MEDTRONIC PAIN THERAPIES & BRAIN MODULATION INVESTOR BRIEFING JANUARY 17, 2019 NORTH AMERICAN NEUROMODULATION SOCIETY (NANS)

Transcription

1 MEDTRONIC PAIN THERAPIES & BRAIN MODULATION INVESTOR BRIEFING NORTH AMERICAN NEUROMODULATION SOCIETY (NANS) JANUARY 17, 2019

2 RYAN WEISPFENNING VICE PRESIDENT INVESTOR RELATIONS

3 FORWARD LOOKING STATEMENT This presentation contains forward-looking statements which provide current expectations or forecasts, including those relating to market and sales growth, growth strategies, financial results, use of capital, product development and introduction, regulatory matters, and related effects, accounting estimates, working capital adequacy, competitive strengths and sales efforts. They are based on current assumptions and expectations that involve uncertainties or risks. These uncertainties and risks include, but are not limited to, those described in the filings we make with the U.S. Securities and Exchange Commission (SEC). Actual results may differ materially from anticipated results. Forward-looking statements are made as of today's date, and we undertake no duty to update them or any of the information contained in this presentation. Certain information in this presentation includes calculations or figures that have been prepared internally and have not been reviewed or audited by our independent registered public accounting firm. Use of different methods for preparing, calculating or presenting information may lead to differences and such differences may be material. This presentation contains financial measures which are considered non-gaap financial measures under applicable SEC rules and regulations. We believe these non- GAAP measures provide a useful way to evaluate our underlying performance. Detail concerning how all non-gaap measures are calculated, including all GAAP to non- GAAP reconciliations, are provided on our website. 3

4 GEOFF MARTHA EVP & GROUP PRESIDENT RESTORATIVE THERAPIES GROUP

5 PAIN & BRAIN THERAPIES: EVOLUTION OF GROWTH COMPREHENSIVE STRATEGY, CLEAR PRIORITIZATION Record RTG revenue growth driven by Brain and Pain Therapies Pain Therapies turnaround underway powered by recent product introductions including the Intellis, Evolve & Snapshot VECTORS Interim Clin Trial Results in Spinal Cord Stim DBS Primary Cell + Sensing DBS on the verge of several disruptive product introductions including the next generation primary cell + sensing device and directional lead in FY20; cranial mounted DBS beyond FY20 Surgical Synergy enabling more accurate procedures while breaking down payor and patient barriers to therapies Cranial Mounted DBS Visual Programming & Directional Leads Medtronic Sales by Group (as of Q2 FY19) MITG 27% DIAB 8% CVG 38% RTG 27% Specialty 20% Spine 33% Brain 31% Pain 16% RTG Sales by Division (as of Q2 FY19) Surgical Synergy/Enabling Technologies 5

6 MARSHALL STANTON, MD SVP & PRESIDENT MEDTRONIC PAIN THERAPIES

7 PAIN THERAPIES TRACK RECORD OF INNOVATION The Pain Therapies turnaround has been driven by new products (Intellis, Syncromed II), new procedures (Evolve & Control) and new data services (Snapshot) Our next phase of growth will be driven by evidence (VECTORS, EMBRACE and Opioid studies), new platforms (Accurian & MyPTM), and expansion of data services (Snapshot) Evolve & VECTORS Study Control & EMBRACE Study Pain Therapies Revenue Growth vs. Prior Year 1 25% 20% 15% 10% 5% 0% -5% -10% FY17-2% FY18 +1% Q1 +16% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY17 FY18 FY19 Q2 +20% Snapshot 2.0 Opioid Project Accurian MyPTM 1 Constant currency, constant week Y/Y revenue growth. FY17 figures adjusted to exclude FY16 extra week in baseline. 7

8 PAIN THERAPIES MARKETS & STRATEGY Pain Stim & Early Interventions Market Size $3.5B WW GAIN SHARE IN STIM CORE SEGMENTS AND MOVE UP CARE CONTINUUM Targeted Drug Delivery ADVANCE INNOVATION IN PUMP THERAPY WITH CONTROL WORKFLOW Interventional Pain PROTECT LEADERSHIP IN VCF AND SEIZE OPPORTUNITIES IN INTERVENTIONAL ONCOLOGY AND GLOBALIZATION Market Growth Low teens MDT Revenue $1.2B WW MDT Share 36% MDT Outlook 1 Low teens growth 1 Constant currency growth. 8

