Your Go-To Source for MedTech Industry News
Welcome to MedTech Monitor, your weekly update on the latest news and trends in the medtech industry.
?? Want more industry news? Sign up for our daily newsletter to receive an enhanced edition of MedTech Monitor directly to your inbox.
?? Discover the pulse of innovation in healthcare with Let's Talk MedTech , MD+DI's podcast featuring industry leaders from across the world of medtech and healthcare.
Let's dive into the weekly news...
Tim Walz Has a Strong Track Record of Supporting Medtech
Updated to include comments from the Democratic rally in Philadelphia, PA Tuesday evening.
If Kamala Harris wins her bid for the presidency in November, the medical device industry will have a supporter in the White House.
Harris has tapped Minnesota Governor Tim Walz as her running mate on the Democratic ticket. Walz, 60, has led Minnesota as a two-term governor, taking office in 2019.
While the mainstream media highlights Walz for his "folksy demeanor" and describe him as an "approachable Midwesterner," he also has a track record of supporting medtech innovation. It helps that so many medical device companies call Minnesota home.
The state, particularly the Twin Cities, has long been a leader in life sciences, going back to the late 1950s when Medtronic founder Earl Bakken tinkered with pacemaker technology out of his garage. Medtronic moved its corporate headquarters to Ireland after its 2015 merger with Covidien, but the company still maintains operational headquarters in Fridley, MN, a suburb of Minneapolis.
Other large-tier medical device companies with a notable presence in Minnesota include Abbott (thanks to its acquisition of St. Jude Medical), Boston Scientific, and Solventum (the 3M healthcare spinoff ). A significant number of mid-size and smaller medtech companies also have roots in Minnesota.
People cheer as Democratic vice presidential nominee Minnesota Governor Tim Walz departs from his temporary Governors residence for a campaign rally in Philadelphia on Aug. 6, 2024 in St Paul, MN. Walz was selected today by Democratic presidential nominee Kamala Harris as her running mate. Image by Stephen Maturen/Getty Images.
Walz fought for the provider tax in Minnesota
Walz has shown an interest in healthcare and medtech in a variety of ways during his time as governor, beginning with his choice of Jodi Harpstead, a former Medtronic executive, for commissioner of the state's Department of Human Services (DHS). After she was announced for the job, Harpstead complimented Walz for working during the 2019 legislative session to win a budget that included the provider tax, a critical source of funding for DHS programs, according to MinnPost .
Showing love for Medtronic and Medtech
Walz also has proven to be a fan of Medtronic, making a number of appearances at the company's operational headquarters and even declaring April 29 "Medtronic Day" in Minnesota. He made the proclamation earlier this year as Medtronic celebrated its 75th anniversary . Medtronic was founded as a medical electronics repair business in a Northeast minneapolis garage on April 29, 1949, by Bakken and his brother-in-law Palmer Hermundsile.
"Great to hear his vision and passion for #OneMinnesota – attracting top talent, investing in medtech innovation, and the role Medtronic plays in the future of our great state," John Liddicoat, MD, a former Medtronic executive, commented on a Medtronic LinkedIn post four years ago after Walz spoke at the company's town hall meeting.
Last year, the Biden-Harris administration designated Minnesota MedTech Hub 3.0 as one of the 31 inaugural Tech Hubs in regions across the country that show potential for rapid growth in key technology sectors. Naturally, Walz applauded the designation.
“Minnesota leads the world in innovative medical technology, and as Governor I’ve made the case for critical investments in workforce development, education, research and more to bolster our position and keep us competitive,” Walz said. “The selection of our Minnesota MedTech Hub 3.0 in this highly competitive process is a recognition of our incredible ecosystem of private companies, regional economic development partners, healthcare providers, and world-class research institutions. I’m proud that Minnesota landed this federal investment to accelerate production of next-generation smart tech, creating jobs at home and improving healthcare around the globe.”
Minnesota MedTech Hub 3.0 is a consortium led by the Minneapolis Saint Paul Economic Development Partnership. It is aimed at positioning Minnesota as a global center for “smart medtech" by integrating artificial intelligence, machine learning, and data science into medical technology. Leveraging its medical technology ecosystem and concentration of hospitals, research institutions, and medical device manufacturers, the MedTech Hub 3.0 is working to capitalize on regional assets to drive innovative collaboration in the medtech sector.
