Medtronic plc (MDT) Earnings Call Transcript & Summary

Okay. Hello, everyone. Thanks for joining us today. I'm Ryan Weispfenning, Vice President and Head of Investor Relations at Medtronic. Thank you for joining call showcasing the Altaviva device, which just secured FDA approval back on September 18. I want to remind everyone that today's event is being recorded, and a replay will be available on our website shortly after the call. A few quick announcements before we begin. Please note that today's call may include forward-looking statements. [indiscernible] be open to Q&A from the analysts and investors that have joined via Zoom today. So please get your questions ready and click the raise hand button if you have a question. With that, I'd like to introduce our special guest today. Joining me to discuss Altaviva is Emily Elswick. She's President of our Pelvic Health business, which is one of the 5 businesses within our neuroscience portfolio. Emily, we're thrilled to have you join us today and shine a spotlight on Altaviva. But maybe before we dive in and talk about the device, could you spend a little bit of time talking about it yourself and your background here at Medtronic.

Sure. Thank you, Ryan. Hello to everyone on the call. It's really a great day to be here and talk about Pelvic Health and Altaviva. Thank you for inviting me. I've been at Medtronic for about a little over 20 years. I entered through the surgical business as a sales rep and held various commercial leadership roles within U.S. Surgical and Covidien, and came through the acquisition of Covidien before moving in-house to various marketing and leadership roles, notably, the General Manager of our lung health business in our surgical operating unit. And flash forward a few years, I was asked to join Geoff Martha and his team in the office of the CEO before ultimately moving into this current role that I've been in for just roughly 1.5 years. And the past 1.5 years has definitely brought a lot of change in anticipation of this very moment, but I couldn't be more excited about where we are today and more importantly, the future path that we're on with Altaviva and Pelvic Health.

Great. Thanks, Emily, for sharing your background. Next, and there may be some people on the call today that are new to Medtronic, maybe not familiar with the neuroscience portfolio. So I was wondering if you could spend a few minutes here talking about your business, Pelvic Health and how it fits into Medtronic.

Yes, happy to. The Medtronic Pelvic Health business really offers the most extensive neuromodulation portfolio for bladder and bowel control. And it really is allowing physicians and patients together through shared decision making, which is really becoming more and more of a topic in health care to select the best and most appropriate therapy option and experience. And we've been at this for 30 years' experience bringing innovation into this space, starting with InterStim for sacral neuromodulation, we advance that market, improving on the device, expanding indications for use and improving access around the globe. And we've leaned into digital as well. You can see that in the middle of the screen with our MyJourney patient education and diary app. And on the tibial side of the business, we have percutaneous neurostimulation with our neuro product. And now implantable tibial neuromodulation with our recent FDA-approved Altaviva device. It's a special business, Ryan. And honestly, a very underserved patient population. Think about it, 1 in 6 U.S. adults have overactive bladder and 1 in 12 of us suffer from fecal incontinence. So 2 conditions that arguably many just struggle even talking about. The addressable market is less than 10% penetrated, and we're determined to keep driving that awareness for patients with these really life to ensure that because there's a portfolio of options in these advanced therapy realm and especially now specifically focused on urge urinary incontinence with our Altaviva device.

Thanks. Yes. And we shared with investors that are Altaviva tibial device is a real key product launch for Medtronic. When you think about it, combined with PFA and Ardian and the other good things we have going on across the company. And all of that is expected to accelerate our growth here in the back half of the fiscal year. Maybe if you could spend a little bit of time talking about what makes you so excited about this opportunity. And I think it would be helpful as well if you could help analysts' investors that have joined us today, think about the size of the opportunity with Altaviva.

Sure. Lots of numbers on this slide, so I'm going to break this down a little bit for you. But if you look specifically at UUI, if that opportunity is massive in and of itself, nearly 16 million people in the U.S. experiencing this common symptom of overactive bladder. And they really characterize it by this sudden urge to urinate. It's often followed by involuntary leakage, or you rush to me to go to the bathroom. These symptoms, they have a significant impact on a person's quality of life. They're mental health, sleep and it's really a large economic burden as well on patients and society and to few of us are receiving relief today. And so of that 16 million, that blue circle that you see on the screen there, that are impacted 45% of sick treatment today, so that's about 7 million people, the remaining 9 million don't seek treatment, instead they're kind of suffering in silence and either trying to self-treat with pads and diapers and there's been some very notable celebrities as of recently as well that have been talking about or advocating for pads and diapers or adjusting their lifestyles to just never be too far from the bathroom. For the 7 million at the top of the screen, that are seeking treatment, about 80% of those are unlikely to respond to really the first stage of advanced therapy discussions, which is really behavior modification and physical therapy. So that gives you about 6 million people. The majority of those patients will then fail the next stage, which is medications. So that's about 87% of the population. So that leaves us with 5 million patients eligible today for advanced therapies. And we firmly believe we have an obligation to advance care, so that more people can benefit from this therapy, and match the therapy to what their lifestyle and their life goals and expectations are. And so with the addition of Altaviva, we really believe that we have a solution that can reach that 5 million eligible today that are seeking treatment and raise awareness, which we're going to talk about as well, of the 9 million people that aren't seeking treatment, who can be inspired to potentially buy this device to take action because it's simple and it's an effective option for patients. Maybe before we move on in a moment, I also want to call out the incontinence, whether it be urinary or fecal. It's a highly stigmatized condition. It results in patients being extremely embarrassed staying at home, not enjoying life, and not even being able to live their life on their terms. So remember, those 9 million in the U.S. who aren't seeking treatment, they are out there suffering, and they're not yet comfortable talking to their physician about what options they have. So they're either trying to self-treat, like I said, with the diapers and pads or they're just adjusting their lifestyle. So untreated UUI can significantly impact quality of life, as we said. But we believe, again, there's an option with Altaviva to identify and really reach the $5 million and reach the 9 million, which is ultimately going to grow the market and grow more access to patients.

