All
right. So good afternoon, everyone. We'll get started. I'm Ryan Weispfenning, Vice President and Head of Investor Relations at Medtronic. Thanks for coming to our cardiac and vascular Group Investor Briefing here at the Transcatheter Cardiovascular Therapeutics Conference in San Francisco.
Welcome to those joining us around the world on the webcast. And it's good to see another full room here today in San Francisco on what is, I guess, the 3rd and final leg of our North American tour this week. Yes. Thanks for all those all of you that survived that. For those that missed it, we do have replays available from our robotic assisted surgery analyst update that was in Hartford on Tuesday and our Restorative Therapies Group NASS investor briefing from yesterday in Chicago.
Those are available on our website investorrelations. Medtronic.com. Today's webcast event will also be available for replay at that same site. For today's event, I want to note that we can make some comments that may be considered forward looking statements and actual results might differ materially from those projected in any forward looking statement. 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 and we do not undertake to update any forward looking statement.
So today's event is scheduled to last about an hour. I'd like to introduce Mike Coyle, the Executive Vice President, Group President of CVG. Mike will make some introductory remarks and then introduce the rest of the team here that we have at the event today, and we'll be happy to take your questions. So Mike?
Great. Thank you, Ryan. And we have no prepared materials, so this will be all Q and A, but I thought it would be useful just to start with some introductory comments, mostly as it relates to the fact that what we or CVG is pretty much headed in the same direction we talked about at the end of Q1 on the call. So everything is very much in line with what we were discussing at that time. We expect our Q2 to essentially be in line in terms of growth with what we saw in Q1, but then we expect to see an accelerating growth profile for the business as we head into the second half of the year, principally driven by a very robust pipeline of products, which we'll talk a little bit about, but also the sort of annualization of a number of headwinds that have been kind of masking growth for the group that will be helpful in terms of our reported growth rates.
In terms of that accelerating pipeline, this meeting is important in terms of kicking off some key new product approvals. Obviously, the low risk labeling indication for TAVR as well as you saw at the end of last week, we received FDA approval for the EVOLUPRO plus which is a significant advancement on each of the size ranges within our TAVR product line in terms of both reduction of profile as well as improvement of PBL, especially in that 34 millimeter size. And Neet will be happy to take us through those differences as well. Heading into Q3, we expect a number of additional important approvals, the LINQ II product, which basically is our first wafer scale based device in the insertable loop monitor area, 5 year battery life that has Bluetooth connectivity and a number of additional sensors that will be embedded into that device for long term expansion of that segment of our business. In addition, we'll be introducing for the first new ICD high power platform that we've had in 7 years based on our Polaris chipset.
It will also have Bluetooth connectivity, significant improvement in battery life as well as a number of important therapeutic and diagnostic features, especially related to HF management and atrial fibrillation management. And then finally, we expect approval of the IMPACT Admiral device for the AV fistula indication. I think you all were able to see at the CIRSE meeting at the end of last month both the efficacy and safety data that was presented, 6 month efficacy and 1 year safety data, which basically showed very strong results on efficacy and none of the signal the safety signal that has been the concern on the paclitaxel side at 1 year. And then as we head into Q4, the Micra AV will become available in the marketplace. In fact, we will be presenting the MARVEL II data that looks at AV synchrony with that device at the American Heart Association meeting in November.
So we expect the availability of the product itself in the Q4. And obviously, that's a meaningful product for us not only this year, but even more so next year as it expands the micro participation from what essentially is 15% of the market and now allows it to participate in up to 60% of the bradycardia market. And as I mentioned on the call last at the end of Q1, we now have essentially over 65% unit share in the single chamber market here in the United States and over 80% revenue share. And so we are very anxious to see this technology expanded into what is essentially a dual chamber pacing indication. I mentioned the headwinds.
Basically, we've already annualized the accounting change from the our Hospital Solutions business for the treatment of flow through OEM products that was costing us about $10,000,000 to $12,000,000 a quarter in elevated prior year comparisons that's gone away as of the end of Q1. And of course, a very significant opportunity for us to get our prior year comparables more favorable is the LVAD annualization that takes place at the end of this quarter. So the second half of next year, we should be looking at sort of like to like comparisons from the UNOS changes that we've talked about and the share shift that occurred with the Heartbeat 3 device approval. We also see a more favorable replacement cycle coming forward. We've already begun to see that in a meaningful way in Brady this in the last two quarters, and we will now start to see that in the CRT segment, which is the largest replacement revenue driver for us.
So we are expecting that to become a neutral issue for us in FY 2021 and it should get better as we head here to the end of the year. And then finally, on the drug coated balloon side, obviously, the availability of the AVF data that we showed at SIRCE provides additional confidence that the signal that was in paclitaxel, has some countervailing facts that we can now begin to talk about. But I think probably the more important thing is that it just reinforces this consistent efficacy message that we have seen throughout all of our randomized controlled clinical studies and sets us up for additional data availability from the claims based analysis that had been done that basically reinforces our belief in the safety of paclitaxel and of course the efficacy benefits are very significant compared to standard balloons. So those are some things that you may want to ask about specific to this meeting. We obviously have the low risk approval as well as the Evolut Pro approval for discussion, but we also are doing a lot of education and training around the expansion of the training for the NCD here in the United States.
