Medtronic plc (MDT) Earnings Call Transcript & Summary

Okay. Good morning, everyone. Good morning. We're going to get started here. So let's see, we'll get the slide advanced here. Here we go. I'm Ryan Weispfenning, Vice President and Head of Investor Relations at Medtronic. Thanks for coming to our Restorative Therapies Group Investor Briefing here at the North American Neuromodulation Society conference here in Las Vegas, and welcome to those joining us around the world on our webcast. Before we get started, I want to note that we could make some comments that may be considered forward-looking statements, and actual results might differ materially from those projected in any forward-looking statement. Additional information concerning factors that could cause actual results to differ is contained in our periodic reports and other filings that we make with the SEC, and we do not undertake to update any forward-looking statement. I encourage you to go back and read this slide. The slides we're presenting today, they are available on our website, which is investorrelations.medtronic.com. Also, I want to note that given today's the last day of our fiscal third quarter and we are in our quiet period, we won't make any qualitative or quantitative comments on the quarter, including topics such as sales, market growth or market share. Today's webcasted event will last about an hour. Brett Wall, our Executive Vice President and President of Medtronic Restorative Therapies Group, will make some introductory remarks; then we'll have presentations by Marshall Stanton, who is our Senior Vice President and President of Pain Therapies; and Mike Daly, our Vice President and General Manager of Brain Modulation; and we'll end by having Matt Thomas, who's the VP and GM of Pain Stim; and Charlie Covert, who is the Vice President and General Manager of Drug Delivery, join Brett, Marshall and Mike to take your questions. And we plan to wrap up in about an hour at 9:30 a.m. Pacific Time. With that, I'll now ask Brett to come up and make some introductory remarks. Brett?

Good morning, everybody, and thank you for attending the event. And I'll jump in and get started. First, it's an exciting time for Medtronic and Medtronic's pipeline, particularly in RTG. So if you look across in RTG, we have exciting things that are happening both today, in the near term and then in the future. So if you look across the portfolio, we have a lot of things driving growth now: our enabling technologies, which is a market-leading spine and cranial enabling technologies for navigation, robotics and imaging; and powered surgical, which is really leading the way in this revolution in spine that's occurring right in front of our eyes. In particular that I want to point out there on the enabling technologies is we've done our also first case of our cranial robot. We have a small cranial robot. We did our first case in Phoenix last week, and this is an exciting new technology that's married to our StealthStation. So we're moving very aggressively into these fields and into these areas where we can place and wrap it in our surgical synergy portfolio, which includes navigation, our imaging and robotics and powered surgical. The Riptide Aspiration System, this is our React catheter, along with the Solitaire X. This is a market-leading system for stroke, and we continue to like the stroke market and the prospects. And then Titan. Titan is an acquisition, so that's inorganic, but that's driving growth. And the thing about Titan is it's not only an interbody that we acquired, a titanium interbody. It's actually a technology because of the nanoLOCK surface modification that is done to this. What's interesting about that is that surface modification does not allow a biofilm to form, and that's a very interesting concept when you start thinking about proliferating this technology into other implants' future. Marshall will be talking today significantly about DTM therapy on Intellis. We're really excited about what this therapy can do. This market responds to new technology and to data. The InterStim Micro and the SureScan MRI leads, this product has CE mark now in Europe. We've done our first case as of last week. So we are in the market, and we're excited about where this goes full body, 3T, 1.5T MRI. Percept deep brain stimulator. Mike Daly is here today. He is the Vice President, General Manager of the Brain Modulation business, and Mike will talk to you about this. We are back. We are in the market. We are in Europe. We are doing cases, and that's a really, really exciting technology for us because it's going to allow us in the future to close the loop and actually have closed-loop therapy in the brain. Our NIM monitoring system. This morning, we just received a CE mark approval for the Pipeline Vantage with Shield Technology. This is a new aneurysm device within Europe. It is a smaller system, allowing to go through a smaller catheter, and it has the surface modification that mimics red blood cells and helps in the process when you're using dual antiplatelet therapy. And then beyond, we have new hemorrhagic stroke intrasaccular devices. We're continuing to iterate on the spine technologies and then the closed-loop deep brain stimulator. So a very full pipeline, and we continue to invest in this particular area of RTG because of the markets. Today, we're going to get a little more in-depth on the technologies here, and what you're really witnessing here is a really large investment and the culmination of that investment across our entire neuromodulation portfolio. So Marshall, as I stated, will talk about DTM. Mike will be talking about the Percept device, which -- I mean we're really excited. I won't steal any Mike's thunder, but we're really excited about this device and what it can do. It actually changes the entire dialogue about what's possible in deep brain stimulation, and it's very, very exciting. And then our InterStim devices and the Micro for sacral neuromodulation. We -- this is a 3 cc device, the Micro, the smallest device on the market, best battery overdrive technology on the market. 3T, 1.5, full body MRI. We are going to be more than just competitive in this particular space. So when you look at this and you look across the board, we have an exciting neuromodulation platform that we're talking about here today, and you're going to see a lot of exciting things moving forward. So with that, I'll turn it over to Marshall Stanton, our Senior Vice President and President of our Pain, with Therapies business unit. Here you go, Marshall.