Walz supports academic health
In August 2023, Walz issued an Executive Order establishing the Governor's Task Force on Academic Health at the University of Minnesota , further showing his support for healthcare and medical innovation. The goal of the task force is to develop recommendations to support world-class academic health professions education, research, and care delivery by the Health Sciences Programs that advance equity, center primary care, and ensure that Minnesotans can continue to receive the highest-quality care in a financially sustainable way.
Walz led medtech and ag trade trip to the Land Down Under
And finally, in November 2023, Walz led an eight-day trade mission to Australia focused on medical device technology and agriculture. He was joined by dozens of Minnesota business leaders, including representatives from Medical Alley, Zopec Medical, and Imricor Medical Systems.
For Walz, medical technology is personal
At a rally Tuesday evening in Philadelphia, PA, Walz talked about making personal healthcare decisions, including the choice to use IVF treatments .
“When my wife and I decided to have children we spent years going through infertility treatments and I remember praying every night for a call for good news, the pit in my stomach when the phone rang, and the agony when we heard that the treatments hadn't worked. So it wasn't by chance that when we welcomed our daughter into the world we named her Hope.”
What Abbott & Medtronic's Collaboration Means for Diabetes Tech
By Omar Ford
Medtronic and Abbott Laboratories, two rivals and heavy hitters in the diabetes tech space, are teaming up.
The two will collaborate on an integrated continuous glucose monitoring system (CGM) based on Abbott’s FreeStyle Libre technology that will connect with Medtronic’s automated insulin delivery (AID) and smart insulin pen systems. Abbott will design the CGM and it will be sold by Medtronic.
Financial terms of the collaboration were not disclosed.
The companies said the integration of Abbott's CGM sensor with Medtronic's?AID?algorithms will enable?automatic adjustments of?insulin to keep glucose in range.
"This partnership pairs two global leaders in glucose sensing technology and insulin delivery," said?Jared Watkin, executive vice president of Abbott's diabetes care business. "Libre technology has set the standard for accurate, accessible, easy-to-use and reliable?continuous glucose monitoring. Connecting this CGM built for Medtronic's insulin delivery systems and algorithms makes it easier for people to spend less time thinking about their diabetes and more time living.""Our partnership with Abbott allows us to expand access to our advanced automated insulin delivery and smart MDI systems that deliver best-in-class outcomes with the most widely used CGM in the world," said Que Dallara, executive vice president and president, of Medtronic Diabetes. "We're committed to simplifying diabetes management and making the transition to automated technology much more seamless for those who wish to achieve more with their diabetes care."The collaboration comes as Medtronic has won FDA approval for the Simplera CGM. Simplera is the company’s first disposable CGM and is half the size of the company’s other CGMs on the market.
Related: Dexcom's Historic Win for CGM
Potential Impact of Collaboration
Marie Thibault, an analyst with BTIG, wrote in a research note about what the partnership might mean for the diabetes market.
“While we were initially surprised by the headline, we think this will help open the market for both companies given their respective competitive positions and installed base in the Type 1 CGM and AID market,” Thibault wrote. “However, this is still very much a coopetition arrangement. The CGMs Abbott will OEM to Medtronic will only be operable when paired with Medtronic's AID and Smart MDI systems, meaning that it can't be used as a standalone CGM. Additionally, Medtronic will continue to advance their own CGM platform with Simplera and Simplera Sync while also investing in next-generation sensors.”
Two of the biggest players in the diabetes tech space that could be impacted by the collaboration are Dexcom and Insulet.
领英推荐
Thibault wrote, “We see this partnership as a way for Medtronic to retain their existing pump users (we estimate ~700K WW) and try to attract new users, both of whom may be less satisfied with or wary of Medtronic's in-house CGM technology. Given the very different form factors and business model, we tend to think the type of patient who is contemplating a tubed pump is not typically straying away from a patch pump like Insulet's Omnipod 5. For this reason, we see a minimal threat to Insulet's (PODD, Buy, $270 PT) business.
