June 10, 2021
Geoff Martha took the helm of Medtronic just as the world was entering an epic pandemic. But the lockdown didn’t slow down Medtronic’s reorganization, a seismic change that Martha and the management team felt was necessary to instill a new “Medtronic Mindset.” Now one year in, Martha shares his thoughts on the past year. What’s gone well? What could go better? And where is Medtronic looking for growth? He also speaks to the decision to pull] Medtronic’s HeartWare HVAD off the market.
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 you insights in the MedTech industry led us to the fine, fine folks at 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 of 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, hop 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. Welcome to this episode of the MedtronicTalks podcast. It's great to have you here. Today's guest quite literally needs no introduction, but I will give you one anyway. I had the opportunity to speak with Geoff Martha. Geoff, of course, is CEO and Chairman of Medtronic. He became CEO last year, just as the pandemic started to set in last spring. So we talked a bit about his first year at the helm, about where Medtronic is and where MedTech is in the COVID recovery. But I think more interestingly, we talked about what he learned about being CEO. What were some of the pro's and the con's might be too strong, but things that surprised him.
Tom Salemi (01:29):
We talked about Medtronic's reorganization and its move forward to hold employees more accountable for market share. It was a great conversation, I learned a lot. And I know you will, too. Before we get into this conversation with Geoff Martha, I want to bring in Dave Franchino. Dave is the president of Delve. Delve is this week's sponsor. Dave, I'd love to learn more about Delve, tell us about your company.
Dave Franchino (01:52):
Tom, thanks. Delve is a full service strategic design innovation firm. Our mission is to help companies research, design, develop, and implement innovative new products and services. We've been at that about 50 years. There's about 95 professionals who work for Delve. And we're located in three offices. We've got Madison, Wisconsin, San Francisco, and downtown Boston as well for our staff. Really the bulk of the firm is working on healthcare and medical devices, I'd say probably 85% of our work is in healthcare and medical devices. We jealously guard the part of our work that's not in healthcare and med devices, we think that really helps inform the work that we do. But the firm is primarily constructed around helping medical device manufacturers and healthcare bring innovative new products and services into the marketplace.
Tom Salemi (02:45):
We'll hear some exciting news about Delve a little later in the podcast. For more information, though, you can go to Delve.com. Now, let's hear from Geoff Martha, the Chairman and CEO of Medtronic. Geoff Martha, welcome back to the podcast.
Geoff Martha (03:04):
Yeah, thanks for having me.
Tom Salemi (03:04):
I saw you on LinkedIn. This is kind of a softball question to start. But you posted a graduation picture of your daughter. And I recall from our first podcast you shared the story of how you had to break her heart and move her when she was 12 years old. It seems as though she recovered okay?
Geoff Martha (03:20):
She has recovered, yeah. Funny you remembered that. Yeah, it was a difficult conversation to get her to move from Milwaukee to here in Minneapolis. Now things have dramatically changed. She's a happy college graduate and she's moving back to Minneapolis here and taking a job here in the Twin Cities, and she's super excited, and her mother and I couldn't be more thrilled that she's at least going to be in the same town as us. So it's good times for us.
Tom Salemi (03:49):
I wonder, I've talked to a lot of executives. A lot of them have moved, in MedTech and other industries throughout their career. That's not likely to ever go away. But do you see any meaningful changes to how MedTech is working post-COVID? We're all sort of seeing maybe that moving isn't a necessity, that relocation might not need to happen. Do you see any lasting changes to what will corporations require of their executives?
Geoff Martha (04:13):
Yeah. I think it's been changing a ton over the years, I'd say. I grew up in GE, and back in the '90s it was, you could have a conversation with your manager... "Well, we're thinking about this job in Oregon." And I'd go home and talk to my wife and say, "Look, let's get the house on the market." And there was no question, we just moved. Right? Over the last 15 years, I think people have been finding a little bit more of a work/life balance, and companies have been a little more flexible. But I do think after COVID, it'll be interesting, I think that flexibility will increase because of technology. And I still believe in this hybrid idea, it's some sort of combination of face to face and you can use technology for part of the time. I don't think you can lead a team remotely, especially in an R&D environment, an innovation environment, full-time. You need to have some face to face.
