Medtronic plc (MDT) Earnings Call Transcript & Summary

Okay. Thanks, everyone, for joining us this morning. It's a real pleasure to have Medtronic with us. And representing the company, we have Mike Weinstein, Senior Vice President heading Strategy for the company. I know we have Ryan Weispfenning from Investor Relations in the background. Mike, thank you so much for taking the time this morning. I mean, this must be -- I know for many years, you would ask the tough questions, so this is now with tables reversed, get ready for -- to be in the hot seat, but thank you so much for making the time this morning.

Thanks for having me.

So when I think about Medtronic, '21 is shaping up to be a really, really big year for Medtronic. But before we get into the catalyst, something that's been topical for us, investors, has been the second wave. And so far, some of your peers based on the comments they've made, it seems to be manageable within the range of expectations. I think when you guys gave your guidance, I know you had your earnings recently. Sequentially when you thought about 3Q flat to up, is that -- are you still comfortable with those numbers, just given the rising second wave we're seeing currently?

Well, first off, thanks, Vijay. And again, thanks for having us. You just heard from us, so nothing has changed at Medtronic. When we talked to you on our earnings call just before Thanksgiving, we indicated that our business is healthy and that the strong trends that we had seen in October has continued into November up until Thanksgiving. And so at this point, there's -- we've seen no change in our business. Obviously, COVID is an issue around the globe. It certainly is here in the U.S. It is in Europe. And there are pockets of impact. I think overall, our business is strong. Does it mean that, that can't change? I think it's hard to make the call really on the issue. As I imagine, you know better than anybody on the short-term impact of COVID over the next couple of months. But what we've seen so far is consistent with what we saw in October, and November was healthy, and we'll see what happens from here.

Fantastic. So with the near-term out of the way, I think looking at calendar '21, it's unbelievable, the number of products coming in. Starting from every single segment, right, you guys have something going on. And I want to rattle off a few products. Let's start with the Micra AV, up 75% in the third quarter. That's a big, big number. What's driving this growth, Mike? Is this just converting your existing base into a higher-priced product? Is that what's driving 75%? Or how much share gains are you seeing in that business right now?

Sure. So the short answer is that it's both, right? It's -- we're effectively half the market for pacemakers, so you're getting both the impact of us converting existing Medtronic implanters to a higher price point device, which is obviously a product that patients want right now. So that's going to continue. And as well, as you're going to -- what you're going to see in this category is increasing patient pool, right? The appeal of Micra relative to a traditional pacemaker is it's fairly obvious. And so as awareness grows, as comfort grows, both from the implanting electrophysiology community and their referring community, so as awareness and comfort grows and that patient pool develops, I think you will see the uptake here accelerate. So right now, we're starting to get a sense for what the pattern is. It looks like we're gaining share sequentially every quarter. I would certainly expect that to continue over an extended period of time. We still have 2 strong competitors -- or really 3, if we conclude Biotronik. Strong competitors in this market. So I don't want to dismiss them, but this is a generational technology and our expectation and our goal is to make this standard of care.

And just on the topic, Mike, I think, I saw something from you guys recently about the battery technology. It looks like Medtronic here already has an advantage. Perhaps just talk about the lead that you have on the battery side and how that translates into perhaps Micra having a sustainable lead over competition?

Well, Medtronic has battery capabilities that we've invested in over the last 25-plus years that are unique to Medtronic. We don't rely on an outside vendor for that technology and so we are now in a position in several of our businesses, and you might have heard us talk about this recently in our Pelvic Health business that we are able to create some competitive advantages across all of our electrical stimulation products. So whether that's in cardiovascular with pacemakers and defibrillators or in pelvic health or pain stimulation -- deep brain stimulation. There are a lot of areas where we can leverage battery technology. And it's not just the technology that we're developing. We're -- a lot of it is us taking the advances that are happening in the technology world and bringing them to our own platform and our own products. And battery technology is just one example of that.

Got you. And moving beyond Micra, sticking to cardiovascular, in the TAVR, one of your competitors had a little bit of a hiccup, pulled Lotus off the market. How should we think about Medtronic's share in that opportunity, right, where I think you guys have mentioned OUS. Medtronic is the #1 player in TAVR. Should I just translate half the revenues just shift to Medtronic? How should we think about the capture rate here?

