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. And 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 2 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. And I want to remind you that we'll have day 3 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 and 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 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. 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, and he was recently appointed as Executive Vice President and Group President of RTG, a role that he will assume officially in November. Brett is going to make some introductory remarks.
He will introduce the rest of the team here and then we will be happy to take your questions and we will wrap up about 4:30 p. M. Central Time. So Brett?
Thanks, Ryan. I'd like to thank all of you for joining us and 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.
And officially, I'll take over the duties from Jeff 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 the system of technology that talks together. And 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. So 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. And here at this meeting this week, we're launching a number of new technologies. The MR8, the new next generation, the 8th generation of the Midas Rex Surgical Drill, this has been part of our company and this has been an interesting story for 50 7 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 1,000,000 navigated spine cases now in our experience. So a 1000000 navigated spine cases with Stealth, over 40,000 Mazor cases, over 1,000 Mazor X cases with Stealth. So we are learning every single day how to make this ecosystem work.
Our panel today includes Jacob Paul. Jacob is the VP or the SVP and President of the Spine Business. We have Dave Anderson. Dave is our VP, General Manager of Enabling Technologies. Cherilyn 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.
So 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. I really started with Jeff. A number of people here now for the last couple of years have been part of this turnaround story you'll see in spine. So with that, I'll turn it over to Jacob Hall.
Thanks, Brett. Good afternoon, everyone. So 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. So I'm going to talk about 3 things. 1 is the journey we've been, the transformation of spine. And if you look back in history, several years ago, spine 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. And we are doing that through 3 main pillars, 4 main pillars. 1 is, Brett talked about our surgical synergy strategy, where with our 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 have a rapid cadence of meaningful innovation, innovation that adds value at scale.
And this is something that we do a lot better than our competitors. And you'll see in NASS this year, we have a really exciting portfolio. And then finally, a focused commercial team led by general managers that drive the innovation, and you'll meet 3 of them here. So at NASH, you'll see Titan. 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 inner body that's growing significantly faster than the inner body market. But it's more than just that. It is a platform technology with deep science with backed by peer reviewed literature. And then we have the second is Synergy OLIF 360.
It's single position. It optimizes efficiency in the OR. T2 Stratosphere, Brett mentioned, it's the 1st navigated cropactamine device out there, but there's more than that. It is, again, based on our synergy strategy with MR8, our new power platform in Grafton DBF. Infinity, the occipital system that we launched with Synergy, and this simplifies the most complex procedures and is efficient.
So we have an exciting array of technology and now I think we'll open up for Q and A.
Thanks, Jacob. Thanks, Brett. We'll take first question. Matt? We've got a mic coming.
Matt Makesik, Credit Suisse. So given the success of Mazor and the integration with Stealth, I think you've got 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 development path forward between navigation, robotics and imaging that sort of help you maintain this trajectory of growth that we've seen?
Sure. So 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. So that the numbers that Brett showed in terms of millions of Stealth patients, 40,000 robotic patients, etcetera.
Now as you look at the roadmap, we have a robust multi year roadmap. We look at the nearer term as more integrating our So that's more near term. As you look at mid to long term, it's more disruptive. So So 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. So as we look at the longer term, we're looking at more of a disruptive portfolio.
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 share this, you gave us the broader buckets. But for example, how important is just the pull through from Mazor implantables or Masa Stealth implantables to get into that factor?
How important is Titan? How important are sort of other factors? And 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 the further placements and the contribution from Titan mix to get there?
So I think so I'll take that and then also invite my colleagues to comment. I think it's a combination of announced that's clearly working in especially when it comes to competitive business. And then Titan is a big part of our growth strategy because Titan not only does that get us into a high growth inner body titanium inner body space, but also it pulls through the fixation business that we don't have in those accounts. And then the third is our cadence of meaningful innovation. So all of those 3 put together, I think will get us sustainable above market growth.
