It’s unlikely that Medtronic will be going the way of Abbott Labs, which recently separated its drug business from the rest of its operations, any time soon.
Despite suggestions that Medtronic spin off its troubled spine business, CEO Omar Ishrak told Reuters on Friday that Medtronic sees no benefit in doing so because the business is still benefiting from other parts of Medtronic.
As the aging population seeks treatment for back ailments, Ishrak said, the spine business will recover from the controversy earlier this year surrounding its Infuse bone growth product, for which revenue declined 8 percent in the quarter ending July 29, and its lackluster purchase of Kyphon in 2007.
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So, Medtronic will stay intact, Ishrak says, except for one business it’s been trying to sell for years: Physio-Control, its emergency response system business unit.
The medical device giant first said in 2006 it wanted to divest the business and reiterated that wish earlier this year. But since 2006, Physio-Control has suffered from some Class I U.S. Food and Drug Administration recalls — first in July 2009 and again in April 2010 and July 2010 — that have made it a questionable buy.
Medtronic’s growth has slowed recently, with fairly flat profits in its $15.9 billion sales year ending in April. In a September interview with MedCity News, Ishrak said his overall plan for growth included leveraging technology and health IT, establishing Medtronic internationally and keeping Kyphon.