On the mitral side, we have a number of important developments relative to both the pipeline on Intrepid as well as the study design for APOLLO, which we can ask Nina to step us through. And then on the coronary side, obviously, you just saw the late breaking clinical trial presentation in regard to the ONX-one and 30 day dual antibody platelet therapy, which was very encouraging for what we believe is the most deliverable stent in the marketplace and complements the telescope guide release that we've now done for treatment in complex PCI. So we really like how we're setting up in the coronary side. And then finally, as we mentioned on the paclitaxel side, the AVF data really gives us a significant new randomized controlled data set to discuss with FDA, and we do expect that will be supportive of an approval in the timelines that we've talked about. So with that, I'm going to turn it over to you guys to ask questions.
Just in terms of who we have up here to answer those questions, obviously, the President of the Coronary and Structural Heart Business, Sean Salmon, is here as is Jason Weidman, who heads up our aortic and peripheral and venous businesses. And then within their organizations as it relates to structural heart, both the TAVR and mitral opportunities, Nina Goodhart. On the coronary side, we have Dave Moller to answer any questions. Peter Capitan is the Chief Medical Officer for both of those businesses. And then as it relates to the peripherals side of the business, we obviously, you have the opportunity to have Laura Mori with us, who is basically the Head of Clinical for Medtronic but has been really doing a lot of the heavy lifting not only for us, but for the industry in the treatment of the data analysis around paclitaxel.
And then Mark Pesina is the General Manager of that business. So we will direct your questions to the people who know best, which generally speaking will not be me. So why don't we open it up?
Okay. Yes, first question, Rick.
Rick Wise, Stifel. Mike, just there's so many questions, but just to start off with TAVR, if I could. Low risk, obviously, amazing at ACC. My sense over the last few months is maybe it didn't show the dramatic acceleration that some of us thought maybe possibly. But I really feel like I'm starting to hear anecdotally from physicians that we're really starting to see that acceleration happen.
So are you seeing it? Do you feel like something is happening? And maybe just as long as you're talking about the market, talk about some of the competitors that are coming and the role and the impact on you even with all the wonderful data, Evolut Plus and everything else. Thank you. Sure.
Well, let me actually just turn this over to Nina. Then Michelle, if you have any additional comments, you can make them as she lives and breathes
this space. Every day. So I think your comments are very well taken. And I think if you'll recall, as we've talked about low risk, we kept saying that we thought the ramp would be not quite so fast as some other people thought, but that there would be continued education about these patients, understanding of the data. We've been seeing these patients in the low risk trial and then the continued access trial.
So they've been ramping up, as we go. So I think the market is moving the way we anticipated. It would be moving. But I also think to your point, we are hearing it from physicians that they are seeing now more and more of those patients and they expect to visibility that low risk has brought, that visibility that low risk has brought that alone and that awareness is bringing more patients into that funnel as well. So I think we're going to continue to see it.
I don't think we ever expected the ramp would be quite as steep as we saw with extreme risk and high risk and even intermediate. But we know that bolus of patients is there. We're seeing them. We believe that it's still underpenetrated in terms of AS, and I think we're going to see it continue to grow. Competitive side?
On the competitive side, we're continuing to watch the market. I think we feel really good about the position that we have, especially with low risk. We think that the CorVel technology, given the superior hemodynamics that we've been talking about for quite a while, now as Mike mentioned, the introduction of Pro Plus puts us in a really good position to address this particular patient population, this younger more active patient population. I think that we continue, we're seeing some trialing as we would expect with Boston. We're watching to see the data with VERTICO.
We're going to see how that goes. But when I look at what this technology offers to patients, I feel good about where we are.
David.
David, those markets. Just back to you. The Intrepid, just can you update us on sort of the progress of the IMPALA trial when we get into transfemoral? Are we still on pace for transfemoral Intrepid actually here in the near term? And the regulatory pathway, frankly, for intrepid over time.
And then just related follow-up would be, we understand your replacement
comment that we have made an investment, a significant investment in a repair technology that we think is pretty differentiated. We're watching that closely. We're feeling good about what we're seeing. As we said then, and I'll repeat now, we're still early in that. And so we're not going to talk much about it until we have to move a little bit further along.
But we've said from the beginning that if we're going to be leaders in structural heart, which is our goal, we're going to need both a repair and a replacement technology, this whole toolbox that we've continued to talk about. And so we'll continue to keep you updated as we see a little bit more on that. In terms of replacement, I think there are a couple of things that are moving forward and we're feeling good about in the mitral space. 1 is that we have expanded that trial both to Europe and to Japan. We're anticipating seeing patients treated in Europe before the end of the calendar year.
We're waiting to see what the enrollments are going to look like for Japan, but we're excited now to take essentially what was a U. S. Trial and making that a global trial. So that's first. The second thing that we are looking at for these MAC patients and we are looking at a registry within the APOLLO trial to really study these MAK patients.
There will be more to come on that. Doctor. Leon is going to talk about that a little bit in his symposia on Saturday. So I don't want to steal a lot of his thunder, but we'll be talking about that. The 3rd piece, I'm trying to remember everything that's happening.
First demand, regulatory timing.
Yes. Thank you. Appreciate the prompts. In terms of transfemoral, I'm very, very pleased to announce that we just got approval this morning from the FDA on our early feasibility trial for transfemoral. And so we are looking at a trial of about 15 patients.
