All right. We'll get started here. Good afternoon. I'm Ryan Weispfenning, Vice President and Head of Investor Relations at Medtronic. Thanks for coming to our Restorative Therapies Group Investor Briefing here at the North American Spine Society Conference in Chicago. Welcome to those joining us around the world on our webcast. It's good to see a full room here in Chicago, on what I guess is day two of our North American tour. Thanks to all of you that made the trip. I see a lot of familiar faces from yesterday, making the trip from Hartford here to Chicago. I want to remind you that we'll have day three tomorrow at the TCT Conference in San Francisco with our CVG management team.
For those that won't be at TCT, we'll also webcast that event. That will start at about 12:45 P.M. Pacific Time tomorrow or 3:45 P.M. Eastern Time. For today's event, just a quick disclaimer, I want to note that we could make some comments that may be considered forward-looking statements. 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. We do not undertake to update any forward-looking statement. Today's event will last about an hour. I'd like to introduce Brett Wall. He's the current President of our Brain Therapies division in RTG. He was recently appointed as Executive Vice President and Group President of RTG, a role that he will assume officially in November.
Brett's going to make some introductory remarks. He'll introduce the rest of the team here, and then we'll be happy to take your questions, and we'll wrap up about 4:30 P.M. Central Time. Brett, go ahead.
Thanks, Ryan. I'd like to thank all of you for joining us on this multi-city tour as we go across the country. As Ryan said, my name is Brett Wall. I've been part of the Brain Therapies business for the last three and a half years. I came through the Covidien transaction into Medtronic. Officially, I'll take over the duties from Geoff on November 1. A couple of things. It's an exciting time for us and for this business, particularly as we look at our spine business and the ecosystem that surrounds our spine business. The technology that we have, which Jacob will talk about, as well as we'll take questions on the panel, really creates this entire system of materials and this system of technology that talks together. What's interesting about it, we're not talking about this technology coming tomorrow or next month or next year.
This technology is actually here today. As we look at imaging, if we look at planning, if we look at robotics, if we look at navigation, if we look at all the hardware and all the different implants and pieces that go along with this, so it's a really compelling story. Here at this meeting this week, we're launching a number of new technologies. The MR8, the new next generation, the eighth generation of the Midas Rex surgical drill. This has been part of our company, and this has been an interesting story for 57 years that has been continually innovating all along the way, and this new system is really compelling. We have new implants, new corpectomy implants, which Jacob will discuss, which are very exciting, the T2 Stratosphere system, as well as, of course, the Mazor X with Stealth.
We have over 1 million navigated spine cases now in our experience. 1 million navigated spine cases with Stealth. Over 40,000 Mazor cases, over 1,000 Mazor X cases with Stealth. We are learning every single day how to make this ecosystem work. Our panel today includes Jacob Paul. Jacob is the SVP and President of the Spine Business. We have Dave Anderson. Dave is our VP General Manager of Enabling Technologies. Sherilyn Jossy, who is our VP General Manager of our Core Spine business, and Brett Knapp, who is VP and General Manager of our Biologics business in spine. We have a good panel here. I think the other thing to comment on, over the last 3 plus years or so, we've had a real fundamental change in management across this entire enterprise. That really started with Geoff.
A number of people here now for the last couple of years that have been part of this turnaround story you'll see in spine. With that, I'll turn it over to Jacob Paul.
Thanks, Brett. Good afternoon, everyone. My name is Jacob Paul. I've been with Medtronic for 18 years. My last job was in Asia. I was in Singapore leading the Asia-Pacific RTG organization. I'm going to talk about three things. One is the journey we've been, the transformation of spine. If you look back in history, several years ago, our spine business was declining, and we were losing share. Over the last couple of years, we've stabilized it, and we are growing at the market. Now we are growing, getting into an exciting new phase of accelerated growth. We are growing above the market. We are doing that through three main pillars, four main pillars.
One is, Brett talked about our Surgical Synergy strategy, where with the broadest portfolio of enabling technologies from robotics, navigation, imaging, power, the broadest portfolio, and they work together to drive better outcomes, greater efficiency, and this is really making a difference. The second is innovation. We are a rapid cadence of meaningful innovation that adds value at scale. This is something that we do a lot better than our competitors. You'll see in NASS this year, we have a really exciting portfolio. Then finally, a focused commercial team led by general managers that drive the innovation. You'll meet the three of them here. At NASS you'll see Titan. We closed Titan, and it's been a great acquisition. This is one acquisition where I have no buyer's remorse.