9 RAPID STIM MARKET GROWTH REFLECTS EXPANSION INDICATED PATIENTS, PROCEDURAL INNOVATION & OBJECTIVE OUTCOMES FUTURE $5.4B MARKET Indicated patients increase 5x over FBSS population TODAY $2.7B MARKET FBSS patients US dominant market driven by SCS Subjective outcomes New stim procedures drive global revenue Objective, functional outcomes drive predictive models & VBHC 9

10 MEDTRONIC S STIMULATION & EARLY INTERVENTIONS RECENT LAUNCHES & NEW GROWTH DRIVERS WIN IN CORE CONDITIONS Evolve Intellis VECTORS Next generation primary cell & rechargable LEAD WITH OUTCOMES Snapshot Snapshot 2.0 & 2.1 EXPAND STRATEGIC ADJACENCIES Accurian Nerve Ablation Degen Spine (Virgin Back) Painful Diabetic Neuropathy 10

11 THE INTELLIS PLATFORM OVERCOMES LIMITATIONS OF CURRENT SCS SYSTEMS WORLD S SMALLEST IMPLANTABLE SCS STIMULATOR Smallest <14cc Overdrive battery 1 hour recharge from empty to full <5% capacity fade at 9 years Wireless tablet programmer simplifies programming Wireless trial stimulator improves trial experience Integrates SureScan for MRI access Compatible with TYRX *Under specific conditions, and requires SureScan TM MRI implantable neurostimulator and leads. Refer to product labeling for full list of conditions 11

12 OVERDRIVE BATTERY TECHNOLOGY FOR INTELLIS STORY OF MEANINGFUL INNOVATION & INDUSTRY LEADERSHIP Exclusive Medtronic Technology Recharges in 1 hour, 3-4x Faster than Competition Maintains 95% Capacity After 9 Years A custom Lithium ion chemistry Specially developed for SCS devices Battery Capacity (%) Intellis units 12+ Years of internal development 20+ Patents to secure our IP leadership Early Prototypes 12

13 EVOLVE PROVIDES A SIMPLE, VERSATILE METHOD FOR HD & LD PROGRAMMING Map leads using paresthesia and if lead placement spans T9/T10, consider using Evolve Start trial with HD (1,000/90) and look for pain relief over 2-3 days with diligent patient follow up If no pain relief, adjust bi-pole programmed with HD and continue with patient follow up If no pain relief, use traditional stimulation using paresthesia mapping Dosing starts with high dose to avoid conditioning patients with paresthesia. Stop adjusting programming once pain relief is achieved. 13 Pain Therapies Investor Briefing NANS 2019 January 17, 2019

14 THE VECTORS STUDY WILL EXPAND THE EVIDENCE ABOUT EVOLVE WITH INTERIM RESULTS PRESENTED AT NANS Trial success 90% High Dose (HD) trial success 85% 71% of subjects had at least a 50% reduction 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Overall Low Back Leg INTERIM RESULTS Results from 87 of 103 subjects who have completed a 3 month follow up Trial success: 90%; High Dose (HD) trial success 85% Overall Pain Relief at 3 Months: 71% of subjects had at least a 50% reduction STUDY MILESTONES Interim Analysis: January 2019 Last Patient 3 Month Visit: End of Jan 2019 Primary Endpoint Data available: June 2019 Last Patient 12 Month Visit: November Month follow up data available: Jan

15 OBJECTIVE OUTCOMES SNAPSHOT CAPTURE OBJECTIVE MEASURES, CREATE PREDICTIVE MODELS & IMPROVE CLINICAL & ECONOMIC OUTCOMES SNAPSHOT 1.0 Activity data from Intellis accelerometer SNAPSHOT 2.1 Cohort reporting TODAY FUTURE (not yet commercialized) SNAPSHOT 2.0 Cloud based, timeline reporting with activity, PRO and goals SNAPSHOT 3.0 Patch Sensor Baseline & Predictive Models 15