Thanks, Emily. You've established that this is a very large opportunity, and there are a lot of UUI patients out there that could benefit from Altaviva as you've shown there. I get a lot of questions about the device itself, how the procedure actually works, what the device characteristics are. Could you spend a few minutes walking through those topics?

Sure. The device, Altaviva is really designed to deliver a really simple experience for the patient, for the physician and the staff. Even the name, we were very purposeful in the name, Alta suggesting this altitude, evoking a sense of height and viva nodding to Vitality and is as for life. It really builds upon giving UUI patients that new hope and it's a single minimally invasive procedure that can be performed really at various sites of care, whether it's a hospital, the ASC and even in the future in the office without need of sedation, no need for imaging, which means you don't need an imaging tech. You don't need any anesthesiologist or CRNA and really allows you, again, to have that simplified procedure experience for all. And so before we dive in, and I've got one right here with me. Before we dive in, maybe we'll watch a quick procedure video to get people in a frame of reference and a frame of mind. So if you can go ahead and play the video. [Presentation]

So if we can move to the next slide. Maybe I'll talk a little bit about what we believe are some of the really differentiated features and benefits of our system. You saw it there. In the procedure video, but I'm really proud of this team and the work that went into this technology and the procedure development because we designed everything in this device with the patient and the physician in mind. As you saw in the video, the device is about -- half the size of a [indiscernible] chewing gum, and it's implanted near the ankle just below the skin. And that incision is very small, 2 centimeters. And again, intentional along the body's natural linger line. So we really optimize that healing and reduce that postoperative scarring. As you saw, it's placed just beneath the skin, but above the fascia, which is really where all that connective tissue that surrounds muscles, nerves, veins, arteries, all the important stuff, really minimizing the risk that we come in contact with any of that, that sits really below that fascia. And the whole procedure takes less than 15 minutes. As shown in our clinical study cases as well as our first commercial cases, which we've already completed in the last couple of weeks and the patient experience, it's just unmatched. Therapy is activated at the same time of the procedure with automatic therapy delivery and customized setting. So it really means you don't have to wait 4 to 6 weeks to have that therapy activation like you would with potentially other implantable devices on the market. We're proud that we're leveraging the power of Medtronic, right, bringing our more than 20 years of MRI knowledge and research, much like SNM and our broader remodulation portfolios and our CRM portfolio, we're MRI ready from start. So patients can have a 1.5T or 3T MRI scan without any extra steps. And that matters because again, this is a 15-year battery life. And we recognize that life happens and the potential for people needing an MRI is real. So -- and lastly, again, just the knowledge and expertise we have in battery technology over the last 75 years or 70 years, it's unlike the traditional lithium-ion battery, where you can get that fade on the battery life, much like our cellphones. We have that proprietary overdrive technology. It prevents that battery degradation over time. And for us and for a physician and for a patient, it means your recharge performance in year 15 is the same as it was on day 1 of year 1. So -- and charging is only required once or twice a year, and it's a quick 30-minute recharge from 0 to fully charged. So it's exciting. We've really -- the intentionality in this product to deliver a great experience for the patient and physician is what honestly, I'm excited about the most.

Yes. It's really an incredible device and appreciate you walking through all the features there. I also know there's competition out there, and investors and analysts have asked questions about this as well, the -- in particular, the competition in the Implantable Tibial Neuromodulation space. And wondering if you could walk us through a little bit, Emily, how Altaviva compares to the competition in the ITNM space and maybe from both a technology perspective but also a clinical data perspective?