Yes, I would just echo what Jacob said. I would also say that we also are careful on how we're defining the market now. So 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 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 purchased. And it is also ensuring that not only are we investing in these platforms, but also in making sure that we are renewing our technologies in all of the segments. So, titanium, corpectomy, last year it was more on the OC cervical segment. You are going to see continued innovation on a regular cadence and making sure that we are filling gaps and also renewing through line extensions in existing portfolios to drive that growth.
Yes. Rich, just because you're taking over to Revit First. When Jeff 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. So as you said, this business taking over to November 1, you'll kind of questions, a, how is important to spine to kind of driving further acceleration or sustainability of RTG?
And 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 in the last few years? Thank you.
Spine continues to be important. I think as Cherilyn and Jacob shared, it's really a journey. I mean, 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. But when we look at the Titan acquisition, it's also an important piece of it because that's an area we didn't participate fact that it's rough in surface, but it's actually it has a nano surface treatment on it that is backed by science that we believe can go into a number of different implants. So now we're going to have this technology across a variety of places.
So that's going to be important. But as the journey starts with the placements, what we also end up getting is pull through in some of our other capital. So now what's happening is we start getting more Midas to come in, in different spots. Stealth, of course, comes into this mix as we go forward. The ORM comes in as we go forward and inspect.
So all of this technology begins to surround it. So 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. And then what I also look at are the adjacencies in some of these markets. There are areas that we are not in, I think we could be in that would be interesting to take a look at. And 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.
And so 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. So we'll be looking at those areas as
well. Kristen?
It's Kristen Stewart from Barclays. See, pretty much all of you are wearing little buttons on evidence in your story. So I was wondering if you could just comment on the BNP panel that was today and just how you're feeling about the infused franchise.
Yes, I'll
put mine on. Yes, I'll
take that one. So, thank you for the question. We were thrilled to see NASS provide an opportunity for a fair and balanced discussion of BNP 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 3 big takeaways for me. One is that it's confirmed that the data shows there's no association between clinical BNP use and cancer, right?
So, kind of puts the rest of that question. 2, the majority of the panelists up there spoke about BNP playing an important role in their practice and how they conduct surgery. And 3, they all universally spoke to the importance of clinical data, the quality of data, the preponderance of data and that plays right into the BMP story. So evidence is BMP story. We are among the best research to port the biologics on the market today, 17 years of use, 2,000,000 patients have used the product and we're continuing to invest.
So 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 get surgeons even more safety and efficacy and dosing data to continue to use BNP as part of their practice.
So 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?
Yes. I think it's going to support it. So it was actually interesting. One of the panelists showed a hype curve that's not too dissimilar from E&P's revenue. So 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, 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.
So that's going to help us accelerate in kind of the 1 to 5 year range as well. So overall, there's a lot of small positive tailwinds behind DNP that are going to keep us growing, we think, in
future. Larry
Biegelsen. Thanks. Larry Biegelsen, Wells Fargo. Two questions
for the panel.
First, what's next for OR? Competitor here just unveiled a new imaging system that can do CT, fluoro and rad image that's integrated into their robotic system. So what's next for ORM? And then 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 OR, if
you want to comment on the
slide market next. So 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. And 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. So 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 size, cost, features.
So we absolutely are committed to being leaders in the intraoperative imaging solution. And the near term is really about integration with robotics and spine procedural solutions. 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 to 3 year timeframe.
Commenting to the spine market, I would agree that what we have also seen is that the down the negative U. S. Spine market has turned positive and we are seeing an increased number of procedures, although price still remains something that is dragging on the market and we believe the market in the U. S. Is still growing anywhere between 2% and 3%.
Next
Steve Lichtman, Oppenheimer. So just following up on that, what is the type of procedures that you're seeing increasing right now? And then secondly, can you remind us your program on deformity and your thoughts ahead in terms of getting more into that marketplace?
Yes. So, types of procedures, where do we see growth, the first question. We are seeing actually deformity specifically in adult deformity being a growing segment that continues to drive. We are also seeing an increase 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 dGen market from a market perspective.