16 OBJECTIVE OUTCOMES SNAPSHOT CAPTURE OBJECTIVE MEASURES, CREATE PREDICTIVE MODELS & IMPROVE CLINICAL & ECONOMIC OUTCOMES SNAPSHOT 1.0 Activity data from Intellis accelerometer SNAPSHOT 2.1 Cohort reporting TODAY FUTURE (not yet commercialized) SNAPSHOT 2.0 Cloud based, timeline reporting with activity, PRO and goals SNAPSHOT 3.0 Patch Sensor Baseline & Predictive Models 15

17 OBJECTIVE OUTCOMES SNAPSHOT CAPTURE OBJECTIVE MEASURES, CREATE PREDICTIVE MODELS & IMPROVE CLINICAL & ECONOMIC OUTCOMES SNAPSHOT 1.0 Activity data from Intellis accelerometer SNAPSHOT 2.1 Cohort reporting TODAY FUTURE (not yet commercialized) SNAPSHOT 2.0 Cloud based, timeline reporting with activity, PRO and goals SNAPSHOT 3.0 Patch Sensor Baseline & Predictive Models 15

18 OBJECTIVE OUTCOMES SNAPSHOT CAPTURE OBJECTIVE MEASURES, CREATE PREDICTIVE MODELS & IMPROVE CLINICAL & ECONOMIC OUTCOMES SNAPSHOT 1.0 Activity data from Intellis accelerometer SNAPSHOT 2.1 Cohort reporting TODAY FUTURE (not yet commercialized) SNAPSHOT 2.0 Cloud based, timeline reporting with activity, PRO and goals SNAPSHOT 3.0 Patch Sensor Baseline & Predictive Models 15

19 NOW APPROVED ACCURIAN RF SYSTEM SEE IT IN THE MEDTRONIC BOOTH PULSED, THERMAL & COOLED Consistent and predictable lesion formation Smart, modern features support clinic efficiency and ease of use Future-ready Commercial availability of The Accurian RF Ablation platform is pending. 16

20 TDD BUSINESS SUMMARY MID SIGNAL DIGIT GROWTH INNOVATION CLINICAL EVIDENCE EMBRACE TDD SYNCHROMED II CLINICIAN PROGRAMMER Simple, visual, and intuitive workflows and programming myptm PERSONAL THERAPY MANAGER Self bolusing with simple delivery, clear lockout timer, and convenient access to therapy details CONTROL WORKFLOW An evidence-based, guided approach to selecting, trialing, implanting, dosing, and managing TDD patients Multicenter, prospective study (~15 sites, 100 Patients) to demonstrate a pump is safe and effective replacement for systemic opioids Enroll subjects, Wean from systemic opioids Pump implant, Initiate IT morphine Low dose morphine monotherapy KEY MILESTONES Protocol finalized Fall Month Primary: Reduction in side effects/ pain relief First enrollment just completed 12 Month FU Follow-up complete for primary endpoint

21 INTERVENTIONAL BUSINESS SUMMARY MID SINGLE DIGIT GROWTH INNOVATION EVIDENCE OPTISPHERE EMBOLIZATION SPHERES First commercially available resorbable microsphere in the US market KYPHON ASSIST Directional cannula for improved control of balloon inflation HIGHER MORTALITY RISK for patients treated with Non- Surgical Management (NSM) compared to BKP and VP 1-5 At one year 1 55% higher risk with NSM vs BKP 1 30 % higher risk with NSM vs VP 1 At up to 10 years follow up 1 24% higher risk with NSM vs BKP 1 8% higher risk with NSM vs VP 1 One study showed no difference at one year follow up. 6 OSTEOCONTROL Accelerated bone access and biopsy for patients with hard, radiated bone STRONG PARTNERSHIPS Have Driven Awareness with HCPs and Patients 18

22 MIKE DALY VP & GENERAL MANAGER BRAIN MODULTATION

23 REINVIGORATING THE INNOVATION ENGINE Brain Modulation Strategic Imperatives 1 2 Rebuild the Foundation Tablet Programmer Next Gen PC+S Directional Lead Protect Share 3 4 Automated Therapy Closed Loop DBS Improved Access Cranial Mount Pursue Epilepsy New therapy opportunity Regain Share + Drive Growth 19 RESEARCH AND TECHNOLOGY INNOVATIONS UNDER DEVELOPMENT. NOT APPROVED FOR COMMERCIAL USE.