Yes, absolutely. So we'll start on the first slide with just some side-by-side comparison information. I'm not going to go in exhaustive detail. You can see all of it here, but I'll point a few areas. There were 2 other commercially available ITNM products in the U.S., right? That's eCoi by Valencia, as you see and Revi by BlueWind. And as I mentioned on the prior slide, the simple experience, same-day activation, device longevity and MRI compatibility. Those are some of our biggest value drivers giving us that unique advantage, we believe, over other technologies. The ability to turn the therapy on the same day. So let's talk about that a little bit. Imagine if you're a patient, you're finally have hope in your solution. And then you're told to wait and come back 2 or 4 weeks later post-procedure to then activate your therapy. You're going back to pads and diapers, right, for 2 to 4 weeks to then have that therapy activated. With Altaviva, the device is immediately turned on and you can live life with possibilities that very day. Like I said earlier about Medtronic developing the best batteries, right, over the last 70 years, because of that overdrive technology, our batteries don't degrade over time. eCoin device lasts anywhere from 3 to 5 years, ours last 15. And the Revi device doesn't have an implanted battery and it has an anticipated device longevity of about 10 years. So when you talk to a patient, and a physician and you talk to them about the experience, having that device longevity of at least 15 years with only a once or twice a year recharge, it's a big advantage. Lastly on the MRI piece, I want to call out that we're the only ITNM device that patients can safely receive an MRI with the device turned on. Body fully in the MRI machine and without the need for a programmer. For patients with eCoin, it's not safe to place their leg in an MRI machine the eCoin device needs to remain at least 20 centimeters from the edge of the scanner bore and the MRI scan. And Revi is also constrained in the full body MRI conditional world, limiting the active scan time and RF exposure and depending upon that magnet strength in anatomical region composed challenges for them. So those are some of the big ones. What you don't see on this slide and maybe before I move off of this slide, I should acknowledge that Coloplast is in the product development process and doesn't yet have FDA approval or clearance. But based on what we know today, their device and procedure involves placing the placement above and below the fascia. We continue to be confident that our strengths, especially again in the simplicity of the experience for the patient and the physicians that will enable us to really have a strong position to unlock and activate that market. We talked about the 5 million and the 9 million, those people that yet to step into this therapy. So we kind of hit on the side-by-side comparison competitively, and you also mentioned let's talk a little bit about the clinical data or the clinical value that we're bringing. On the clinical side of things, we concluded our pivotal study. That is the TITAN 2 study. It included a highly refractory patient population. So what does refractory mean, right? These are patients that had to have previously failed to medications and the inclusion criteria was extremely broad. That is different than the other devices that are on the market. So with the Altaviva device, we had 100% of patients in our pivotal study record either a motory or a sensory threshold to implant. So a feeling or an inflection on that. And so what does that mean? That means we captured the nerve 100% of the time. In our 12-month outcome, we saw that 80% of patients on the participants in the study reported that their condition had improved compared to prior to the implant. 70% of those patients experienced what we call in the clinical world, a clinically meaningful improvement, and health-related quality of life and 61% or 6 in 10 of the patients had a reduction of 50% or greater in UUI episodes or voids per day after 12 months of therapy, which is particularly noteworthy given that Medtronic design the pivotal study, again, to reflect a really broad patient population. We're really honestly extremely pleased with the data. And as we've shared it with physicians, they're like, yes, we expected that. Now imagine what we can do when we find patients that aren't as refractory. So we're excited about this, and we'll be presenting on this at [ OGS ] in next week, so in Vancouver.

Great. Yes, we look forward to seeing that at [ OGS ]. And it does appear that there's some real advantages here for Altaviva, and it does sound like we're well positioned as well versus the competition. Maybe if we shift gears here a little bit, another topic that investors and analysts asked me about a lot with Altaviva's reimbursement. And I'm wondering if you could -- it would be helpful, I think if you could walk through the current reimbursement landscape for Altaviva.

Yes, happy to. When we talk about reimbursement, we always think about coverage, coding and payment. It's also, I think, important to acknowledge that it takes time for a new medical device and innovation or technology to achieve all those levers, that are critical to broad market access, wide-scale coverage, Category I code, physician payment. We're actively working, and I'd argue leading the pack in all of these areas and are currently, we believe, in a really strong position to bring that value both to the providers and to the payers. So let's kind of break down this slide a little bit. So on the left, on a coverage perspective, Medicare coverage, is provided for implantable tibial under reasonable and necessary. And so it's positive coverage as well for Elevance, which is in 14 states. So good progress there already. Prior authorization is strongly encouraged for Medicare Advantage. And commercial payers and health plans that currently don't have a coverage decision, which is why we're excited to offer to those wanting to receive a Medtronic patient access support program. We're doing this as well with Ardian in other areas to really help facilitate that patient access to Medtronic therapies and provide that prior authorization support that a lot of health care systems and institutions may require. So overall, we've got 21% coverage at FDA approval, 27% implicit coverage based on medical necessity and then 20 -- or excuse me, 44% of noncoverage, and we'll address that again through our patient access support program. On the right side of the slide, we've got coding and payment, right? So we haven't established today Category III, 0186T for reporting for implantable tibial neurostimulator procedures. And we're working with industry players to lobby for that Category I code. We currently have hospital and ASC payment, and that payment is actually similar to that of sacral neuromodulation. And once we get a Category 1 code, then that will address the physician or what is called the professional fee, and that will be defined. So in the meantime, physicians can work with payers using crosswalk codes to establish physician payment under that Category III code.