Thanks, Brett. This is a very exciting NANS for Medtronic with all the things that you've seen going on. We've announced some things in press releases. If you've been down to the booth area, you've seen many of the new things that we have on display. Of all the things, I have to say for me, the most exciting is the acquisition of Stimgenics and now our ability to put DTM on our Intellis system. The Stimgenics Group has been investigating mechanisms of chronic pain and stimulation patterns for 10 years. They started with preclinical studies, looking at a novel therapy to address a unique mechanism of action of chronic pain. They went from that to human feasibility trials and then went from that to a randomized controlled clinical trial. Traditionally, when people think of spinal cord stimulation, they think of neurons in the spinal cord. But there are actually cells called glial cells that are much more abundant, more than 10x the amount of cells or glial cells compared to neurons. What happens with pain is that with acute pain, glial cells get activated, and they aid in the transmission of pain, and that's normal. But what can happen is these cells can become dysfunctional, and it's been shown that they play a role in chronic pain. Stimgenics developed an algorithm DTM. They did basic science research on it that showed reversal of pain behaviors in animal models, and that was significantly greater than pain reversal with either low-frequency or high-frequency spinal cord stimulation. They also showed that DTM modulates the neuro glial interaction in animals as assessed by gene expression and also by protein release, and this was also not seen to that extent in high-frequency and low-frequency stimulation by itself. The randomized controlled trial was highly significant, both statistically and clinically. The algorithm was developed for Intellis, and the feasibility and randomized controlled clinical trials were run on Intellis. The data is impressive. The primary endpoint was looking at responders to back pain, and it used the typical 50% reduction in the VAS score, and the results showed that those patients who were randomized to DTM therapy had an 80% response rate as compared to 51% in those randomized to conventional spinal cord stimulation. That was highly significant statistically and obviously clinically as well. Some people have looked at very high responders. Some people have called that profound response. Some have used the term super responders, but it's typically been called those who respond with an over an 80% reduction in their pain score. And when the analysis was done, patients who are randomized to DTM, 63% of them were these profound responders. That is, their pain reduced 80% or more. That compared with 26% profound responders with conventional spinal cord stimulation. If you look at the reduction in the VAS score, the DTM group started with a mean of 7.26 and had a reduction to 1.88, a 74% reduction compared to a 46% reduction in the conventional limb. And as I said, DTM therapy uses a precise proprietary algorithm that was designed and proven only on the Intellis platform in this randomized controlled clinical trial. So what do you get when you use the Intellis system? Well, first off, now you get DTM therapy, which I've talked about. You also get the simplicity and versatility that we've been known for. We have been talking about versatility in spinal -- being needed in spinal cord stimulation for more than 3 years. It's an acknowledgment of how correct we are by seeing other companies now using that exact same phrase of versatility. But we know that there isn't necessarily one algorithm that's going to be right for everyone, and so it's important to have that versatility that Intellis has. And in fact, if you remember, we've been running a trial called the Vectors trial, which we presented early data on previously. And at this meeting, 12-month data has been presented, and it shows that the pain relief that's seen and the responder rate that occurred at 3 months has persisted to 12 months. With Intellis, you get what I would argue is the best battery technology. I'll remind you that we are the only company that, for spinal cord neurostimulators, designs, develops and manufactures our own battery. Our battery is different than everyone else's. We use proprietary battery technology, and that's why we are able to develop the smallest battery, a battery that can charge from 0 to full in 60 minutes, and a battery that at 9 years has 5% battery fade. We are so confident in this -- in our battery technology that at this meeting, we're announcing that we now will warranty our battery in Intellis for 9 years. That's not a pro-rated. You get full payout if the battery does not last 9 years. That is, by far, industry-leading. I challenge other companies to stand behind their product like we stand behind ours. Our SureScan MRI technology in Intellis, the Intellis patients have the most access to full-body MRI of any company. And additionally, we're announcing a new feature in Intellis, electrode redistribution, that allows for delivery of personalized programming and an algorithm that we developed allows scanning for a patient with over 300 different options being tested in less than 3 minutes. It's fantastic to be at Medtronic where we can offer a variety of therapies for pain relief that no one else offers. No one else offers a spinal cord stimulator and an implantable drug pump to treat the problem of chronic pain. We're also announcing something new at this meeting, and that's the full launch of our Efficio software. Efficio is a cloud-based clinic patient management system that will make managing pump patients easier, and specifically SynchroMed II patients. One of the things that motivates us at Medtronic is being able to play a role in combating the opioid crisis, and one of the ways that we're playing a role is with our implantable drug therapy. It has been shown that almost half of patients that are started on implantable drug pump therapy for treatment of chronic back or leg pain are off of oral opioids at 1 year. We developed a control workflow to aid physicians in getting their patients off of oral opioids and on to low-dose intrathecal morphine with the ability to potentially avoid systemic side effects. Not only is it obviously beneficial for a patient not to be taking oral opioids, but there's a financial benefit as well. In this published study, there's over an $11,000 saving per patient in implantable drug pump patients who are able to come off of their oral opioids. We are pushing that and investigating in a formal fashion the outcomes of that with our Embrace TDD clinical trial. That trial is almost half enrolled. Some interim data are being presented during this conference. So we're very excited about where we're at and the future of pain therapy at Medtronic. With that, I'm going to turn things over to Mike Daly, General Manager of the Brain Modulation business.