24 REBUILDING THE FOUNDATION REESTABLISHING COMPETITIVE TECHNOLOGY Visual Programming Launched June 2018 Next Gen INS Sensing Enabled FY20 Directional Lead FY21 External Programmers Devices Leads 20 RESEARCH AND TECHNOLOGY INNOVATIONS UNDER DEVELOPMENT. NOT APPROVED FOR COMMERCIAL USE.

25 AUTOMATING THE THERAPY TOWARDS CLOSED LOOP DBS CHRONIC BRAIN MONITORING INFORMED PROGRAMMING adbs: CLOSED LOOP THERAPY Brain Signals Stimulation Adjust Detect Measure OBJECTIVE DATA EFFICIENT MANAGEMENT IMPROVED OUTCOMES Potential for: Improved longevity Reduced side effects Reduced programming burden 21 RESEARCH AND TECHNOLOGY INNOVATIONS UNDER DEVELOPMENT. NOT APPROVED FOR COMMERCIAL USE.

26 IMPROVING ACCESS VIA A CRANIAL MOUNTED DEVICE BETTER COSMESIS, REDUCED SURGICAL COMPLEXITY CRANIAL PLACEMENT PATIENT CLINICAL ELIMINATE EXTENSION(S) Improved cosmesis Single visit Faster, simpler procedure ELIMINATE PECTORAL IMPLANT WIRELESS RECHARGE No bowstringing Improved comfort No tunneling 22 RESEARCH AND TECHNOLOGY INNOVATIONS UNDER DEVELOPMENT. NOT APPROVED FOR COMMERCIAL USE.

27 DBS FOR EPILEPSY MAJOR NEW MARKET OPPORTUNITY DBS of the Anterior Nucleus of the Thalamus Partial Onset Seizures + Epilepsy Prevalence (18+): 1.8M Successfully Treated With Meds ~1.2M 68% Treatment Refractory ~0.6M 32% With 3+ failed AEDs ~450K 76% 60% Partial Onset Seizures ~400K >5 Seizures a Month ~150K 24% Clinical & Economic Exclusions ~120K 20% Net Indicated Prevalence: ~120K Debilitating Side Effects ~0.4M 30% US Opportunity Launched November 2018 at American Epilepsy Society Meeting 23 RESEARCH AND TECHNOLOGY INNOVATIONS UNDER DEVELOPMENT. NOT APPROVED FOR COMMERCIAL USE.

28 EXECUTING THE PIPELINE LAUNCHING FY20-21 BEYOND Enabling Technologies Adjust Detect Measure Next Gen INS + Sensing Clinician and Patient Programmers Cranial Mount + Directional Lead + Visual Programming ANT Epilepsy Compete Differentiate Disrupt 24 RESEARCH AND TECHNOLOGY INNOVATIONS UNDER DEVELOPMENT. NOT APPROVED FOR COMMERCIAL USE.

29 REINVIGORATING THE INNOVATION ENGINE Brain Modulation Strategic Imperatives 1 2 Rebuild the Foundation Tablet Programmer Next Gen PC+S Directional Lead Protect Share 3 4 Automated Therapy Closed Loop DBS Improved Access Cranial Mount Pursue Epilepsy New therapy opportunity Regain Share + Drive Growth 25 RESEARCH AND TECHNOLOGY INNOVATIONS UNDER DEVELOPMENT. NOT APPROVED FOR COMMERCIAL USE.

30 Q&A PANELISTS Geoff Martha EVP and Group President, Restorative Therapies Group Moderated by RYAN WEISPFENNING Vice President, Investor Relations Marshall Stanton, M.D. SVP and President, Pain Therapies Matt Thomas VP and GM, Pain Stimulation Charlie Covert VP and GM, Drug Delivery Mike Daly VP and GM, Brain Modulation

31 NON-GAAP RECONCILLIATION 26

32 MEDTRONIC PAIN / BRAIN THERAPIES INVESTOR BRIEFING NORTH AMERICAN NEUROMODULATION SOCIETY (NANS) JANUARY 17, 2019