How internal R&D and acquisitions (hello Intersect) are driving Medtronic’s expanding ENT Business

October 13, 2021

In this episode, Vince Racano, president of ENT, lays out the growth plan for this burgeoning business. Racano updates listeners on the announced acquisition of publicly traded Intersect ENT. He explains how the company will fit into Medtronic’s ENT franchise.


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Tom Salemi (00:00):

Hey everyone, this is Tom Salemi of DeviceTalks. Welcome to our newest member of the DeviceTalks podcast family, it's called MedtronicTalks. Our constant search to find new ways to bring new insights in the MedTech industry led us to the fine, fine folks in Medtronic. They've agreed to make their senior leaders available to us and to you. In each episode, we'll discuss the opportunities and challenges facing one of MedTech's clear leaders. So you'll have an inside view on what makes Medtronic go. We'll ask the questions, Medtronic will provide the answers and our great network of sponsors makes it all possible. So sit back, pop on a treadmill, take the dog for a walk, whatever you do when you listen to a great podcast and let's listen to how Medtronic is getting the job done. Let's go.

Tom Salemi (00:45):

Hey everyone, this is Tom Salemi of DeviceTalks. Welcome to this episode of the MedtronicTalks podcast. Today, we'll speak with Vince Racano. Vince is the president of Medtronic's ENT business. This is an important business in its own right, but of course it made news earlier this year with the announcement that Medtronic would acquire publicly traded Intersect ENT, which is one of those high profile medical device companies that had made a lot of progress as a startup, had gone public and had Medtronic as an investor all along, and Medtronic ultimately decided that now was the time to bring its technology inhouse. So we'll talk with Vince about that deal, about why they made the move now and about how Intersect will fit into Medtronic and we also talk more broadly about Intersect's ENT business, where the growth is and how the care for patients will change, and most specifically, where the care for patients will change.

Tom Salemi (01:41):

So it's a great conversation with Vince Racano, but first we'll talk with Chuck Serrin. He is vice president of industry marketing for MedTech and Life Sciences at Propel, a maker of a cloud-based tool to manage product development. Chuck, please tell us more about Propel and what it offers.

Chuck Serrin (01:57):

Propel is a product success platform that really enables companies to build better, safer and more effective products and bring those products to market faster. We really do this from concept to customer and covering the entire product life cycle, and also we're uniquely a QMS, PLM and a PIM of commercialization solution all on one platform. So we eliminate what's commonly three disparate systems and eliminate those huge gaps in data leakage and connect these systems, people processes to reduce the cost of quality. We also enable you to design, make, market and sell and service your products. So being natively built on Salesforce, we really unify that product quality service and customer records for true enterprise collaboration into the sales and service clouds, and then rest assured being built on the sales force platform. We also give you all that security, scalability, analytics, and reporting in a very highly extensible to your processes.

Tom Salemi (02:46):

All right, we'll hear more from Chuck Serrin and Propel a little later in the podcast. If you want to find out more information about Propel, go to

Tom Salemi (03:00):

Well, Vince Racano, welcome to the podcast.

Vince Racano (03:02):

Thank you, Tom. I'm glad to be here.

Tom Salemi (03:04):

Great to have you here. Before we get into the conversation about the ENT group at Medtronic, and there's certainly a lot to talk about, especially with Intersect ENT's pending acquisition which we'll get into later, I do love to learn how folks found into the MedTech industry?

Vince Racano (03:20):

Well, like a lot of folks, it was mostly by accident. I got out of college and local company, I was living in Miami at the time, had an opening for a finance role which I took. The company was called Cordis and took the role and did that for about three years and decided that finance was not what I wanted to do with the rest of my life and ended up moving into marketing, took a product manager role for a number of years and then subsequently went into the field as a sales rep in the Philadelphia area. And then I left Cordis and went to work for USCI Bard up in New England, which is now part of BD. There, I moved in international marketing because I had grown up in Europe. My mother was European, so I spoke a few languages. So I ended up there for a number of years, finished there as director of marketing for the electrophysiology division.

Vince Racano (04:11):

And then seven years later, decided to make another change and join Medtronic in '93 in the coronary vascular business in San Diego and had been there now for 28 years in different functions. Returning back to Europe, working in Europe for a number of years, running the coronary vascular business and then joining what was then called Xomed, which was a new acquisition in 2001 that Medtronic made in the ENT field.

Tom Salemi (04:34):

Your answer, or at least earlier in your career, your answer though, just peaked my interest, what languages do you speak?