Good morning, everybody. I'm Mike Daly. I'm the Vice President and General Manager of Brain Modulation. Thank you for being here. Everybody's talked about things being exciting so far, and I won't be the only one that doesn't. We're really excited in our business right now. The Percept PC, we believe, is the beginning of a long-term change in the way the therapy will be delivered in DBS -- in the space. It's really transformational. We have CE mark. We were approved on January 2. First implant was last week on the 14th. So we're up and running in Europe, and we anticipate being up and running in the spring in the U.S. So Percept, I'll talk a little bit about the stimulator. I'm going to hit BrainSense first, but I'm going to go back to it in the next slide because that's really the game changer here. But BrainSense technology, it's the first and only commercial sensing that's ever been available in DBS, and I'll talk more about that in a bit. But what I don't want to forget about is these other 3 columns here. We've led the way with MR Conditional labeling in DBS. We've always been ahead. We'll continue to be ahead. We're the only device now with 3T. It's the future, and we've got it in this device. The capability is there and on. Our battery technology, Marshall and Brett both mentioned that we have a real advantage there across the board on battery technology. This battery has given us the opportunity in an INS that is 20% smaller, 20% thinner to achieve 15% better battery life with the Percept. So we're pretty excited about that. I know battery life doesn't always seem to be the most exciting thing, but that changes how many surgeries the patient has to get. That changes their outcome significantly. And we also launched new programmers, the clinician and patient programmers, which are tied into this whole new platform, Percept, and the new leads that will be coming later on. So we go back to BrainSense. So what makes sensing important? And we're out right now with open-loop sensing in Europe, and that's what we'll be launching initially in the U.S. as well. And with open-loop sensing, when we say you're going to be able to capture these brain signals, you'll hear more -- a lot more about local field potentials, LFPs, and those are the brain signals. And the big thing here that's different is right now, if you -- I don't know everyone's experienced a little with DBS. But right now, we have a constant on, and we'll continue to have a constant on of stimulation. And what happens is when they initially program a patient, they spend a few months with follow-ups coming in and looking over patient diaries and feedbacks on how they've been and trying to use that information, which is -- which aren't real data, to determine how they're going to program. It does work with very high efficacy, but what we're making a bet on is real data is going to make a difference. So now these clinicians will be able to see what's happened for the patients over the time in between, use that data to inform their programming decision. We believe in the long run, that's going to give better outcomes, less side effects for these patients moving forward. Now that's the open-loop technology. We'll be starting a trial in the spring to approve the concept on closed-loop technology. That will be a couple of years further out. That one will change the therapy completely. But right now, it's open loop, and what that will do is inform programming with personal data-driven numbers that have never been available previously. It's kind of hard to believe that we've been out this long, and they've been doing this kind of like an art, not a science a little bit. I don't want to discount what neurologists do. It's amazing. But to think that they've been doing it on feedback from a patient population that has a progressive disease generally is generally older, generally in -- not in a 100% state, you can see the difference that we'll be getting real data that you're able to use to inform those decisions. And that's all I've got. Thank you for your time, and we'll start with the panel. Ryan?