It's a platform technology in a space, titanium interbody, that's growing significantly faster than the interbody market. It's more than just that. It's a platform technology with deep science, backed by peer-reviewed literature. We have the second is Synergy OLIF360. It's single position. It optimizes efficiency in the OR. T2 STRATOSPHERE, Brett mentioned, it's the first navigated corpectomy device out there. There's more than that. It is, again, based on our Synergy strategy with MR8, our new power platform, and Grafton DBM DBF. INFINITY, the occipital system that we launched with Synergy, this simplifies the most complex procedures and is efficient. We have an exciting array of technology, and now I think we'll open up for Q&A.
All right. Thanks, Jacob. Thanks, Brett. We'll take first question. Matt. We've got a mic coming for you.
Sure. Thanks. Matt Miksic, Credit Suisse. Given the success of Mazor and the integration with StealthStation, I think you walked the floor, there's a lot of other folks with robots coming up the curve or competitive robots, and I'd love to understand sort of what's the differentiation and development path forward, between navigation, robotics, and imaging that sort of help you maintain this trajectory of growth that we've seen.
Sure. I'll take that first. Probably what I'd start with as you're looking at competitive platforms and you're comparing different features, some of those available today, some are promises for the future. Really, everything we're doing is built on our experience. The numbers that Brett showed in terms of millions of StealthStation patients, 40,000 robotic patients, et cetera. Now, as you look at the roadmap, we have a robust multi-year roadmap. We look at the nearer term as more integrating our ecosystem, more continuous improvements like navigate interbodies, including our Stealth-Midas navigated powered instrument platform, which is the only navigated powered instrument. That's more near term. As you look at mid to long term, it's more disruptive, so things like bone cutting, reducing procedure time, data analytics. As we look at the longer term, we're looking at more of a disruptive portfolio.
David.
David Lewis, Morgan Stanley. You talked about the path. Everyone's been waiting for the path to above market growth. You're kind of right at market to get above market. Just hear this, you gave us the broader buckets, but for example, how important is just the pull-through from Mazor implantables or Mazor Stealth implantables to get into that factor? How important is Titan? How important are sort of other factors? More specifically, you place a dramatic number of systems. You sort of know if these systems perform the way you think, does that alone get you to above market growth or do you need, frankly, further placements and the contribution from Titan mix to get there?
I'll take that and then also invite my colleagues to comment. I think it's a combination of announce that's clearly working, especially when it comes to competitive business. Titan is a big part of our growth strategy because Titan, not only does that get us into a high growth titanium interbody space, but also it pulls through the fixation business that we don't have in those accounts. The third is our cadence of meaningful innovation. All of those three put together, I think will get us sustainable above-market growth.
Yeah, I would just echo what Jacob said. I would also say that we also are careful on how we're defining the market now. If we define the market as a procedural solution market, and you start to define it by including robotics and Enabling Technologies and implants and Biologics, then the market growth is slightly different than if you're looking at it specifically implantables. From an implantable perspective, it is a combination. It's not solely Mazor, but we are seeing a very nice growth in the Mazor in the accounts where we have been able to either sell or place. It's not just the earn-outs, it's also in the accounts where they've purchased. It is also ensuring that not only are we investing in these platforms but also in making sure that we're renewing our technologies in all of the segments.
Titanium, corpectomy, last year it was more on the OC cervical segment. You're going to see continued innovation on a regular cadence and making sure that we're filling gaps and also renewing through line extensions and existing portfolios to drive that growth.
Yeah.
Sorry.
Just because you're taking over November 1st. When Geoff took over RTG, it was growing materially below corporate, and that's been one of the real success stories, getting RTG from flat to declining back to corporate growth, right? As you sit in this business taking over November 1st, question is, A, how important is spine to driving further acceleration or sustainability of RTG? Maybe just share with us your enthusiasm for other components of the business that can drive this further improvement that we've seen in RTG the last few years. Thank you.
Spine continues to be important. I think as Sherilyn and Jacob shared, it's really a journey. The first part is as we make these placements, that's been an important part of the strategy to pull through some of the implants. When we look at the Titan acquisition, it's also an important piece of it because that's an area we didn't participate in. A new market, and as Jacob said, it's really a platform technology. If you can imagine with this, not only the fact that it's a roughened surface, but it has a nano surface treatment on it that is backed by science that we believe can go into a number of different implants. Now we're going to have this technology across a variety of places. That's going to be important.
As the journey starts with the placements, what we also end up getting is pull through in some of our other capital. Now what's happening is we start getting more Midas to come in different spots. Stealth, of course, comes into this mix as we go forward. The O-arm comes in as we go forward in this mix. All of this technology begins to surround it. Spine in and of itself is very important for the long-term growth. If I look at the other areas, we have exciting opportunities.
