Global Cardiovascular Big Four Q3 Earnings: Medtronic Slows Down, Edwards Sets $10B TAVR Target

Dec 06, 2023 19:33 CST Updated 19:33

Medtronic

Medical Device Manufacturer

Q1-Q3 2023: The Global Top Four in Cardiovascular, Cardiovascular Business Rankings Remain UnchangedMedtronic ranks first, Abbott second, Boston Scientific third, and Edwards Lifesciences fourth.

▲The Big Four of CardiovascularCardiovascular Business Revenue and Growth in Q1-Q3 2023

Note: The first three quarters of Medtronic's cycle areApril 28, 2022 - January 27, 2023

Medtronic, as the leading company in the industry, has experienced a decline in performance this fiscal year partly due to the impact of the pandemic, with a year-on-year decrease of -2.4% in the first three quarters. The centralized procurement in China is also a significant influencing factor.

At the same time,The year-on-year growth of the second, third, and fourth places all exceeded 10%.How long can the industry leader maintain its position?

In terms of technical layout, Medtronic is involved in the fields of electrophysiology, heart failure, and cardiac valves, which have high technological content, and its involvement is relatively comprehensive. Recently, it has made a breakthrough in the field of left atrial appendage closure devices; however,In the field of heart valves, several products by Medtronic are still in clinical trials, while competitors Abbott and Edwards have already obtained multiple FDA or CE certifications, making the competition dynamic.

Giant Competition: Calm on the Surface, Turbulent Behind the Scenes.

Revenue Competition:

Medtronic Growth Slows, Three Others Achieve Double-Digit Growth

▲The Big Four of CardiovascularRevenue Situation in Q3 2023

Medtronic:Cardiovascular business only achieved 1% year-over-year growth,Coronary artery surgery still hasn't reached the level before the pandemic, and the volume-based procurement in China has also had some impact;

Abbott:As the largest business segment across the company, the double-digit growth in cardiovascular greatly offset the decline in diagnostic business;

Boston Scientific:The star product WATCHMAN (left atrial appendage occluder) is selling well, with a growth rate of over 20%. The electrophysiology business also achieved a high year-on-year growth of 27%.

Edwards Lifesciences:TAVR Business Shows Promising Growth, Department Head Expresses Confidence in Reaching $10 Billion in Sales by 2028.

Medtronic: Strong New Product Growth, but Significantly Impacted by the Pandemic and Centralized Procurement

Medtronic's Q3 2023 period is from October 28, 2022, to January 27, 2023.

Q3 total revenue of $7.727 billion, a year-on-year decrease of 0.5%,CardiovascularThe business is itsThe Largest Business Segment, with revenue of $2.772 billion, a year-on-year increase of 1%, making it one of the two businesses that achieved positive growth.

Cardiovascular business growth is primarily driven by Cardiac Rhythm Management (CRM), Transcatheter Aortic Valve Replacement (TAVR), and diagnostic sectors.。

Cardiovascular Business Analysis:

▲Medtronic Q3 Cardiovascular Sub-Business Proportion

Cardiac Rhythm and Heart Failure Business:YesThe Largest Cardiovascular Sub-segment BusinessRevenue was $1.431 billion, a year-on-year increase of 2.1%. Of this, in the area of cardiac pacing therapy,Strong Growth of Medtronic's Micra AV in China; In terms of cardiac ablation solutions, China's Arctic Front product has seen significant growth, but the impact has been offset by the effects of centralized procurement.
Structural Heart Disease and Aortic Business:Revenue of $760 million, a year-on-year increase of 2.7%. The launch of Evolut™ FX has led to...ThroughThe catheter-based aortic valve business has achieved significant growth globally.
Coronary and Peripheral Vascular Business:Revenue of $581 million, year-over-year-3.6%。Drug-Eluting Stent (DES) Market Share Grows, but percutaneous coronary intervention (PCI) in the United States, Europe, Africa, and the Middle EastBelow the level before the epidemic。

Regional Revenue Analysis:

United States:The largest market scale, with revenue of 1.375 billion US dollars, accounting for 49.6%,The most significant growth, +6%
Mature Markets Outside the United States:Revenue of $8.59 billion, the only region with a decline, year-over-year-8.1%
Emerging Markets:Revenue of $538 million, up 4.9% year-over-year

First three quarters，Medtronic's cardiovascular business generated a total revenue of $8.257 billion, a year-on-year decrease of 2.4%;

From the perspective of细分 business,Cardiac Rhythm and Heart Failure Business Accounts for More Than Half, at 51.5%, a year-on-year decrease of -2.3%; the coronary and peripheral vascular business saw a significant decline, with a year-on-year decrease of -4.6%;

In terms of regions, the decline in mature markets outside the United States was significant, with a year-on-year decrease of -11.5%;Emerging Markets See Largest Growth, an increase of 8.1% year-on-year; the U.S. market was almost flat, with a year-on-year increase of 0.2%.