We are in the process of site selection now. We are anticipating that first patient will be treated before the end of the calendar year. I'm not going to put too much more timing around that, but very, very excited to see the fact that we're feeling good about transfemoral. We've submitted that to FDA. They've approved that early feasibility and we'll be moving forward with that.
Any sense on the TM approval for
I think we've got yes, I'm sorry regulatory approval for transdermal. So I think we've got to get through early feasibility on transdermal first, right. And so I think there's a pathway that we're going to have to follow. I think it's too early to talk about timing on that.
The valve form fit function does not change.
It's the delivery of
the rig.
So you all saw that through the whole TAVR exploration we moved from access site to access site. I'd expect it to be similar. Thank you.
Thanks guys. This is Vijay Kumar from Evercore. Mike, maybe one big picture question for you and a couple of product related questions. CVG, a couple of years ago, you guys were crushing it and now it's well below corporate. Is that Is that a 6 month to end, 12 month, 24 month to end?
And then on the product side, I think, 1, AV access, what kind of share should we be assuming just given some of the data look really good? When you think about the APOLLO trial design,
do you need to randomize this versus MitraClip or are you okay
with your trial design? Thanks. Yes. So,
basically said basically said, wipe out those headwinds that are going to get annualized between the accounting change, the LVAD issue and the issues associated with the drug coated balloon, we would have been growing at 4%. So, those things are going to annualize and become sort of out of the prior year comps. Then you get the clear view of the overlay of the new products, right? So, we would articulate market for cardiovascular to be somewhere 4% to 5%. We expect to go back to where we were in terms of being at least in that range.
And then we're obviously targeting with some of these very disruptive technologies to actually take share which would then get us back to kind of where we were. And so we have a lot of confidence about the pipelines. A little lumpier in cardiovascular because of the very long development timelines. We've also skewed our markets to highly disruptive and market creating opportunities. We haven't even talked about renal renovation getting overlaid on top of that.
So from my perspective, we're vital for that matter. So from my perspective, I have a lot of confidence about the ability for cardiovascular to be at the targeted growth rates of COVID-nineteen Corporation. Let me turn it over to maybe Mark for the AV fistula discussion. Sure.
Thanks for asking about the AV fistula data. I think the corollary is really good in the SFA actually. You've got bar lutonics BD out front by a little over a year here on the indication. But within that situation, with clinical data that certainly showed really demonstrated greater efficacy and you see at the 6 month, 22% delta between a PTA and the AVF DCB arm. I think it'll take us about 9 to 12 months to get to a place where we feel like we've got our fair share of the market again.
And I think that's the same that we saw in the SFA space.
And then for APOLLO, in terms of randomizations, we're continuing to watch the trial really closely. The trial is still enrolling. All of these mitral trials that you're all seeing are slow enrolling trials. So I think we have to reset our expectations. These are not TAVR trials.
All that being said, we're in active discussions with FDA now about what that comparator should look like. I think we have to remember it's still a transapical device and so we have to take that into consideration as well. And so we're actively in those discussions looking at what is the right comparator, should the design change and if it should, when it should. So we'll keep you posted as those discussions continue to proceed.
Okay. Let's go to our Christian.
Chris and Stuart from Barclays. I was wondering if you could just talk a little bit about Renaults and Innovation. So I guess maybe you, Sean.
That would be me.
That would be me.
That would be me
and Sean. She's working.
Tag team here. Just what how should we just think about the opportunity and some of the timelines of the data coming out? And how to expect the potential, I guess, market commercialization of this and what would be kind of also the pathway for reimbursement, assuming the data is looking good?
Yes. It's been a thank you for that question. It's been a long journey for us. I guess it's been about 9 years since we bought Ardian. And I think pretty much every company entered the market at that point.
And then HTN 3 and I think pretty much every company exited at that point. And so I give Mike and Sean a lot of credit that we're still here. We believed in it. We're still at it. And now we're close to, I think, a really exciting milestone.
So we're just a few months away. I think just a few more patients to enroll in the pivotal study, which is the off med study. And so we have some confidence that that data will be presented at ACC in March in Chicago. So that will be our pivotal data set. I think we have a clear path and understanding with the FDA in terms of how to get approval.
And so we'll submit with the off med data. We're also conducting the on med trial. So the powered on med trial that started a little later. So that's going to take a few more months to get enrolled. And so we will submit that data as well as a supplement to the FDA.
And so we think and we believe we can have approval sometime in calendar year 2021. In terms of thinking about the opportunity, I think it might be a little too early to start talking about actual revenue numbers or revenue ramp. We're a couple of years away. I think you all understand the magnitude of the opportunity with the number of hypertension patients. And you've, I think, highlighted probably the biggest potential kind of barrier to adoption or potential impetus being reimbursement.
And we're working early and hard with both private payers and CMS. Of course, the majority of the patients that we're studying are pre Medicare age and so we're working hard with them. So we understand, I think our compendium of clinical data is exactly what they're looking for. It's designed that way knowing that that's approval is not the only goal of our clinical trial program.
I think the only thing I'd add to Dave's very clear explanation is that when we get to are in hand, that's the right opportunity to help you understand how to shake it out for SITC.
So one thing I would add is, I think one of the ahas of the whole experience for renal renovation has been just how poor compliance is to medication in this space. And I think we're beginning to have the payers as well as FDA see the importance of having a therapy that actually doesn't
require patient compliance in order to be effective.