If I look at DBS, in about a couple of quarters, we're going to have a new product launch there, which is a sensing platform, which is going to be able to sense at the level of the brain, and we're going to be doing studies there on new algorithms that will actually work with the current system and perhaps change what those stimulation patterns are so we can keep the patient in the range that they should be functioning at. That's an exciting area. Neurovascular continues to be an exciting area. We like that. What I also look at are the adjacencies in some of these markets. There are areas that we are not in that I think we could be in that would be interesting to take a look at.
We do a number of things with our neurosurgery platform where we plan, where we navigate, where we open the skull, and yet we stop there. I think what's interesting is thinking about what are the other white spaces or adjacencies that would follow along with us that would be interesting for Medtronic to participate in. We'll be looking at those areas as well.
Kristen.
It's Kristen Stewart from Barclays. I see pretty much all of you are wearing little buttons on evidence in your story. I was wondering if you could just comment on the BMP panel that was today and just how you're feeling about the INFUSE franchise.
I guess I'll put mine on.
Sorry to call you out on it, Brett.
It's all right.
Yeah, I'll take that one. Thank you for the question. We were thrilled to see NASS provide an opportunity for a fair and balanced discussion of BMP and to review the data that's been accrued over the past 10 years, because there's really important learnings in that data. When I think about the panel we just came out of, three big takeaways for me. One is that it's confirmed that the data shows there's no association between clinical BMP use and cancer, right? Kind of puts to rest that question. Two, the majority of the panelists up there spoke about BMP playing an important role in their practice and how they conduct surgery. Three, they all universally spoke to the importance of clinical data, the quality of the data, the preponderance of data, and that plays right into the BMP story. Evidence is BMP's story.
We are among the best-researched orthobiologics on the market today. 17 years of use, 2 million patients have used the product. We're continuing to invest. There's a notice of availability out right now. We're running and recruiting sites for a PLF trial. We're recruiting sites and patients for a TLIF trial so we can expand those indications and give surgeons even more safety and efficacy and dosing data to continue to use BMP as part of their practice. It was an academic panel, but the underlying messages are very much aligned with our strategy.
What has been the trend with BMPs of late, and do you think that this can start to kind of further accelerate?
Yeah, I think it's going to support it. It was actually interesting. One of the panelists showed a height curve that's not too dissimilar from BMP's revenue. It grew very rapidly, it fell off, and now we've seen steady, sustained resumption. We've gotten back roughly a third of what we lost, and we're continuing to grow year-on-year. Getting rid of the fear of cancer, kind of clearing up some of these issues are going to support that return to growth. In the meantime, as we expand indications, we're going to get access to hundreds of thousands of lumbar procedures on label each year. Meanwhile, we're currently doing work to get into Brazil, Korea, China, and actually develop new markets for INFUSE going forward. That's going to help us accelerate in the one to five-year range as well.
Overall, there's a lot of small positive tailwinds behind BMP that are going to keep us growing, we think, in the future.
Larry Biegelsen.
Thanks. Larry Biegelsen, Wells Fargo. Two questions for the panel. First, what's next for O-arm? A competitor here just unveiled a new imaging system that can do CT, fluoro, and a rad image that's integrated into their robotic system. What's next for O-arm? Just second, anything anecdotal you can share that you're hearing from customers at this meeting on the spine market? Seems pretty stable based on what I've heard here so far, but I don't know if you're hearing anything different. Thank you.
I'll start with O-arm and if you want to comment on the spine market next. From an intraoperative imaging perspective, the first thing we're looking at again is how do we integrate it more effectively with robotics so things work better together. There's a number of features that I won't go into detail here that are really about our total implants ecosystem will be more effective from an imaging perspective than if you're using anyone else's solutions. That would be point 1 is using today's O-arm, how can we make our whole procedural solution more effective? The second would be, of course, next-gen systems, and that's an area of active interest in terms of understanding customer needs, understanding what the opportunities are from a size, cost, features. We absolutely are committed to being leaders in the intraoperative imaging solution.
The near term is really about integration with robotics and spine procedural solutions. When's the timeline on the integration? The integration, we'll call it some of these features that I'm speaking to, is probably more in the midterm, so it's not next year. It's probably more in the 2-3-year timeframe.
Commenting to the spine market, I would agree that what we have also seen is that the negative U.S. spine market has turned positive. We are seeing an increased number of procedures, although price still remains something that is dragging on the market. We believe the market in the U.S. is still growing anywhere between 2% and 3%.