If you look at, I would also highlight in cervical is arthroplasty. So arthroplasty is also continues to be a big market driver, smaller base. In terms of our deformity platform, there are a couple of areas that we are looking at. So, 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 are working with the FDA on approval pathways.
Revision is another area in the deformity market that we are also focused on.
Josh?
Thanks, Josh Jennings from Cowen. I was just back to the spine market. There's been some speculation when the US market was declining, that spinal cord stim was potentially cannibalizing some potential revision procedures or even de novo cases, being number 1 player and now back number 1 player in spinal cord stim and pain and also in spine. I mean, is there anything and with the spinal cord stim market now, under some pressure, some of that's most of its comp related, but do you see any correlation between the acceleration in 2017 'eighteen of spinal cord stim market and the decline in the US 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. But 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
this is fine.
Yes, we
did some internal kind of trying to connect the dots that question has 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 it just you are 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.
And Tobin, just follow-up on your comment around ASCs and ACDF procedures migrating there and some of the pricing pressure. And what other I think there has been some, I think on the proposal for next year, there are even more spine procedures that are opening up, at least in 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 is 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 are also starting to see a lot more ASCs looking at 1, 2 level T lifts, dGen cases also going into those ASCs and really a lot of those ASCs are also looking for more integrated ecosystem type solutions and how are we linking enabling also opportunity for us in terms of the ecosystem that we have built and how do we start to incorporate that and partner with those ASCs. Got it.
Travis? Travis Steed, Bank of America. 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 kind of outside of Spine as well? And then any color on kind of the growth in your Mazor accounts versus your non Mazor accounts would be helpful.
Yes, I'll start with just maybe one point of view on the, we'll call it the ecosystem pull through,
if you will.
So if you look at not just robotics, but if you look at also navigation and O arm, 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%. And then if you look at it from a share perspective, we have a 60% share in navigation, a 66% share in robotics. So 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 it to Cherilyn.
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 bio. Bio 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 Stealth or Mazor in those accounts. We see higher growth volume on implant sales than we would in non enabled accounts.
So, 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, Q3, Q4 last year. You obviously don't get that pull through. You've said a couple times in the calls, it takes a while to get that ramping up. I mean, 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 to 18 months 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. And I have one other follow-up.
So, the contracts the way there is different forms in which those contracts are set up and I would say that it does take time utilization and making sure we are ramping up utilization that the robot gets used is also important. But 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 biologics from Medtronic from the implants of Medtronic in the overall portfolio. There is a lot of investment that we are 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 are definitely seeing a positive impact there. And 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. So, I mean, just to I mean, would it be a but I'm assuming there's some kind of grace period, you're not expecting them to sort of flip a switch and
On average, I would say it's about 6 months where we start to see if the intention of that agreement was to drive growth, we see it about 6 months.
I think
your range is about right there when you look at the long term. We're looking over this 5 or 6 quarter kind of period. And to Cherilyn'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.
So 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. So there is a period of time there. We review those contracts routinely, and we treat the organizations that we do this with similarly. So we have a consistent approach to how
we go out and
do that.
Okay. And then just the other quick follow-up, if I could. It was a you mentioned bone cutting as a potential downstream application. I mean, you do have this navigated powered instrument. I mean, can you talk a little bit about how and where that would be used?
Is it direct decompression or is it something like that? And maybe anything on timing would be helpful? Sure.
I mean, so 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. So 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, etcetera, disc removal, we would have an automated solution that's safe for that. But that's an ultimate end goal and you got to take steps to get there. So it may be a safe solution that's not fully automated at first. We may automate other parts of the procedure.
So 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 and 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. So it's a mid term, we should be able to have pieces of that procedure long term would be the fully automated solution.
Hi, Ryan Zimmerman, BTIG. 1 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? And how do you think about the penetration of spinal robotics and just a broader market opportunity from a competitive or a hospital perspective?
We think it's in the very early stages. I mean, this is an early, early game. Numbers anywhere from the low single digit percentages are penetrated in robotics. So this is the beginning chapter of what I think is going to be a really, really good book. And we have a number of things and advances that are going to happen going forth here.