Sure. Well, Lotus, at this point, had -- still had a relatively small presence, right? It's share was about 2% in the U.S., so there's not a lot of share up for grabs. But our expectation is that we would capture more than our fair share there. Lotus was being used in valves where there's a lot of calcium, where the patient probably already -- might have already had a pacemaker given the high pacemaker dependent rate of that product. And so it's just intuitive that Evolut would be the product of choice in absence of Lotus for these patients. So we do expect that, that's going to be a share capture opportunity for our business. As you're aware, we've been making investments over the course of this year to build out our sales force in structural heart and really try and go after a higher share in the U.S. market. Those reps are coming online, recognizing that there's a learning curve there. And so we expect to be in relatively good position as we go into next year with our field force, with our product positioning. Our clinical story, I think gets better with every cardiology meeting. We talk about the durability and performance of our products. So we're feeling good about the TAVR business. It's a great market. We have a very strong competitor. And -- but we feel good about positioning of the business as we go into next year.

And just on the topic of U.S. market share gains and building out your sales force, I think -- and I asked this on the earnings call, but there were some comp issues for you guys in the business. So it seemed like the business is down, yet sequentially, you guys gained share. So maybe talk about some of the dynamics. What happened in the Q? What gives you the confidence that Medtronic is gaining sequential share in the U.S. market?

Sure. And just to level set everybody, so on the back of the low-risk approvals that we got and Edwards got last year, we lost some share. Edwards was -- did a better job of capitalizing on that initial opportunity. We lost some share, worked effectively slow, out of the gate. So that was our loss. And so we took a number of actions to put ourselves in a better position, including starting to build out our sales force to call on accounts that we had not even covered before. We also had a number of clinical trial presentations, data -- our data as well as some competitor data that has been favorable to us along the way that has -- I think, that has put us in a better position to tell our story. So from a share standpoint, we still have to anniversary the share we lost on a year-over-year basis. But sequentially, we have gained back some share. I think this quarter, we were largely flattish sequentially to prior quarter. We clearly gained some market share. So I'm not going to say it's going to be every quarter that I expect this because it's not that linear to gain market share. The other element on the year-over-year comparison is that we didn't move to consignment for both of our accounts. You've heard Boston Scientific talk about -- they're doing that now with WATCHMAN. We had not done that with our TAVR business and, effectively, they have started to do that earlier this calendar year. And so that's created a year-over-year comparison as we moved all those accounts to consignment. And so there's an apples-and-oranges comparison year-over-year that will start to anniversary once we get through this last quarter.

Got you. And then maybe switching gears to AF. And this is something that I hadn't certainly paid attention, Mike. I think, Geoff mentioned on the call about the NEJM trial perhaps being a first-line therapy in paroxysmal AF. Just talk about that opportunity, how big could this be if these therapies were the first-line alternative for drugs? Is this now a doubling or tripling up of market or perhaps some context and how to think why is this a big deal?

It is a big deal. It's a pretty dramatic increase in the potential addressable market. If you think about device therapy, in this case our cryotherapy becoming first-line therapy for the treatment of atrial fibrillation -- and [ symptomatic ] paroxysmal AF. We still have to get our approvals, right? We have filings, and we have approval time lines. We still have to go on label. But at that point, the way historically ablation has been considered for atrial fibrillation changes. And this is the big growth market in electrophysiology today. It's driving growth for a number of companies, but we are going to have a very differentiated label, be the first technology to be considered first line. So it -- we're still in our plans on how to capitalize it and have to go out and educate and tell the story because there's going to be some education that's required of the referring -- referral community. And so that will start for us as we -- once we get the approval, but I do think this is a big opportunity for this business. And I think that if you think about our ablation business, okay, it's been basically built over the last decade plus on one technology. We've grown that from less than $100 million to effectively a $700 million business today on the back of one technology. We now have this very differentiated label coming, hopefully, in the next 6 months for that technology. In addition, we're launching our DiamondTemp focal ablation technology, which is a completely different technology for people, to go after the segment of the market that we haven't participated in. That's launched in Europe. We're expecting approval later this fiscal year, with a launch early next fiscal year. So call it middle next calendar year in the U.S. And then we're working on this disruptive technology called pulsed field ablation. We're out in a lead. We've done some very compelling pilot work in this area. We're starting a pivotal trial in -- for pulsed field pulsation. We are, in fact, just got -- we have breakthrough designation here in the U.S. So this is a business that's been a really good growth driver for Medtronic for a decade, where the potential is for this business to become a much larger business over the coming decade. And I fully expect this business to be a key growth driver for the company as I look forward.