Okay. Next question, Steve.
Thanks. Steven Lichtman, Oppenheimer. Just following up on that, what is the type of procedures that you're seeing increasing right now? Secondly, can you remind us your program on deformity, and your thoughts ahead in terms of getting more into that marketplace?
Yes. Types of procedures, where do we see growth? The first question. We're seeing actually deformity, specifically in adult deformity, being a growing segment. That continues to drive. We're also seeing an increase in procedures in ACDF, although price pressure significantly even more so in ACDF, especially if there is a transition in that marketplace going more and more into ASCs. We continue to see an increase as well in procedures in the degenerative market from a market perspective. I would also highlight in cervical is arthroplasty. Arthroplasty also continues to be a big market driver, a smaller base. In terms of our deformity platform, there are a couple areas that we're looking at. Adult deformity is a big one that we are focused around.
We are also looking at the AIS market and looking at some different technologies there that we're working with the FDA on approval pathways. Revision is another area in the deformity market that we're also focused on.
Josh.
Thanks, Josh Jennings from Cowen. Just back to the spine market. There's been some speculation when the U.S. market was declining that spinal cord stim was potentially cannibalizing some potentially revision procedures or even de novo cases, being number one player and now back number one player in spinal cord stim and pain and also in spine. Is there anything, and with the spinal cord stim market now under some pressure, most of it's comp related, but do you see any correlation between the acceleration in 2017 and 2018 of spinal cord stim market and the decline in the U.S. spine market now this kind of reversion to the mean?
It's a good question. I have not heard that from the team. I'm getting now new updates from them as I'm just taking over that particular business, so they're not seeing that. I think when I speak to physicians and talk to them from time to time, there is a challenge on reimbursement and coverage on some of these cases. I think there is a few more challenges there. I think there is this phased approach here where we saw some other companies have some difficulties a few quarters ago. We had a slower quarter, and we just don't know if it's just a phasing, but I'm not connecting it to spine.
Yeah. We did some internal kind of trying to connect the dots. That question, as we've been looking at that question quite a bit to see. We haven't really seen a direct correlation when you start to map it out at an account level that we think it was really-- You're right. We were going down, they were going up, now all of a sudden it's inverted. We think there were potentially other drivers. I wouldn't say no, it wasn't a factor, but we haven't seen it internally as a major factor or major contributor.
I was hoping to just follow up on your comment around ASCs and ACDF procedures migrating there and some of the pricing pressure, and I think on the proposal for next year, there are even more spine procedures that are opening up, at least on the Medicare side, to ASCs and private pay. There's been a migration in the last couple of years. How big of a risk is that to the spine market, just on the pricing side?
I think it's an opportunity. I think there's an opportunity of efficiencies in the overall ecosystem of healthcare. The variability in pricing in an ASC, it doesn't necessarily mean every ASC has a cheaper product. It really depends on the ASC, similar even to the spine market across the different entities who are purchasing implants. There is a shift as well in the ASCs right now. We're also starting to see a lot more ASCs looking at 1, 2 level TLIFs. DeGen cases also going into those ASCs. Really a lot of those ASCs are also looking for more integrated ecosystem type solutions and how are we linking Enabling Technologies with implants. There's also opportunity for us in terms of the ecosystem that we've built and how do we start to incorporate that, and partner with those ASCs.
Travis.
Can you talk a little bit about the degree to which you're bundling with Mazor and navigation and opportunities to leverage the broader Medtronic portfolio outside of spine as well? Any color on the growth in your Mazor accounts versus your non-Mazor accounts would be helpful.
You want to take this first and I'll take the second?
Yeah, I'll start with just maybe one point of view on the, we'll call it the ecosystem pull-through, if you will. If you look at not just robotics, but if you look at also navigation and OR, there's been a lift in our total capital sales since we've introduced robotics. Like this last quarter, for example, they both grew more than 20%. If you look at it from a share perspective, we have a 60% share in navigation, a 66% share in robotics. We're in a lot more accounts, which means a lot more competitive opportunity. Now, in terms of more of the pull-through dynamics, I'll leave that to Sherilyn.
We definitely would say as a trend that we see higher growth rates in accounts where we have brought together both the Enabling Technologies and the implants and Biologics. Biologics not to be forgotten at all because it does play as well into that procedural solution. We would see, not necessarily through earn-outs, but that there is either StealthStation or Mazor in those accounts. We would see higher growth volume on implant sales than we would in non-enabled accounts.
