught the gist of what your question was about the amount of clinical evidence we have versus how much do we need to continue to drive the growth of this space. I mean, first of all, we have a great body of work in clinical evidence, but we're not done, not done by a long shot. We will start to publish some clinical evidence later this year that will be one of the biggest, probably the biggest pacemaker trial ever done or coverage with evidence with Micra that compares all leadless pacemakers with their transvenous counterparts. And it's going to be north of 10,000 patients in that trial.
And that will come out, but and we will have continued clinical evidence that we will drive with Micra new studies that will come out in the coming years. So we're not done with that. And then from a pricing standpoint, in the we have some geographies that have differentiated pricing for Micra and we are doing really well with that right now. The United States and Japan really have differential reimbursement that's broad coverage and we're not having a lot of pushback. In regions such as Europe, we have differential reimbursement for more of niche spaces of Micra, patients that are high infection risk, dialysis patients, things like that, where we have the differential reimbursement.
And we'll continue to bring forward clinical evidence to broaden that reimbursement for more patients for countries in Europe as well. Hopefully, I got the gist of your question.
Very helpful. Thank you.
Hi, Anthony. I think we've got time for one more question. So we will go to the line of Joanne Wuensch from Citigroup. Joanne?
Good afternoon, and thank you for doing this and thanks for taking the questions. During the time, I'll just ask both of them right at front. The first one has to do with the geographic mix as we think about growing CRM in general, but also micro adoption and eventually the externalized could be adoption? And then the second question really has to do with the profitability of the CRM franchise, how it compares to the corporate average? Thank you.
I think I got most of the question that was Joanna was a bit garbled. I think I got most of the question that was Joanna was a bit horrible. We're having some feedback here. Okay. Let's try this again.
So Joanna, I think most of the question, the question about our growth from The question about our growth from a geographic perspective, we are seeing differential growth in emerging markets and particularly in China relative to what our historical developed markets, but are pleased to see that in our developed markets, every one of our developed markets is in fact growing. I think Chris talked a bit about, I think you asked about Micra, Chris talked a bit about where more Micra is and where it's performing well. We're seeing very strong performance in Japan with the VR device and preparing to launch the AV device. China has been a real strong adopter and continuing to drive adoption of micro. We're seeing larger adoption than anticipated in Europe, given some of the reimbursement dynamics.
And then of course, here in the U. S, it's going extraordinarily well. And then from a profitability perspective, this business remains highly profitable and operates above the corporate average. So it's a very large and important business, both from a revenue and a profitability perspective for overall Medtronic. Hopefully, I caught it all, Joanne.
I think I did or most of it.
Thanks, Joanne. Appreciate it. And with that, we'll conclude the call. Thanks to Mike, Quayle and Chris for their participation in today's call. Thank you to the audience for joining us today.
If you have any follow-up questions, please reach out to me, to Francesca DiMartino or Wynn Edson. Wynn is now fresh back from maternity leave, so you can feel free to reach out to any one of us. And as a reminder, a replay of this call will be available on our website, investorrelations. Medtronic.com, later today. We're working on our next episode of our GM call series and hope to announce it soon.
And we want to thank everyone for your continued support and interest in Medtronic and our CRM business, and we hope everyone has a great weekend. Thanks everyone. Bye bye.
Thanks everyone for joining. Really appreciate it. Thanks everyone.
Have a great weekend. Bye bye.