Abbott: Cardiovascular is the largest business, with multiple segments achieving double-digit growth

Abbott's total revenue in Q3 2013 was $10.143 billion, with the medical device segment, where cardiovascular is located, being the largest share ($4.229 billion) and also the segment with the highest growth rate (YoY +16.6%).

Among whichCardiovascularRevenue of $2.525 billion, up 12% year-over-year, remains impressive when viewed independently.The Largest Business Across the Company, accounting for 25%.

Abbott's recent launch of several products and new indications has contributed to strong performance, including the Amplatzer Duct Occluder, the Amulet Left Atrial Appendage Occluder, and the Navitor Transcatheter Aortic Valve Implantation System.

Cardiovascular Business Analysis:

▲Abbott Q3 Cardiovascular Segment Business Proportion

Cardiovascular(Coronary Intervention, Peripheral Vascular Intervention): The largest细分 module, with revenue of $6.72 billion, a year-on-year increase of 10.9%.
Rhythm Management:Revenue of $5.63 billion, up 6% year-over-year
Electrophysiology:Revenue of $544 million, up 16% year-over-year,The largest increase
Structural Heart Disease:Revenue of $487 million, up 15.8% year-over-year, with growth close to the electrophysiology business.
Heart Failure:Revenue of $284 million, up 10.2% year-over-year

Regional Revenue Analysis:

United States:Revenue of $120.8 billion, of which cardiovascular(Coronary intervention, peripheral vascular intervention) business growth is the largest, up 17.5% year-on-year;
International Market:Revenue of $134.2 billion, of which heart failure isThe Sub-segment with the Largest Growth`, year-on-year`+30.9%。

The first three quarters，Abbott's cardiovascular business revenue reached $7.585 billion, a year-on-year increase of 10.2%;All细分businesses and different regions have achieved relatively high growth.

Among them, the structural heart disease business had the largest year-on-year increase of 13.8%, while the rhythm management business had the smallest year-on-year increase of 4.3%, cardiovascular(Coronary intervention, peripheral vascular intervention) business revenue was the highest at $20.04 billion, a year-on-year increase of 6.7%;

By region, the international market saw the largest increase in heart failure business at 19.2%, while the U.S. market had the smallest growth in rhythm management business at 3.4%.

Boston Scientific:WATCHMAN Sales Soar to $323 Million in a Single Quarter, Showing Strong Growth Momentum

Q3 Overall Revenue: $3.527 billion, YoY +11.2%; Cardiovascular Business Revenue: $2.185 billion, YoY +11.6%;

Cardiovascular is the larger of its two major business segments, accounting for 62%.

Cardiovascular Business Analysis:

▲Boston Scientific Q3 Cardiovascular Sub-segment Business Proportion

Cardiology:Revenue of $1.647 billion, up 11% year-over-year

- Interventional Cardiology Treatment:Revenue of $583 million, up 7% year-over-year, driven by the continued success of imaging technology boosting the growth of the coronary therapy franchise; AGENT™ DCB performance in Japan continues to exceed expectations; led by ACURATE Neo2™, the European structural heart valve franchise achieved double-digit growth.

- WATCHMAN：Left Atrial Appendage Occluder, isThe only product with separately counted revenue`, revenue of $323 million, a year-on-year increase of 23%.`

- Cardiac Rhythm Management:Revenue of $5.52 billion, a year-on-year increase of 5%, in diversified dynamic electrocardiography andInsertable Cardiac MonitorDriven by the ICM product portfolio, the diagnostic business achieved double-digit growth.

- Electrophysiology:Revenue of 190 million US dollars, year-on-year+27%，Pulsed Electric Field Ablation SystemFARAPULSE™ andCryogenic Ablation SystemPOLARx™ has driven 33% organic growth in the international market, while 22% of organic growth in the U.S. is attributed to the Access Solutions franchise and the early contributions of the POLARx™ system.

Peripheral Interventions:Revenue of $538 million, up 8% year-over-year. Driven by the continued success of the drug-eluting product portfolio, the arterial business achieved double-digit growth; with the launch of Embold™ coils and strong demand, the interventional oncology franchise also achieved double-digit growth.