Geoff Martha (05:15):
But I do think there'll be more flexibility. There'll continue to be more flexibility around remote and virtual.
Tom Salemi (05:20):
Interesting, yeah, no, it'll be interesting to see how things develop. Well let's just hit upon COVID for one second, I listened to your quarterly call. In that you suggested or declared that at least in the US, we seem to have moved past the COVID impact. Is that a fair assessment of what you said?
Geoff Martha (05:43):
Sure, it's not 100% back yet for every therapy. But you know, by and large, we're getting really close. Some of our therapies in the US were even above pre-pandemic levels. And others are in that 85% or more. Even our more elective therapies or procedures are coming back. So I think the US is very close to being - is fully back, fully returned.
Tom Salemi (06:12):
How are you managing OUS? Obviously it's in various stages, and some horrible stages, in some companies and markets. What is Medtronic doing to support those businesses outside this country and help them do the best that they can? And obviously to weather this pandemic storm.
Geoff Martha (06:27):
Well I think first of all, in some of the emerging markets, you've got to highlight India and parts of Latin America where COVID is still, and other parts of southeast Asia, outside of India, where COVID is still a really big problem, even bigger than it had been prior, the support, it feels like we're back at day one, the way it was in the United States in March and April of a year ago, 2020. It's really supporting those employees and their families, it's a humanitarian crisis. That's first and foremost. So we're doing a lot of expediting of different products and services to those markets. And working with governments, with the US government, and then I'll use India as an example, the Indian government. I'm on a task force that was organized by the White House to help.
Geoff Martha (07:16):
It feels like back in the early days of, like I said, 2020. I don't know fully why India didn't go through that experience back then and they're going through it now, there's different theories. But nonetheless, it's a real humanitarian crisis. And it affects, obviously, the people on the ground in India. But also in an engineering company like ours, there's a lot of employees and leaders of Indian descent. So it's a very sensitive topic, and I haven't talked to an Indian employee that does not have a family member or close friend that lives back in India that hasn't been impacted. Right now, it's an all hands on deck to get them supplies, ventilators, oxygenators. And ultimately vaccines.
Geoff Martha (07:59):
We're working with various other companies, the US government, other governments, and of course, the Indian government to make this happen. That's taken up a lot of time over the last couple weeks. Then you've got some places on the other extreme, like China, like the US that are fully returned. Then you've got Europe, I'd say, is in the middle. It's closer to the United States, I think. It just hit this inflection point that we hit in the US a few weeks ago, or a month or two ago, on vaccines. Where enough people have gotten vaccinated and you feel the momentum coming back in western Europe.
Geoff Martha (08:35):
With western Europe, the support we're providing is some of the lessons that we learned in the US, is once you hit that inflection point, things move fast. And I hope that's what's going to happen in Europe.
Tom Salemi (08:45):
Have you required anything internally at Medtronic vaccination-wise? Have you communicated anything to employees?
Geoff Martha (08:50):
Yeah. Again, we have to work with the different jurisdictions around the world. In the US it's by state and we work with various countries all over the map. Our team's done a great job. Working with governments to procure vaccines for our employees, and their family members, and the community, in some cases. We're doing vaccinations out of our facilities. And again, working with the local authorities to get these vaccines. It's been great. Our employees and their families are very grateful for it. And the communities, too. Like in India, for example, we're trying to get vaccines to our Indian employees but we've kind of agreed to this one to three or one to four ratio, for every employee we vaccine, we vaccine three in the community. We're trying to make this good for our employees, but also for the communities that they're in.
Tom Salemi (09:50):
Do you have a threshold in mind, the vaccination rate of employees you want to reach or hit?
