CEO: Omar Ishrak
Based: Dublin, Ireland
2014 diagnostics division sales: $17.5 billion
2013 diagnostics division sales: $16.9 billion
Now-Ireland's Medtronic (technically Medtronic PLC) hogged the headlines in 2014 with its recently completed $50 billion acquisition of Covidien, in what was easily the biggest example of the merger mania that swept across the medical device industry landscape last fall.
The deal survived government anger and new Treasury Department regulations designed to deter the tax-saving practice of inversion. However, as a result of those regs the company was forced to borrow $13.5 billion more than originally planned, leading to consternation among credit rating agencies.
Even without Covidien being an official part of the company, Medtronic posted decent growth numbers in 2014, led by its cardiac rhythm management and heart failure unit, which had sales of $5 billion between the third quarters of fiscal years 2014 and 2015. In addition to implantable defibrillators, pacemakers, and related devices, the unit's services segment powered growth.
"We're actively expanding our cath lab managed services business model globally with several new accounts in Middle East and Africa, Latin America and Canada," said CEO Omar Ishrak during the company's most recent earnings call. "As of the end of Q3, we had over 50 long-term agreements with hospital systems, representing $1 billion in revenue over the life of the contracts, which have an average span of five to six years. As we look ahead, we're working on converting a full pipeline of cath lab managed services contracts with hospital providers around the world."
Overall, the cardiac and vascular group contributed $9.1 billion in revenues over the year between Q3 of FY 2014 and 2015, according to Medtronic's earnings statement. Meanwhile, the restorative therapies group contributed $6.6 billion in revenue and the diabetes group earned $1.8 billion during the time period.
The most important product launch came from the FDA approval of its CoreValve TAVR for patients too frail for open heart surgery in January 2014.
But, overall, 2014 was the year of Covidien, and this year will be all about the integration effort.
Ishrak gave plenty of hints about how he intends to utilize Covidien now that the transaction has closed.
He values its international presence, especially in the Middle East, Africa and Latin America. New devices such as its Solitaire Revascularization Device for treating stroke victims are a welcome addition. Sales of the Solitaire are expected to rise thanks to studies showing that the specialized stents are an effective stroke-fighting tool, in addition to medicines.
He also said Covidien's sales force will come in handy for selling Medtronic peripheral devices, like its newly approved drug-coated angioplasty balloon for peripheral artery disease. The new addition will also focus on developing minimally invasive surgical devices, Ishrak said.
-- Varun Saxena (email | Twitter)
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FierceMedicalDevices timeline of key events during the Covidien transaction with links to our coverage of the deal