Regional Revenue Analysis:

United States:YesThe only region showing a decline，Interventional cardiology business decreased by 4% year-over-year; while the WATCHMAN product achieved a year-over-year growth of +24.5%, becoming the fastest-growing segment in the U.S.
International Market:All segments achieved positive growth, among whichElectrophysiology business sees the largest increase, for+34.7%, followed by peripheral intervention business, up 21% year-over-year.

First three quarters，Boston Scientific's cardiovascular business accumulated revenue of $6.534 billion, a year-on-year increase of 12.1%;

Among them, the electrophysiology business saw the largest increase, with a year-on-year growth of +34%.WATCHMAN increased by 26.2% year-on-year, ranking second; interventional cardiology treatment had the smallest increase at 8.2%.

Net sales for the fourth quarter of 2023 are expected to increase by approximately 9% to 11% compared to the same period last year on a reported basis.

Edwards Lifesciences: Growth Boosts Confidence, TAVR Business Aims to Sell $10 Billion in 5 Years

Q3 total revenue was $1.481 billion, a year-on-year increase of 12.3%;

Cardiovascular business revenue was $1.26 billion, a year-on-year increase of 13.3%.

Cardiovascular Business Analysis:

▲ Edwards Lifesciences Q3 Cardiovascular Sub-Business Proportion

Edward Life Sciences has four major businesses, three of which belong to the cardiovascular field:

Transcatheter Aortic Valve Replacement（TAVR）：Revenue of $9.61 billion, a year-over-year increase of 11.4%; its new product SAPIEN 3 Ultra RESILIA, launched in 2022, is driving growth; Larry Wood, President of the TAVR and Surgical Structural Heart Division, stated,Opportunity to Accumulate $10 Billion in Revenue by 2028。
Transcatheter Mitral and Tricuspid Valve Treatment Business（TMTT）：Revenue of $0.52 billion, a year-over-year increase of 76%; driven by the accelerated adoption of PASCAL Precision and growth in transcatheter edge repair procedures.
Surgical Structural Heart Business:Revenue of $247 million, up 12.2% year-over-year; driven by the widespread adoption of RESILIA products and overall growth.

Regional Revenue Analysis:

Note: This data pertains to the company's overall business, including critical care.

United States:The largest proportionThe market, with revenue of 8.70 billion US dollars, increased by 10.6% year-on-year, accounting for 59%;

Europe:Revenue of $322 million, a year-on-year increase of 19.3%, isThe largest increaseRegion;

Japan:Revenue of $108 million, a year-on-year increase of 4.1%, representing the smallest growth among all regions;

Other Regions:Revenue of $180 million, a year-on-year increase of 14.2%.

First three quarters，Edwards Lifesciences' Cardiovascular Business Cumulative Revenue$3.793 billion，+11.4% year-on-year，

Among whichTMTTBusinessThe growth was the most significant, with cumulative revenue reaching 142 million US dollars,Up to +67.3% year-on-year；

JapanYesThe only region with a decline, with cumulative revenue of 3.4 billion US dollars, a year-on-year decrease of 6.1%; however, compared with the over 20% decline in the previous two quarters, the downward trend in the third quarter has greatly slowed down.

Next-Generation Technology Layout:

Pulse Field Ablation Breakthrough by MedtronicHeart ValveField Wave Science Exit

In the cardiovascular field, multiple细分directions have high technical barriers, providing ample competition space for the four major players in cardiovascular:

Electrophysiology，The Advent of Cardiac Ablation TechnologyNew Trends——Pulsed Electric Field Ablation；
Pacemaker TechnologyDeveloped earlier, the latest development trend isLeadless Direction；
In terms of heart valves, Aortic valve technology is relatively mature,Mitral Valve, Tricuspid Valve TechnologyIs a new hot field.

1. Electrophysiology FieldPulsed field ablation is considered the next generation of ablation technology.

In 2021, the world's first pulsed field ablation product, Farapulse PFA from Boston Scientific, received CE approval and is currently used in Europe for paroxysmal atrial fibrillation.

In 2023, two pulsed field ablation products from Medtronic, Sphere-9 and PulseSelect, successively received EU CE certification.

Left Atrial Appendage Occluder Field，Basically monopolized by Boston Scientific's Watchman series and Abbott's Amplatzer Amulet, but the two have different technical approaches.

Boston Scientific WATCHMAN Left Atrial Appendage Closure System, plug-style occluder, officially received FDA approval in the United States on March 18, 2015.
Abbott's Amplatzer ACP/Amulet, a plug-type left atrial appendage occluder, received CE certification from the European Union for the Amplatzer ACP left atrial appendage occluder in 2008.