Geoff Martha (09:56):
I think it's in line with what you're hearing, like it did take the US. We're hoping to get into the 70's. I haven't gotten an update recently on the percentages, but it seems to be going pretty quickly. But given how many employees we have, at Medtronic say it's 100,000-ish, and a good portion of those in the United States, call it 40, 50,000, it starts to reflect what you're seeing in the country, right? We'll probably mirror the United States. Maybe a little higher end, because it being a healthcare company and a little closer to it, there's maybe a bias to trust the science. So maybe it's a little higher than what you're seeing in the United States. But so far, almost every employee I've talked to's been vaccinated.
Tom Salemi (10:42):
I swear, I didn't want to go down the COVID rabbit hole, but once you start talking about it there's so many questions. But it's been a big part of your first year as CEO, and I wanted to talk about that. Both, we'll talk operationally in a moment. But just personally, this is your first CEO role. What is different about being the CEO? What are the positives? Have you identified anything, I don't want to say negatives? But any challenges, perhaps, that you'd rather be without?
Tom Salemi (11:12):
All right, let's take a quick break from this conversation with Geoff Martha to visit again with Dave Franchino, the president of Delve. Dave, I understand you've had some exciting news at your company. Have an interesting merger you'd like to tell us about?
Dave Franchino (11:26):
Yeah, we're really excited about this, Tom. So after 55 years of operating independently, Delve is going to be merging together with Bresslergroup. They're a Philadelphia paced full service innovation consulting firm, and we're being helped in this merger by Trinity Hunt partners. It's a Dallas-based private equity firm who's kind of helped us form a vision, a real comprehensive product design powerhouse. Relative to Bressler, very similar company to us. We've known and respected them for a long time. Very similar pedigree in history. They're about our size, common disciplines and specialties. Their roots, their passions, similar to ours, is in innovation and innovative consulting.
Dave Franchino (12:07):
They have a tremendous portfolio of medical device work. We've really, over the last half a year or so, we've got a chance to really get to know the leadership of Bressler, and it's going to be, I think, a lot of fun to integrate our two organizations. Together, we'll be one of the largest product development firms in the world. It basically doubles our capacity and our resources, so the ability to take on more exciting and deeper projects. Then together with Trinity Hunt, we have some really exciting plans to expand and grow in areas that we think are really going to help our staff take on more challenging projects, help our clients with a broader range of services.
Tom Salemi (12:47):
Finally Dave, I also understand that Delve has been recognized for some work it did in the MedTech area. Tell us about your recent award.
Dave Franchino (12:55):
Both us and Bressler were both recognized as finalists for the 2021 medical design excellence awards. So really excited about that. Similar to us Bressler group has a great focus and pedigree in healthcare and medical devices and they ran for a rapid, intuitive baby screening technology and we are really proud of having run for the real immersion system that we did together with Penumbra, which is the world's first virtual reality system that's purpose built for stroke rehabilitation. So essentially, the current state of technology in stroke rehabilitation is taking a stroke patient and walking them through a series of exercises to try to test mobility. With the real system, it actually tracks and displays upper extremity rehabilitation exercises for adults who might have symptoms related to stroke or neurological diseases.
Dave Franchino (13:52):
So with engineers and designers that had decades of experience in medical device development, that was combined together with essentially a 3D art and game development studio that allows a clinical practitioner to setup in a couple of minutes and then use sensors that can accommodate limited grip strength and mobility and allow patients to work through a series of exercises that's much more enjoyable, it's much more immersive, it offers kind of a gaming environment to the patient but also provides real time feedback and statistics to the clinical staff who's trying to track rehabilitation. So it was recognized with an MDEA gold award and we're really excited and proud of the work.
Geoff Martha (14:33):
But it's the type of work, I think, that really inspires our staff, and we really consider ourselves fortunate to have partnered with a great firm like Penumbra on that.
Tom Salemi (14:41):
Thanks for joining us, Dave Franchino, and thank you Delve for sponsoring this episode of the MedtronicTalks podcast. For more information about Delve, you can go to Delve.com. I mean, this is your first CEO role. What is different about being the CEO? What are the positives? And have you identified anything, I don't want to say negatives? But any challenges, perhaps that you'd rather be without?