Okay. Yes, we'll start with Q&A. David?

David Lewis, Morgan Stanley. Just a couple of questions first on Stimgenics, [ maybe ] the market, just a couple of questions on Stimgenics. Could we talk about the IP dynamics throughout Stimgenics, how proprietary you think the DTM algorithm is relative to peers, maybe battery dynamics and then just launch dynamics? Should we assume this has got a full commercial launch kind of 1 week after NANS?

Yes. I'll take the first couple and then let Matt talk about the launch. As I described, the DTM algorithm was designed for Intellis, and it's not just how Intellis is programmed. It's how the Stim engine in Intellis interprets the algorithm and delivers the therapy. That's what was used in the randomized clinical trial. That's what resulted in the fantastic outcomes that you've seen. Additionally, as part of the acquisition, we acquired an intellectual property and including a patent portfolio, and we intend to defend our intellectual property in a strong way. And...

Commercial launch, just the launch timing.

Yes, commercial launch. We're starting to roll out now. Obviously, we're sharing the 3-month data here at the meeting. We'll start training reps within a week. But we're being very deliberate in the rollout cadence. There's, to Marshall's point, subtlety to the programming, and it's not a just kind of do it any way you want to. It's not generic. It's very specific. The results were generated by a very specific algorithm that's required to be followed. So the training is obviously rigorous for our reps to make sure that's followed, and you can expect the results than you've seen in the RCT. So we'll finish training the entire U.S. sales force within the next couple of months and be fully launched here quickly.

Yes. So the simple answer is we're launching now. Yes. I mean there's a lot to do there, but obviously, it's ready to go. It's within the parameters of the approval that we have to run this particular algorithm. And so as Matt said, we're training our individuals there. It's a fairly straightforward programming concept. And -- but we're launching now. We're not prohibited in any way.

And one of the things that we talked about when we first launched Intellis is that it's future-ready. And you see a few examples of that here, the fact that we can launch DTM right now, the fact that we're launching electro redistribution. And that's -- those are backward compatible with people that have Intellis now.

Okay. And just the quick follow-up is, do you think you can prevent your competitors from doing the glial cell stimulation? And then just market growth, Marshall, we can talk about. That's been the big issue of last year. How you're seeing market growth in the next 12 months. And in light of Stimgenics, how you think your relative share within that market has fared.

I'm not going to litigate our patent portfolio here, so that's all I'm going to say about that. The market, I'll talk about the going forward. We're in a quiet period, as Ryan pointed out, so I'm not going to talk about the dynamics of what's going on right now. But there are substantial tailwinds for this market. Chronic pain is still an enormously underpenetrated problem in the United States and around the world. There's the opioid crisis. And this market has been driven by innovation and clinical evidence. And we've got innovation. You've seen a lot of innovation from us here today. You've seen a lot of clinical evidence today. And so we see that as being positive for the market going forward.

And share, [ do you feel you'll take share in SCS here ] with Stimgenics?

We feel very good about Stimgenics from a competitive standpoint. Yes, we believe it will take share.

Larry.

Larry Biegelsen, Wells Fargo. Just a couple on Stimgenics and one on DBS. So Stimgenics, just a little bit more color on the differentiation besides the mechanism of action. Is it paresthesia-free or not? And when are we going to see the full data? I wasn't sure if leg pain was significant or not. And I had a follow-up on DBS.