And so that I think is going to Nina, the FDA required some of the, CTs, some
of the for Nina. The FDA required some of the CT sub studies for transcatheter valves. When will you guys have some of the results for your study?
So we're waiting for the full cohort of CT scans to come in. You'll remember that we started our trial after the Edwards trial. So our anticipation right now is that we'll have those ready to present at ACC.
At ACC. Okay. Thank you.
Thanks, Robbie Marcus, JP Morgan. Evolut Pro Plus was just approved I think yesterday for 25% of the market, the 34 millimeter is your first competitive valve with the skirt. Maybe talk about how we should think about the adoption curve there and the competitiveness versus your competitor?
Yes. Nina thinks a lot about that.
So needless to say, we are extremely excited about the approval and perfect timing to come into TCT with such a strong story. We've been we're now on our 4th generation of core valve technology, so we continue to evolve based on the needs of the market. We heard pretty clearly from physicians that they like the 34 valve, but that they wanted all of the benefits of having that skirt on it on the whole range of sizes. And so what Pro Plus offers us is skirting, if you will, across all ranges and bringing the profile down of the 3 main sizes. So we anticipate seeing further adoption of that 34 millimeter bell.
We think some of what was holding it back was not having the skirt on it. It's a very strong valve for us in Europe. We're expecting that now to come forward and be a stronger valve for us in the U. S. Now as well.
Great. Maybe just on drug coated balloons. On the fiscal 1Q call, you talked about seeing an improvement in the market in July versus June before the FDA panel. Is that a trend you've continued to see throughout the fall end of summer and to fall?
Sure. Yes, just to bring everybody back. So when we saw the letter in March, right, we saw pretty much an immediate drop of almost 50% of the usage and penetration here in the U. S. Based on that FDA letter.
We did see a trend immediately following the FDA panel where new information was presented and we continue to see that trend of stabilization of that overall. And I think we communicated about a 33% overall drop in penetration. And so we have seen that stabilize and continue to stabilize here through the fall. So we anticipate more of the same as we go forward. It is geographic.
So I think we've highlighted that in Japan, we haven't seen much of an impact at all because the Japan, physicians and the MHLW have all looked at the Japan data, which doesn't show a signal. Europe was earlier in terms of a drop. They dropped earlier than the March FDA letter, of course, but then have been fairly consistent and stabilized there as well. And in the US, we saw significant improvement over the course of between March and the FDA panel, and we see that stabilization continuing.
But I would point out there's still a lot of work to be done at the account level to basically share the data as it becomes published because a lot of the things that were shown at the panel meeting have not yet gone into peer reviewed publications like the claims based analysis, which was very compelling in terms of the large end associated with it. So I don't know, Laura, if you have any comments about when we
can see something. Yes, I would agree. I think that this is a trend that's going to continue because much of the data haven't been published. They were presented at the FDA panel, not all clinicians have processed that information yet. And I would say that's true probably affecting both the European physicians as well as the U.
S. Physicians. The observational data are really compelling. So I don't think we'll see any surprises when those are published. They're going to show 100 of thousands of patients with long term follow-up and no safety signal in a very well designed analysis.
Maybe if I could just squeeze in one more. I think the last time we've seen some public sizing on the official end market was when Bard was a standalone company. What's your thoughts on how big that market can be and what you think it is today?
Yes. Great question. So I think even a number of years ago, we pegged the opportunity there around $300,000,000 worldwide. But you have to really think about what is the the opportunity there. And in the US, which is which is a big portion of that, about a third of procedures, about 30% to 33% are done in the hospital, and the rest are done in office and outpatient settings.
And so the reimbursement, the available market today is mostly done within the hospital setting. And so over time, with better data, with more somewhat limited in terms of the addressable market and the reimbursement environment is much more favorable in the hospital.
Just a follow-up on paclitaxel coated devices. You guys got some PMA approval for an updated label. I was just wondering if you're concerned that that language around that label could become a headwind in the near term once that's made public, just on websites, etcetera? And are you comfortable with 1 year of efficacy and 1 year safety gaining approval for devices going forward? Or do you think the FDA is going to require longer term safety follow-up data before approval of paclitaxico device?
I have one follow-up.
Sure. Why don't I start with the ABF approval just to hit that really quickly because I think we've stated and publicly said that the FDA has asked for not just 6 month, which is the original primary endpoint, which we reported at CIRSE, but also the 1 year data. I think it's very similar that they asked for on the Lutonix BTK device. And so I think that is the position that we're into and we have supplied that. We're right in the middle of that process right now with the FDA.
And I think, and Laura, you can comment more. But my view is that they are going to look at the safety and efficacy at 1 year as the primary determining factor at this point.
Yes. They may be interested in seeing later follow-up at later stages. But in terms of submitting for approval, we believe that the 1 year end will be suitable for the FDA.
Remember that this is a very different patient population. It's very, very sick. At 3 years, almost 50% of these people are dead, and they have 1 to 3 FDA are very interesting from the standpoint that they want
to have boilerplate class, FDA are very interesting from the standpoint that they want to have boilerplate class data in the labeling, but then they want you to supply your own device specific data on your safety and efficacy. We think this plays well for us because we have very consistent results in all of these vessel beds in multiple randomized controlled clinical studies that basically are very supportive of its safety profile over time, not just by 1 year but out to 5 years. And then obviously, it really focuses on the efficacy in terms of reduction of target lesion remasculization, which has been extremely consistent for us in the SFA position across our studies and very significant compared to the control group and the ABF data just reinforces that message in a much sicker patient.
