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Most Memorable Medtronic Moments Under CEO Omar Ishrak

In honor of Medtronic CEO Omar Ishrak announcing his plans to retire in 2020, here is a look back at some of the company's biggest moments under Ishrak's watch.

  • The medtech giant with humble beginnings will go through a major leadership change next year.

    Medtronic announced Wednesday that Omar Ishrak will retire as CEO on April 26, which marks the end of the company's current fiscal year. Geoff Martha, who currently oversees Medtronic's restorative therapies group (and previously led the company's spine business), will succeed Ishrak as CEO on April 27.

    Ishrak has served as CEO of Medtronic since June 2011 and has led the company through some significant milestones. The news does not come as a surprise given that Ishrak is approaching the company's mandatory executive officer retirement age of 65.

    Ishrak is expected to serve as the company's executive chairman after he retires to provide counsel and guidance to Medtronic's leadership and oversee the CEO succession. In the meantime, Martha will assume the newly created role of Medtronic president and become a member of the company's board of directors, effective Nov. 1, 2019.

    “Today, we announced leadership changes that meet both the board’s objective of executing a thoughtful leadership transition as well as my personal desire to begin transitioning my duties as CEO to a new leader coinciding with the start of our next fiscal year,” Ishrak said. “This plan and its timing enable Geoff and I to partner on achieving Medtronic’s key financial performance goals as well as delivering on our critical pipeline milestones, including several important product launches. Leading Medtronic as CEO is an honor and a privilege, and I know that Geoff is the right leader to take Medtronic to the next level of its growth and evolution. Geoff is a results-oriented, dynamic, and innovative business leader who is passionately committed to our mission, the advancement of our growth strategy, and the development and diversity of our people. I am confident he has the right track record, commitment, vision, and judgment to lead our company.”

    Mike Matson, a medtech analyst at Needham & Co., said he believes Medtronic's CEO succession plan will be received positively by investors.

    "Martha is a strong CEO candidate, in our view, since he has been highly visible to investors and was in our view instrumental in turning around [Medtronic's] spine business which was losing share for years prior to Martha taking the helm," Matson said.

  • Medtronic-Covidien Deal

    By far the most memorable event during Ishrak's tenure at the helm of Medtronic was the company's $42.9 billion acquisition of Covidien through a tax inversion deal that moved Medtronic's corporate headquarters to Dublin, Ireland and freed up $9.3 billion in cash that had previously been trapped overseas.

    The announcement came with a promise, however. As a direct benefit of the company’s new financial structure, Medtronic vowed to make $10 billion in U.S. technology investments over the coming decade in areas such as early-stage venture capital investments, acquisitions, and R&D – above and beyond existing plans that either company already had in play.

    “The medical technology industry is critical to the U.S. economy, and we will continue to invest and innovate and create well-paying jobs,” Ishrak said that otherwise-quiet Sunday in June 2014. “Medtronic has consistently been the leading innovator and investor in U.S. medtech, and this combination will allow us to accelerate those investments. These investments ultimately produce new therapy and treatment options that improve or save lives for millions of people around the world.”

    The company was quick to start making good on that $10 billion promise too. After closing on the Covidien acquisition in January 2015, Medtronic went on a record-breaking shopping spree, announcing more than a dozen smaller acquisitions and strategic investments in the first year alone.

  • Artificial Pancreas

    Among Medtronic's most noteworthy clinical accomplishments under Ishrak's leadership is the MiniMed 670G insulin pump, which FDA approved in September 2016 and the company released to the market in 2017. The device was touted as the world's first hybrid, closed-loop artificial pancreas. It was also the first FDA-approved device intended to automatically monitor glucose and provide appropriate basal insulin doses.

  • HeartWare Acquisition

    Medtronic put up $1.1 billion to buy HeartWare in 2016, a deal that gave the company more even footing in the minimally invasive ventricular assist device market with St. Jude Medical (now owned by Abbott). While the deal did expand Medtronic's reach across the heart failure continuum and broadened the company's portfolio of therapies, diagnostic tools, and services for patients suffering from heart failure, the acquisition came at a time when HeartWare was dealing with two major recalls involving its flagship product.

    Medtronic also encountered another problem with the HeartWare ventricular assist device (HVAD) last year, and although that problem did result in another Class I recall, the patient risk appeared to be relatively low. That time the problem involved the potential for an interruption of the electrical connection between the device's power source (battery, AC adapter, or DC adapter) and the HVAD controller. The interruption could cause the device to switch to a secondary power source and/or emit a beeping sound. Medtronic said the interruption is caused by oxidation of connecting surfaces between a power source connector and the controller's power source socket, and typically lasts up to 2 seconds.

  • SYMPLICITY HTN-3 Failure

    While it's easy for a CEO to look good during times of success, a leader's true colors often appear during times of adversity. In Ishrak's case, his strengths as a CEO became evident back in January 2014 when the company delivered the news that the  SYMPLICITY HTN-3 trial, a hypertension study of the Symplicity Renal Denervation System, failed to meet its primary endpoint.