Additionally, Thibault wrote, “On the CGM side, the partnership does not impact basal-only adoption, but is specific to the core Type 1 patient population. The exclusivity means Dexcom does not have a chance to convert existing Medtronic users to a Dexcom CGM. We do not see a high likelihood of material impact to Dexcom's existing T1D installed base, since these patients would also need to be using a pump and decide to switch away from their existing device to Medtronic's form factor.”
Finding the Silver Lining in Penumbra’s Storm Clouds
Penumbra executives might have gotten a bit ahead of themselves when providing 2024 guidance earlier in the year, CEO Adam Elsesser admitted during a recent earnings call .
"And that's on me personally. Obviously, I take that responsibility," Elsesser told analysts and investors during the call. "But it really doesn't have an impact in the underlying success in innovation and performance of our company right now."
Penumbra updated its guidance range for the year to reflect a $60 million reduction at the midpoint from its previous guidance range. The Alameda, CA-based company now expects total 2024 revenue to fall between $1,180 million and $1,200 million.
Jason Mills, executive vice president of strategy at Penumbra, said the $60 million change in guidance comes accounts for impacts to the company's revenue in the back half of the year, including: $20 million reduction to its business in China due to a "much more challenging economic backdrop for medical devices in the near term"; a $15 million reduction from the company's European business primarily due to a slight delay to the launch of its Lightning Flash 2.0 and Lightning Bolt 7 computer-assisted vacuum thrombectomy (CAVT) products in Europe; $5 million revenue impairment due to a strategic move in its immersive healthcare business; and a $20 million change to guidance for U.S. thrombectomy growth for the full year.
This last change, Mills said, aligns with Penumbra's new guidance philosophy, which Elsesser expounded on during the Q&A portion of the earnings call.
We've lost something in the story of the company when we're spending most of our time talking about our guide and not the extraordinary strength of the innovation that has brought us here with products that have totally transformed the way thrombectomy works. – Penumbra CEO Adam Elsesser
In short, the CEO said Penumbra has evolved a great deal from where it was nearly 10 years ago, when it went public as a company that focused exclusively on stroke treatment. As the company has grown dramatically since then, Elsesser said it's time the guidance philosophy evolved with that.
"When we were a much smaller company, guiding was a lot easier, there were very few moving parts," he said. "And we did a pretty credible job of guiding based on what we knew we could achieve. I think we're at a point now where there are a lot of variables. We've obviously heard the market talk about that and how we guide, and we wanted to build a little bit more comfort into the way we guide."
That's not to say guides are now like layups, Elsesser said, but the company has a lot of work to do each quarter to grow the business at the rate management thinks it can grow.
"I think we've lost something in the story of the company when we're spending most of our time talking about our guide and not the extraordinary strength of the innovation that has brought us here with products that have totally transformed the way thrombectomy works. That's the story of the company. That's the success that we have. That's our future," he said. "And it's time we don't spend a lot of time talking about the guiding philosophy of our company, more the innovation and the extraordinary road ahead we have through this year, into 2025, and beyond."
Despite near-term headwinds, the silver linings in Penumbra's outlook shine bright
Elsesser forecasted a brighter 2025 as Penumbra moves past some transient headwinds that are impacting the company this year.
First, the company has decided to leave certain international markets with its embo and access business in where they weren't financially viable for Penumbra as reimbursements changed and moved down over time, Elsesser said during the company's previous earnings call in early May. So, as the impacts of that decision anniversaries and the company turns more of its focus to its growing thrombectomy business, that should improve the overall outlook.
China is a headwind for many of the medical device companies MD+DI covers, and Penumbra is no exception. However, that should also be behind the company in 2025.
"And then, we will have the benefit of new product launches that we've talked about in terms of new products in the U.S., but also in Europe with Flash 2.0 and Lightning Bolt coming," Elsesser said. "So, there's a lot to look forward to in the back-half of this year, but there's also, I think, a lot to look forward to in 2025. ... I think, with with 2024 and some of the things we're working through this year to get past, 2025 is going to be another really fun year for us.