Geoff Martha (15:09):
There's a lot of positives. Being a CEO of a company of any size, especially a large one, an iconic company like Medtronic that's in healthcare, it's humbling to see. You get really a bird's eye view - and I think this is a healthcare comment, for certain, a Medtronic comment - how dedicated people are to healthcare, and helping other peoples' lives and how seriously they take that and how hard they work every day. It's very inspiring to see that. I think one thing I've learned over the last year, and COVID's really helped that, is when you've got the resources available to you of a company like Medtronic, and scientific capabilities, clinical capabilities, technology, balance sheet, financing, relationships with physicians.
Geoff Martha (16:03):
I've started to think bigger in terms of what we could and should be doing. For sure, on the healthcare side, we take great pride in that we impact the lives of two patients every second. That sounds like a lot, two patients every second, it adds up to roughly 80 million people a year. But then I started to think about that, 80 million is just a small fraction of the world's population, and we tend to deal with the sicker people that need a cardiac device or a surgical procedure. I do think that 80 million should go to 800 million, and we should be much more ubiquitous given the advancements in technology and the role that we can play in healthcare.
Geoff Martha (16:46):
And a lot of it is miniaturization of electronics, and longer batteries, data and AI, and all these things. I really think we can get that 800 million in a reasonable period of time. 800 million patients versus 80 million. That, I've really started to think about the challenges. How do you run the company day to day to hit the goals we need to hit and keep everybody happy? But also have these, I wouldn't' just call them aspirations but real goals to really transform the company, transform healthcare. That, to me, has been the biggest, I think most exciting thing that I'm dealing with right now. It's just, inspired every day by seeing these employees do what they do, and our partners, the physicians in the hospitals.
Geoff Martha (17:36):
And two, just this opportunity to transform healthcare given what we have. In terms of the other side of the ledger, every conversation that you're in, every meeting that you're in, people are really watching what you say and what you do. Every kind of mannerism. So you really need to be on your game every day, in terms of positive outlook, be patient but have a sense of urgency, but be patient. Be optimistic but pragmatic. To have a lot of energy. To have that personal touch. I've had to learn to kind of, I wouldn't say radically change my life, but to get better at managing my energy and being disciplined so that every day I am in that mode, and you've got to make trade-offs in your personal life that sometimes are difficult.
Geoff Martha (18:33):
You want to go visit some friends for the weekend, and sometimes you just can't do that because you've got to use the weekend to really rejuvenate, and also sometimes just think because you're going from event to event during the week. That kind of a lifestyle can be a little exhausting, so it's definitely not a positive. I don't know if it's a negative. But I've got to learn to deal with it. I've gotten better but I'm still working on that.
Tom Salemi (19:01):
That's interesting. I can relate to that doing a podcast and interviewing people all week. By the end of the week, you can be exhausted.
Geoff Martha (19:09):
Tom Salemi (19:10):
I had a thought and it just slipped out of my head, hold on.
Geoff Martha (19:13):
Well I think like we talked about before, things that I've learned to do, like we talked about, before we got on the show here, hockey, I'm still playing men's league hockey. It sounds silly, but that hour, this weekend it was an hour and 15 minutes, and I was praying for that Zamboni guy to open the door. I was so gassed. But really, it's a different type of exercise, it's a real release. That's really, what I'm talking about, that's part of my recovery process. Getting that recovery process, or that rejuvenation process, both physically and mentally, is something that you really have to get good at and you have to be consistent with.
Tom Salemi (19:53):
But I was going to say, a lot of CEOs, I think, to counter that, maybe they withdraw, at least publicly, and they don't say as much publicly. You've put yourself out there and I daresay you've inspired others to do that. We've got the MedtronicTalks podcast. I know that doesn't happen if you don't put yourself out there and communicate. You've got the videos on the investor relations calls. You're really making a point of maybe you're being more careful as to how you communicate, but you're not dialing back on that communication at all.