Vince Racano (04:39):

The one I'm truly fluent in is German. I went to school there for six years.

Tom Salemi (04:44):

Oh, very cool. Very cool. All right, great. Well, let's get a sense of your ENT business. We've talked about the reorganization on this podcast in the past, you're leading the ENT business. Tell me a bit about the areas that you serve and the products that you sell.

Vince Racano (04:59):

Here at Medtronic, we really primarily focus on two of the main disease states in ENT. One of which is chronic rhinosinusitis, which is a 12 week or longer sinus infection that then needs to be treated surgically. The other main area that we deal in is in head and neck tumors, primarily those of the thyroid. For a little bit of background on sinus, that's really 60% of our business, it's important to understand a bit. The sinus disease is really related to the mucosa that you have in your nose and your sinuses. What that does is, think of it as fly paper. It warms the air that you breathe, and then it also traps pollutants, pollens, dust. So to make that work effectively, you have to have a certain drainage and most people don't realize it, but the average person secretes about one liter of mucus a day, down the back of your throat.

Tom Salemi (05:57):

Let's let that one sink in for a second. I had no idea it was that much mucus. That's a good fact. Sorry Vince, continue.

Vince Racano (06:08):

That's all right. And you don't notice it because it drains on a back your throat and it's a thin, clear viscus fluid. But what happens and that's done because it constantly renews itself and has to remove all these pollutants that you're inhaling. What you have with a sinus infection is when there's a blockage, you have a honeycomb of passages and cells in your sinuses that they're both maxillary, under the cheeks or in the forehead, and when one of those passages get blocked, the fluid cannot drain, it builds up, gets infected and that's when you end up with the sinus infection and the classic pain that you would find depending on where the infection is itself.

Vince Racano (06:45):

So what we're really talking about in treating sinusitis is a plumbing issue. We need to reopen those passage ways to restore the natural flow and have the body work normally again, I should say the sinuses work normally again. And that's what we do. We basically reopen the passages. There's several different ways to do it. We have mechanical methods, which is what we call a microdebrider, which is basically, think of it as a rotating drill that then removes and opens up those passages, but also can be done with a balloon to reopen it, similar as in coronary angioplasty.

Vince Racano (07:22):

That's basically what the sinus section is about. In head and neck it's as the name implies. What you're dealing with there are tumors, primarily the thyroid, and what you want to avoid is complications. There's complex structures, including nerves. And what we do there is we have a device called a nerve integrity monitor that helps the surgeon make sure that he's not stressing or even worse damaging the nerve during that surgery, as he removes the tumor in there. For a little more background, speaking of chronic rhinosinusitis, it affects about 30 million Americans a year. There's about 1.5 million surgeries done worldwide. Thyroids is about 1.5 million surgeries done as well, about 125,000 in the US alone.

Tom Salemi (08:10):

That's great. All right. That's obviously an important area. I think it's one that touches if not everybody who's listening to this podcast, everyone who listens knows someone who is suffering from this. I'm curious about the procedure to open up the sinuses is... How has that advanced over the last decade and a half or two decades? I remember when sinuplasty first came out, there was discussion of a more invasive procedure that was necessary. Is that still, is that no longer the gold standard? What is the gold standard of treatment?

Vince Racano (08:37):

The gold standard is mucosal preservation. Remove as little tissue as possible. And that's where our equipment is helpful with that. So the main transition was, which is Xomed introduced back in the 1990s was really going from manual surgery, using a headlamp, and then various hand and steel instruments to the power instrumentation and you do it under an endoscope. So the surgeon has an endoscope in one nostril and then has the instrument in the other and operates, that way removing the tissue again, minimally invasive.

Tom Salemi (09:11):

So where is the growth going to come from in your business? I know every operating unit, every business at Medtronic is charged with finding new growth and grabbing more market share, or introducing new products. Where does ENT's growth come from? Separate from let's talk Intersect, let's handle Intersect ENT differently just from your current portfolio.

Vince Racano (09:33):

So basically we have five, what we call main product categories in our business. One is the powered systems I mentioned before, which composed of a console that drives a handpiece. Then you have a series of disposables about 150 different type of blades, depending on which anatomy you're looking to resect. Secondly, there is something called image guided surgery or navigation, which is used by the surgeon to track the tip of his instrument when he is doing the surgery. Can be quite unclear where you're at in the anatomy and this basically overlays the tip of the instrument with the CT scan taken previously. So you always knew where you're at, because remember, as you're operating through the nose, you've got other anatomical structures such as the optic nerve, the orbit itself. And then also you can go up to the skull base in inadvertently into the brain.