Got you. And just to clarify on the label for cryo as a first-line therapy, is that specific for Medtronic? Or is that sort of a class effect? And other cryo products coming on the market, could they also be considered as first-line therapies?

That would be specific to our technology.

Got you. And on pulsed field ablation, is there a time line on how big are these trials? And when should we expect an FDA submission?

Good question. I don't think we've outlined yet. We got to -- we have to start the pivotal trial. And I expect that to enroll relatively quickly because, as you can imagine, this is an incredibly compelling technology. The safety profile is -- it makes it much -- very compelling. I think the efficacy still needs to be fully vetted and demonstrated. But the interest level from the electrophysiology community is extremely high. The desire to participate in this trial is extremely high. So I fully expect it to enroll quickly, and we'll see how quick that is and then the follow-up and submission. So I don't want to put a target out there for when we expect to submit yet. Let's get the trial started. Let's see how the patient enrollment goes, and then we'll be able to give you a better sense.

Understood. And I guess sticking on to the cardio, structural heart EP sort of landscape. When you think about your mitral trials, I know you guys were looking at enrolling patients with a transfemoral approach. Have you started enrolling patients with the TF approach or is that on the come?

We are. That's still in a -- in the -- under the umbrella of effectively feasibility work for the transfemoral. And to spell it out for everybody, so we have a 35-French transfemoral system. Our goal is ultimately to get to a 29-French transfemoral system. We think we need to be in that size range or lower for it to be a truly attractive product and one that can be a workhorse product to the marketplace. So our goal is still to continue to downsize the delivery system. We are in clinicals now with the 35-French. We're still working on the 29-French, but that's the end game. And that space is one where it's still going to take some time for mitral replacement to come to fruition because of the challenge of enrolling the clinical trials. We modified design of our trial. Our competitors are effectively doing the same. So that's still going to be a few years off before mitral replacement can come in and begin to challenge mitral repair, which is developing nicely now.

And just on when you think about delivery devices, Mike, there's been quite a few issues when it comes them. And when you think about Boston's Lotus, right, it was all around the delivery. But when you think about downsizing from 35-French to 29, maybe some context on how challenging is that downsizing or the risk associated with that program.

Yes. It's not easy. I mean, that is still challenging. So actually, what you're trying to do is work with the same valve because we've demonstrated the utility efficacy of this valve, and we want to maintain that product as we downsize it. So we don't want to have to modify the valve to get to a smaller delivery system. So it's not easy. Our team is convinced that they can do it, and they're on the path to doing it. But I don't want to dismiss it and say, okay, because it does take a lot of very intelligent engineering and design work to get it to that. So that work is underway. They have a pathway to do it, but I don't want to dismiss it and say that it's something that's easy to do.

Understood. That's helpful. I guess switching gears to renal denervation. This is a product for resistant hypertension. A lot of excitement around how big this opportunity could be. I think one of the things that caught my attention on the earnings call was you got a fast track -- you got fast-tracked in China. Some context around how big is China, is there a time line on when you could get a China approval?

We expect that we can get China approval within a few months of the U.S. approval. So we're -- there are multiple opportunities here with renal denervation that we're excited about geographically, additional indications. There's -- this is going to be probably as big of an opportunity as we're going to go after at Medtronic, certainly over the next decade that I can see. And so if -- you always see a company of our size, close to $30 billion in revenues, it becomes hard to move the needle. Renal denervation can absolutely move the needle at Medtronic. And so when you think about these big growth opportunities, whether it's renal denervation or surgical robotics, which we have in our spine business and cranial business today, and we're going to be introducing soft tissue robot. There's multiple different avenues of big growth for Medtronic in front of us that each on our own can move the needle. And collectively, they can really accelerate the profile of the company.

And just for people listening, Medtronic is the first mover in this market. It is a greenfield opportunity. But maybe as -- because it's greenfield, Mike, there is some education to be done, market development work to be done. How should we think about that ramp? It's an exciting market. Is the reimbursement system in place, et cetera? Maybe talk about the adoption curve.