Geoff Martha (20:25):
No. I think look, what great organizations do is they lay out, I think, an ambitious or bold vision, they tell you what they're going to do, and then they go do it and they update you along the way. I do think it's important to communicate. And these different communications, whether they be the earnings calls or podcasts like this, or a lot of internal communications. I know various audiences, even though it might be geared to one audience, is listening, they're listening. It's a way to move the organization forward and the ecosystem around us that's important is to kind of set out that inspiring, ambitious vision. Then along the way, update people and call balls and strikes. Like I said on our earnings call, here's where we're winning share. And here's where we're losing share.
Geoff Martha (21:16):
I think everybody wants to be on the winning side, no one wants to be on the losing side, but we've got to be clear with people. Look, the other thing is if you're going to come up with something great, you've got to be ambitious about it and you've got to make yourself vulnerable. You've got to put yourself out there. And sometimes, it doesn't always work out. You have hiccups along the way and you've got to own those and be straight with people, don't try to sugar coat it. I think that gets you support and credibility, and it's liberating, to be honest with you. So yeah, we have stepped up the communication quite a bit and I'm hoping and anticipating that will continue and evolve.
Tom Salemi (21:58):
I noted that in the call, and I advise everyone who wants the balls and strikes, and to see all the numbers, you do a great job with that presentation and they can get that here, that presentation. But you did identify those businesses that, perhaps, I don't want to say disappointed, but that could do better, and you identified competitors who grabbed some market share from you or places where you lost some market share because of them. I don't know if that's always done on these calls.
Geoff Martha (22:24):
I had a few board members call me and say, "Are you sure you want to call competitors out like that?" We're not necessarily calling them out. It's not badmouthing or trash talking. It's just look, we tend to use the word competitor. I'm like, well, in this case, throw out we lost share to Boston Scientific and in this other case, we gained share from Axonics, whatever. It's not meant to be negative, just it's clarity and honesty.
Tom Salemi (22:54):
That's interesting you got that call but I took it that way as well, or took it as honesty. One thing you talked about, and I do want to get into the businesses, but this is a great conversation. Your focus on market share, you said the upcoming fiscal year will be the first time you count market share gains and I presume losses as well.
Geoff Martha (23:15):
Right. Unfortunately. There are some of those.
Tom Salemi (23:19):
And calculating compensation. That makes it very real for employees. How difficult it was to come up with a metric that measures it correctly, and maybe it's super simple, I don't know.
Geoff Martha (23:30):
No, it's not.
Tom Salemi (23:31):
And are you just looking at dollars generated? Are you looking at lives touched? Are there other factors when you come up with the market share?
Geoff Martha (23:40):
Well look, in some cases we've got really granular and accurate data. In some of our markets, us and our competitors, years ago, way before me, have agreed to submit their data to an independent third party, like an accounting firm, like a Deloitte or somebody. Then that firm publishes that data. So we know what the overall market's doing and then we know what our piece is, so we can tell if we gained or lost share. So there it can be very specific. In other cases we're triangulating, and it's very difficult, right? We're reading earnings reports, triangulating our data with earnings reports from other companies who have various numbers grouped together, and we've got to splice them apart so it's not exact.
Geoff Martha (24:30):
But you can get a trend at least, and you can see a trend. I've asked the team, don't get so caught up in precision. Get the general trend. And just going through this exercise has been helpful. The other thing I'd say, Tom, is we are looking at very unique cases so we may, for our cardiac rhythm business, measure it one way. But for our spine business measure it another way. Just based on the availability of data, based on what we're trying to ta- again, this is internally for us. It's not meant to be some audited number. It's like, okay. But it's as precise as we can get it and it's as contextual as we can get it.
Geoff Martha (25:08):
Some cases it's units, some cases it's dollars, some cases you're looking for more of an improvement trend, quarter over quarter. In other cases more year over year. So we'll see. This will be our first year. And just this last year, just learning how to track it better and talking about it and then debating it internally, even arguing over, okay, what's the best way? It's been a learning ... The idea here is to really get the organization focused on it. One of the other challenges is just the messaging around it. One share of market growth is way more important than one share of market share growth really. Growing the market's more important. So this doesn't take our focus off growing the starting new markets. It's an and.
