Following Philips, Medtronic also announced its exit from the ventilator business

 Following Philips, Medtronic also announced its exit from the ventilator business

Medtronic announced on Feb. 20 that it would exit the ventilator market and convert its remaining patient monitoring and respiratory businesses into a new unit, reversing a plan announced more than a year ago to spin off those businesses.

Chief Executive Geoff Martha told investors on an earnings call that shutting down the ventilator business was ultimately in the company's best interest and that the savings would increase investment in new units, particularly in remote patient monitoring.

"Last year, the business became increasingly unprofitable. Growth has slowed further and the dynamics in the field are changing towards less sharp ventilators. We look forward to more unique and valuable contributions in higher sensitivity, hospital-based products, "he said.

M&s said the decision had been "difficult" and highlighted how it had "dramatically" scaled up production during the COVID-19 pandemic as cases climbed around the world, leading to a shortage of ventilators.

Despite the difficult decision, Medtronic believes the spin-off strategy no longer benefits the company.

                              There were plans to spin off the business

Medtronic announced in October 2022 that it would spin off its patient monitoring and respiratory intervention (PMRI) business. At the time, the move looked like yet another healthcare company spinning off or selling low-growth businesses to focus on other areas deemed more profitable. According to Reuters, medical technology giants including GE Healthcare and ICU Healthcare have also been mentioned as potential buyers.

Instead, Medtronic will now exit the ventilator market and consolidate its remaining PMRI business into a new unit called "Acute Care and Monitoring," which will include pulse oximeters, remote patient monitoring, airway management and respiratory monitoring products. M&s said that during the separation process, changes within Medtronic and in the market influenced the company to change direction.

According to a report by GlobalData, Medtronic is the market leader in ventilator equipment in the United States and Europe, with a market share of 42.5% and 18.4%, respectively, in these two regions.

"Our competitive position has improved, particularly in our surveillance business, which changed last year. When we work on the process, we continue to run the business and we perform well. The competitive dynamics have changed significantly compared to our main competitor Masimo, which is positive for us, "he said. "We believe that by increasing our investment, we can ensure that change is lasting."

The CEO also stressed the importance and value of data as part of the decision to retain patient monitoring products.

Jpmorgan analysts wrote in a note to investors that they expect the new unit "to deliver higher revenue growth after the ventilator exit, albeit on a smaller scale relative to the company as a whole."

According to the company's earnings report, Medtronic expects non-GAAP charges for its fiscal fourth quarter to be in the range of $350 million to $425 million as a result of this decision.

Medtronic did not give further details on why it was shutting down the ventilator line or why its market position was unsustainable in terms of financial performance. After all, it's no secret that sales of the company's ventilators have slowed since demand soared during the Covid-19 pandemic.

            The executive vice president is leaving in the latest restructuring

                                                        Bob White

At the same time, Bob White, executive vice president and president of Medtronic Medical's surgical product portfolio, will leave the company in a new round of restructuring.

Medtronic CEO Jeff Marsha also announced the departure of White, the company's executive vice president, at the end of the earnings call.

In a statement shared by a media spokesperson, the company listed some of White's numerous accomplishments during his 14-year tenure:

He successfully led the integration of Medtronic and Covidien in the Asia Pacific region following the $50 billion merger in 2015, bringing more than 5,000 employees together into one team.

He went on to lead the Minimally Invasive Therapies group through the COVID-19 pandemic and more recently led the Medical Surgical product portfolio.

"We appreciate Bob's dedication to Medtronic and our mission and look forward to seeing his continued impact across the industry," Medtronic said in a statement.

           Philips announced its withdrawal from the US ventilator market

The Philips ventilator recall, which lasted three and a half years, ended with the withdrawal of several products from the market.

According to the product portfolio update on the Philips website, in the United States and the United States, Philips Vikon will focus on the sale of consumables and accessories, including face masks, and will no longer sell hospital ventilators, certain home ventilators, portable and stationary oxygen generators, and sleep diagnostic products, of which as many as 19 products will be discontinued as of January 25, 2024.

In recent years, Philips Vecon has faced ongoing scrutiny and regulatory challenges. In June 2021, the company announced a recall of millions of sleep apnea and ventilators, saying patients using the devices could inhale a foam particle and gas that degrades and releases harmful and possibly carcinogenic substances. Since then, the incident has continued to fermenting, and in 2021 alone, the number of respiratory devices recalled by Philips worldwide has reached 5.2 million, far higher than the original estimate of 3 million to 4 million.

Combing through the recall history of Philips can find that since April 2021, the FDA has faced 5.5 million sets of product recalls, and found that the recall continues to April 2023, the recalled product models continue to increase, the latest recall products involve Philips redesigned ventilator products, in addition, according to the FDA disclosure, With 3,700 cases of product problems concealed in the U.S. and European markets, or facing 11 years of litigation, Philips' return to the market is full of uncertainty. The Philips ventilator recall, which lasted three and a half years, ended with the withdrawal of several products from the market.

Philips also said the changes to its commercial product portfolio will not affect its commitment to remediation of devices affected by the June 2021 recall of certain CPAP, BiPAP and mechanical ventilator devices.

With the withdrawal of Philips from the US market, it will reshape the competitive landscape of home ventilators in the region.