Left Atrial Appendage Closure Device Field, the four giants have not made much progress, but recentlyMedtronicBroke this situation.

On November 28, Medtronic announced that its left atrial appendage closure device, Penditure, received FDA approval for market release, intended for patients with atrial fibrillation requiring left atrial appendage closure. This marks Medtronic's achievement since August of this year, acquired from a well-known...Incubator Syntheon was acquired.

2. In the field of heart failure,Medtronic, Abbott, and Boston Scientific have long been established in the high-end three-chamber pacemaker market, while leadless pacemakers have become the new direction of technological advancement.

MedtronicIt was the first in the world to receive approval for a wireless pacemaker, until this July.AbbottBroke Medtronic's market monopoly, obtaining approval for a wireless dual-chamber pacemaker. Boston Scientific’s wireless pacemaker also began clinical trials two years ago.

3. Heart Valve Field，The aortic valve is relatively more mature, while the mitral and tricuspid valves are more noteworthy.

Transcatheter Aortic Valve Replacement（TAVR）

Edwards Lifesciences:Pioneered commercialization, launching a similar product as early as 2007.SAPIEN 3 was approved in June 2015.FDA Approval, obtained in June 2020NMPA Approval, becoming the entry into the Chinese marketThe First Imported TAVR Product。
Medtronic:This Year10Month24Recently, Medtronic announced itsEvolutPositive Four-Year Results from the Low-Risk Trial of the Transcatheter Aortic Valve Replacement SystemIts hemodynamics is significantly better than surgical aortic valve replacement.(SAVR)。
Evolu FXObtained in the United States in August 2021FDA Approval, October 12 this yearObtainCE Mark。
Abbott:Portico is a self-expanding TAVR valve with intra-annular (within the native valve) leaflets, which, when placed within the patient’s native valve, helps provide optimal hemodynamics.Portic with FlexNav TAVR System Received Approval in August 2021FDA Approval。
Boston Scientific:In November 2020, Boston Scientific voluntarily recalled all unused LOTUS Edge devices due to issues with the delivery system and announcedStop InvestmentLOTUS Edge Platform.

Mitral Valve Replacement (TMVR)

Abbott:CurrentlyGlobally Unique ApprovalListedTranscatheter Mitral Valve Replacement Device, Only from AbbottTendyne, on2020Year of EU ApprovalCECertification(Currently, there are no similar products approvedFDACertification).
Medtronic:The Intrepid system consists of a dual-layer self-expanding nitinol stent and a tri-leaflet bovine pericardial valve.September 2020FDA Breakthrough Device Designation, currently not officially approved.
Edwards Lifesciences:The SAPIEN M3 system includes a nitinol frame surrounding the mitral valve apparatus, with a 29 mm balloon-expandable valve placed within it.Currently, the product has beenKeyTrial Enrollment。

Mitral Valve Edge-to-Edge Repair

Abbott:Abbott's MitraClip is currently the only mitral valve repair product approved by the U.S. FDA, with global applications exceeding 100,000 cases. The product received EU approval in 2008.CE Certification, obtained in the United States in 2013FDA Certification. In June 2020, Abbott's third-generation MitraClip receivedNMPA ApprovalLaunched in China, this is also the first domestically approved mitral valve repair device.
Edwards Lifesciences:Edward's PASCAL is a mitral valve clip system delivered via femoral vein-atrial septal puncture. In February 2019, it demonstrated excellent results in a single-arm clinical study in Europe and received approval in the same year.CE CertificationCurrently, the global usage of PASCAL has exceeded 1,000 cases.
Medtronic:In October 2020, Medtronic reached a strategic agreement with Foundry to jointly develop transcatheter mitral valve repair products (Half Moon Project), and quickly enterClinical Trial。

Tricuspid Valve Replacement（TTVR）

Edwards Lifesciences:On October 19 this year, EdwardsLife Science Announces CE Mark Approval for the EVOQUE Tricuspid Valve Replacement System for Transcatheter Treatment of Eligible Patients with Tricuspid Regurgitation (TR).ThisYesGlobalThe First ModelObtaining Regulatory ApprovalTranscatheter Valve Replacement Therapy for Treating Tricuspid Regurgitation (TR) Patients.
Medtronic:MedtronicThe Intrepid system, while in clinical trials for mitral valve replacement, has also initiated experiments on the tricuspid valve, with specific features as mentioned above.

