Medtronic is expanding its corporate strategy to move beyond medtech devices to bring more data-driven products to market. The company is setting new environmental and social goals as well to become “the leading healthcare technology company and a cornerstone for societal change.”
The company plans to increase R&D spending by 10% over the next fiscal year, which represents the largest increase in company history. Also, by 2025, the company plans for 20% of revenue to come from products and therapies released in the previous three years.
Torod Neptune, senior vice president and chief communications officer, said that the company is changing its brand focus to emphasize digital health instead of purely medtech.
“This change reflects our recent innovations in robotics, our work around data algorithms and artificial intelligence on top of products themselves,” he said.
Neptune said that the company’s environmental and social goals reflect the new expectation that companies will address significant societal problems, not simply make great products.
Two engineers founded Medtronic in 1949 as a repair business for medical electronics. In 1957, Earl Bakken built the first battery-operated pacemaker. The next significant milestone was a prosthetic heart valve in 1977.
The company’s GI Genius product is one example of how the company is shifting its focus away from devices exclusively and more toward data and advanced algorithms to reduce the risk of illness.
Using AI to lower colon cancer rates
Many people skipped routine health screenings during the pandemic, including colon cancer screening, Giovanni Di Napoli, head of Medtronic’s gastrointestinal business, said. Now that case levels have dropped in some cities, doctors are seeing up to 20 patients every day. That’s double the usual number. The company’s GI Genius device provides a second set of eyes on each colonoscopy.
The computer-aided detection system uses artificial intelligence to detect polyps in the colon. The FDA approved the device in April. Di Napoli said that the algorithm that runs the device has been trained on 30 million polyps.
“AI, for us, means improving diagnosis, decision making and access to care,” he said.
Di Napoli said the company has seen an increase of 14% in the detection rate in screenings done with GI Genius, as compared to screenings done without it.
“This is important because a 1% increase in detection represents a 3% reduction in cancer,” he said.
The company has another early detection product in the pipeline: a pill with tiny cameras that could do a colon cancer screening at home. The patient swallows the device and it transmits images to the cloud as it passes through the colon. An algorithm scans the images for early. If surgery is required, the surgeon would have a map to guide the procedure.
Di Napoli said the goal is to detect lesions in the colon before the growths become cancerous.
This new screening option would make the procedure more comfortable, which also should increase the number of colon cancer screenings overall. This new procedure also could reduce the number of unnecessary scans and give doctors a specific location for surgery if that is indicated.
“This will reduce costs, improve access and patient outcomes,” he said.
Setting new goals for environment, equity and access
At the company’s first ESG Investor Briefing on Wednesday, Oct. 13, company leaders will highlight how the Medtronic sustainability strategy is tied to the company’s mission and supports its long-term growth objectives of 5%+ organic revenue and 8%+ adjusted EPS. Geoff Martha, chairman and CEO of Medtronic, said in a press release the company’s environmental, social and governance goals will drive better outcomes for our world through a healthier society and healthier planet.
“This year we focused our ESG efforts to drive measurable impact on issues that accelerate access to healthcare technology, advance inclusion, diversity and equity, and protect our planet,” he said.
The company shared its progress against ESG goals in the 2021 Integrated Performance Report: Engineering Impact. This report claims the company has reduced greenhouse gas emissions intensity by 11% year-over-year and sourced 25% of energy from renewable and alternative sources. The company also reports 100% pay equity for women and people of color at the company as well as 99% gender pay equity for employees globally.
By 2026, Medtronic aims to have 45% of global management positions held by women and 30% of U.S. management positions held by ethnically diverse people.
The company plans to make packaging improvements to reduce waste by 25% for targeted high-volume products by 2025 as compared to a baseline set this year.
To address issues of equity in healthcare, the company is putting a stronger focus on gender, racial and ethnic diversity representation in its more than 300 clinical studies that are currently on-going.
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