                     Another home ventilator giant is also at risk of a recall

It is reported that according to 2020 sales, Resmed and Philips account for nearly 80% of the international home non-invasive ventilator equipment market.

On January 12 of this year, the U.S. Food and Drug Administration (FDA) website information shows that Resmed is recalling all continuous positive airway pressure (CPAP) respirator masks with magnets as a Class I recall because "in some cases, when magnets are close to certain medical implants and devices (less than 2 inches), the recall is not required." It could disrupt their function or location, potentially leading to serious injury or death."

Resmed, together with Philips, is the world leader in the ventilator industry and is headquartered in Australia. Prior to the recall, the global market for non-invasive home ventilators and ventilation masks was highly concentrated, with Resmed and Philips as the main competitors, with a combined market share of more than 75% in 2020.

However, the successive problems of the two major industry giants have made the global non-invasive ventilator market and mask market face a reshuffle. It is worth noting that although ResMed only recalled some respirator masks, its respirator sales were not affected. In addition, ResMed's latest financial results show that the recall has not had a significant impact on its current sales.

          A number of giants announced their exit from "profitable" businesses

丨LivaNova

On January 12, the global ECMO giant medical device company LivaNova PLC announced that in order to further focus resources and strengthen its core cardiopulmonary (CP) and neuromodulation businesses, the company decided to orderly shrink its Advanced Circulatory support (ACS) business unit. In the first nine months of 2023, the ACS business contributed approximately 4% of the company's net revenue. The closure is expected to be fully completed by the end of 2024.

丨Stryker

In August 2023, in its financial report, Stryker revealed that it was withdrawing from the spine business in China due to the failure of the spine collection bid. Among them, the company failed to bid in the procurement project of spine products carried out in the third quarter of 2022 and is therefore withdrawing from the spine business in China.

It has been observed that in the spine national mining conducted in September 22, both Mei and Stryker did not appear in the bidding list. Compared to joint, trauma and limb income, Stryker's spine accounts for a relatively small proportion of income. The share of the domestic spine market is also relatively small.

丨Jemai Bonme

In March 2023, ZimVie, the original business segment of Gemmai Bangmei, announced that it planned to completely withdraw its spine business from the Chinese market due to the influence of the spine country.

丨Siemens

On May 10, 2023, Siemens Healthcare announced plans to discontinue the CorPath GRX (Turing) interventional surgical robot business in the field of cardiac coronary artery.

When the news broke, the industry was in an uproar. According to statistics, the vascular interventional surgery robot track is still in the early stage of development, Siemens Medical is one of the representative enterprises, and CorPath GRX is currently the world's only FDA, CE double certified vascular interventional surgery robot system, is also the commercialization of the track leader.

丨Johnson & Johnson

In October 2023, according to foreign media reports, Johnson & Johnson also said at the third quarter investor meeting that Johnson & Johnson Medical Technology was restructuring its DePuy Synthes orthopedic business. This time, the two-year restructuring plan will move the Orthopedics division away from "less profitable markets and product lines" and aims to simplify and focus on the orthopedics business to improve the division's profitability. The restructuring is expected to be completed by the end of 2025 at a cost of $700 million to $800 million.

                        Net profit rose 8.8 per cent in the latest quarter

Medtronic reported sales of $8.1 billion and profit of $1.3 billion, or 99 cents per share, in the quarter ended Jan. 26, 2024. Compared to the third quarter of 2023, net profit increased by 8.8% and revenue increased by 4.7%.

Excluding one-time items, Medtronic earned $1.30 per share. The results were 4 cents above the consensus of Wall Street analysts, who expected earnings of $1.26 per share on revenue of $7.95 billion.

Medtronic's diabetes portfolio led the way, growing 12.3% year-over-year to $640 million, nearly a year after it resolved the FDA warning letter and received FDA approval for its Guardian 4 sensor-equipped MiniMed 780G infusion pump. The portfolio continues to rebound. Cardiovascular portfolio up 6.4% to $2.9 billion; The neuroscience portfolio grew 4.8% to $2.4 billion; The Medical and surgical portfolio grew 3.9 percent to $2.1 billion.

Some of the company's achievements in recent months include:

Symplicity Spyral Renal denervation (RDN) system for the treatment of high blood pressure, the first commercial case in the United States;

FDA approves Medtronic PulseSelect Pulse Field Ablation (PFA) system

The next generation Micra AV2 and Micra VR2 micro leadless pacemakers received CE mark approval;

The Percept RC neurostimulation device was approved by FDA and received the CE mark.

The MiniMed 780G, which bears the CE mark of Simplera Sync's one-time all-in-one CGM, is scheduled for a limited release in Europe in the spring and a phased commercial release in Europe in the summer

M&s also said that the Aurora EV-ICD MRI SureScan extracavascular defibrillator has begun limited availability, with the FDA approving the product in October 2023. He mentioned that he expects the new device, which places wires below the sternum and outside the heart and veins, to accelerate Medtronic's ICD sales growth.

"We are gathering momentum and have delivered on our commitments with conviction for another quarter. As we expand the use of innovative medical technologies around the world, we will continue to deliver sustained revenue growth, with particular strength in several businesses and international markets." M&s said in a press release. "Our recent major product approvals - including transformative products in the areas of diabetes, heart rhythm management, neuromodulation, hypertension and pulse field ablation - strengthen our confidence to drive solid growth in the coming quarters and years."