Tricuspid ValveEdge-to-Edge Repair

Abbott:TriClip is specifically designed for tricuspid regurgitation, with an improved delivery system based on the anatomical position and structure of the tricuspid valve, making it more suitable for operations within the right heart system. TriClip received approval in April 2020.CE Certification, becomingThe World's FirstApproved Transcatheter Tricuspid Valve Repair Devices.
Edwards Lifesciences:PASCAL can be used for both mitral and tricuspid valve diseases simultaneously, and was approved in May 2020.CE CertificationFor tricuspid valve interventional treatment.

Under the centralized procurement:

Cardiovascular consumables centralized procurement covers all categories, with a reduction of up to 96%

Since 2019, more than ten centralized procurement projects for cardiovascular medical consumables have been launched across provinces and nationwide in China, ranging from large devices like pacemakers to smaller items like guidewires, covering nearly all categories.

Image Source: Arterial Network

Among them,Except for coronary stents and aortic interventions, the localization rate of other cardiovascular medical devices in China remains low, all below 10%.

Statistics on the Localization Rate of Cardiovascular Medical Devices in China. Data Source: Frost & Sullivan

Some categories have seen relatively moderate declines, leaving some room for MNCs.For example, the localization rate is less than 10%.Cardiac ElectrophysiologyField.

In December 2022, the 27-provincial alliance led by Fujian Province for cardiacElectrophysiologyThe results of the collection of similar medical consumables were announced. Except for Edwards Life Sciences, the other three companies participated and won the bids. The price reduction was generally less than 50%, indicating a relatively moderate decrease.

This procurement includes catheter products, catheter sheaths, and puncture needles.

Medtronic:Exclusive winning of one subgroup in the group procurement model,Single-item procurement model: 3 out of 14 specifications won bids; Supporting procurement model: 1 out of 5 products won bids.
Abbott:In the group procurement model, simultaneously winning bids in three groups with Johnson & Johnson Medical,Single-item procurement model: 10 out of 14 specifications won the bid.Five products were awarded in the supporting procurement model, with three winning bids;
Boco:Single-item procurement model: 9 out of 14 specifications won the bid.Five products were included in the bundled procurement model, with two winning bids;
Edward:Not Participated

But there are also categories with extremely large declines, reaching over 90%.

For example, the localization rate reached 80%.Coronary Stent。

In November 2020, the first batchCoronary StentNational centralized procurement opens bidding in Tianjin,Two foreign companies, Medtronic and Boston Scientific, participated, with one of Medtronic's products, the Drug-Eluting Coronary Stent System, winning the bid.Price from¥18,207Reduce to$648，A reduction of up to 96%.The first-year procurement volume obtained was 51,667 units, accounting for 4.8% of all中标 products.

Medtronic:One out of 10 products was awarded the bid, which isDrug-Eluting Coronary Stent System;
Boco:2 out of 10 products won the bid,For the Platinum Chromium Alloy Everolimus-Eluting Coronary Stent System and the Everolimus-Eluting Coronary Stent System,Is the only company that won bids for two products in this round of centralized procurement.

Recently, the centralized procurement of cardiovascular products is still ongoing.

In October 2023, the alliance of 16 provinces (autonomous regions) including ZhejiangCoronary Guiding CatheterThe results of the centralized bulk procurement selection have been released, with Medtronic among the selected;

November 2023,Hebei Medical Insurance Bureau Releases "Announcement on Publicly Soliciting Opinions for the Centralized Bulk Procurement Documents of Medical Consumables"Hebei Province Leads the Beijing-Tianjin-Hebei "3+N" Alliance in the Centralized Bulk Procurement of Medical Consumables, Including the Procurement VarietiesLeft Atrial Appendage Occluderetc.

Currently, in fields such as heart valves and pacemakers in China, foreign companies occupy an absolutely leading market share. However, in the coronary stent and balloon industries, the localization rate has reached as high as 80% and 40%, respectively.Chinese manufacturers are breaking import monopolies in multiple fields, centralized procurement further aids the substitution of domestically produced products. How will MNCs respond to this changing landscape? This tests the survival wisdom of each enterprise.

In products with a lower barrier to entry, foreign giants face a huge impact from domestic substitutes and centralized procurement.In cutting-edge technology, while the R&D process itself is fraught with risks, giants also have to face fierce competition from powerful "rivals." Every strategic move and every choice could potentially lead to a major shift in the landscape.

Now Medtronic's growth has slowed, Abbott's gap with the top position narrows, Boston Scientific’s single product is selling well, and Edwards proposed a $10 billion target. In the next five years, who will becomeThe New Dominator in the Cardiovascular Field?

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