For renal denervation?

Yes.

Right. So there is reimbursement work to be done. We're actually doing that as we speak here today. It does have in the U.S. breakthrough designation status, which potentially paves the way for reimbursement for the first 4 years of the technology. We do think this technology, which results in not only just dramatic reductions in blood pressure as you've seen in the various trials, but it's not just a one-time point. What you see is the efficacy and the benefit of the therapy actually grows over time. And we tend to focus when we come out with trials on, okay, what did that trial tell us and at that endpoint, there's a definitive conclusion. But this is actually different one because you see the curves continue to widen over time such that the efficacy of renal denervation increases from 6 months to 12 months, 12 months to 24 months and 24 months to 36 months. And you can see that in the data that we've collected to date. So the -- when you look at the benefit of the therapy over time, the economic arguments become pretty strong. And obviously, we're very focused on building that economic evidence. Our intention is to continue to collect that data, to generate sufficient and strong reimbursement around the globe. So we have plans in place. There's work to be done there because we're not just focused on the U.S. market. We're focused on China. We're focused on multiple geographies. But we're going to have a compelling story to tell with this technology. The nature of the therapy and the benefit to patients is fairly obvious and the economic benefits that accrue over a longer period of time will build, and we'll be able to tell that.

I think one of the catchphrases was, it is always on. I think that's pretty apt when it comes to renal denervation. Pretty exciting. The last 2 major product categories I want to touch upon was diabetes and robotic surgery. And perhaps this is where there's a lot of healthy debate on the investor side. You have skeptics and the believers, and I'm not sure either side has any concrete data points to baseless arguments. I mean, we all have our thesis, theories. Let's start with diabetes, right? You have 2 new sensors coming in, a brand-new pump coming in with a new algorithm. There's a lot going on in diabetes. But perhaps starting with Zeus, when should we expect that sensor approval for you guys in the U.S.?

Sure. So we filed it with the FDA. So now it's in the hands of the agency. One of the comments that Geoff made on the last earnings call and I think he made a similar comment at the Analyst Day was that this division of the FDA is very occupied right now in dealing with COVID and COVID diagnostic approvals. So that has taken up time. In fact, when we -- we've talked about our 780G, which is our next-generation pump with the advanced hybrid closed loop system in it, which is a new algorithm. It's launched in Europe. And I'll tell you, Vijay, the feedback in Europe on 780G is phenomenal. It's the -- we get it every day in the patients that initially were in the trial and now that it's been commercialized, it is a whole new world for the customer feedback on a Medtronic pump relative to what we had with 670G and the early challenges there. And so with 780G with the filing, our original plan was to file that with for an adult submission based on the adult data, which we generated earlier this year. And the FDA, because of all the issues you're dealing with in this division with COVID diagnostics and approvals, you know what, rather than submit multiple filings, adult, then pediatric, can you just wait until you get the pediatric data? So we held the 780G submission to generate pediatric data. And now the fact that the FDA has asked us to put everything together -- so we've already submitted Zeus. We're going to submit everything combined so they can try and review Zeus plus 780G as one filing. And then it's just going to be up to the FDA. Again, it's -- the FDA has been -- that division of the FDA is just going through a unique and challenging period right now. We hope they'll be able to do it soon for patients because the patient benefit is very clear. And we have this very -- Medtronic has this very large installed base of patients that could be upgraded from a 670G today to our current product, 770 and then 780. We want to be able to offer that to patients as quickly as possible.

And just on -- I think when I think about diabetes, what held Medtronic back was one, on the pump features, the alarms, which is kind of tied to the sensors, right? How many calibrations does that -- the Zeus have? I heard feedback from some investors, if there is no calibration in Europe, is there a reason why perhaps you shouldn't qualify for a 1-day calibration in the U.S. as well for Zeus?

That's a good question. So it was designed to be 0 calibration. Our filing in Europe and our expectation is that it will be a no-calibration product in Europe. The assumption at this point is that is a first-day calibration. That's a 7-day wear product. So on the first day, you would calibrate the product. But we'll have to see. We'll have that discussion with the FDA in terms of what's the right labeling for that product. We've commented before publicly that -- we had the clinical trials on that product, we feel very good about the performance of it. And we just need to have that discussion with the FDA, and we'll see how that goes. Our assumption right now is that it's a first-day calibration in the U.S., no calibration in Europe. But we're going to have that conversation with the FDA.