    Medtronic inherited the technology through its $800 million acquisition of Ardian under Ishrak's predecessor, but Ishrak did not fault his predecessor's decisions regarding Ardian.

    “This was not an execution issue,” Ishrak said. “It’s not one where we did the acquisition before thinking, nor one where the model didn’t make sense.”

    The hypothesis for acquiring Ardian was based on the assumption that the clinical trials would work, he said, noting that there are risks to conducting clinical trials and sometimes you have to live with the results.

    “This doesn’t mean that we are going to walk away from risk in medtech,” Ishrak said. “We are going to sharpen our pencils a bit more on due diligence.”

    Ishrak added that experiences like these reaffirm his strong belief in having diversified end markets.

    “If you have diversified end markets, you can absorb these [disappointments] and it gives you the ability to take clinical trial risks,” he said.

  • Weathering the Storms

    In 2017, Medtronic's resiliency shined through after a quarter filled with natural disasters. The company faced three hurricanes plus devastating wildfires during its fiscal 2018 second quarter.

    Ishrak said Hurricane Maria, in particular, took a significant toll on the company's manufacturing operations in Puerto Rico, and thousands of Medtronic employees were affected by these natural disasters.

    "Yet the resiliency, dedication, and persistence of our team to overcome these challenges was remarkable," Ishrak said during the company's earnings call that quarter.

    CFO Karen Parkhill said the company used alternate manufacturing sites, directed field inventory movement, and "ultimately were able to restore operations more quickly than anticipated," in Puerto Rico.

  • Medtronic's Foray into Robotics

    Medtronic made a big move back in May 2016 by inking a major multi-phased strategic and equity investment agreement with Mazor Robotics. That agreement ultimately led to Medtronic's acquisition of Mazor in a deal valued at about $1.64 billion that closed earlier this year.

    We would expect to see robotics play an even larger role at Medtronic under Ishrak's successor. During the company's most recent earnings call, Martha said the company will look at robotics in "virtually every area that we have a procedural presence."

  • Making Diversity Matter

    Under Ishrak's leadership, Medtronic made diversity and inclusion more than just a box-ticking exercise. The company ranked third on Thomson Reuters' 2018 Diversity and Inclusion Index, jumping ten spots from number 13, which it held in 2016 and 2017.

    "We know that greater diversity inherently drives better decisions — different perspectives enable us to see challenges and solutions from new angles," said Sophia Khan, senior director of global inclusion, diversity, and engagement at Medtronic. "It’s not only our employees and business that benefit, a stronger and united Medtronic means we’re continuing to drive innovation and devise powerful solutions that help our partners deliver better patient outcomes and contribute to human welfare."

    The index ratings are informed by Thomson Reuters environmental, social, and governance data, designed to transparently and objectively measure the relative performance of more than 7,000 companies and provide investors with differentiated insight. After ranking the top 100 companies as measured by 24 metrics across four key categories (diversity, inclusion, people development, and news controversies), the index is calculated by weighing each metric based on importance in the market and how each company compares with its peers.

  • Taking the Lead on Value-Based Care

    Under Ishrak's leadership, Medtronic also set an example in the industry for how to make the most out of value-based care initiatives.

    "I know I have spoken a lot about value-based healthcare, but I'm particularly pleased to see this translate into real numbers, which have real differentiating value for Medtronic," Ishrak said during an earnings call last year."

    Ishrak said the company's Tyrx absorbable antibacterial envelope is just one example of innovation being linked directly to an outcome when the company built a business model around it. The mesh device is used to hold a pacemaker and ICD in a stable environment and release antimicrobial agents over a period of seven days when the chance of infection related to surgery is especially high. As of February 2018, more than 1,000 hospitals were participating in the Tyrx program, which is designed to tie patient outcomes to the cost.

    The Tyrx device is not reimbursed separately, so the program essentially creates a guarantee that is appealing to providers. After seeing the appeal of the Tyrx program, Medtronic began to apply the same approach to other parts of its business.

    "We are increasingly partnering with additional stakeholders and the healthcare value chain including payers, providers, and other interested organizations to lead the change for FIFA service models to value-based programs," Ishrak said at that time.

    Also, in July 2018, Medtronic and UnitedHealthcare shared how a unique value-based partnership demonstrated a 27% decline in the rate of preventable hospital admissions for Medtronic insulin pump users compared to patients on multiple daily insulin injections.

    Around the same time, Medtronic launched a new performance guarantee program around its MiniMed 670G insulin pump. The new program is an outcomes-based offering for payers and employers designed to mitigate costs for diabetes-related complications. With this guarantee, Medtronic said it will provide flat-fee reimbursements of up to $25,000 per pump over four years for qualifying diabetes-related inpatient hospitalization and emergency room admissions for eligible in-network patients in the United States.

    "The idea is to really put our money where our mouth is and really get behind the performance of our products," Suzanne Winter, vice president of the Americas region for the diabetes group at Medtronic, told MD+DI at the time.

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