Vince Racano (10:27):

So it helps you protect the surgeon from going where he doesn't want to be. So that's the second main product line. The third main product line in sinus, is what we call tissue health. And that's a series of products that are placed in the nose or in the sinuses, I should say, post-surgically. Remember, this is an open field. You don't sew everything back up again at the end, so you still have pollutants. You still have things come in and you want to prevent bleeding, you want to prevent bleeding. So you need hemostatic agents. You want to avoid infections. So that means you want to have some antimicrobial product. And then lastly, sinus disease is an inflammatory disease, as I mentioned before. So you want to do what you can to minimize the inflammation by another topical agent. And that's really where Intersect comes in, that we talk about a bit later.

Vince Racano (11:22):

So as far as where growth comes from, it's really about continuing to expand the market, meaning of all those procedures I mentioned earlier those, those 2.5 million surgeries done worldwide only about 30, 35% use our equipment. So we spend a lot of our time and effort training physicians on how to use powered equipment. Same thing with the use of navigation. Only a relatively small number of procedures are using navigation right now. Same thing with nerve monitoring, only a certain percentage of procedures are using neuro monitoring doing that and then finally with the topical tissue health products as well. So there's a lot of opportunities to expand the adoption of our technologies, probably the best way to put it. Then of course, there are market share opportunities in certain segments like in below wounds and other areas.

Tom Salemi (12:13):

Well, that would be a great time to sort of explore where you are with the acquisition of Intersect ENT. I'll take a quick break to visit with Chuck Serrin of Propel. Chuck, how do MedTech companies use Propel?

Chuck Serrin (12:26):

Med device is really one of our largest focuses. So we've got customers like ZOS in pharmaceutical for Zany as copy ANR, doing medical devices for thrombectomy Livongo, doing health monitoring devices for MedTech, but really we help them create commercialize and correct their products. So create meaning managing entire product development process, building up their products and documentation, their billing materials, their item, masters and manufacturers, and include that entire value chain for success, product launches. For commercialization, we give access to and manage to new and extended markets controlling what you can sell, where and when. So the product registrations, the EI Fuse, the environmental and packaging compliance and localize information that can be spread to the Omni channels. And also to correct, we manage the entire enterprise quality processes to your CAPA's NCRs audits and scars your training records. And of course, I do customer incidences all the way to resolution.

Tom Salemi (13:21):

So what makes propel unique?

Chuck Serrin (13:23):

Having both product and quality in the same system and really allowing the only true close loop quality and product solution out there. This is what really gives us tremendous insight in use cases of better NextGen designs or designing for quality earlier in the NPD process. That one source of truth really allows teams to collaborate, to unify their data, to streamline their business processes and be more simplified. And I mentioned the commercialization aspect of tying a service field assets and sales. So we can do field service quality better by tying asset repairs, to the latest changes. And then of course, being on the Salesforce platform, we can simplify your IT stack and your administration with a very easy to use modern interface, as well as having multiple three releases a year, give you those validations and allow you to upgrade or pull when you want to upgrade.

Tom Salemi (14:14):

For information, go to Well, now would be a great time to sort of explore where you are with the acquisition of Intersect ENT. I know Medtronic had an interest in the company for a long time, has been tracking its progress. What led it to move on acquiring the company now?

Vince Racano (14:32):

We just felt that timing was right in terms of the market and the opportunity is relative to the fact I mentioned before. The tissue health portfolio that are referenced, we had an entry in most of those segments in hemostatic as well as antimicrobial. We did not have a product offering in the anti-inflammatory range, which is a significant part and really the largest part of tissue health. The Intersect product is basically a steroid alluding stent. And again, well before that chronic minu-sinusitis is inflammatory disease, and that is where steroids come in. Most ENT patients with chronic sinusitis post surgery, and pre-surgery get a dose of steroid, systemic steroid, but obviously there are side effects to that. So what the Intersect product does the PROPEL in particular, it's a postsurgical stent that all alludes a steroid for two to three weeks post-surgery and therefore reducing and helping reduce the inflammatory response that you have with sinus. They also have a second product offering a SINUVA device, which is actually a revision case. About 25% of sinus patients have to come back for a follow-up surgery again, to treat the inflammation. This device, the SINUVA device is a very high dosage version of the PROPEL about three times as much of the steroid, which then can help reduce the inflammatory response without going back into surgery.