Great. Great. So the last big topic area that I'd like to cover is our market launch. And I'm wondering if you can share how you're thinking about the rollout of Altaviva in the U.S. And do you have any early updates on our DTC campaigns and any feedback -- early feedback that you're hearing from physicians or patients?

Yes. We think about our market launch with the perspective really of, as you said, the consumer is a little new to Medtronic, right, the patient, the physician and the health system. And we believe the consumer and the patient are different, right? We're now just under 3 weeks since FDA approval of Altaviva, and we're already seeing Altaviva everywhere with an enthusiastic market response and clinician engagement. You can see some of what we're doing here on this slide. With this launch, we're doing things differently. I think it's arguably very progressive inside of Medtronic. We're leaning into the consumer early. Typically, you lean in a little bit later to the consumer, but we need to educate and empower not only the 5 million that are seeking treatment today, but again, activating that 9 million of those consumers out there not yet seeking treatment. The simple experience offered with this device really provides a path, we think, for action that's just not previously existed for consumers. We've already put up billboards all around the country. We are doing community takeover events. We had the opportunity to take over the Twin Cities Marathon this weekend here in Minneapolis, this last weekend, and we wrapped the porta potties with Altaviva campaign logo and information and bringing Altaviva on the road as well through our Medtronic mobile labs, and we leverage those labs across the operating units, but really leaning into the mobile lab experience for our physicians, for training and then for patient community awareness. Again, I think it's really progressive. It's nontraditional, I think, in med tech and to put something like Altaviva on the side of porta potties where you have thousands of runners learning that there's a simple solution that could address their bladder leaks or someone that they know is really exciting. If you can go to the next slide, maybe we talk a little bit about what we're doing with physicians and what we're doing with health care systems because it's a launch, it's a new product, and there are still things that we need to work through, right? So we're excited about the momentum, as we said, that we're generating, but we're mindful that it can take time, which is why we're really investing to accelerate in key areas. So on the physician side, we have a commitment to train physicians clearly. It's part of our mission, right, on safe and effective and proper use of our therapy, bar none. But we're surrounding those physicians with, I would just say, top-tier medical education, but also the teams around them. We've developed the therapy development team, our reimbursement resources that we talked about earlier and really to ensure the seamless integration of Altaviva into that current care pathway. We believe this is really going to help physicians meet the needs of the large number of patients that are likely to come in. Those are either patients that are already in their walls or the 9 million that are coming and hopefully asking, hey, what is this new device Altaviva? In our initial experience, these last 10 days post-approval, we've increased capacity to our physician training. And this past Saturday, we trained physicians. And within 48 hours, Ryan, those physicians were already seeing new patients treated. So they went to that training. They said, I need to do this, and they started calling patients that very next Monday morning, and we had patients being treated on Tuesday. So again, it shows the power and the simplicity of action that patients are wanting to actually step into this procedure. In our initial experience, we've also seen physicians stacking cases. And that gives them that simple, but also reproducible experience as we walk them through what we call kind of procedure proficiency. We want them to get really comfortable doing this procedure, and you learn that comfort over time. And our therapy development team is really readying and they're the ones really supporting these physicians on demand. On the health care system side of things, we're working closely. Again, we're leveraging the scale of Medtronic, leveraging our enterprise accounts team and our ASC team who really have some strong relationships across whether those are large urology group practices, IDNs or ASCs. And we're really determined to work with these health care systems to ensure that physicians and patients have access as soon as possible to Altaviva. And in doing that, we're leveraging, again, those relationships, but we're also leveraging the power of our portfolio. We have the most comprehensive neuromodulation portfolio for overactive bladder, UUI and fecal incontinence. So it's a unique differentiator and you add Altaviva to that, and you really have a nice contracting strategy for our health systems and IDNs that want to contract across the portfolio. So -- we're also helping navigate through what everyone knows to be the Value Analysis Committee process, which is part of just bringing a new medical device into any of these institutions. And VACs are in hospitals and in ASCs and some move really fast and some take a little longer than others. So maybe the last slide here for this section again, very intentional. You'll see this language in different places. If you're driving up and down a highway somewhere, you might see this less restroom, more guest room. We're aiming to really prioritize the consumer and activate and drive awareness, while creating that world-class physician and patient experience. So people are picking up our content at rates that we just have not seen before. We're getting inbound patients calling us, wanting to know more about Altaviva. And we've already had more than 40 stories published about Altaviva since our initial release on September 19. So we've got thousands of digital billboards, as I said, across the country. And again, who would have thought -- maybe we'll end on this, who would have thought that we'd be branding porta potties. It's really an exciting time at Pelvic Health, and we're really thinking differently about the explosiveness of this launch.