Geoff Martha (25:54):
It's like look, you need a growth market but you also need to be competitive. It's an and, not an or. Kind of getting that message across, that hey, look, we're not just shifting from an innovation driven company that's really focused on market development which is what Medtronic, I think really separates the company, starting different segments. Hopefully a new one will start, renal denervation for hypertension, that's a new one we'll start and lead. Leading these markets, that's what Medtronic's known for. It's awe-inspiring to just watch that process play out. We're not moving away from that. We're just saying once we open up these markets and start to grow them, we need to keep that share for longer.
Geoff Martha (26:32):
Or conversely, when we're entering a new market with surgical robotics, and we're competing against Intuitive, we want to really partly measure ourselves, again, market growth. Because there's a lot of market growth there more than anything. But also how we're doing against the competition there. So it's both.
Tom Salemi (26:51):
I'm glad you hit upon those two, I was going to get into them later but let's bring it up now. With robotics, how does the Mazor™ roll out, or your Mazor™ business, has that helped inform what you're doing with Hugo™? You brought that up in the call, you mentioned some of the successes you have with Mazor™, rather. Is it comparable to Hugo™? Does it help you layout a plan for rolling that out? Or is it completely different?
Geoff Martha (27:16):
Well, there's some. It is quite different. Because in spine we were us and Globus were the first two. There may be others that are calling themselves robots. But these two seem to be the leading ones and it was new for spine surgery. So we were earlier on there, and blazing that trail. The spine surgeons weren't as discerning, because this was the first robot they had. It wasn't quite the same. Versus in surgery, Da Vinci's been out there for 28 years or something like that. The surgeons and the sophistication of robotics has evolved for quite a bit longer there. There's not an exact analog, but there's definitely some lessons learned.
Geoff Martha (28:02):
We learned how to think about going to market. This is a big commercial capital equipment purchase. It's a certain skill to sell a piece of capital like that to a hospital, you get into the budgeting process, the c-suite, it's a big million dollar plus purchase. Then there's a lot of training that goes, so you have to have a certain training sales force at the beginning, it's a little more hypercare models, we call it, until the surgical team is up and running. Then you have the maintenance. How to think about go to market and how to think about different acquisition models. There's a lot of lessons learned that are going to help. For sure, the Mazor™ experience is going to help us on the surgical robot side. But I don't want to make it out to be it's exactly the same, because it's definitely not.
Geoff Martha (28:53):
There's quite a bit of differences. One thing, the business models, I think there might be some more flexibility in spine because you've got so many more consumables per procedure. The spine cases, there's a lot more value in the consumables than an average general surgery case. That gives you different options on business models that are a little bit more difficult in surgery. But definitely, it's just informing us. For example, we're using the scale of our maintenance business that came from our neuroscience area. Because it's not just robots. We've got robots, we've got imaging, like the OR, and we've got navigation. That service organization, we're going to leverage region by region to help with our robotics maintenance. So there are some synergies as well.
Tom Salemi (29:38):
Two more questions. Renal denervation, obviously you don't have the approval yet but you're anticipating hopefully some exciting news in the fall at TCT, if you have clinical results. What are you doing now to prepare? Are you doing anything now to prepare for a commercial roll out? Are you starting from scratch with that sort of roll out? Because it's such an innovative technology. What goes into building that kind of business?
Geoff Martha (30:01):
Well, first of all, given that it's a new concept, I think the marketing of it needs to be different. It's a whole new concept, hypertension therapy that's device-related, people are thinking about hypertension they think about, well, change my diet and exercise, take some pills, a pharma regimen. But some sort of med device procedure with a catheter and this seems crazy. We can't rely on, in this case, the United States, the interventionists here, the interventional cardiologists. I think the marketing job, we need to work with them on and go direct to the patient to drive awareness. So we've been building that muscle of how to go direct to patient to drive awareness of what the benefits of this therapy exist, the benefits of it.
