Amid plans to trim off a few of its business units to give higher-priority areas room to grow, Medtronic is also undergoing some smaller-scale internal pruning.
Earlier this year, the company quietly combined its surgical robotics and surgical innovations operating units into a single segment, dubbed the surgical unit. MassDevice was first to report the news this week, based on a small change to Medtronic’s website: The company’s bio for Mike Marinaro, who was named president of the surgical robotics business last spring, now lists him as the head of the surgical operating unit.
In a statement sent to Fierce Medtech confirming the update, Medtronic said, "By combining these businesses, we will capitalize on one of the most attractive markets in all of healthcare—a market that is forecasted to nearly double over the next 10 years."
The statement continued, "And as the only company uniquely positioned with open, laparoscopic and [robotic-assisted surgery] capabilities, we have a significant opportunity in front of us right now. With an aligned portfolio and a clearly defined innovation and investment strategy, we are better positioned to leverage our expertise and customer partnerships to secure our place as the leader in surgery."
The combination took effect on Feb. 1, per Medtronic, at which time Marinaro took on his new title and also joined the company's executive committee. Meanwhile, Matt Perry, who had been president of the surgical innovations unit since early 2019, has updated his LinkedIn page to show that he left Medtronic last November.
Though Medtronic hasn’t publicized the slight restructuring beyond that tweak to Marinaro’s bio, it doesn’t come as a total surprise. In 2020, the company laid out a plan to implement a new operating model that streamlined the far-reaching medtech business into 20 separate units, each with their own leadership, R&D resources and budget planning. “The idea is to perform like 20 agile, $1.5 billion companies,” CEO Geoff Martha said in a presentation at the time.
Two years later, in its most recent annual report (PDF), Medtronic said the operating model transformation “is starting to take hold” but added that it’s always looking for other restructuring opportunities to help home in on its highest-priority areas: “We are continually evaluating our business, structure, market conditions and ways to position ourselves for success.”
For Medtronic’s last fiscal year, which ended April 29, 2022, the surgical innovations and surgical robotics businesses together brought in just over $6 billion in sales. That represents year-over-year growth of 11%—making it the second-fastest growing segment at the company, close behind the 12% growth earned by the specialty therapies division within Medtronic’s neuroscience portfolio. In comparison, the company as a whole achieved year-over-year growth of just 5% for 2022.
The newly created surgical operating unit is housed within Medtronic’s medical surgical portfolio. That division also includes the respiratory, gastrointestinal and renal unit, which saw its sales drop 7% year over year and which has been the target of the company’s last two major restructuring efforts.
Last May, Medtronic announced that it was teaming up with dialysis services giant DaVita to form a new kidney tech company. The joint venture will see Medtronic send its entire renal care solutions business—spanning a variety of renal access and acute and chronic therapy devices, plus its pipeline, R&D teams and manufacturing facilities—to the new company. The companies expected that the new company would be established within a year of their initial announcement, according to the press release issued at the time.
A few months later, in November 2022, Medtronic said it would also spin out its patient monitoring and respiratory interventions businesses, spurred along by nosediving ventilator sales as COVID-19 cases wane.
With those businesses out of the picture, the medical surgical portfolio will be left with two units. One is Medtronic’s GI unit, which was the subject of a high-profile artificial intelligence partnership with Nvidia announced earlier this week. And the other is the new surgical operating unit, which includes the long-awaited Hugo surgical robot as well as surgical stapling products, AI-powered digital surgery tools, hernia repair implants, electrosurgical tools and more.
Editor's note: This story was updated with comments from Medtronic.