Yes. It certainly is exciting, Emily. And I appreciate that overview, and it looks like we're a really good start to the launch here. Maybe before we go to Q&A from the analysts and investors, anything you want to leave us with?

Yes. I think you can tell our excitement, right, at Pelvic Health, and that is across the board, whether those are the engineers, quality, regular teams, regulator teams that we're working on this, our commercial teams, our operations teams, those that are manufacturing for us. around the globe. We're excited about Altaviva and the novel way that we're approaching this UUI patient population. And like I mentioned at the beginning, this affects 16 million patients in the U.S. and the majority of those patients aren't receiving care today. And we believe that the Altaviva device will provide that simple experience and appeal really to millions of these UUI patients in the U.S. today. But to unlock that patient population, we're really committed to moving with speed. We're going to activate this market like we haven't seen before through a really diverse set of physician and patient experiences. And we're fortunate that the market really has some natural momentum as well with an increasing conversation and topics like menopause that's really helping elevate that impact. And our efforts, they're not going to stop until we turn the tide and until these consumers start realizing that pads are not an answer. They have options, and they have an options to be leak-free. And lastly, as I'm sure the analysts and many have heard on Geoff's earnings calls about Medtronic, we're really -- we're asked to be now an and company, right? We believe in our mission at Medtronic, alleviate pain, restore health and extend life and drive performance. And this rings true at Pelvic Health. We believe in Altaviva and helping the millions of patients that are affected by UUI. And by serving these patients, we know that just 1% of us being able to impact that patient population is a $1 billion market opportunity. So again, thanks, Ryan, for having me today and being able to share about Pelvic Health and Altaviva and our mission to really unlock this amazing market and more importantly, help these patients with UUI.

Yes. Thanks, Emily, and incredible opportunity here. I appreciate you walking through all of it. 1% penetration, about $1 billion in revenue is a big opportunity, not just for Pelvic Health, but for all of Medtronic. So I'm sure investors and analysts appreciate.

Let's move to Q&A. We're going to try to get to as many as possible here. [Operator Instructions] Okay. I see we've got a few questions. Let's go to the line of Ryan Zimmerman.

Can you hear me okay, Ryan?

Yes.

Awesome. Emily, thank you for doing this. Very informative and like the tagline. Two questions for me. One, can you just talk about urologists' comfort level with implanting a device in the ankle? I think that's certainly something that we've found in our diligence as being potentially something that needs to be educated. And then the second question, I'll just ask it upfront, which is there's not a meaningful difference, at least from meta-analysis that we can see around clinical outcomes between sacral versus tibial neuromodulation for urinary incontinence. And so do you think the clinical data difference needs to be greater here? Or is the form factor and the ease relative to maybe sacral neuromodulation more than sufficient to compensate for that kind of relative equivalence in clinical outcomes?

Yes. Great questions. Thanks, Ryan. So maybe I'll answer the first one around the ankle because as we were going through the pivotal study, that was a really big component of, okay, these folks are used to working with the bladder, right, and even bowels to some degree, but you get in the extremities and it's like, what am I doing here? I will say percutaneous tibial neurostimulation has been around since back in early acupuncture days, right? So they are used to doing that through neuro, but we really put a significant emphasis on making sure we understood how to teach and train and educate not only on the product and the procedure, but what to look for, whether it's with wound healing, how to identify, honestly, what's a good ankle, right? It's important. But as we've kind of walked through with physicians, I think they're getting more and more comfortable with it. Some physicians liken it to a birth control implant in the arm, right? They're not -- gynecologists aren't used to -- weren't used to doing that yet. They put it in the arm. And they said it's simpler than a mastectomy. So we really haven't, to date, had issues or concerns around that. But I think it's partly, again, how much time we're spending in education and training, ensuring that they have a comfort level, and they understand what makes a good patient for this procedure and really having thoughtful mind and care of the ankle to put everything around that area as we take them through the didactic and the cadaveric labs and such. So I feel like we're really moving quickly through it. Also, as we think about the 2-centimeter incision, and it's a very small incision, again, along the layer line. So as they're thinking about accessing that pocket or they're closing that pocket, they're really not disrupting a lot while they're in there. And so that, I think, gives them a bit of confidence as well. Your second question around, gosh, there's not a clinically difference in this in sacral neuromodulation, you're right. What I think is really important and what we're seeing in the early physician feedback is the simplicity of the procedure, the ability to activate day 1, no trial, right, no lead. It's just an easy ability to say yes to getting into the advanced therapy space and having a shared decision-making conversation with these patients, I think, is a lot simpler, right? You're talking about Botox, which is an injection multiple times a year, injecting that into the bladder. You're talking about percutaneous tibial nerve stimulation, which is every week for 12 weeks, right? So you got a fine time every week to come in. Sacral neuromodulation, great for the right patient, right? Again, broader indication, fecal incontinence today works extremely well. It requires a trial. It requires them to then come back and have a permanent implant, whereas with Altaviva, if you're interested, you could arguably through prior authorization, be receiving treatment within days and weeks and then going on and living your life. So again, that simplicity and that ability to opt into an advanced therapy, we're getting patients that weren't looking at other therapies or they just weren't comfortable at taking maybe a more invasive first step. I hope that answers your question. Thank you, Ryan.

