Medtronic CEO: Kyphon Acquisition Disappointing

A management shakeup, a poor product launch, a DOJ settlement, and increased pressure can all be attributed to what Medtronic CEO Bill Hawkins calls "a bit of a disappointment." Some of the delay in integrating Kyphon's business into Medtronic's spine division stem from unsuccessful marketing of Kyphon's X-Stop Spacer for lumbar spine stenosis, and the product even underwent a relaunch due to the need to provide better education about the implant and more training for doctors. In addition, the president of Medtronic's spine division, Pete Wehrly, left the company last year and was replaced with Medtronic's head of operations in Japan, Steve LaNeve. Differences in product demographic and sales rep method also caused hiccups, according to the Star Tribune. Medtronic's spine division focused most of its marketing on younger patients who had scoliosis and degenerative disc disease, while Kyphon went for older patients suffering from spine fractures and stenosis. Despite any difference in sales method, CFO Gary Ellis says the merging of the sales force resulted in a loss of few people. And although there's been a slower-than-desired integration, Ellis says the company has taken care of most of the issues with Kyphon.