I couldn't agree more, but just on the boilerplate language, could that become a headwind for the market?
So I can address that to some extent because I think we all of the companies have really collaborated with the FDA to try to put the standard boilerplate work together. We do anticipate that every company within the next handful of weeks will get that out in DEI views and update that. I think as you guys see that information, it won't be any different than what we've already seen from the FDA letter to practitioners here in August. So I don't think there will be any new information that will fundamentally change the perception. There's been so much, awareness of what's going on today that I don't think this is going to change the dynamic.
The dynamic is still going to be out there. There's 2 fundamental questions is you've got the consentliability discussion that everybody is talking about of how do we address that as not just industry, but the societies, the FDA, the entire stakeholders. And the second thing is really more about the definition of high risk. And so you've heard it even over last couple of days here is that, that is where the safety risk benefit discussion is being had at the physician patient level. And so that isn't going to change in my perspective based on updating the labeling because it is the same information that's already been made public.
Okay. And just one more label question on label. Just on Rick's question just about volumes post approval, sounds like they're picking up. Just wanted to hone in For TAVR. For TAVR, sorry, TAVRIS, excuse me, yes.
Thanks for that clarification. But just are we are you experiencing with the CorVel franchise, I believe franchise, your clinicians are treating low risk bicuspid patients because the label there is a precaution? And is that with is that are those cases being treated for 1 and then 2, when will we see the registry data? Is that next year at TCT? Thanks.
Do you
want to talk about bicuspid?
Yes. So we're currently doing two studies actually that inform us better about bicuspid patients. So we're also looking for those results. And currently, there are patients treated with mycospid valves, the higher risk patients. Our physicians think that they may have an advantage.
But currently, we are not allowed to promote it because we don't have done the studies yet. So but we're working on those.
This is following the intermediate. Right. So we're very confident
about that.
We anticipate the precaution to be removed as the studies are completed in the FDA FDA.
Peter, I'll just invite you to expand this a little bit. Can you talk about how where does bicuspidase show more prevalently? And where do you see
patients, what is important, you have a lot of calcium in the aortic annulus. So I think the chance of an aortic rupture with a self expendable valve is less than with a balloon expendable one. So I think that's where we have an advantage. The other thing is also the ceiling is important. So you want to prevent paravalval leakage, which we think with our Pro Plus platform, we will also address that issue.
So that's another advantage that we may have there. And then, of course, you want to, let's say, place the valve the correct annulus at the correct height of the annulus. And with the Pro Plus, you can also better address that issue as well.
And these patients are younger.
And the patients are younger. So if you look at the patient population, in the younger patient population, it's about 40% that may have bicuspid valve either a fusion of leavers or true congenital bicuspid valve. So we there's a large population that we can address with bicuspid valve when we have low risk approval and bicuspid approval.
And to cut that
to the
rabbit, yes. On average, these patients with bicuspid valve, aortic stenosis are about 10 years younger than, xenial calcific aortic stenosis. And so they're more active patients. It probably matters a lot more the hemodynamic result that's associated with the valve.
Let's go to Larry.
Thanks a lot, Larry Biegels of Wells Fargo. For Nina and Peter, just the timing of those 2 bicuspid trials, if you could just tell us those and I actually took 2 separate questions, but what's the timing?
So we've been rolling in the bicuspid trial. We are just about finished. We're I would say very, very close to final enrollment. We'll then have the follow-up. I'm trying to remember in terms of timing.
Yes. So this is U. S. Study and at the same time we're doing a study in Europe with for patients with bicuspid feldt specifically aiming at sizing methodology there. And so we also hope to complete enrollment this year.
And then so 2 TAVR questions for you Nina. 1 on market opportunities beyond low risk. How are you thinking about asymptomatic? How are you thinking about symptomatic moderate AS? And secondly, anecdotally, I've heard about some warehousing of patients ahead of the low risk approval in the U.
S. If that's the case, how will you help us think about that when you report your results? Will you kind of break out maybe a one time benefit from warehousing? Thanks for taking the questions.
Yes. So in terms of warehousing, we hear a little bit of that, but I think that physicians have been treating in the 2 low risk trials. So they've been treating these patients. They then were treating them in the CAS, in the continued access for both programs. And
so I'm
not sure just how much warehousing there has been. I think we're going to continue to watch the ramp of that and we'll see how that goes. I'm sorry, Larry, your other Yes, right. And so Larry's question for those of you who couldn't hear is how we're thinking about what the next indication expansion is going to be. And as you would imagine, we're spending a lot of time right now, now that we've gone through all the risk categories, thinking exactly around that, where do we go next and we're doing a lot of work to explore symptomatic, asymptomatic, moderate, AI, etcetera.
So we'll be coming forward shortly. We have we don't have anything specific to say yet, but we're clearly looking at where the next opportunity is going to be.
And maybe if you can add to that for asymptomatic, it's clear that if you really look at the patient carefully, a lot of those that claim to be asymptomatic are actually symptomatic. When you stress more exercise then, about 60% of those who are claimed to be asymptomatic actually symptomatic. So they should get a valve already. And then those 40%, they will become symptomatic during the course of their disease. So if you follow them closely.