Geoff Martha (30:57):
And then build the referral pathway from that consumer, who could be a patient, into the healthcare system through their primary care and/or cardiologists, and eventually get to that interventional cardiologist. So that we're working on the direct to patient marketing as well as the referral pathway, which is something unique. In the past, if you think about it, even with a new therapy, a lot of the times, the concept is out there and the referral pathway is set. It's just a new mousetrap. Here, this is a whole new concept without the referral pathway. That's probably the biggest thing. Then reimbursement, we're working with different commercial payers and the CMS on reimbursement.
Tom Salemi (31:42):
Okay. And perhaps a final question, I know you have to go, last week you had the announcement about HeartWare™. What went into the decision to stop selling HeartWare™? And how is that calculation done? Can you share, give us a little color on that process?
Geoff Martha (32:02):
Well sure. This was one, just for context these are very sick patients. There's two therapies out there today, one, two left ventricular assist device, one from Abbott and one from Medtronic. Both companies purchased these smaller companies years ago. It was a growing body of evidence. What really drove the decision is a growing body of evidence that Abbott's device was better for patients. We got some new data to show that just, it's in the process of being published, that our device has a higher neurological events, higher incidence of neurological events, including stroke, and a higher mortality. On top of that, we've had some performance issues with the device. But the bigger issue for us is that there's an alternative. Abbott's device had lower rates.
Geoff Martha (33:06):
The rates were different enough that we just felt it was better for patients. It kind of, not kind of, it goes straight to the heart of Medtronic's Mission-driven focus. We're disappointed we couldn't address some of these issues. It's a complicated therapy, we couldn't get it to where we wanted to. But the path was uncertain and the time was too long. So we decided in the name of better patient care to make this decision, and financially it's a hit but we can absorb it, it was in our guidance. From our earnings call. Because we've kind of anticipated something like this. But look, our reputation is the most important thing here at Medtronic, and our Mission and this is the right thing for patients.
Tom Salemi (33:55):
Was there any external review that went along with that? Or was this all internal, Medtronic sort of analyzing the data and coming up with this conclusion?
Geoff Martha (34:02):
No, no, we wouldn't' make a decision like this alone, normally. We work with the FDA. We work with an independent physician group as well, when I say it's independent, they're in the space, but not tied to Medtronic, and they provide us with independent thoughts. We work with both, hand in hand. Matter of fact, we showed the FDA some of the data that we knew was coming that we knew was emerging. And so yeah, the FDA was working with us. And then ultimately, if you notice, there was timing with Abbott, they released a press release saying that they can handle the extra volume. Working with Abbott to make sure that they were prepared as well. Alerting them, I mean, and giving them some time to be prepared.
Geoff Martha (34:50):
Again, we tried to make this as little of patient impact as possible. And make sure that we had all the right decision makers around the table. Because there are trade offs, and then you're down to one therapy here, at least for the next several years. But we thought the trade off, when we say we, collectively, all the people we consulted with in the organizations, this was the right decision.
Tom Salemi (35:13):
Great. I don't want to take any more of your time. I appreciate it, Geoff. Great. Thank you for joining us on the podcast.
Geoff Martha (35:19):
All right. Thanks, Tom, good talking to you as always.
Tom Salemi (35:20):
Well that is a wrap. Thanks for joining us on this episode of the MedtronicTalks podcast. Thanks again to Geoff Martha for taking the time and sharing his story. You can find other episodes of this podcast on DeviceTalks.com. I am editorial director of DeviceTalks. You can also find our DeviceTalks weekly podcast on DeviceTalks.com as well. You can find both of these podcasts on Apple, Spotify, Google, Amazon, all the biggies. You can find them there, you can subscribe to them there, so you don't miss a future episode. Finally, if you share this podcast, and please do share this podcast, on your social media channels, please tag me. I am on LinkedIn. Tom Salemi, S-A-L-E-M-I, or you can find me on Twitter @MedTechTom.
Tom Salemi (36:11):
Thanks again, Geoff Martha, for joining us. Thanks again to Delve for sponsoring this episode. Join us next time, we'll have another great episode of the MedtronicTalks podcast waiting for you.