Yes. So first off, as I referenced there, versatility is really important. And so it is important, we believe, whether it's with DPM -- DTM or the evolved workflow that paresthesia mapping be done. Programming then is done to comfort because what you're aiming for is pain relief. And...

The differentiation, it's a different mechanism, but is there -- when you look at other novel waveforms like HF10, what are some of the benefits of this over that? Is it -- we've heard of like a lower charge burden. Is there anything you would point out in terms of how it's differentiated from other waveforms? And when are we going to see the full data set?

Yes. For most of the patients, the way it's programmed, there shouldn't be any difference in current drain compared to using our evolved workflow. Also, I'd say that our battery, as I pointed out, is industry-leading and is very user-friendly for patients. The clinical trial is still ongoing. We're going to follow these patients out to a year. The Stimgenics investigators are analyzing -- fully analyzing the data set that they have now, and they are writing that up. They presented predominantly the data that I've shown here at this meeting. So it's going to be a few months of preparation and then manuscript acceptance process.

I mean the other thing, too, Larry, just on the battery because it's kind of an interesting question. If you look at the overdrive in this, the battery technology, one thing that's probably not appreciated as much is -- and Marshall mentioned it, was the recharge time, right? It's from a flat battery to fully charged in 60 minutes. So that's really important. The other thing is fade, and we've talked about that a little bit. But over the period of time and over years when you recharge something -- we've all had this experience before. I think Apple does it as planned out obsolescence for all of our phones but -- where the fade can drop down substantially. And we're at, what, 5% to probably fade over 9 years. So that battery will react virtually the same way it did at implant 9 years down the track. And from a patient convenience, from a patient satisfaction, we believe the battery technology is pretty important.

And that's why we're putting our money where our mouth is and going to a 9-year warranty.

Got it. Fair. And on DBS, you guys have been -- your DBS business has been slowly -- slightly -- down slightly. My question is...

We've been a share donator. What are you talking about?

Yes. So my question is, I did -- is Precise PC enough to get positive growth in DBS? And I didn't see anything on the steerable leads. So kind of just is this -- is Precise PC...

Mike?

Well, first, we're not doing a good job with the name because it's Percept, not Precise. So I just want to be clear on that. So Percept PC, yes, we do believe we'll get market share gains there. We think we'll stop the bleeding and get growth from this device. As far as the directional lead, we're probably 12 months out on the directional lead. The reason that we're 12 months out is we made a conscious decision that we weren't going to come out with a me-too product. So we believe in sensing. We believe it's the future of the therapy. So when we were coming out with the directional lead, we were tasked with coming up with a directional lead that was optimized for sensing. So to insulate all those wires so that you could get the best possible noise. So that's a hard project, and it's taken a little bit longer because we're going after a premium product.

In the U.S., 12 months out?

Yes.

Matt?

So a couple of follow-ups. One on the electrode redistribution. If maybe you could just talk about sort of the competitive advantage there, how you expect that to affect the business or your relationship with clinicians. And then a follow-up on the deep brain simulation side.

There's a segment of the physician population that has told us that they like the idea of being able to put different amounts of current onto different electrodes. So we were responding to a segment of the customers, and that's why we implemented it. Matt, do you -- anything else you want to add?

Yes, it's a feature set that physicians -- some physicians like that are not necessarily tied to an outcome. So much is just control. So we're now providing...

And just to be clear on DTM, there's nothing special or different about where you -- electrode positioning or anything like that. These are flexible?

Well, we're not going to comment on that, but we use the full array of target and energy profile to deliver DTM.

Got it. And then on deep brain. Maybe if you could talk a little bit about sort of the advantage of open loop and in advance of having a closed-loop system and what do you think that potentially can do if you're studying the impact of that, just what we can expect maybe over the next 12, 18 months as you get to directional and then closed loop.

Sure. Well, closed-loop is the goal. That's where we're going to get. Open loop right now is -- it's kind of a lily pad to get there. So a lot of the doctors aren't that familiar with sensing, so this is an opportunity for them to start getting their feet wet with sensing. The device Percept is -- we had an investigational device prior called PC+S. The Percept device has all the investigational features of PC+S. And then Marshall mentioned earlier about devices that are upgradable. So is Percept. So that will be the same device that becomes the device that we use for the closed loop when we get there. To go back to the open-loop question, though, it's really kind of an amorphous thing right now because people haven't had it. They haven't had that data.