Question? Matt? Okay.
I just wanted to follow up on a couple of questions. One is the thing you were just covering on sort of pull-through and performance of robot, sort of accounts with robots is you place a robot, you sell a robot, third quarter, fourth quarter last year. You obviously don't get that pull-through. You've said a couple of times in the calls it takes a while to get that ramping up. Can you talk a little bit about the expectation or not getting too far into the weeds of a contract, like what's in the agreement of is it over the next 12-18 months, is it over a certain amount of time that an account is expected, for example, to meet its internal obligations to move share, if that's the contract? Just something on color on that front would be helpful. I have one other follow-up.
The contracts, there are different forms in which those contracts are set up, and I would say that it does take time. Utilization and making sure we're ramping up utilization that the robot gets used is also important. In order to meet the terms of those contracts, it doesn't necessarily have to come from robotic-assisted cases. It could come from also arthroplasty or other areas in which they would be using Biologics from Medtronic, from the implants of Medtronic, and the overall portfolio. There's a lot of investment that we're also doing just for the utilization of robotics overall in education and investing heavily in education to make sure that we have reproducible curriculums that are going out to ensure that the education is supporting proper utilization of the systems, and we're definitely seeing a positive impact there.
As we invest there, we're starting to see further utilization and then further utilization of Medtronic pull-through as well in those robotic-assisted cases.
Okay. I'm assuming there's some kind of grace period. You're not expecting them to sort of flip a switch.
On average, I would say it's about six months.
Okay
where we start to see if the intention of that agreement was to drive growth. We see it about six months.
That's great.
I think your range is about right there when you look at the long term.
Yeah.
When we're looking over this five or six quarter kind of period, and to Sherilyn's point there, it's really the beginning of a journey. The first thing that happens is the hardware gets placed, and then when we look after the hardware, other things start to pull through. Some of our other capital, some of the other disposables that come with that capital, such as Midas Rex and other types of materials there, and then ultimately, as we get to the spine implantables and the other types of technology that comes through. There is a period of time there. We review those contracts routinely, and we treat the organizations that we do this with similarly. We have a consistent approach to how we go about doing that.
Okay. Just the other quick follow-up, if I could. You mentioned bone cutting as a potential downstream application. You do have this navigated powered instrument. Can you talk a little bit about how and where that'll be used? Is it direct decompression, or is it something like that? Maybe anything on timing would be helpful.
Sure. This is an area we've received probably some of the most clear and strong feedback about the importance of both from a procedural time perspective, from a safety perspective. We look at it as if you were to look at the ultimate end goal, it would be every place where we're removing bone decompression, et cetera, disc removal, we would have an automated solution that's safe for that. That's an ultimate end goal, and you've got to take steps to get there. It may be a safe solution that's not fully automated at first. We may automate other parts of the procedure. If you look at it as an end goal of we want to be in a fully automated bone removal perspective, what are the steps that it takes to get there? We feel we have the solutions to do that.
It's just a matter of taking those steps. In terms of timeframe, it's more of a mid to long term. I'd say midterm, we should be able to have pieces of that procedure. Long term would be the fully automated solution.
Over there.
Thank you. Hi, Ryan Zimmerman, BTIG. One of your competitors, I think, is actually moving into total joint robotics, having started in spinal robotics. Should we view that as an indication that the spinal robotics market is more penetrated than maybe we initially realized? How do you think about the penetration of spinal robotics and just the broader market opportunity from a competitive or a hospital perspective?
We think it's in the very early stages. This is an early game. Numbers anywhere from the low single-digit % are penetrated in robotics. This is the beginning chapter of what I think is going to be a really good book. We have a number of things and advances that are going to happen going forth here. I don't connect those two at all. I can't speak for what they're doing, but I know that we are at a very early beginning stage here.
Completely agree.
Yeah.
Kyle?
Kyle Rose, Canaccord. I wanted to go back to some of the comments on the ASC market. Just, I guess, just given your market share, one, how big do you think that market is now? I guess what are the expectations for that to grow moving forward? You specifically mentioned that being an opportunity for Medtronic. Can you maybe talk about how the Enabling Technologies initiative kind of helps position you within that market?
I won't comment to the exact size of the ASC market. I think there's a lot of speculation that's going on around there. I would say that the ASC market is moving very quickly into that. In the ASC market in spine, a lot of the simple cases, less than 20% of the cervical ACDF market is in that ACDF market. A lot of acronyms here. We're seeing clearly a shift as well in that DeGen market, as I said earlier. The opportunity with Enabling Technologies is that clearly surgeons, especially the younger generation surgeons who are also investing personally themselves at times in those hospitals, are also valuing the procedural solution, the ecosystem of how are we thinking about bringing navigation in, how are we even thinking about robotics in those spaces.