"Despite the shortfall in U.S. thrombectomy growth this quarter and change in guidance for the year, we continue to like the company's position, its strategic outlook, and technological solution," Margaret Kaczor Andrew, a medtech analyst at William Blair, wrote in a recent report. "The reset in guidance sets a range that is both achievable and likely conservative. While it will take time to prove out, we believe the company is going about market development in the right way, account by account presenting data and metrics demonstrating the improved clinical and economic benefit of its CAVT platform. Management is confident in the data it has already produced (though has not publicly published yet) and noted it is now a matter of blocking and tackling in each of the hospitals. To the extent?Penumbra is successful in these market initiatives, we believe it should start to come through in growth."
China Hinders Revenue Growth for GE HealthCare
By MD+DI Staff
GE HealthCare is the latest medical device company impacted by the healthcare freeze in China.
The freeze and a delay in the China 2024 stimulus hindered sales of the Chicago-based firm’s imaging and ultrasound equipment. As a result, the company cut its full-year guidance, causing shares to drop by 10% last week. ?
China’s healthcare freeze stems from Beijing initiating a year-long anti-corruption campaign that targets the bribing of doctors in drugs and medical equipment.
“As it relates to China performance, we previously communicated that the region would experience negative sales growth in the first half as we face a challenging compare,” Arduini said according to a Seeking Alpha transcript. “At the time, we expected positive sales growth in the second half. Today, the prolonged timing of the rollout of the new stimulus announced earlier this year is impacting the timing of orders and sales. We expect a continued sales decline in China year-over-year in the second half, and we anticipate growth in China will be negative for the year. As a result, we're lowering our total company full-year organic revenue growth guidance.”
According to the Seeking Alpha transcript of the call, Arduini added, “Although we're disappointed with the second-half reduction in sales growth, this is a temporary challenge, and we expect to see China market orders recovery later in the year. We continue to view this market as an attractive long-term opportunity.”
GE HealthCare said its sales in China declined 18.3% to $583 million from a year prior. The company said China was roughly 14% of its business in 2023. ?
And really, I would say on the growth side, we don't know what value China is going to create in 2025. Obviously, it's probably going to be more than we had previously expected. We'll have to see how that shakes out, and it's not time to give guidance on that, but that clearly will be a positive.”
Johnson & Johnson and Philips have also seen pressures from a fall in sales in China. During a recent earnings call, Philips CEO Roy Jakobs said that the decline in sales would be temporary.
“I actually just returned from China last week, where I met many of our customers and partners,” Jakobs said according to a Seeking Alpha transcript. “And it is clear that this remains an attractive healthcare market. We do not expect that the anticorruption measures impact structural demand. Our order funnel is active in the country and we expect China to gradually contribute to order growth in the coming quarters, albeit from a low base. This will be supported by the recently announced government program for renewal of aged medical equipment.”
Tim Schmid, Johnson & Johnson Executive VP, Worldwide Chairman, MedTech commented on the headwinds in China, saying the region was a “very volatile market," during an earnings call for Johnson & Johnson, according to a Seeking Alpha transcript.
Recommended Reads ??
?? Olympians Once Loved These Technologies – Where Are They Now?: Which of these technologies are still being sported at the 2024 Summer Olympics, and which have fallen off the podeum?
?? Nevro Ponders Next Move After Competition Increases in SCS Market: The company is looking at options which include a sale of the business or diversifying its product portfolio after launches from Boston Scientific and Medtronic.
?? USMGC Set to Acquire Polyisoprene Chemical Facility: The company also launched an independent division to oversee the production of raw nitrile and polyisoprene.
?? Will Magenta Medical’s Elevate Disrupt the MCS Market?: The Kadima, Israel-based company’s device would compete against Johnson and Johnson’s Impella heart pump.
?? Integer Launches its First ESG Report: The Plano, TX-based company said it was working to strengthen its business while minimizing its environmental footprint.
Upcoming Industry Events ??
MEDevice Boston | Sept. 25-26, 2024 | Boston, MA
MD&M Minneapolis | Oct. 16-17, 2024 | Minneapolis, MN
MEDevice Silicon Valley | Nov. 20-21, 2024 | Santa Clara, CA
MD&M East | June 10-12, 2025 | New York, NY