What I want to add, I would say, Matt, is patients, they keep a diary, and it's probably inaccurate because it's uncertain of what the data really is. What the open loop does is record all this information in the beta and the gamma bands. And what's really important about that is that patients on L-Dopa or they have other types of things, you're trying to titrate them into this band, and the physicians call it local field potentials. They're sensing all this here, and they're trying to keep them in those bands. And when they get out of those bands, you get things like rigidity or dyskinesias or other types of things that cause significant problems. So the idea here is how do we titrate them and how do we understand when the drug is working or when you need stimulation or both or one or the other, and that is the really game-changing aspect of this particular therapies. We're going to understand it. We can hear it, and now we're going to run algorithms in the trial on the closed-loop to create a thermostat. So DBS is great. It's like we discovered fire when -- a long time ago. We were cold. Wanted to maybe heat up our food. Fire was a really good thing. But fire couldn't moderate the temperature. It can do one thing. And that's a bit where DBS is today. We get a great result, but we can't really moderate it. And the goal here is for us to create a thermostat for us to be able to understand this, dial back or increase the level of stimulation to keep patients in the right range for longer periods of time and do that consistently. And to tell you how hard this is and why I'm so proud of this device, Mike's team, the engineers, if we're on the tarmac here, Las Vegas airport, and -- I don't know, you guys from the banks probably fly privately all the time. So you're spinning on your Gulfstream 650, and we're 100 meters apart. And I whisper while the engines are going fully spun up, you can hear me. And that is the noise separation. We're canceling out all the noise of the stimulation because it's a very noisy environment there. You're pulling out that signal, so you can understand what's going on. So open loop's going to give us that information. It's going to allow us then to do the trial. We're going to run the algorithms and close the loop. And we're very skeptical you can do this with a wearable device. I think you guys were all at another session here earlier today, and we think that going into the brain sensing at that level, understanding what's happening right there and returning that back into this system which can actually do something about it is the future. And then, as Mike said, we're a year out of the directional leads. The directional leads, we'll work with that. Directionality in and of itself, it's a good thing to have. We need to have it. We want to have it. But that alone doesn't really get the results that this, we believe, is going to get. So this is an exciting game-changing therapy.

Yes. For open loop, the easiest way to think about it is they program now with feedback from a patient, and now they're going to program with data, and that just has to be better.

Yes.

Kaila?

This is Kaila Krum with Suntrust. Two quick questions. So first, I guess, how do you guys think about the virgin back opportunity with SCS? And specifically, I'm kind of curious how you're thinking about as a company investing in both the spine implant business and then also SCS, how you balance that strategy.

I can do the first one. Clearly, there's a large population of patients for whom stimulation versus fusion is an ideal opportunity. Now there are a number of studies, both RCTs and feasibility, in play there that other companies have invested in. We take that seriously, and I think we'll talk more about that in the near term. I won't comment anymore other than it's a meaningful population that deserves that care that spinal cord stimulation can deliver. I think relative to spine, my only comment would be we want the right procedure with the right data for the right outcomes at the right time, and so I think we'll let the data speak for itself to say what patients should get what at what phase. And I think at least from the Stim side, the investments there to do the right thing for those patients will be what we do going forward.

Okay. That makes sense. And then on Stimgenics. So you guys now have the 3-month data, but you've also talked about the importance of showing durability and the 9-year warranty. So just kind of curious how important is that 12-month data going forward.

I think with any therapy, not just spinal cord stimulation, it's important to track the efficacy, side effects, et cetera, over time. And we're committed to doing that, as I said. So about a year from now, we'd be seeing the 1-year data.

Chris?

Chris Pasquale, Guggenheim. Just want to clarify on DTM. Do you view this as another menu option? Or do you expect this to be the default option for Intellis patients that most patients are going to be programmed to going forward?

I mean it's a -- we have superiority in back dominant pain, so we would say this is your -- this is where you start with stimulation. And therefore, we've got a great RCT. We'll have the long-term data as well that demonstrates it. But we do know that patients get habituated to programming, and therefore, having alternatives that are also fact-based, evidence-based is critical. And so I think as we -- as you look across our programming portfolio instead of just saying, "Well, we can do it," we've built evidence now for DTM. We've got long-term evidence about Evolve and using high-dose T9/T10. And it's demonstrating how to do what and ultimately providing the best fact-based alternatives for physicians to program. But we're starting with DTM as the starting point for FBSS patients.