Got you. And is this -- when you think about the non-adjunctive claim, is Zeus going to qualify for a non-adjunctive claim as well?

Well, see, that's going to be up to the FDA. That's part of the discussion. We feel like it has that profile, the product does. But we -- that's going to be up to the agencies. So we'll just have to see how the discussions play out in the next few months.

Got you. And then the other key product for you guys is Synergy. I think you guys started the pivotal trial in the U.S. and noted enrollment was really, really strong. Maybe talk about the time line because I was thinking if enrollment is really strong, you guys should have the data by end of next year. Does that seem reasonable for you guys on Synergy?

So the data by the way, we'll actually have the data relatively soon here because it is a -- those clinical trials on sensors are relatively short follow-up studies. So we will actually have that -- those results from the pivotal trial on Synergy in-house relatively soon. And then the gating factor for us filing for synergy approval is we need to get the manufacturing modules completed. So actually -- usually, it's the generation of the clinical trial data that's the last piece. That clinical trial module is the last piece that goes into the agency. In this case, because the enrollment was so fast, we will actually complete a clinical follow-up before we will complete the manufacturing spec work that we need to do to submit to the agency. So that will be the gating factor. And then we'll submit that in, and we'll see how long it takes to get an approval.

And when you think about the regulatory pathway for both the pump and the CGM with the algorithms, I know the 780G right now with the PMA. But when you think about the 780 in combination with Synergy, why can't that be a 510(k), Mike? Should that be another PMA pathway? Or -- because now you already have a predecessor, can't you have a 510(k)?

Well, I don't want to commit or comment on the potential for it to be a 510(k) because that depends on how the FDA treats the Zeus sensor and the pathway from there, whether it's iCGM designated device. So the Synergy for this area builds on the chemistry and the performance of Zeus, which we're still hoping to present publicly at some point here. So you get the performance of Zeus, and you get this dramatically reduced profile product that is so much easier to put on for the patient. It's a 3-step, very easy insertion. The feedback on it in the clinical trial was just fantastic in terms of the performance of the product and the appeal for patients. So it is a -- that is the product that's going to put us in a much more competitive position. I view it as really a 2-step process. Zeus gets us there in terms of the performance. But in terms of the profile and the appeal and the attractiveness of the product, I think we need to get to Synergy. And the good news is that, that trial has now completed enrollment. We're in the midst of following up these patients, collecting that data. We should be in a position to submit that module once we get everything on the manufacturing side done. And hopefully, you'll be looking at a year from now or shortly thereafter, in a much stronger position for our overall diabetes business.

And maybe a last question on diabetes. When you think about Medtronic getting back to market growth rates or perhaps even above-market growth rates, we'll see. Is that -- what gets us? Is that the 780G with the Zeus? Or is that the 780G with the sensor? Which product do you think gets Medtronic to back to market growth rates?

That's a good question. I do think that 780G plus Zeus will get us into a much more competitive position on the pump side. I think that we are fully competitive on an integrated system. I think we have a superior pump in 780G. I think we will have a very competitive sensor in Synergy. So we have those 2 from our -- kind of our core business today will be there. Now in addition to that, as you know, Vijay, we acquired Companion Medical, which is the leader in developing these smart pens. And so we are now the leader in taking all the investments we've made in algorithms for our pumps into pens. And so there's a pathway that we're going to develop here with our pen strategy that is going to mirror what we're doing in pumps. And the -- for patients that don't want to go on external insulin pump, which is still the vast majority of patients, we are going to meaningfully improve their experience. And Companion, the InPen is on the market today, we very quickly got an approval for real-time integration with our current sensor today. We have plans in place to make that product really the leading product in the pen marketplace and to really drive growth. And so that's a small base for us today. Again, we just approved -- we just acquired Companion, just got our first approval. There's a whole pipeline of products that we're working on there. There's a lot of interest from third parties to work with us because of the attractiveness of that technology. So that's a whole new growth engine that really does expand the TAM for our diabetes business versus how it had been viewed historically. So that, we're pretty -- we're really excited about where that's going to go. So in addition to kind of the core legacy business, you add on top of it this whole new growth platform that we think it's going to meaningfully accelerate growth profile of the business. And so as that ramps, at the same time, the core business gets competitively a lot stronger, we're going to be in good shape in diabetes.