And so I don't connect those 2 at all. They might be looking I can't speak for what they're doing, but I know that we are at a very, very, very early beginning stage here.
Kyle Rose, Canaccord. So 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? And I guess what are the expectations for that to grow moving forward? And then 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?
So I won't comment to the exact size of the ASC market. I think there is a lot of speculation that's going on around there, but 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, lot of acronyms here. And we are seeing clearly a shift in as well in that DJM 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.
And so, 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 are able to provide.
Yes, 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.
Anthony for Shone, Jefferies. Maybe just a follow-up on ASCs and we haven't heard a lot on pods lately physician owned distributors. So 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. And then in terms of the 1,000,000 navigator 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. So 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, etcetera. Robotics, we're still in the early stage. We're probably more I'd call it in product kind of evidence.
But an example of that, there's a recent publication by Doctor. Van that looks at pedicle screw accuracy and 99% from Azure versus 74% for a competitive system. So where we're going with robotics is to get that clinical and economic outcome evidence. Today, that's a navigation and we're still building that robotics.
Matt O'Brien, Piper Jaffray. I was hoping to hear a little bit about the how long it's taken to close deals right now. Is it shorter than maybe 6 months ago? Is it longer? And then 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? And how do you prevent seeing some kind of blips as far as closing deals when those 2 new systems come out? And I do have one follow-up.
Yes.
So I'll start on the deal timing side and talk about the price side. So on deal timing, first of all, there's quite a bit of variation. So you've got sort of your normal funnel in 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 being competitive hospitals. So 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 has been stable. And that's true across our ecosystem, meaning robotics and ORM and Stealth, they've all been stable. We've actually probably seen a slight uptick with that Stealth addition in terms of price.
Okay,
but just to expand on that a little bit next year, there's 2 competitors today. Next year, there'll probably be 4, maybe 5, who knows? You're going to get more flexible on the pricing side when that happens? And then again, how do you make sure that the cycle doesn't elongate as you're trying to
close these things? We were also I'd start by saying we're adding value. So our goal is we're going to keep adding more and more value. Our goal is to keep pricing stable and add value. It's not we're not modeling price decline.
Okay. And then there's a follow-up. The international markets are areas that some of your competitors are really targeting because they're under indexed there. So how do you stave off competition there? And how do you grow your business overseas?
Yes, thanks.
So I'll start again and feel free others to add to. Certainly, the international market, it's a little unique geography specific from capital pricing to spine pricing to training capabilities to service capabilities. So there's a lot that's needed to have a successful robotic program. I think we're being very deliberate and purposeful and taking it a geography by geography approach. So 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.
And I
would say internationally, I mean Europe for 1 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 and definitely leveraging the partnerships and relationships that we have with our spine business in those regions is continues to be the model in terms of when 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 I mean, we could do that all day long. But 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. And 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 for 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. And as we've seen the adoption of robots, no matter what where you are, there is some we need to invest in training and education and making sure that surgeons can 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.
And so this service model outside the U. S. Is particularly important to make sure that that is covered, so that we can ensure success. So, we are 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.
Yes, playing long ball is important, Gary.
Hey, Lee Hanbury from Bernstein. I have a long vol question.
Okay, here we go.
It's about interventional spine therapies. So there's a bunch of little companies out there working on needle based or ultra minimally invasive therapies. And they're all trying to kind of delay the progression to fusion or potentially obviate the need for fusion, mostly focused on the pain docs. Maybe just wonder if you could comment a little bit on internal investments or external investments in that area?
Well, 1st 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. And I always go back to other parts of our portfolio. Some of you know this very well, on the neurovascular portfolio, stroke is a wonderful opportunity from the standpoint of what you can do for patients. But probably the best thing Medtronic can do is provide technology that stops that event from ever occurring.
And so we have a device called Reveal LINQ, which we implant, which looks for Afib and forestall those patients from having a really bad event. So 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 kind of move into that and think about how we can actually participate in that space, because it's likely a growth opportunity. And 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 is going to be there for a good long time.