Great. And then I was just curious if there's any update on the cranial mounted system. They received a fair amount of attention for a program that was still early at the last analyst meeting. Any updates there?

No. We're in early development of that project. So that's several years out before we'd see anything on the cranial.

David?

Just want to get updated in some clinical trials. I think last year, you talked about a clinical study for PDN. I don't think you've updated us yet on NSRBP. So just where we are on the PDN study. And then, obviously, just for de novo virgin back pain, what are your thoughts on initiating a clinical trial in that area?

Yes, Matt, you want to...

Yes. Again, PDN is -- painful diabetic neuropathy is a critical market, a tremendous patient population with a high unmet need. We're clearly evaluating that. We've had many physicians bring forward concepts and bringing -- as you look at the literature, the number of small studies underway as well. We'll talk more about what our plans are there and how we expect to succeed in not just the pain, but how do you get patients from the endocrinologist to the pain physician to get treated because it's not a typical referral pathway. And so as we address that population, we'll certainly address how those referrals would take place and the evidence required to do it.

Larry, do you want...

Could you talk about where you are with your SCS closed-loop system? You disclosed that -- Geoff disclosed that on a couple of calls, kind of threw it out there that you guys are pursuing that internally. Is there any update how far away is that for market?

There's a number of different technologies that we're working on. You're alluding to one there. We've seen great progress in some of them. At this point in time, we're not going to disclose anything more. But I think within the next year, you'll hear us talking more about that.

Ben Weaver with Barclays. Just want to ask how the launch of the Accurian system is progressing and then what your overall views on the RF ablation market opportunity are.

So the Accurian launch is going very well. It's beating our deal model. We were excited about the value that it brings to physicians. And clearly, the market for ablation continues to grow well and a number of innovations and studies that people are bringing to the market. I think we see that market continuing to be strong over the short term and long term. But we're thrilled about Accurian. And obviously, ablation is a key part of our customers' portfolio, right? They do -- for every spinal cord stimulator, they'll do 10 to 15 ablations. And so therefore, it's a part of what they do, and we have a tremendous opportunity to impact patients in that way. And we've got what we feel like is an absolute best-in-class system for both thermal ablation as well as Cool and creating that option to add Cool as reimbursement changes.

Jason?

Jason Mills, Canaccord Genuity. Brett, since you're here, I wondered if you'd indulge maybe a question within your purview but outside of pain, specifically in stroke, perhaps talk about what we've seen in acute ischemic stroke market growth over the last year and whether or not you expect any change in slope for that growth over the next couple of years. And if so, what might drive that one way or the other? And I also would be interested in your thoughts on a market I'm sure you've thought about but potential commercialization for Medtronic and neuro rehabilitation technologies. We've obviously heard a lot about virtual reality. There's plenty of clinical literature on it, big market seemingly. But would love your thoughts on both of those, if possible.

Yes, sure. On the stroke side, we continue to be encouraged by the stroke market. I mean it -- around the world, it's one of the biggest problems that systems and governments face when they're looking at their population. And as we interact with government leaders from around the world, it's one of the first things in their health care questions that come up, about how can we get help on the stroke market. The RESILIENT trial, which was in -- which we supported, which was in Brazil, this looked at really the same types of patients that were treated in the United States and Europe and the 5 major New England Journal trials. And it was in the public health care system in Brazil. And what they were able to do in this randomized trial is get the same results in the public health system, which can be very challenging in Brazil that you've seen in the United States or in Europe. And so the value of this therapy is extraordinarily high. And so that has generated great interest in China, great interest in really countries -- Romania, many places around the world. So we see an ongoing tailwind in stroke. The numbers -- Ryan, I don't know if you want me to talk about the numbers right now on the market.

The current, but go forward.

I mean go forward, I mean we're still clocking at around 20% or in that range. And we think there's room to go here, quite a bit of room to go here yet. On the rehabilitation side, it's a big market for sure. It's a big patient market, and not a lot of good options there. What we're looking at is if we were to enter that market, how would we do it? We think there's some challenges on the coverage and reimbursement. It's a lot of skilled nursing in the coverage and reimbursement area there. We're working to understand it even better, but we see it to be a little challenging there on how that gets paid for over time for a long time and the results you get. Now that being said, I think there's potentially other technologies or other places you could go. Right now, for post-stroke spasticity at our Targeted Drug Delivery business with Charlie, we have pretty interesting opportunities there where you might want to talk about that, Charlie, just a little bit.