Thanks for the question, Ryan. Next, we go to the line of [indiscernible].

[indiscernible] appreciate all the information. Can you hear me, okay?

We can.

Okay. My question is on SNM versus ITNS. Kind of can you comment more on what gives you the comfort that there won't be cannibalization here? And it sounds like you're really excited about the ITNS pitch, but you have a big sacral business. And so how do you protect that while growing this and prevent it from becoming left pocket, right pocket stuff? And then one numbers question. Can you comment on the average selling price of your device versus your sacral device? Is it different, or is it similar?

Sure, sure. So maybe we'll take the cannibalization first. We believe a broader portfolio is the right answer. It's the right product for the right patient at the right time. And we truly believe that Altaviva is the product that is also going to help us reach the 9 million that aren't having the conversation. Share decision-making is a little bit new in the urology and urogynecology space. The AUA guidelines were just updated in 2024 really to reinforce the importance of having that conversation and sharing about all of the advanced therapies that are out there. I think what's unique about this space, again, is in SNM today, our patient population is roughly -- the average is about 65 years old, right? So these are [indiscernible] the patients. These are patients with urinary incontinence, frequency, mixed incontinence, neurogenic bladder and fecal incontinence. So again, sacral neuromodulation is a great product for those folks that want that procedure and have and need a relief from that symptom specifically. UUI subset, but a bit different of a patient population. They have Urge. Those patients are most often the ones that will look to seek care because they're leaking, and they want to do something about it. But I really think that we are going to activate a new population earlier in their disease progression. Our SNM patients tend to be highly refractory patients. So we think we're going to activate them earlier, and we're going to reach more patients. So we believe that this is going to really raise all boats. You asked about price. I think we're very price competitive with our peers, but we are also mindful that Medicare commercial coverage is still being established, but the payment, as you saw on there, is comparable to S&M. So while we don't disclose price, we are competitively priced in the market versus our competition and relative to the innovations and the premium around our innovation. So hopefully, that answers your question.

Thanks, Mike. Next, we go to the line of Larry Biegelsen.

Ryan, this is Nathan Treybeck on for Larry. I just wanted to touch on the broader public health business. It's been a little under pressure recently. I guess what is the growth outlook with the launch of Altaviva? I guess, how long until the business sort of returns to growth?

Yes. Thank you. Understand, yes, the SNM space has been under pressure. We believe that SNM is still a mid-single-digit grower. And this space, we're less than 10% penetrated. So we truly believe that Altaviva can be an unlock for that market. Again, the simplicity of the procedure, our ability to go upstream. And this space hasn't seen novel new innovation and technology for quite a long time, right? Like we've been in this space for 30 years on the backs of Sacral, Botox has been around for quite a long time. Axonics came into the market with a me-too arguably on the SNM side and with the acquisition of Boston. And I think we are going to absolutely grow and develop this space. We haven't had a lot of focus on the consumer and really driving patient awareness and patient access. So we think our investments both in that and our commercial restructure that we did in the end of May by focusing our clinical support and service on our sacral business, so we can free up our reps and our therapy development team to really go drive the Altaviva market is the right mix to drive growth back again into this broader advanced therapy market for OAB.

Thanks, Nathan. Next, we'll go to the line of Chris Pasquale.

Can you hear me?

We can.

So I was hoping you could put the 61% responder rate in TITAN 2 into more context for us. I believe BlueWind reported 79% in their study. Axonics was about 90% back when they did their pivotal trial. It sounded like you were saying there might be some differences in the patient population that should be taken into account. So could you flesh that out for us and talk about sort of this form factor versus efficacy trade-off?

Yes, absolutely. Great question. So a reminder, in our TITAN 2 study, a couple of things. Those patients had to be off medication. So they could not be on medication for the full 12 months that we were managing that patient. So no OAB medications. In other studies, different portions of those patients could be on other therapies, they could be on other medications. The designs of the studies are very different. So it's really hard to make direct comparisons. If you look at BlueWind, 32% of the patients with Revi were on OAB meds during the time of the trial. So we were saying, you know what, we don't want any OAB meds. We want to see the performance of this therapy by itself. And remember, this is a highly refractory patient. They had failed or were intolerant to at least 2 meds prior, and they generally had a higher BMI than the competitive ITNM clinical studies as well as having higher voids and leaks per day. With Valencia, I think I'm trying to remember with Valencia, I think while TITAN 2, which is our study required failure of 2 meds, I think Valencia's eCoin device required failure of 1 prior therapy, which could have been medications, Botox or PTNS. So just very different studies and different comparators than what we're collectively all looking at. So we feel this is a starting point. We're going to learn a lot. We are committed to a post-approval study with the FDA as well, and we're starting up early research on different elements to really understand this patient population. It's new, right? This is a UUI-specific patient population. So at 61% with that patient, that very refractory patient population, we believe that finding earlier, honestly, less sick patients, that number is only going to improve.