So I think creating more awareness among cardiologists is already very helpful in this respect. And moderate AS, it's also hard to sometimes identify those patients. They don't have the same symptoms as patients with severe aortic stenosis. So they have symptoms that are not that distantly out and during exercise. So that's another thing that we're looking at.
So can you really find those patients and do a start a study in that group?
Joanne?
Thank you. Joanne Winch from BMO Capital Markets. Could you remind us what the market opportunity
is for
the AV Micra? Well, again, the overall pacing market is 3,000,000,000 dollars So that is essentially the current sort of market opportunity. We've been playing in 15% of the market. Now we're going to be playing in 60% of the market. And the obviously, the 3x markup relative to a transcatheter system versus a device implantable system is sort of where we're going to be playing with this generation of device with Micro AV.
Obviously, the rest of the market or at least another 30% of the market will be available to us with the 3rd generation of the Micro, which actually will have a fixation system that's targeted for the atrium so that the device can pace and sets in the atrium. Then once we have that, obviously, we can treat patients who have sinus node dysfunction and essentially we're then at 90% of the market and for the small number of patients who have both AV block and have sinus node dysfunction. We have the opportunity longer term to use 2 devices in a stage
outside of that macro things that you worry about, Brexit, med device tax, anything odd that you're sort of keeping your eye on that we probably should be aware of also? Yes.
Thank you. Thank you.
I'll ask Ryan just to comment on that. It's he obviously answers those questions generally for the corporation.
So in terms of Brexit, it's something we're watching very closely, but we don't see any potential supply disruptions at this point. It's something we're preparing for. On the med device tax, it is also something that we're watching closely. Obviously, there's bipartisan support and we get approval. It needs to happen before the end of the calendar year.
And we're watching that closely and still hopeful that something does get done before the end of the calendar year. Let's go to Steve Lichtman,
Oppenheimer. Just one for me on LVADs. Mike, You mentioned obviously the anniversary coming up. The slowdown was multifactorial. Can you give us your thoughts on market growth post the anniversary of the slowdown?
Are there reasons for optimism market can accelerate? And Andy, you can do on share to respond. Yes.
So I would characterize it this way. Before the events of the UNOS change, the market was growing in the high single digits. When the UNOS change happened, the market last quarter was growing, where it was shrinking mid single digits. So that portion of it, I would ascribe essentially to the bridge transplant penetration reduction. Obviously, we were down close to 50%, and obviously, the rest of it was all share that we ceded, which was meaningful.
That has begun to stabilize. And obviously, the ability for us now to focus the discussion on the lateral data that looks at our size advantage, the benefits of a thoracotomy placement of the device and then really just getting more data on the long term performance RV3 and our product on this trade off between stroke and pump thrombosis. We're keeping a very close eye on, especially disabling stroke rates to see if there's some trade off associated with the benefits that have come for pump thrombosis. And then obviously, we have a lot of activity of just essentially getting more effective in delivering our marketing messages into the field based on data that we have. And we've essentially changed over leadership in marketing and sales as well as the general manager itself in the business to basically drive commercial optimization of the product we have, which we feel is under
that's what we're going to
continue to drive.
Raj?
Thanks. Raj Tanaway from Jefferies. Maybe Nina, one for you on the NCD expansion or the new NCD, I should say. You guys have talked about an additional maybe 200 TAVR centers that could come online in United States. I'm curious if you're still comfortable with that number of 200.
Have you started to see some interest in new TAVR centers getting started? And then a couple of follow ups, well, maybe you can start there.
So in terms of the NCD, yes, we have started to see those sites and we are still comfortable with somewhere in that 200 range. I think we'll see some hospitals that determine that it's just too hard to new to TAVR program. This was a Medtronic sponsored program. We called the new to TAVR program. This was a Medtronic sponsored program where we invited the new to TAVR sites for a full education program on how do you actually start a TAVR program, how do you understand the clinical data, how do you understand the technology, etcetera.
We were at maximum capacity in that participating. We invited heart more people. And that gave us I think really good a really good sense people. And that gave us I think really good a really good sense that these new sites are very active and very ready to get started. And so we are absolutely seeing the high interest level in these sites.
We're seeing the recognition of the benefits that the CorVel technology offers. There's a lot of interest as you would expect in the low risk indication. And so they're also seeing the benefits of the hemodynamics that we offer. And so I think we're still feeling pretty good about that.
And the two follow ups are there's been some debate on whether those new centers would would have been centers that would have referred previously, right? So you're not really going to get that much of an expansion ultimately in the number of cases. I wonder if you have any comments on that. The second one I'll ask it now too and maybe it's what you were just alluding to but I think Mike you've commented about how you guys have designs on maybe taking a disproportionate number of the new centers that come online, you know in terms of maybe increasing your share because of getting some more of these new centers to adopt your products. Is that still the case and are you finding that that's a success thing for you as well?
So I think as we originally assumed it was going to be both, right? So it was going to be some bleeding, if you will, of the established centers and now those patients being seen in these new to TAVR centers. We also know that when we with new sites come new patients. And so when CMS put the NCD in place, one of the things they thought a lot about and we had a lot of discussions about was patient access and patients who were not being seen by some of the centers that were currently operating TAVR programs. So we do think there's going to be a significant number of new patients.
What we're also seeing and you're probably hearing about as well is capacity constraints in some of these larger centers. We've got centers who are talking to us about 6, 8, 10, 12 week backlogs. They don't have the hybrid OR rooms. They don't have the capacity in their institutions to take on some of these patients. So some of those patients now will be seen sooner in some of these new to TAVR sites.