For us as an opportunity, it's how do we actually leverage the solutions that we have in those different spaces, bringing those together to be actually partnering with those ASCs, and leverage those interconnections that we're able to provide.
Yeah, we have all the technology we need to compete effectively. It's just a question of putting those into a solution and then going working with these ASCs to get them to market.
Go ahead.
Anthony Petrone, Jefferies. Maybe just to follow up on ASCs, and we haven't heard a lot on PODs lately, physician-owned distributors. Anything as the ASC market grows, is there a risk that PODs come back in price aggressively in that market, sort of bring that down? Then in terms of the 1 million navigated cases and 40,000 Mazor cases, just anything in terms of outcomes, like how much better is the patient's quality of life in those cases versus a non-navigated account or a non-robotics account procedure? Thanks.
Sure. I'll begin with on the navigation side, there's quite a body of evidence on improving outcomes, both clinical and economic outcomes, pedicle screw accuracy, cost, et cetera. Robotics, we're still in the early stage. We're probably more, I'd call it in product kind of evidence. An example of that, there was a recent publication by Dr. Van that looks at pedicle screw accuracy and 99% for Mazor versus 74% for a competitive system. Where we're going with robotics is to get that clinical and economic outcome evidence. Today, that's in navigation, and we're still building that robotics.
Matt.
Thank you. Matt O'Brien, Piper Sandler. I was hoping to hear a little bit about how long it's taking to close deals right now. Is it shorter than maybe six months ago? Is it longer? As you get a couple of new competitors on the market next year, how do you think about your pricing models? Are you going to be more flexible? Are you going to stick with what you're doing now? How do you prevent seeing some kind of blips as far as closing deals when those two new systems come out? I do have one follow-up.
Robotics, you're talking.
Yeah.
Yeah.
I'll start on the deal timing side, then talk about the price side. On deal timing, first of all, there's quite a bit of variation. You've got sort of your normal funnel and pipeline, and then you have deals that accelerate for lots of reasons. It could be, for example, more administrative driven, it could be competitive driven. It's competitive in this case, I mean, competitive hospitals. There's lots of reasons that deals may accelerate. I don't see a difference in that shifting, meaning over the past year to 2, I don't see that timing window shifting. You have sort of a standard window, and then things accelerate. On the pricing side, I would also say pricing's been stable, and that's true across our ecosystem, meaning robotics and OR and Stealth. They've all been stable.
We've actually probably seen a slight uptick with that Stealth Edition in terms of price.
Okay. Just to expand on that a little bit. There's two competitors today. Next year, there'll probably be four, maybe five, who knows? You going to get more flexible on the pricing side when that happens? Again, how do you make sure that the cycle doesn't elongate as you're trying to close these things?
I'd start by saying we're adding value. Our goal is we're going to keep adding more and more value. Our goal is to keep pricing stable and add value. We're not modeling price decline.
Okay. As a follow-up, the international markets are areas that some of your competitors are really targeting because they're under indexed there. How do you stave off competition there, and how do you grow your business overseas?
Yeah.
Thanks.
I'll start again, and feel free, others, to add, too. Certainly in the international market, it's a little unique, geography specific, from capital pricing to spine pricing to training capabilities to service capabilities. There's a lot that's needed to have a successful robotic program. I think we're being very deliberate and purposeful in taking a geography by geography approach. There's not really, I'd say, a one-size-fits-all answer there, but we're definitely looking at the geographies where we see the penetration being the most attractive over time, and then building more of a capability in that geography versus just a one-off.
I would say internationally, Europe for one, is a very advanced market, lower prices, but very advanced market where navigation has been strong there. Japan is another market where navigation has also been very strong, and there has been money for different sources to also fund capital. Definitely leveraging the partnerships and relationships that we have with our spine business in those regions continues to be the model in terms of which we can drive and penetrate those markets with our Enabling Technologies overall.
I also think it's important to look at it not necessarily from an opportunistic point of view, where if I can sell a system here, I can sell a system there. We could do that all day long. The real value is in having a system that's up, that works, that's supported, that has service behind it, because you have to service these instruments and make sure that they work well so that they function in the ecosystem.
We've been, as David said, very deliberate in how we go about that, picking the markets, picking the areas that we want to go into, and then being able to support those markets so that we can actually provide the level of service that our customers, number 1, expect from Medtronic, and 2, that allows the market to develop and have the proper support and start on the right procedures and then advance over time.