Thanks for the question, Chris. [Operator Instructions] Next, we'll go to the line of Shagun Singh.

So I guess 2 quick ones for me. Earlier in the presentation, you kind of almost equated the opportunity to PFA and RDN. Can you just put that into context with us -- context for us, what does it mean in terms of growth contribution to Medtronic? Any ramp expectations you can share? And then also, what are you seeing in the market from Boston Axonics portfolio at this point?

Thank you. I think the -- and maybe Ryan can help me here a little bit, but I think the point of this is if you just look at the 5 million patients that are currently eligible for an advanced therapy today, if we impact just 1% of that 5 million, that's roughly $1 billion of opportunity for Medtronic. So that is the context. Also, Geoff talks a lot about future growth drivers for Medtronic, places where we're making meaningful investment, but places where we expect high growth, that being our PFA business today, RDN with SYMPLICITY and then Hugo, right? And one of those growth drivers that's coming, right, over the next few years, we see as Altaviva. So that's some context, and he's alluded to that in, I think, some recent earnings calls as well. As it relates to Boston Scientific, we haven't seen a lot from Boston on this front. We're focused on ourselves. We're focused on making sure that our patients and our physicians have the best experience from a physician and medical education perspective and that they can really work to develop this and incorporate this into their care pathway and believe it's absolutely going to be a new opportunity for us. So we're super proud of that. And we're always conscious of our competition and mindful of it, but we are heads down making sure that we make this launch as successful as we possibly can.

Okay. We have another question that was e-mailed to me from Matt O'Brien at Piper Sandler. Matt writes, can you ask Emily about the reimbursement dynamics and whether that is buttoned up enough under a Cat III code to get quick uptake? Or will it require a Cat I? And why do DTC now if you don't have reimbursement buttoned up?

Yes. Great. So we absolutely feel really good about where we are from a reimbursement. Do we want to get to CAT I? Absolutely. The sooner the better. But from a reimbursement perspective, the nice thing is as we're going in and talking to health care systems, first and foremost, the hospital and the ASC both have a payment that is quite favorable, right? So as you saw in there $21,000 and $19,000 for a payment. So that's a really nice place to start. That's comparable to sacral neuromodulation. And so we haven't seen a challenge yet on the hospital or the ASC side. Are physicians saying, "Hey, it's been a little rocky, right, with our competitors in this space relative to the professional fee." It's why we've leaned in so heavily on the Medtronic patient access support and making sure that we help them navigate through prior authorization and making sure we have society and physician support as we move forward with the Category I code. But you always have early adopters and innovators, right? The natural curve. So we are definitely on the innovators and early adopter side of the curve where those types of elements aren't as challenging for them. And we've already put patients through the patient access support program, and we were getting approvals within days and weeks. So again, I think that added support resource that we have, which are experts in the field is really helping remove some of those potential barriers that you would see. But hey, we are going to do everything we can to move as quickly as we can to garnering a Category I code as well.

Great. Thanks for the question, Matt. It looks like Mike Polark has a follow-up question. Mike, please go ahead.

Yes. Along those lines, the path in the office, can you just describe what that looks like? Are there -- what are the reimbursement items to achieve there over time? And then procedurally, does it fit super, super well? It sounded pretty clean and straightforward, or is there some tension that you would expect a lot of docs to be deterred by and thus kind of volume stay in the more traditional sites of service?

Sure. So in our clinical -- that's a great question. Thank you, Mike. So in our clinical study, in our TITAN study, we were 1/3, 1/3, 1/3. So 1/3 of the patients had their procedure performed in the hospital, 1/3 in the ambulatory surgery center and 1/3 in the office environment. So we know it can be done in the office environment. We actually think this low acuity setting and this simple procedure, especially, again, no anesthesia, no imaging, just lidocaine or a local anesthetic, it makes sense definitely to go into the office. So we're working with what we have today, which is a focus on hospital and ASC, but we will be absolutely working with health systems to kind of prove a path to the office. We can go there for sure. I think we'll walk our way there over the coming years and learn what it's going to take to go to the office, both from a clinician, a payment and an overall patient experience perspective. But the simplicity of the procedure is absolutely a procedure that can be done, we believe, safely, effectively and consistently in an office environment. So we have a plan on getting there over time, but we do have to make sure that coding, coverage and payment and everything are in place just as we would in the hospital and in the ASC. So it will take some time.

Thanks, Mike. Next, we'll go to the line of Danielle Antalffy.

And Emily and Ryan, thanks very much for doing this. This is super helpful. Emily, this might be a really dumb question, so I apologize if it is. But I'm just curious, thinking about the tibial therapy, could that serve as a step function towards eventually getting SNM? Like could one into the other? Or is that the wrong way to think about it? Sorry.