Tom Salemi (16:01):

And what I'm just curious internally, what sort of conversations went and what occurred now that made it a good time to acquire the company? Did it establish itself enough? Did you want to make sure there was an interest for the market, there was a market for this product? I'm just curious, just how a company decides to move on an acquisition. What is sort of the... Is there a single tipping point or does it really vary from deal to deal?

Vince Racano (16:25):

It really varies from deal to deal. A lot of it's timing for a while the company had other priorities, and then it became attractive enough with the stock price where it was at the right point at the right time that we decided to move on it.

Tom Salemi (16:38):

And what is the status of the acquisition? I understand it's not expected to close until maybe first half of next year.

Vince Racano (16:46):

Right. It's currently going through a number of government reviews for antitrust regulations. And so that's going to take a while to work through, but we're expecting it to close before the end of our fiscal year, which is April of next year.

Tom Salemi (16:59):

And how do you work as an organization knowing that that sort of is in process? Are you beginning to lay down a framework for the company to come in or do you completely treat it as a separate entity? And don't think about integration until the deal's actually closed.

Vince Racano (17:14):

No, we do treat it as a separate company and we are doing integration planning internally, but we're still running very much as separate companies.

Tom Salemi (17:23):

And do you know what plans are for the company? Is it going to function as part of your unit? Is it going to operate as an independent company. Any idea on employees and such if there are any going to be any changes there?

Vince Racano (17:36):

We're still working through all those details at this point.

Tom Salemi (17:41):

OK. Well, it certainly was an exciting acquisition to see it was one of those companies I'd followed from the very start. So it's great to see it's maturation and it's ultimately finding a home. Let's go back a bit to your current portfolio. I understand that you have an image guided surgery platform. Can you talk a bit about that? And how and when is that used?

Vince Racano (18:01):

Yes, we have what's called electro mechanical system. And what it basically does, as I mentioned earlier, it allows the surgeon to track the tip of his instrument. Be it a tool, be it a micro reader blade in the anatomy of the skull, as he's operating to avoid getting into areas he does not want to get into. So it's used mostly for, I would say medium to complex cases. It's not used in every case. But it provides that extra assurance that the surgeon is where he intended to be.

Tom Salemi (18:33):

Is that used... Are these procedures typically done in hospital, in ambulatory surgical centers? Where are you selling those systems?

Vince Racano (18:45):

Those systems are both in hospitals, as well as ambulatory surgery centers. About 70% of procedures, sinus procedures are done in ORs about 30% in the ambulatory surgery center. And then the balloon cases are typically actually done in the office under local anesthesia.

Tom Salemi (19:03):

Oh, interesting. Okay. I guess it's telling that I'm not asking my COVID question until toward the end of the interview. Normally this was first or question out of my mouth, but I'm sure there was a significant impact. How did COVID impact the ENT business? And I would imagine that there's... That if any specialty was sensitive to the risk of COVID. It would be one that's working in the nasal passage where, so much of the virus congregates.

Vince Racano (19:32):

Right, absolutely. Yes, when COVID first hit March of last year, sinus surgery basically came to a complete stop as surgeons were figuring out how to deal with this. We got involved actually very early on and we established number of round tables with thought leaders, but different ways of protocols to protect themselves and their patients. And eventually by the time we got into the second quarter or mid or summer of last year, the procedure started coming back, not quite at the volume that they were before, but those procedures came back. And then as we went through third wave, fourth wave, the impact has been less and less. I think a key point is most sinus procedures don't require an ICU bed. That's obviously a limiting factor right with COVID. So now we are still seeing, not back to pre COVID volumes, but getting fairly close because of the fact that we're not using utilizing ICU beds. Just more it's the pressure on the entire system as the volume of patients are coming into hospitals.

Tom Salemi (20:34):

And how did you work with your ENT customers or physicians during the pandemic? Were you in constant contact with them? Did you create any sort of different communication channels to keep them abreast of where you were and I guess to understand where they are?

Vince Racano (20:54):

Yes. As I mentioned we had a series of global round tables discussing what was going on, as I said, sharing best practices, of how to deal with the patient flow and the OR setups. But also we continue to educate. I mentioned a lot of our business is about developing the market and exposing customers to our interpretation. And we pivoted to a virtual broadcast, workshops, live surgery, any live surgeries with instructors. And we continue as best as we could with that effort versus the hands on approach that we'd be taking. We have a surgical lab here and we do hundreds of cases with university hospitals, or other centers around the world every year. Here we had a pivot to a virtual world in this case.