So I think like most things it's going to be a combination and we're going to have to watch it closely. But we're absolutely seeing interest and we're seeing new patients that we don't think would have been seen before.
And just to be clear on the comment about share, differential share opportunity, when the original sites were opened, Edwards was training those sites, right? I mean they because they were the only ones with improved product in the United States. Now as these new centers open, they basically have access to both companies' technology and training opportunities. And so we would expect there to be more of a splitting in that market versus what we saw in the first centers that were brought up to speed by Edwards on their own without our presence in the labs. That's the only point I was trying to make.
Let's go to Matt
Taylor. Hi, Matt Taylor from UBS. Just for completeness, I guess I wanted to ask Mike about the CRM business in ICDs. You mentioned the replacement dynamics are going to turn in your favor. Could you help us understand the timing and magnitude of that first?
And then secondly, just the pathway for high power. What are some enhancements that you can make over the next year or 2 to move back to a stronger share gain position and remind us on the timing of some of the combination systems and other things that you've talked about longer term?
Sure. So, the implantables business, we actually have been in a good position relative to initial implant share capture. We're running high single digit growth in initial implants in the Brady side of the business. And then on a high power side, it's roughly flat, slight increase, low single digit year over year growth in initial implants in a market that we would say is down 2% to 3%. So we actually do quite well on the initial implants just based on the offerings that we have today.
The opportunity that we see going forward on the high power side that we now will be able to move to getting the patient more interactive with the management of their disease via the Bluetooth connectivity that we have for the device. Some improvements in battery longevity which obviously are well received in our customer base. But probably most importantly, we've been making significant advancements in terms of sort of the algorithms within our devices to be purposeful in managing atrial fibrillation monitoring as well as therapy and that, you know, the ability to use the reactive ATP feature to actually continuously monitor the atrial fibrillation rhythm. And then when we see that it is slowed to a certain degree, we can actually turn on ATP and actually convert the patient out. And I know this firsthand because my mother has one of these devices and I was able to actually look at her that this actually happened in her as a patient on the Brady side.
Those will be ported over onto the TACUSY side. In addition, heart failure management features of our devices, you know, they carry a wealth of data at nighttime heart rate variability, impedance measurements within the heart. We have the presence of atrial arrhythmias detected accurately, the percent of our CRT pacing and these things are actually predictive of the compensation events and we will have now both the algorithms as well as the connectivity to be able to take advantage of those algorithms. In addition, we now have the only active fixation lead for CRT that has now been released and is a differentiating aspect of our product getting a price premium in the marketplace. So all of these things we think will already take what is essentially an initial implant share advantage and at least continue it and perhaps accelerate it.
And then of course, the real opportunity for us is to actually now not have all of that masked by replacement cycle. And we are already at a point where essentially we've neutralized the replacement cycle on the Brady side of the business. Where we sit in terms of the high power side of the business is that CRT is now rapidly moving out of that window where we had the replacement cycle. And that's important because CRT, half the devices that go in for CRT are replacement devices. So that will be the big one.
Obviously, dual chamber and single chamber happen at different rates, and we are going to see standard ICDs actually getting a little worse, but it will be overwhelmed in a sense by the CRT and the Brady advantages. So as last year, there were many, many, many tens of 1,000,000 of dollars in prior year headwind that we had, we expect it to go neutral year in FY 'twenty one. So that is good. And that was not included in my 4% number, when I talked about what our Q1 growth would have been without the 3 headwinds that I referenced.
And then just a second one on stem market and dynamics there maybe for Sean. Can you just talk about since the new entrants and some pricing pressure that we've seen in the market, what's your ability to hold share with Onex? Does this data help you? Can you actually grow that business? Well, we have been I'm going
to invite Dave to comment, but we have been gaining share in the U. S. And around the world. And an important thing to know about the U. S.
Market is it's roughly 20% of the world market. So the growth of opportunity exists with the globalization of the therapy, for 1, but I think the strategy that Dave's been embarking on is giving returns on all markets. So maybe you'll find a little bit.
Yes. I mean, if you just look at the drug eluting stent market, Sean's right, not just in the United States, but around the world, we've been slowly gaining share, probably more rapidly in the United States. I certainly think this ONEX-one data is a tailwind. I think it will absolutely help. I think some people think about it, will it be a class effect?
I think you have to run the trial. I think there's a lot of questions about stent design and about polymer and we've proven it. So I do think that'll be a tailwind for market share. But it is it continues to be a challenging ASP environment. So erosion in the stent market has been a real headwind.
But as we diversify and get into more of the ancillary kind of complex PCI types of devices, there is plenty of growth to be had in those markets.
And it's important to recognize those data for ONX-one, 40% of the market would be considered high bleederase patients. So this was really the first time it's been studied at least head to head for stent. So we do it as a real opportunity to get the message out on what we believe is the best deliverable stent now having this clinical advantage as well.
Thank you.
Let's go to Bob Hopkins.
Hi, Bob Hopkins from BofA. Just a couple of quick questions. First, for Nina, can you just remind us how many active TAVR centers there are in the U. Today? Just because I'm wondering where we're going to when we add 200 or so.