So how big could that market be on the smart pen side, Mike? Is that a -- could this be like $0.5 billion revenue line for you guys over time?

Yes. And I think you have to view the benefit as being -- I would say twofold. But really there's multiple benefits, and we probably don't have time to go through all of them. Obviously, we'll be selling pens. But in addition to selling the pens, we'll get pull-through on our existing sensors, and we'll create an avenue for patients who ultimately end up on our pumps. So it's not just selling the pens. It's all the consumables that go with it, our sensors, obviously, that are going to be big revenue contributors. So don't view it as just capturing the pen sale, view it as pens plus CGM plus other opportunities that will come after it.

Got you. And then switching gears to robotics, Mike. I mean, this is perhaps where there's healthy debate, I would say, in the market. I know you guys just reiterated your time line, U.S. IDE submission in Q1 of calendar '21. Is there any update on what the clinical trials could look like? How large are these going to be? And when should we expect an eventual FDA approval for your surgical robot?

Sure. So the pathway that we described going back to the Robot Investor Day that we had last year, just about this time but yes, last year. Really, that pathway that we articulated hasn't changed. The time line pushed out because of COVID. And as well, I think some of our own software work took longer than we were expecting. But the core pathway hasn't changed. The clinical work that we expect to be required as part of our submission or we expect to complete as part of our submission will be -- I don't want to spill it out for competitive reasons, but those aren't big trials. Those are small trials to drive specific indications. I wouldn't expect that to the extent of clinical work, and I don't expect it to take a long time either. And that was what was incorporated into that original guidance commentary that we gave. But in the meantime -- but again, that's just to be clear for everybody that we're just talking about U.S. market and what will be required for our launch of the U.S. That's separate from Europe and other parts around the globe, where, again, we expect to be filing for a CE Mark in Europe around the end of our calendar first quarter -- end of the calendar first quarter next year and then be in a position to launch later in the calendar year.

Got you. And when you think about that revenue ramp on that side, Mike, the way I've been thinking about it is you have the ortho market, which is a lot smaller. You have Zimmer talking about 200 placements annually. I feel like for you guys, that should be at the low end, 200 systems. And at the high end, you have Intuitive, they're doing about 1,000, 1,000-plus annually. Should placements somewhere fit between those low end and high end? Do those assumptions make sense to you in terms of placements?

Well, I don't want to give a forecast yet on what we expect and the placement ramp. Right now, we're focused on completing the work we needed to get our filings in, number one. Two, putting the resources in place, Vijay, for the launches. One thing we need to obviously make sure is that the user experience is excellent because we know that word-of-mouth on how that user experience goes is going to dictate enthusiasm for our system going forward. So we want to have a fantastic user experience over those first 100, 200, 500 robots that we end up placing. So we want to make sure right now that we're putting the resources in place, that we're doing, kind of the hard work that needs to be done to make this successful for long term. So yes, we obviously are interested in trying to build our presence quickly in the marketplace because we see the obvious advantage of that. But we also want to do it right, and that's probably more important that we do it right and that the feedback on the experience is as good as possible.

Yes. Absolutely. And what would you say, Mike, to -- obviously, the incumbent has spoken about a moat, about training but how fellows have trained on the da Vinci? I mean, I feel like this market, either it's large enough for many players to sustain. I mean, certainly, it feels like that way, but I'm curious on when you think about that competitive landscape, do you feel like you have all the elements to go out and compete and hold your own against the incumbents and perhaps J&J as well?

We do. We certainly have the presence. We have -- as you're aware, Vijay, we have a geographic reach, right? We have a presence around the globe that the incumbent doesn't have, right? And so there's -- we have advantages that we will play to, that we will leverage. We have training and education capabilities around the globe that we want to utilize as we launch this technology. So we feel very good about it. It's not about kind of winning on day 1, and we've articulated this all along. It's not about us coming into this market to displace Intuitive Surgical, who's done a fantastic job in developing this market. And we very much respect Intuitive. It's that we think that we can drive the adoption of robotic technology at a much higher rate. And then having somebody come in with the capabilities that Medtronic has and integrate the robotic offering with the standard of care, world-class, best-in-class and the vectors that we have is going to make a huge difference. And so having that -- having us come into the market with our capabilities and our product portfolio that we have today is going to drive a real acceleration in robotic adoption.