So I think to the long ball answer to that, I think you have to jump into that. You have to look at that very, very I think you have to have a great deal of interest in that and look at that very carefully. And it should be seen as an opportunity.
If I can weigh in on that, Brett. So 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, we're prepared to go and do something. And 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.
Chris?
Yes, Brett, earlier you had mentioned some white spaces, I guess.
I guess, 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 Jeff for quite some time, who knows. But how do you just think
going to put
a lot behind
on that question.
As you lay in bed at night just thinking about taking over on November 1, what do you think about and just the businesses being in brain for a while and just think about the possibilities of where to go from here? Do you think that there's going to be a lot of opportunities? Obviously, Medtronic as a border corporation has a lot of cash and great balance sheet to kind of 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?
Well, I'll take it.
Sorry, Jeff, by the way, if
he's listening.
I really didn't mean that that was a joke.
That's okay. My review is coming up.
I'm sure
it will go in there. But 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. And when you speak with surgeons and you speak with hospital administrators, there's all these areas where there's just interesting things that happen.
And if technology was applied to some of those problems, there's opportunity. One of the things I look at is skull based surgery. When we do a lot of work towards that with our navigation solutions, our powered surgical solutions. But one of the biggest problems physicians have is how do you characterize a tumor versus brain tissue? How do you know when to stop?
And 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. And 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 lasted 8 hours that could have lasted 6 if they could have 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 the brain. And so 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. So 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. And that's not 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 activate it.
And that's going to help a lot of people as you do that. So I think about those types of opportunities. And 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.
And I think we have the same opportunity here with things that will allow our ecosystem to do more. And so 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. So 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. And it's just a really exciting space to be
in. Just a follow-up on some Mazor numbers again. Just you remind us how many robots are actually out there? And you mentioned single digit penetration, just where do you think robotics can that penetration can go over time? Just robotic penetration is fine.
Thanks.
So our current installed base for Mazor X and Stealth Edition combined is 152. We have, if you include Renaissance, 270. And then 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. And that's probably a corollary that we've looked at for certain procedure types. If you want to share more on penetration, Cheryl?
On the robot side?
Yes, on the penetration of robotic procedures. That's I think what you're asking or?
So 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 de gen cases and use of de gen cases, although high interest in the deformity cases. So, bones deformity, our focus specifically has been around mid lift, T lift and deformity and I would a little cautious on saying deformity, I would say more multi level 3 to 7 levels and so it could be an AS, but it could be an adult deformity. But I would say those are the focus, 3 focus areas where we are in, we are 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?
Just want 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're opting for different materials? And is that why Titan is such a big plug there? And then also just if you can just remind us prior to acquisition with the revenue run rate was I believe was somewhere around 25,000,000 but I'm not remembering correctly and just plugging that into the channel.
I mean are there any capacity constraints on the manufacturing side for Titan? Thanks a lot.
So I think so the inner body, the titanium inner body itself that space was growing at over 60%. And while the overall antibody was not was growing single digits, it came at the expense of peak and we didn't have a presence there. And the other growth driver is that the interbody use drives the selection of fixation. And so when we get and Titan has the most the widest portfolio of titanium devices of anybody in the industry today. So with having this now, we were able to pull in fixation business that in those accounts that we didn't have.
And what was your last question?
Manufacturing capacity.
We will take care of it. So we don't
We don't have any
issues.
Where robotics is kind of 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? So where are you seeing navigation most used, which particular cases and how penetrated in those cases is navigation? Yes.
So 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. So the U. S.
Market, it's closer to 25% of navigated procedures that are out there. It's really everywhere except for ACDF. So, 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 copectomy device in the trauma space, which is pretty exciting, significantly reduced radiation and driving accuracy real time and seeing the expansion of the copectomy device. And so, dGen, all of those areas are areas that surgeons are using navigation. The real drivers where we are seeing it more commonly used in the penetration rates per procedure, I would say it really bounces back between D JET and deformity.
Any additional questions? Okay. We'll wrap up there and look forward to talking to you tomorrow from San Francisco. Thank you.