The model to cover surgeries that exist in the U.S. is not the same model once you leave the U.S. As we've seen the adoption of robots, no matter where you are, we need to invest in training and education and making sure that surgeons are properly using the system the way intended to be used and in the workflows so that they don't stop using it, and they don't put it in the corner. This service model outside the U.S. is particularly important to make sure that is covered so that we can ensure success. We're in it for the long term. We don't want to just be selling systems, and then they get parked. We want to be selling systems that get used, and that are really generating the output that we're expecting.
Yeah, playing long ball is important here.
Lee.
Hey, Lee Hambright from Bernstein. I have a long ball question.
Okay, here we go.
It's about interventional spine therapies.
Yeah.
There's a bunch of little companies out there working on needle-based or ultra minimally invasive therapies.
Yeah.
They're all trying to delay the progression to fusion or potentially obviate the need for fusion, mostly focused on the pain docs. Maybe just, I wonder if you could comment a little bit on internal investments or external investments in that area.
Well, first and foremost, I think that's really interesting, and I don't think you have to be afraid of those type of advancements because I think they're actually really important. I always go back to other parts of our portfolio, and some of you know this very well. In the neurovascular portfolio, stroke is a wonderful opportunity from the standpoint of what you can do for patients. Probably the best thing Medtronic can do is provide technology that stops that event from ever occurring. We have a device called Reveal LINQ, which we implant, which looks for AFib and can forestall those patients from having a really bad event. Any technology like this that might forestall that or do that, I think as a company, we can't be afraid of that. Matter of fact, we have to embrace it.
We have to move into that and think about how we can actually participate in that space because it's likely a growth opportunity. At the same time, I think when you look at the population curves and some of the other issues that we're having, the spine market's going to be there for a good long time. I think, to the long ball answer to that, I think you have to jump into that, and you have to look at that very, I think you have to have a great deal of interest in that and look at that very carefully. It should be seen as an opportunity.
If I can weigh in on that, Brett. One of the things that we're doing is with stem cell therapies, for example. We're investing some money, some resources, and some technical talent to better understand mechanism of action, the best way to utilize such technologies, so that when the long ball becomes the mid ball, that we're prepared to go and do something. It's not just about delaying the onset of spinal fusion. There is an untreated population out there that has discogenic pain that is not indicated for fusion. That can be a great new white space for us to go after when the technology is mature enough and ready for commercialization.
Kristen.
I guess, Brett, earlier you had mentioned some white spaces, I guess.
Yeah.
How do you think just about the strategy of RTG as you're taking it over? Do you think that there are a lot of other opportunities? I know you haven't obviously stepped into the seat just yet.
I kind of have, actually.
Maybe you've been dreaming of knocking over Geoff for quite some time. Who knows? How do you just think as you're.
I'm going to put a lot behind on that question.
As you lay in bed at night just thinking about taking over on November 1st
Yeah
What do you think about RTG and just the businesses, being in Brain for a while and just think about the possibilities?
Sure
of where to go from here. Do you think that there's going to be a lot of opportunities? Obviously, Medtronic, as a broader corporation, has a lot of cash and great balance sheet to make a lot of things happen. Do you think acquisitions are going to play a larger role for you? What are just kind of your initial thinking, I guess here?
Well, I'll take it.
Sorry, Geoff, by the way, if he's listening.
Yeah, if he's listening.
I really didn't mean that. That was a joke.
That's okay. My review's coming up, so I'm sure it'll go in there. I think a couple of things. I think we're in some of the most exciting markets in medicine right now, and particularly in the device space, where there are good markets, there are growth markets, and then there's kind of opportunity all around it. When you speak with surgeons and you speak with hospital administrators, there's all these areas where there's just interesting things that happen, if technology was applied to some of those problems. There's opportunity. One of the things I look at is skull-based surgery. We do a lot of work towards that with our navigation solutions, our powered surgical solutions. One of the biggest problems physicians have is how do you characterize a tumor versus brain tissue? How do you know when to stop?
Right now, many times in an operating room, physicians will be standing there with their hands up, waiting for the analysis to come back and understanding if they've gone far enough. If you look at hospitals and they think about their efficiency, having I was talking to someone the other day, and they had a procedure that lasted 8 hours that could've lasted 6 if they could've shrunk that time that they were waiting every time they'd resect, and they'd send the sample out to see what they had actually removed from the brain. That's one example of an area where you start thinking there's probably, and there's technological answers that are out there, but you start thinking, boy, that's a technological answer that probably we could provide. It's in our workflow. It's in the things that we actually provide.