Tom Salemi (21:48):

And just looking ahead, we talked a lot about growth drivers moving forward, but I'm wondering within at Medtronic. I'm wondering overall in the field itself and especially itself. Where do you see innovation sort of headed? What are some new approaches or technologies that have you particularly excited?

Vince Racano (22:07):

Yeah, I think there's a number of areas. Obviously we still have a lot of runways I mentioned in terms of driving adoption, but there's also many adjacencies. I started by saying that ENT had a lot of specialty fields. Some of which were not into - exciting areas of amid clinical needs, such as obstructive sleep apnea, allergic rhinitis. And also even in those specialties, we're currently involved with, we spoke before about head and neck cancers. There's many exciting technologies coming to that space, not least robotics. There was opportunities there as well. We recently acquired a small company, the PTeye™ device, which has helps to search and identify the parathyroids when he does the thyroid surgery. Parathyroids are small glands that regulate the calcium in your body that can easily accidentally be removed along with the tumor, so this helps the surgeon detect where those are and avoid that. So there's many other areas where we can continue to add new technologies. And then Intersect in the future will give us a platform, a whole new platform for us of pharma and drug delivery that not been their core competencies. So beyond their current products, there's many more opportunities to develop those technologies.

Tom Salemi (23:20):

And would the drugs delivered to those means, would they all be related to sinus or is that a way to deliver drugs that would affect or benefit other parts of the body as well?

Vince Racano (23:29):

There could be other areas in, well, certainly in ENT there, drugs are commonly used in otology applications, but really expanding what we do in the sinuses, because as I mentioned before, there's about a 25% recurrence rate of sinus disease, so finding ways to reduce that rate through better outcomes.

Tom Salemi (23:50):

And Vince, are there any opportunities for more care office based care of these patients?

Vince Racano (23:56):

Yes, Tom, there definitely is a trend towards that. It started, as I mentioned earlier, with balloons under local, and as physicians got more comfortable with doing procedures in the office. They're starting to do smaller surgeries there as well under local. Other procedures coming into the office also include a new technology called Eustachian tube dilation, also using the balloon to open up the Eustachian tubes. And I think we'll see more and more advances of minimally invasive surgeries in the office setting as the tools develop. And we are developing tools specifically for that smaller footprint, navigation systems, different type of equipment. That's more suitable in an office setting.

Tom Salemi (24:36):

And is that, I'm just curious is maybe a premature question, but it always comes down to reimbursement. Does that change reimbursement at all, having it done in the office or are you at a point where... You must be at a point where you're sort of least anticipating what the impact would be.

Vince Racano (24:50):

Right now, depending on the procedure, the reimbursement is uneven in the office setting. But there's a lot of work by the societies, the physician communities to improve that because you can imagine, of course the more you're in office, you take away the pressure from the OR time or the procedures. Also, patients prefer the having procedures done in an office setting is versus going into the OR ward and under general.

Tom Salemi (25:13):

All right, well, it's great stuff. I look forward to tracking the Intersect ENT acquisition and hearing how it fits into Medtronic and appreciate your taking time and for joining us on the podcast. Thanks.

Vince Racano (25:24):

Well, thank you very much, Tom. I enjoyed it.

Tom Salemi (25:26):

All right. Well, that is a wrap. Thank you. PropelPLM for sponsoring this episode of the MedtronicTalks podcast. Thanks again to Vince Racono of Medtronic for sitting down and sharing his story. And of course, thanks to you our listeners for your continued support of this podcast, could do a few things to help us out and we'd be even more grateful. Please subscribe to this podcast on any of the podcast players you're listening to. Look for subscribe or follow and future episodes of the podcast will be sent directly to you. You can also share these episodes on social media, just post them from your podcast app, or you can find them at We have a page there just for the MedtronicTalks podcast. Just click on the graphic for this episode. You'll be able to share that link on LinkedIn, Twitter, and wherever else you'd like to post it. When you do that, please do tag me. I am on LinkedIn, Tom Salemi, S-A-L-E-M-I or I'm on Twitter @medtechTom. While you're on the device, website, please look at our other offerings of our podcasts, our digital meetings and our in-person meetings, which are happening next year in Boston, Minneapolis and the west coast. Again, thanks for tuning in to this episode of the MedtronicTalks podcast tune in next week. We'll have another great MedtronicTalks podcast waiting for you.