Medtronic sees spinal sales fall 5 percent in 2Q

Sales at Medtronic Inc.’s Memphis-based spinal division fell 5 percent in the fiscal second quarter to $782 million.The Minneapolis-based company released its latest earnings report Tuesday morning, which showed overall revenue increased slightly in second quarter 2013 to $4.095 billion, up 1.8 percent compared to sales of $4.023 billion in the second fiscal quarter of 2012.
Medtronic’s net income declined by 25.8 percent in the quarter to $646 million, or 63 cents per diluted share, compared to $871 million, or 82 cents per diluted share, in the year-ago quarter.
“Our second-quarter performance reflects the results of our ongoing focus to deliver consistent and dependable growth in a changing healthcare environment,” Omar Ishrak, Medtronic’s chairman and chief executive officer, said in a statement. “Our growth was broad-based across several businesses and geographies, driven by continued stabilization of our end markets and the ongoing successful execution of new product launches.”
While the company reports improvements in other divisions of its Restorative Therapies Group, which includes Spinal, Spinal revenue was negatively impacted by the sales decline of its Infuse Bone Graft product. Infuse, which promotes bone regeneration, was thrust back into the spotlight by the late October release of a Senate Finance Committee report, which alleged Medtronic paid $210 million to physicians to write about the product and that the company was “heavily involved in drafting, editing and shaping the content of medical journal articles” about Infuse.
The federal government investigated the allegations in 2011, but found no wrongdoing. The company responded to the Finance Committee report saying it “vigorously” disagreed with any suggestion that “it improperly influenced or authored any of the peer-reviewed published manuscripts.”Earlier this month, Medtronic completed its acquisition of China Kangui Holdings, an orthopedic device company based in Changzhou.
“While overall business slightly declined year-over-year, we continue to gain market share in core spine, and see signs that our procedural innovations and recent product introductions … are being well-received, laying the foundation for continued share gains,” Doug King, senior vice president of Medtronic Spine, said in a statement.
Source:Memphis Business Journal by Michael Sheffield, Staff writer