Our teams are there right now with those physicians in the operating room doing those things. That actually is pretty exciting. If you look, one thing to highlight, we did a partnership in neurovascular with Viz.ai, which you've probably seen, which looks at every CT scan that comes into the hospital, runs it through an algorithm, and immediately pulls out the large vessel occlusions and distributes those through a communication vehicle to all of the stroke teams. That's not replacing somebody. What that's doing is making that person significantly more efficient so they can actually see what those cases are, understand what they are, adjudicate them, and make certain that the stroke team is ready to go and activated. That's going to help a lot of people as you do that. I think about those types of opportunities.
We talked a lot about the applications and the software that we can actually update. If any of you own a Tesla automobile, it's actually fascinating. You come downstairs in the morning, and you have a new car because they've downloaded new applications. I think we have the same opportunity here with things that will allow our ecosystem to do more. When you think about that kind of shift where you have hardware, but you're actually taking firmware and software updates and doing things that can actually make the physicians more efficient and actually do other things. RTG is really set up pretty well, and I think there's a lot of really good opportunities for us to look at in the future. It's just a really exciting space to be in.
To follow up on some of these numbers again, can you remind us how many robots are actually out there? You mentioned single-digit penetration. Where do you think that penetration can go over time? Robotic penetration in spine. Thanks.
Our current install base for Mazor X and Stealth Edition combined is 152. We have, if you include Renaissance, 270. As you look at penetration, what I would just probably say as a corollary is look at the ortho market in Mako and look at its penetration. That's probably a corollary that we've looked at for certain procedure types. I don't know if you want to share more on penetration, Sherilyn.
On the robot side?
Yeah. On the penetration of robotic procedures. That's I think what you're asking or-
I would say robotic procedures in the spine market right now are still about less than 10% of overall procedures. We're seeing much more of a focus on degen cases, in the use of degen cases. Although high interest in the deformity cases. Both deformity. Our focus specifically has been around mid lift, TLIF, and deformity, and I'm a little cautious on saying deformity. I would say more multi-level, 3 to 7 levels, and it could be an AIS, but it could be an adult deformity. I would say those are the three focus areas where we're very focused with the customer base, investing in training and education. It still represents less than 10% of the procedures that are being done together, all combined.
Questions? Josh.
Thanks. I just wanted to follow up on some of your comments around Titan and understand more about how that is a significant growth driver for the spine franchise. I guess to start just with your historic interbody portfolio, was that an area where Medtronic was losing share on Medtronic cases where they were opting for different materials? Is that why Titan is such a big plug there? Can you just remind us, prior to the acquisition, what the revenue run rate was? I believe it was somewhere around $25 million, but I'm not remembering correctly. Just plugging that into the channel, are there any capacity constraints on the manufacturing side for Titan? Thanks a lot.
I think the titanium interbody itself, that space was growing at over 60%. While the overall interbody was growing single digits, it came at the expense of PEEK, and we didn't have a presence there. The other growth driver is that the interbody use drives the selection of fixation. Titan has the widest portfolio of titanium devices of anybody in the industry today. With having this now, we were able to pull in fixation business that in those accounts that we didn't have. What was your last question?
Manufacturing capacity.
We will take care of it.
We don't have any issues.
No.
Anthony.
Can you give a rundown on robotics on where robotics is focused on the types of spinal procedures, so deformity in certain areas within the spine ecosystem? Just can you give that rundown for navigation as well? Where are you seeing navigation most used, which particular cases, and how penetrated in those cases is navigation?
Yeah.
Thanks.
I'm going to say U.S. because it's different outside the U.S., but I think you're probably more interested in the U.S. market. The U.S. market, it's closer to 25% of navigated procedures that are out there. It's really everywhere except for ACDF. In trauma, in tumor, in deformity, in posterior cervical, complex cervical. For us, actually, interesting now in trauma is, as Jacob mentioned, we've now just launched the first corpectomy device in the trauma space, which is pretty exciting. Significantly reduced radiation and driving accuracy, real-time in seeing the expansion of the corpectomy device. Degen, all of those areas are areas that surgeons are using navigation. The real drivers where we're seeing it more commonly used is in the penetration rates per procedure. I would say it really bounces back between degen and deformity.
Any additional questions? No. Okay. We'll wrap up there and look forward to talking to you tomorrow from San Francisco. Thank you.
Hey, good to see you.
Thanks.
Yeah.
Yeah.
It would be interesting to.
Yeah.
We have a couple small follow-ups from people online because that's information.