And then for Mike, I was wondering back on Micra AV, when I look at what you've done in single chamber pacing with Micra and consider the price and make some share assumptions I've come up to a roughly a incremental US market opportunity for Medtronic of maybe $400,000,000 plus So if you could let me know if I'm wildly off that would be much appreciated. And then I've got one more, but I'll wait for the other 2. Thank you.
So I'll start with the number of TAVR centers, Widely quoted has been there's been about 600, 610 TAVR centers somewhere in that range. And we've said that adding that 2 100 gets to about 800 TAVR centers.
And just on the Micro AV, I think what you've described is simply the math, right, in terms of given that percentage of the market and that markup, what it would look like. I do think you have to think about penetration rate into that segment. There were essentially meaningful trade offs to be made in the single chamber segment to go with a micro versus an implantable pocket based system. As you move into the dual chamber side of things, there are more trade offs you have to think about in terms of the sort of diagnostic Bluetooth connectivity that we have with an Azure device isn't available in a micro, you know, dual chamber device if you have concerns, for example, about packet management of atrial fibrillation. And obviously, as the patient progresses in disease, a dual chamber system can deal with anything that micro, you have to believe in the pipeline, if you will, what's going to come down the pipe in terms of the additional product areas.
So I would say there's probably going to be less of an overall penetration rate into dual chamber or if you will, the AD block patient population. But still, is going to be extremely meaningful in terms of driving double digit growth in pacing for us.
Okay. And
then one last one Nina again back on mitral. Over the last couple years doctor has been pretty negative on TA approach but you guys are you know have a gathering a lot of data now. So two quick things one what's the soonest you could have TA approach intrepid approved in the United States? And is there a reason to believe that despite all the neggagism that that might be a decent opportunity for Medtronic?
Yes, it's a really interesting question. So, we're still again, as we've said, we're early in the trial. It's really hard to project out when we'll be completed. There is some thinking around whether or not we would bring a transapical device that we continue to get guidance from our physicians about whether or not it makes sense to bring the current transapical device to market or do we wait for the transfemoral device. I think we'll wait and see how the TF experience goes with early feasibility.
We'll wait to see whether or not that can be put into the APOLLO trial. And so I think there's a lot of moving parts here still before we can make any firm comments on timing.
Just a couple quick unrelated questions on Link 2, it seems like there's now in office reimbursement for ICMs. Is that have you seen any impact on the growth in that market of your business or do you expect one? And then secondly, just where do you stand on LAA?
So on the first question, we actually think the availability of LINK 2 is really important for exactly what you're talking about. The in office reimbursement has now been made available for LINK, but it is, of course, at a lower rate than what we see in the in hospital use of the product. And that has been exploited to some extent by competitors who've come in with lower price points associated with their product, which we have been reluctant to follow because we have 85% market share. Now with the availability of Link 2 and it's taking battery life from 3 years to 5 years in comparison to the 2 year battery life that we see with competitive devices, we now can segregate on pricing using the old link and the new link to basically turn that old link into more of a syncope device, if you will, and target it at that segment. So we think we can actually recapture share that we've ceded because it didn't make sense for us financially to go price down, to go get it.
Now there's an And then optimize and then optimize pricing for those particular indications and those areas for use. And your second question was LAA. LAA. So it's an interesting space from our perspective. It obviously fits with significant core competencies we have not only within our structural heart business, but within our atrial fibrillation business in terms of the management of patients over the lifetime of their disease.
We can do it with reaching our sort of financial hurdles for acquisition, we certainly would look at an inorganic play in that space, and it continues to be high on our list of areas to sort of evaluate.
I'll come
Kristen Stewart from Barclays. I guess kind of following that last note, just thinking kind of a strategic level, how do you think about just the portfolio and also just opportunities for inorganic opportunities from a technology perspective. Just thinking about the landscape, are there a lot of things out there? Are assets really highly priced? And then just with the change in management from leadership, do you expect there to be kind of a change in strategy?
Just how are you feeling about the overall objectives from the top and whatnot?
I think we've long been committed to having a balanced investment portfolio of out of our pipeline versus what we acquire. On the other hand, we have
out of our pipeline versus what
we acquire. On the other hand, we have extraordinarily valuable assets in the field that putting product into the hands of those people tends to give us a a us for us to play in where we have not only field presence, but we also have the ability to exploit technology core competencies, manufacturing core competencies, and so that's going to be high on our list. In the peripheral area, especially the venous area, there are significant sort of opportunities for us to actually put in product into the bag that actually drives value there as well. And even in the aortic space, we see opportunities to basically take what is the industry leading footprint for a field of highly skilled individuals and put in bolt on product into those areas. But it's also true that we tend to there are very few segments where we don't play across cardiovascular.
So, we also have to weigh that against opportunities within other groups of Medtronic who have other opportunities for bolt on products that actually are, in many cases, more recently priced. So that's we're constantly as an executive committee talking about those trade offs.
We'll go to the last question with Peter.
Thanks, Brooks. Fitting me in here. A question on the Japanese tavern market. So what size of the market today? What market share do you guys think that Medtronic has?
And as you think about that in the next 3 years, what approvals have you done to expand the market out going forward?
Yes. So Japan is a very, very strong market for us as you would imagine. We have recently brought in Evolut Pro and the TAB and SAB indications. So we're continuing to see high growth in that market. We'll continue, we think, to see high growth in that product portfolio that we have there.
So strong market that's going to be worthy of more investment.
Thanks, everyone. Thanks to all of you for joining. And we'll end there.