So we maintain a therapy, intrathecal baclofen therapy for patients who suffer from these types of conditions, post-stroke spasticity. That's been a primary focus for us for a couple of decades now. And some very new interesting data just in the last couple of years that showed superiority for that particular indication versus oral baclofen. So that's an implantable therapy that we'll continue to drive, but it might be something that we continue to evaluate in a complementary way with some of the things you're talking about as well.

Maybe just -- Matt Miksic at Crédit Suisse. Just one follow-up on the market generally and a question that a lot of us are trying to get to, which is just the stabilizing market growth rate. Some of your competitors, I think most folks, haven't been committal to sort of a normalized rate where SCS in particular will kind of settle. But given, Brett, your sort of visibility across RTG and spine and the importance of [ failback ] to this indication, just wondering if that's something that you're seeing in terms of either tightening of payer restrictions 5, 10 years ago or improving outcomes, which obviously spine has been focused on that, or any other trends you're seeing that might be able to explain some of the trends we've seen in the -- in this end market.

Yes, I think if I take a step back and I look at spine, we've been kind of encouraged at spine to see the forward growth there be maybe 5% procedurally, 2.5% price headwinds, assuming you net out in that 2% to 3% range. But then with robotics and with the other technologies we have, now with the acquisition of Titan, we kind of like the traction we're getting with those types of things and the investments we've made there, and we're continuing to do that. So that's -- so we like that. On SCS in particular, I mean one of the reasons we kind of applaud the team because it's kind of nice when you take a new job and you have something new like 2 months afterwards, you get a lot of credit for that you probably shouldn't get. But it's a good thing because we see the market generally respond to the technology and respond to a new type of stimulation therapy that actually has data, and the data actually is pretty compelling. Now we need to see what it's going to be over 12 months, and we've seen -- it's been there. But we think that's going to be a tailwind for us as we go forward. We think it's going to be a tailwind for us. But the market's been -- look, it's been a tough market, and we're encouraged by what we see with this technology and what we think it's going to do for our team and as we move forward. And that kind of M&A for us is pretty efficient. So expect more of it.

Marshall, did you want to add anything on the SCS market slowdown? Add something?

Yes, thank you. We've done some market research. And first off, coverage has not changed for spinal cord stimulation. But one of the things that comes out in our research is many physician practices are seeing an increased burden in the authorization process. That probably came about because payers are increasing -- applying the rules that they had more so than they did before because they were seeing very rapid growth in this area. We've reacted to that. And we've done a number of things. One is we've done educational webinars to make sure that physicians and their practices know what's the most efficient way to submit, what do you have to make sure that you have, things like that. We've done some other things also that I won't comment on here, but we think that's going to help with restoring growth as well.

Ryan, if I could...

Sure, Larry.

So Mike, in DBS, there seems to be a lot of excitement in the clinical community for a closed-loop system for epilepsy. I didn't hear you talk about that today. What's the pathway forward there?

Yes. Well, the epilepsy DBS market, it's a market development opportunity right now. It's a small -- it's a growing market, but it's a very small base. And that clinician population is very conservative. So there's a lot of trying and waiting, trying and waiting. And that's just on DBS as it is now. So we're trying to develop the DBS market in epilepsy. We're focusing on the closed loop. The focus of that is really movement disorders. We will get there on epilepsy, but the focus is not on movement disorders.

I think the other thing, too, Larry, is as we look at -- we're kind of playing in a lot of these epilepsy markets in a way and kind of around it. DBS is there. We have an ongoing clinical study on Visualase for a specific type of epilepsy. And now with our new, what we call, Stealth Autoguide, which is our kind of small cranial robot, that can be used to place the sEEG leads and do it in about 4 minutes a piece. So it's more efficient. So we're interested in the space. And as we kind of surround it with these other technologies, I think we're just interested in epilepsy in general and making some investments there.

Any other questions? Okay. Thank you very much for attending. I appreciate you being here today. And let me know if you have any follow-ups. Thank you, everyone.