Got you. And I did have many more product questions, but I do want to shift to balance sheet, cash flows and culture. It's been an interesting debate on, at least on the sell-side, on is this the old Medtronic or is this the new Medtronic. I'm curious, I mean you've been on both sides. You've been on the sell side. You've been at the company now for a couple of years. What changes have you seen? And what would you say, Mike, I mean, on this, is this the old or new Medtronic debate?

Well, it's -- I can tell you from Medtronic, from when I walked in the door and obviously covered for 20-plus years to today is -- and it's not just -- so everything is clear, it's not just changes that we're making today. There have been changes underway over the last 2 years in a number of different ways that have been -- that have probably been less -- that have been less visible to The Street and that have brought a level of, I think, of discipline, of focus, of ambition, if you would, to our businesses that probably people wouldn't have recognized 2, 5, 10 years ago. And I think, Geoff and the changes he's making to the structure, for the organization, to intentionally trying to add new elements to the culture, and that's very real. That's not just kind of talk to The Street. I mean, literally, this week, we had big launch events with the whole organization, not just the leadership teams, which we've been having these discussions with but with the whole organization about talking about the cultural evolution of Medtronic and adding these new elements to it and how not just kind of talk about it, but what's going to change and what is changing at the company. And the level of transparency, Vijay, for example, on performance that everybody had their business, ran their business, reported up to whoever they reported to, ultimately, to the CEO. And they knew how they were doing, and they really didn't know how anybody else is doing. Transparency is dramatically increasing. This is a company where everybody is going to know how every business is doing relative to their end markets, relative to the competition, where there's going to be a healthy amount of competition within the company. There's going to be support, and it's all going to be focused on maximizing the customer experience, maximizing the growth for Medtronic. And we have these now 20 operating units, which you've heard us talk about. And we've been having -- we had reviews all through November, talking about the strategy of each business and what we can be doing in each business, should be doing and new opportunities. And the level of energy that's within the company today is really impressive. And it's hard to feel from the outside, but it is -- there is an enthusiasm and excitement for kind of what we're doing inside that's pretty much palpable.

Got you. No that's -- the title I'm thinking of in my mind is, let there be light, and there is transparency for Medtronic. I guess switching gears to margins and cash flows in the last couple of minutes. One, I know your guidance, at least the current expectation is Q4, you get back to normalized growth levels. As you think about fiscal '22, assuming there are no curve balls thrown at us because of the pandemic, if revenues are at a normalized level, should '22 margins get back to pre-pandemic levels? Or are there some puts and takes we should be thinking about from a margin perspective?

Well, that's our -- yes, I'd say that's our -- kind of our broad plan is to get profitability back to pre-pandemic levels. But I'll say is -- for everybody who is not as familiar with Medtronic as Vijay, we're, in April, ending fiscal year. And so from a timing standpoint, we haven't gone through all the process of building a plan. And recognize as well that without having gotten to it yet, we want to make sure, I want to make sure that we're making the right investments to support some of these big opportunities that we're talking about, whether it's renal denervation. We've got this massive multi-billion dollar opportunity in front of us that we're going to be submitting for regulatory approvals and expecting to start getting approvals, hopefully, as early as late next year, but certainly into calendar '22. And so the opportunity in renal denervation, in soft tissue robot, where again, we're expecting to have a CE Mark approval later next calendar year. We want to be able to fully support those launches as well as additional launches and opportunities, things we're doing in diabetes, the pen strategy. I could go on and on. So we haven't gotten to our budgeting process for FY '22, but I think everybody knows that we're very focused on accelerating and sustaining a higher top line growth profile for this company. And the opportunity is there because we've gotten -- we're getting so much more competitive and we're on the offense, as Geoff talked about, in several businesses today. But then on top of that, we've got these new growth vectors that are going to be kicking in. So we just want to make sure that we fully realize those and don't leave anything on the table.

Fantastic, Mike. I think with that, we're at the end of the time. A lot going on for Medtronic. I wish you guys all the success as you think about those product launches. Fantastic. Thank you for the time this morning.

Thank you, Vijay, and hope everybody has a great day. And stay healthy and stay safe.

Thank you.