COVID 19: A Medtech Opportunity and Threat

For the first time ever, some big medtech companies, like Boston Scientific, are reducing hours and pay, to keep their finely honed teams ready to go once the pandemic lifts.

And, I am pleased and proud to report that I was interviewed about the impact of the pandemic on medtech in MDDI[i], which as we all know, has been substantial.

As coronavirus continues its spread across the U.S., many hospitals and health systems continue to cancel elective surgeries to dedicate resources to its coronavirus response. 

With unprecedented transparency, some medical device companies are revealing the hit to their finances. This is extremely courageous on the part of Medtronic, done I am sure for the benefit of the stock, shareholders, Wall Street and employee morale. It also serves as a useful model for other medtech companies that are trying to model their own finances during these unprecedented times. While the sales of some Medtronic business units are up (minimally invasive therapies, diabetes and cardiac & vascular groups, which represents ~10% of Medtronic’s pre-coronavirus worldwide revenue), Medtronic has reported[ii] that US revenues are down by an astonishing 60%[iii].

Country Approximate % of revenue pre-coronavirus Impact
China Represents ~ 7% of total Medtronic revenue pre-coronavirus On average, weekly revenue declined approximately 50% YOY through the week of March 9. Since that’s time, Medtronic’s weekly revenue has declined ~ 20% to 40% YOY.
Western Europe Represents approximately 20% of total Medtronic revenue pre- coronavirus In recent weeks, Medtronic’s weekly revenues have declined ~ 20% to 30% year-over-year on average, excluding any impact from customer bulk purchases.
US Represents ~ 53% of total Medtronic revenue pre- coronavirus Medtronic began to see an impact to revenue from coronavirus the week of March 16. In recent weeks, Medtronic’s U.S. weekly revenue has declined approximately 60% YOY on average, excluding any sales from customer bulk purchases.
Rest of the World Represents the remaining 20% of total Medtronic revenue Medtronic saw variable impact, with recent weeks declining on average ~ 40% to 50% YOY.

To respond to coronavirus, Medtronic has divided their businesses into More Urgent, Moderately, Urgent and More Elective.

More Urgent Moderately Elective More Elective
Cardiac and Vascular Group
  • Pacing
  • Aortic
  • Coronary
  • Cardiac Surgery
  • ICDs/CRT-Ds
  • TAVR/Structural Heart
  • Peripheral
  • AF Solutions
  • EndoVenous
  • Diagnostics
Minimally Invasive Therapies Group
  • Surgical Innovations: appendectomy, bowel obstruction, trauma
  • Respiratory and Patient Monitoring
  • Renal Care
  • Surgical Innovations: CABG, oncology
  • Surgical Innovations: bariatric, hysterectomy, hernia
  • GI
Restorative Therapies Group
  • Spine: Trauma
  • Neurovascular: ischemic stroke
  • Brain Modulation
  • Neurovascular: hemorrhagic stroke
  • Spine
  • Pain Therapies
  • Pelvic Health
  • ENT
Diabetes Group
  • Diabetes supplies
  • New insulin pump starts

[i] https://www.mddionline.com/medtech-perseveres-during-covid-19
[ii] https://www.massdevice.com/medtronic-reveals-steep-covid-19-financial-impact/
[iii] https://www.sec.gov/Archives/edgar/data/1613103/000161310320000010/exhibit991-covidx19pan.htm

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