No, I think I've oftentimes talked to this about is this a gateway therapy, right? When you think about it, if you're interested in -- you're contemplating, I waited it all this time, right, potentially of getting a therapy or I'm 51 like myself, and I'm starting to have weeks. I don't want to age like this. I want to do something now. That first step, that simple first step may be Altaviva for a patient. And 15 years later, right, the thing about this is the condition doesn't go away, right? We're not curing anything. So the potential that you would step into sacral neuromodulation over time is absolutely possible. And again, sacral is great for certain patients with certain conditions that we currently don't have an indication for, like I said, fecal incontinence, broader OAB. But it is absolutely possible to think about this as a first step. And then, again, 15 years or at some time in the future, if sacral and your condition evolves or changes, sacral could absolutely be a good opportunity as well. So not a bad way to think about that at all. That's a really great question. Thank you, Danielle.

Thanks, Danielle. Next, we'll go to Imran Zafar.

So I just wanted to ask how you're thinking about the international opportunity. Obviously, reimbursement is going to be much tougher to secure OUS, but just wondering how you're thinking about that. And then I guess, to help inform that, just remind us what the -- how big the business is for InterStim internationally?

Sure. Yes. So maybe I'll start with that first one. So the business is about a $700 million business. 80% of our business is U.S., 20% of our business is outside of the U.S., the majority of that being in Western Europe. Are we thinking about Altaviva outside of the U.S.? Absolutely. Expanding to markets outside of the U.S. is absolutely a priority, and we're actively exploring ways to bring the product to a global patient population as early as possible. We are contemplating the great thing about doing a post-market study is we can also look at potential to add OUS sites to that. We're also looking at our clinical strategy, which we're putting a significant investment in as well to really start learning, right? What's it going to take to not only enter the market outside the U.S., but as you said, really be meaningful in the market and that meaningful in the market comes with reimbursement. So we're going to take a very focused approach, but it is absolutely a top priority for us.

Thanks, Imran. Next, it looks like Chris Pasquale a follow-up question.

Yes. Could you walk through the recharge schedule just to make sure we understand what the burden is for the patient there and also clarify whether the implant is delivering stimulation constantly or only for a certain amount of time each day?

Yes. Great question. So maybe I'll first talk about the stimulation. So again, I talked about the therapy being activated the same day, right? So as you activate the therapy, we will look at what is that personalization for you. And we have an express setting that is therapy activated every other day for 30 minutes. And then that physician can also do personalization, if you want. They can do it every day. They can change the days; they can change the time. They can also change the stimulation. That's up to the physician, right, working with that patient, but it's a very simple thing to do on the clinical clinician programmer. So they'll set that up. The nice thing is you can also change that -- so if you're going to Europe, right, and you're traveling for a month, and you don't want it to be at 9:00 a.m. in the morning because that's ultimately the evening, right, when you're going out to dinner or something like that, you can adjust and change the time of day and be able to make that work for you. So we do have customization that you can do from that perspective. As it relates to energy, that energy is, like I said, every other day initially for 30 minutes a day. And you also asked about the recharge frequency. So the recharge frequency, what we saw in the study and what we believe will happen kind of out there in the real world that on the normal settings, right, we see a recharge needed maybe once, maybe twice a year. So you envision that patient coming back for their annual visit right? Putting that recharger on the ankle, having them be at the clinic for roughly 30 minutes for their visit. They get the recharge. Again, it's 0 to 100 in less than 30 minutes, and you're often in living your life. So once, maybe twice a year on standard settings.

Okay. Just to clarify, they need to go and see the doctor to recharge the device?

They could do it at home themselves. We provide the recharger as well. The clinicians are just saying, hey, I'm going to see these people annually anyway, right? Why not come in, but they have the option to recharge by themselves as well.

And did you guys do sort of a dose-finding study to arrive at every other day for 30 minutes? And it sounds like the patient can feel the stimulation. Is that the reason why they would want to do it at a certain time of day versus just having it going on in the background?

Yes. We were looking at the dosing and feel like we're still learning about dosing. But in the study, we saw that really doing every other day stimulation was enough for the majority of patients. And again, that's up to the physician and the physician can determine if they want more stimulation or more frequency of stimulation.

Okay. Thanks, Chris. I don't see any other questions in the queue. So I think we will wrap there. If you have any additional questions, please feel free to reach out to me or anyone on the Investor Relations team. Emily, I want to thank you again for sharing your insights today. And I also want to thank all the analysts and investors that joined us today. I hope you're walking away with some new learnings on this important growth driver for Medtronic. And just a reminder, too, if you missed any of today's call or have colleagues that were unable to join, a replay will be available on our IR website later today. We'll see you all again on our Q2 earnings call, which we plan to report on Tuesday, November 18. So with that, thanks for your interest in Medtronic, and have a great day.

Thank you.